The first case involved a taxpayer who claimed a medical expense tax credit for just over $29,000 of medical expenses incurred in 2012, the bulk of which was paid to SCI Healthcare in India. The taxpayer fertilized a donated egg and the embryo was subsequently implanted in a surrogate in India. The taxpayer claimed $1,400 for travel to India and $400 for meals during his trip. While the Court ruled his medical expensed and travel was eligible for the medical expense credit, it concluded that none of the expenses related to the surrogate mother were eligible. The reasoning for this was based on the definition of “patient” in the Tax Act. Under the rule, medical expenses “on behalf of the patient who requires a(n)… organ transplant” are eligible for the credit. The rule does not apply to surrogacy arrangements because the surrogate who receives the transplant is not the “patient” which is defined for the purposes of the Tax Act as the taxpayer, their spouse or partner and dependents.
The second case involved a taxpayer who claimed $81,000 of medical expenses on his return, $64,000 of which related to compensation paid and medical expenses of the surrogate. After being denied the expenses based on the reasoning above, the taxpayer in this case also tried to argue that gay male couples are being discriminated against by the tax rule. So the question before the Court was whether the fact that the surrogacy expenses are not deductible infringes the anti-discrimination rule in section 15 of the Canadian Charter of Rights and Freedoms. In this case, the Tax Court judge ruled that there was no discrimination “since surrogacy fees are consistently non-deductible for anyone, whether heterosexual couples, female gay couples or male gay couples…The burden imposed by the law on male gay couples is no greater than that imposed on anyone else”.