Opposition critics are calling on Canada to follow the lead of countries like the United States and Australia by making work-related purchases of COVID-19 personal protective equipment (PPE) tax-deductible.
Conservative revenue critic Philip Lawrence said making PPE tax-deductible would relieve the financial pressure on low-income workers who have to protect themselves on the job.
“I think a lot of the people who are working but perhaps being paid minimum wage, who are just trying to scrape by … they are putting themselves in harm’s way by being those front line workers out there. We should be doing everything we can to make sure they are safe,” said Lawrence.
“Full deductibility of PPE is something we need to study and see if it will help Canadians by making sure that they’re safe by making PPE a little less expensive.”
Lawrence said he wants a parliamentary committee to study the idea and called on the government to provide an estimate of how much the policy would cost.
NDP revenue critic Matthew Green said he’d also like to see the federal government consider reimbursing personal purchases of masks and other protective equipment for work.
“I absolutely think that in order to best support our public health mandates on mandatory masking, that at the very least, these should be tax deductible through the CRA (Canada Revenue Agency),” he said. “In the United States, they even have programs for reimbursements.”
He suggested the federal government should itself be distributing PPE to front line workers with lower incomes.
“I think in an ideal world, our government would play a role in not just the recouping of expenses but also the distribution of critical PPE to citizens — particularly ones who are on fixed incomes and can’t afford an undue burden of having to pay for new masks,” he said.
Cash-strapped workers may be reusing masks: Green
Green said he worries that some people may be tempted to reuse disposable masks to save money, while running the risk that they might be contaminated.
Unions like the United Food and Commercial Workers Union and Unite Here say they have been pushing with some success to get employers to foot the bill for the PPE their employees have to wear at work.
Many workers say they’ve had to buy their own face masks and hand sanitizer for work use — especially in the early days of the pandemic, when many stores and shopping malls were taken by surprise by COVID-19 and mandatory mask orders.
“We didn’t have masks at the store yet so it was really up to the employees to make sure that we had the protection,” said Ottawa retail worker Madina Kerimkulova. She estimates she’s spent around $70 over the past year on masks and hand sanitizer.
Rules on declaring the cost of PPE for work can vary considerably from one country to the next.
Strict limits on PPE deductions in Canada
The Canada Revenue Agency says the cost of PPE can be a tax deductible medical expense for individuals — but only if they have a doctor’s prescription and a specific health condition, such as a “severe chronic respiratory ailment” or “a severe chronic immune system disregulation.”
Most over-the-counter products, such as masks, face shields and hand sanitizer, don’t qualify as tax deductions. The Finance Department says it has tried to make PPE more affordable by exempting it from federal sales tax.
In the United Kingdom, the government initially made PPE exempt from its VAT sales tax; that exemption expired on Oct. 31.
PPE is a tax-deductible expense in the U.K. for both employers and self-employed individuals. In cases where PPE is required for an employee to do their job, U.K. health and safety law obliges an employer to provide PPE for free, or to reimburse employees for the cost of buying it.
In the United States, a recent Internal Revenue Service (IRS) bulletin said that purchases of personal protective equipment “such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of the Coronovirus Disease 2019,” count as deductible medical expenses as long as the taxpayer wasn’t reimbursed through a health insurance plan.
The IRS does not require that PPE be purchased for work in order for it to qualify as tax-deductible.
That’s not the case in Australia, where the cost of things like face masks is deductible only for those who need PPE for work. In order to qualify under Australia’s rules, those claiming deductions for masks must be required by the terms of their employment to be at their place of work and to wear a mask while at work. Australians also can’t claim deductions for masks if their employers provide them free of charge.
Only Australians whose work brings them into close contact with customers, or involves cleaning the premises, can claim for other PPE items such as gloves, sanitizer or anti-bacterial spray.
In New Zealand, where there are few income tax deductions for salaried workers, the cost of PPE isn’t deductible for individuals but is for businesses.
Aaron Wudrick, federal director of the Canadian Taxpayers Federation, said his group supports reducing the tax burden but believes there are easier ways to do it.
“With respect to making it tax-deductible right now, we’re not huge fans of making new, boutique tax measures,” said Wudrick. “If there are ways to more broadly apply existing credits — like, say, having the CRA say that masks count as ‘medical expenses’ eligible to be deducted — then OK.”