New Federal Budget Has Canadians Paying Less For Naturopath & Acupuncture

ID-100143969Canada’s 2014 federal budget was just recently released and naturopaths and acupuncturists have a special provision that is going to make their services less expensive. One of the changes in the 2014 Canada federal budget was to make services provided by naturopaths and acupuncturists GST or HST exempt.

This is great news since most Canadians are used to paying out of pocket for these services, as they are not covered under our national health care system. This includes acupuncturists as well – both naturopaths and acupuncturists were not previously recognized as medical services under the GST/HST rules by the federal government.

Less Money, More Consumer Confidence

Although many patients tend to have some level of insurance coverage that extends to naturopath and acupuncture services, there are also many that do not receive these type of benefits from their employers and pay for these services entirely out of pocket. Most importantly, this provides clients of these services the piece of mind that the federal government now recognizes these services among other medical professionals such as dentists, physicians, nurses, midwives and optometrists.

Patients in provinces that use HST are now saving a whopping 13% on every visit, providing a great boost to the industry. Paying taxes for medical services did not create a strong sense of consumer confidence with naturopath and acupuncture patients as it drew a distinct line between traditional physicians and so-called “alternative practices”.

It is great to see the federal government recognizing naturopaths as primary health care providers after years of Canadians independently adopting the methods for their own care.

Every Province Is Different

It’s possible that your province already covered one or both of these services under your provincial medical services plan. If so, they would already have been exempt from GST/HST and therefore this change in the GST/HST legislation will not effectively result in any change for that particular profession.

Every province is different and this was one of the reasons why the federal government decided to make this change; to maintain consistency with GST/HST treatment across Canada.

GST Claims

If you are a naturopath or an acupuncturist, anything related to the services that you are providing, such as paying GST on rent or office equipment, can still be used to offset against any GST/HST you’ve collected throughout the year. The big change here is that your services are now exempt from GST/HST but any products you sell (bottles of pills or various packaged goods) will still be subject to GST or HST. This limits your ability to claim input tax on just the products that you sell, not the services you provide.

Basically, your accounting tracking system is going to be completely different. You’ll specifically need to have your POS system changed to address the difference in tax when collecting payment from your clients. At this point, you should have done this already.

2014 Federal Budget Report

BDO released a report on the 2014 Canadian Federal Budget. Read it here now. The changes put in place that include those described in this article became effective as of February 12, 2014 – the day after budget day.

Questions?

Are you a naturopath or an acupuncturist with questions about transitioning to the new rules? Give us a call at 250-763-6700 or email me directly at PTattersall@bdo.ca.
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2 Responses to New Federal Budget Has Canadians Paying Less For Naturopath & Acupuncture

  • Jan says:

    The Federal Budget has not yet passed and therefore is not law in Canada. Budgets are not law until passed in legislature. This has not been done yet.
    Acupuncturists and Naturopaths still must charged GST/HST

    • Ken Davidson says:

      It is true that the particular change is not yet law BUT when it is passed into law it will be effective from Feb. 12, 2014 forward, and since the Conservatives have a majority government there isn’t much doubt that this will happen. Practically, acupuncturists/naturopaths can conduct themselves as if this provision is already in effect.

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