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Should therapy be tax-exempt? New campaign calls out 'bureaucratic semantics'

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A new campaign is aiming to finally clear away a financial barrier to therapy — a tax on counselling therapists and psychotherapists’ services, which experts say is unfair.

While other mental health professionals can offer their patients an exemption from the Goods and Services Tax/Harmonized Sales Tax (GST/HST), counselling therapists and psychotherapists currently aren’t able to, something the Canadian Counselling and Psychotherapy Association has been lobbying for years to change.

Now, a new campaign they’ve launched this month aims to finally close that gap.

“Counselling therapists and psychotherapists across the country have shared that adding GST or HST to psychotherapy services has limited access,†Lindsey Thomson, director of public affairs for the Canadian Counselling and Psychotherapy Association, said at a press conference last week to launch the new campaign, Tax Free Therapy.

“This unfair tax should not be a barrier to affording mental health care.â€

The campaign’s explains that counselling therapists and psychotherapists are the only mental health professionals required to charge GST/HST, and prompts Canadians to sign a parliamentary petition and send a letter to their MP along with Finance Minister Chrystia Freeland.

Thomson, who is herself a registered psychotherapist who has been working with clients over the past six years, said the need for these services is huge.

“Prior to the COVID-19 pandemic, psychotherapy was already the most requested, but the least met, health-care need of Canadians,†she said.

The unequal taxing of these services “has to change,†in order to help meet the need of Canadians, she said.

“Social workers, psychologists and occupational therapists have already been exempt from charging this tax for providing the same psychotherapy service,†she added.

‘BUREAUCRATIC SEMANTICS’ BARRING MENTAL HEALTH ACCESS

If other mental health professionals such as social workers and psychologists can offer their services without having to charge GST/HST, why aren’t the services of psychotherapists/counselling therapists treated the same?

It comes down to a simple confusion over what the titles of counselling therapists/psychotherapists mean, the petition explains.

A profession is eligible to be GST/HST exempt nationally if it is regulated as a health profession “by at least five provinces or territories,†the petition states.

Counselling therapy/psychotherapy meets this criteria, with Nova Scotia, Quebec, Ontario, New Brunswick and Prince Edward Island all including a therapy profession that is regulated as health care.

However, the name of the profession ranges from province to province, with Quebec and Ontario both referring to psychotherapists and Nova Scotia, New Brunswick and Prince Edward Island specifying counselling therapists as the job.

“A tax exemption was refused because the provinces regulated the profession under different titles,†the petition states.

But there is functionally no difference between these jobs, experts say — counselling therapist and psychotherapist are essentially two words for the same thing, and the title is merely a matter of regional preference.

“Counselling therapy and psychotherapy are the same profession as demonstrated by a shared scope of practice, comparable qualification requirements, aligned codes of ethics, and recognition under the Canada Free Trade Agreement,†the petition clarifies.

“This is a bureaucratic game of semantics that is causing barriers to further accessing services during a time of extreme need for Canadians,†Thomson added.

The Canadian Revenue Agency’s website confirms that psychotherapists have to charge their patients GST/HST, while other health-care practitioners who are already eligible for tax exemption do not have to charge that tax for psychotherapy services.

“Currently, there is no provision in the (Excise Tax Act) that specifically exempts from the GST/HST supplies of psychotherapy services or services rendered by a psychotherapist, even if the psychotherapist is licensed and renders the service in a province that regulates the profession of psychotherapy,†the website states. “Therefore, a psychotherapist is required to collect GST/HST on his or her supplies of services, if he or she is a GST/HST registrant.â€

Although the GST/HST amount may be small for a single visit, the added monetary burden of having to pay taxes for every therapy visit can make accessing this help daunting for some Canadians.

According to the Tax Free Therapy campaign’s website, one in four Canadians aged 18 or older showed symptoms of depression, anxiety or post-traumatic stress disorder in spring of 2021, and 5.3 million Canadians said they needed help for their mental health in 2017.

“Of these, 2.3 (million) reported that their needs were only partially met or actually fully unmet,†Thomson said. “In the wake of the pandemic, it’s widely known that many Canadians have struggled with their mental health, whether its the isolation of lockdowns or quarantine, losing a job, not having adequate child care, or the loss of a loved one, (so) the estimated number of 5.3 million has surely skyrocketed.â€

In December 2021, a bill was tabled to amend the Excise Tax Act and make psychotherapy services tax free — Bill C-218 — but a budgetary bill also must be tabled to make the change, something noted in the petition.

The goal of the petition and the campaign as a whole is to force Parliament to respond and get the bill passed. Since the launch, the petition has garnered more than 6,000 signatures, with more than 600 letters sent to MPs, according to a press release.

Making psychotherapist/counselling therapists services exempt from GST/HST would cost around $3 million in 2022-23 in terms of the reduction in GST revenue, and around $76 million over the next five years, according to an official estimation of Bill C-218 by the Office of the Parliamentary Budget Officer.

However, this is pennies compared to the overall GST/HST revenue yearly, which was $37.4 billion in 2019-20, according to data from Statistics Canada.

And the toll that mental illness has on Canadians is an economic one as well. The Mental Health Commission of Canada estimates that the economic cost of those living with untreated mental health struggles is more than $50 billion annually.

Experts say that increasing access to mental health services by eliminating this tax will result in saving far more money than would be taken out of the GST revenue.

And considering the pandemic’s measurable impact on the mental health of Canadians, this is something that matters now more than ever, Thomson says.

“The government can demonstrate its commitment to supporting the mental health of Canadians by eliminating the tax on counselling therapy services.†

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