CSA Opposes Saskatchewan's Plan to Tax Travel Medical Insurance

TORONTO, June 12, 2017 /CNW/ - In the recent 2017 budget, the government of Saskatchewan announced that it was raising the rate of the provincial sales tax (PST) from five per cent to six per cent. In addition to this increase, the government also announced that it would be expanding the number of goods and services subject to PST, including travel medical insurance premiums which were previously tax exempt. The effective date for the application of PST to insurance premiums is August 1, 2017.

"This change will make Saskatchewan the only jurisdiction in Canada which collects retail sales tax on travel medical insurance premiums and will increase the cost of travel insurance for Saskatchewan residents," said Karen Huestis, President of the Canadian Snowbird Association. "The Canadian Snowbird Association (CSA) is firmly opposed to the planned application of PST to travel medical insurance premiums in the province. We urge the Saskatchewan government to keep travel medical insurance premiums tax exempt, as they are in every other province and territory in the country."

Supplementary travel medical insurance is a necessity for those who travel outside of Canada as the government of Saskatchewan only reimburses travellers a maximum of $100 per day for emergency in-patient hospital care received abroad. Saskatchewan's practice for reimbursing residents for emergency health services while abroad contravenes the portability criterion of the Canada Health Act, which requires the health care insurance plan of a province to provide the same access to emergency health services outside of Canada as they do in Canada. Recognizing the limited emergency medical care coverage outside Canada, the government of Saskatchewan recommends that residents travelling outside of the country should obtain additional health insurance.

Moreover, travel medical insurance coverage is generally purchased from providers located outside of the province and is purchased for emergency medical care which, if required, will be obtained outside of Saskatchewan. Some provinces in Canada, such as Manitoba, exempt travel medical insurance premiums from retail sales tax because health insurance covering the health care costs of insured individuals is deemed a non-taxable insurance contract. Other provinces, such as Newfoundland and Labrador, exempt travel medical insurance premiums from retail sales tax because the insurance coverage relates to risk, peril or events outside of the province.

The Canadian Snowbird Association is a 100,000 plus member, non-profit, non-partisan organization representing Canadian travellers from across the country. The CSA works in partnership with government and business to educate and advocate on behalf of all travelling Canadians.

SOURCE Canadian Snowbird Association

For further information: Evan Rachkovsky, Director of Research and Communications, Canadian Snowbird Association, (416) 441-7062, evan.rachkovsky@snowbirds.org

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