Summary#

This bill changes the federal Excise Tax Act to stop charging GST/HST on psychotherapy and mental health counselling services. It adds these services to the list of health services that are tax‑exempt and updates who counts as a “practitioner” (licensed professional) for this purpose. The change would start six months after royal assent (Coming into Force).

• Removes GST/HST from psychotherapy and mental health counselling services when provided by licensed practitioners (Part II of Schedule V, s. 7(j.1)-(j.2); practitioner definition).
• Extends the same tax treatment already given to psychological services to these two service types (Bill, Section 1; Schedule V).
• Applies across Canada, including in HST provinces, because HST uses the federal GST base (Excise Tax Act framework).
• Takes effect six months after the bill becomes law (Coming into Force).

What it means for you#

• Households

  • If you pay out of pocket for psychotherapy or mental health counselling, the GST/HST line on your bill would be removed. Your savings equal the current GST or HST rate in your province (Bill, Part II of Schedule V, s. 7(j.1)-(j.2)).
  • The exemption applies only when the service is provided by a recognized practitioner under the Act (licensed or certified, per the updated “practitioner” definition) (Bill, Section 1).
  • Start date: six months after royal assent. Until then, current tax rules continue (Coming into Force).

• Patients with insurance benefits

  • If your plan reimburses or pays providers directly, eligible claims would no longer include GST/HST on these services once in force. Your plan’s out‑of‑pocket share would reflect that change (Bill, Part II of Schedule V).

• Providers (psychotherapists, mental health counsellors)

  • You would stop charging and collecting GST/HST on qualifying services once the change takes effect (Part II of Schedule V).
  • As with other exempt health services, you generally cannot claim GST/HST back on related business purchases (called input tax credits) for exempt supplies under existing GST/HST rules (Excise Tax Act, Schedule V framework).
  • You may need to update invoicing, point‑of‑sale systems, and engagement letters to reflect exempt status as of the in‑force date.

• Other health professionals

  • Psychological services are already exempt; this bill adds psychotherapy and mental health counselling to the same list, reducing boundary issues when patients see different types of mental health providers (Bill, Section 1; Part II of Schedule V).

• Governments

  • No change to provincial standalone sales taxes; the bill only amends the federal GST/HST law (Excise Tax Act scope).

Expenses#

• Estimated net cost: Data unavailable.

• Key points

  • No official fiscal note was provided with the bill text. Data unavailable.
  • By creating a GST/HST exemption, the bill would reduce federal GST revenue and the HST revenue shared with participating provinces. The size depends on the volume and price of eligible services. Data unavailable.
  • No appropriations or new spending authorities are included; the impact is forgone tax revenue only (Bill text).

Proponents' View#

• Lowers out‑of‑pocket costs for people seeking care by removing GST/HST from psychotherapy and mental health counselling (Part II of Schedule V, s. 7(j.1)-(j.2)).
• Aligns tax treatment with other regulated health services, including psychological services already listed as exempt, improving consistency across mental health care (Bill, Section 1; Schedule V).
• Could reduce a financial barrier at the point of care for those without public or private coverage (Preamble; Schedule V amendment).
• Administrative simplicity for patients and providers: no tax to calculate or remit on these services, matching existing practice for other exempt health services (Schedule V framework).
• Six‑month implementation window gives CRA and providers time to update systems and guidance (Coming into Force).

Opponents' View#

• Reduces federal and HST‑sharing provincial tax revenues; no official estimate is provided, creating budget uncertainty (Expenses: Data unavailable).
• Variation in provincial regulation of “psychotherapy” and “mental health counselling” could cause uneven application and compliance disputes about who is a qualifying practitioner (Bill, Section 1; practitioner definition relies on licensure/certification).
• As an exempt supply, providers generally cannot claim input tax credits on related business inputs, which may raise their unrecoverable costs and could be passed through in prices (Excise Tax Act, Schedule V rules on exempt supplies).
• Boundary and enforcement risks: mixed services (e.g., coaching vs counselling) may require classification, adding audit and documentation burdens for providers and CRA (Part II of Schedule V).
• The tax change alone may not improve access if provider availability and wait times remain the main constraints (Preamble notes access issues but does not add supply‑side measures).