Canadians shouldn't have to pay taxes on therapy
In the wake of a national mental health crisis, the federal government must rethink taxes on counselling and psychotherapy services
Our country is undeniably battling a brutal mental health crisis, with particularly pronounced effects on young people and low-income households. Mounting evidence indicates that the crisis is only worsening as inflation raises the cost of living.
However, the government’s efforts to support individuals during this period are falling short.
In Canada, counselling and psychotherapy is the most requested yet least met need for those seeking mental health support. On top of that, therapy is the only mental health service that is taxed. Besides counselling therapists and psychotherapists, all other mental health care providers, including social workers and psychologists, are currently exempt from charging clients harmonized sales or goods and services tax.
So, why are therapists required to collect taxes? Well, it simply boils down to nomenclature.
Any regulated health care professional is exempt from the federal tax. In order to meet this criterion, at least five provinces must recognize the profession as a health profession. While this is the case with counselling therapists and psychotherapists, this profession operates under different names from province to province. Due to the variable designations among provinces, a tax exemption for therapists was denied by the federal government — even though counselling therapists and psychotherapists serve the same purpose.
Since psychotherapy is considered an allied health profession, it is also outside the bounds of provincial and territorial health insurance plans. In other words, these public health insurance plans do not typically cover the costs associated with visiting a therapist. The lack of coverage, however, forces more individuals to opt for visiting a psychiatrist for support, increasing wait times, limiting accessibility, and leading to untreated illness — all while therapists are ready and well-equipped to support these individuals.
Beyond hurting people in need of support, the unnecessary requirement for HST/GST billing among therapists is also costing the economy.
According to the Mental Health Commission of Canada, untreated mental illness among Canadians costs the economy an estimated $50 billion annually compared to the $37.4 billion in revenue generated by HST/GST in 2019-20.
Clearly, the taxes on counselling therapy and psychotherapy are benefiting no one. In recognition of this, Bill C-323 was introduced by MP Stephen Ellis, from the riding of Cumberland-Colchester, Nova Scotia, to abolish the taxes on therapy.
Bill C-323, also known as an Act to Amend the Excise Tax Act (Mental Health Services), completed its second reading in the House of Commons on Sept. 27 – six months after its first reading in March. While mental health and well-being is outlined as a priority in the federal statement on shared health priorities, these priorities aren’t being reflected in practice. The Canadian Mental Health Association also released a statement on the 2023 federal budget for mental health, reporting concerns on the lack of investment being made in the health and well-being of Canadians.
If you or someone you know is in need of mental health support, please know that there are ways to get help. McMaster University’s Student Wellness Centre and the Canadian Mental Health Association offer a variety of resources, services and information that may help you begin prioritizing your mental health and well-being.
If you are in need of more urgent services, the McMaster Students Union Student Assistance Program provides all McMaster students with access to 24/7 multilingual mental health support from professional counsellors at no cost. To get help immediately, please call or text 1-888-377-0002.