Principal Issues: How are the kilometre rates determined that are used to calculate vehicle expenses for purposes of medical travel for the medical expense tax credit?
Position: The Canada Revenue Agency uses the rates established by the National Joint Council (NJC) of the Public Service of Canada.
Reasons: The CRA has accepted that the rates set by NJC are determined in a fair and reasonable manner.
December 5, 2014
XXXXXXXXXX
Dear Colleague:
The Honourable Joe Oliver, Minister of Finance, sent me a copy of correspondence that your office wrote on behalf of your constituent, XXXXXXXXXX, about the kilometric rates the Canada Revenue Agency (CRA) uses to calculate vehicle expenses for purposes of medical travel for the medical expense tax credit.
The CRA uses these kilometric rates according to the Treasury Board of Canada Secretariat guidelines. The guidelines are based on the annual kilometric rates set by the National Joint Council (NJC) of the Public Service of Canada. The CRA has always accepted the NJC rates as fair and reasonable. The NJC determines the rates by analyzing new vehicle prices, depreciation and financing rates, current fuel prices, insurance premium rates, and operating costs in each province or territory. When these costs increase or decrease, the kilometric rates change accordingly.
You can find more information about the method the NJC uses to determine kilometric rates at www.njc-cnm.gc.ca/doc.php?did=117&lang=eng#tc-tm_4_1. This webpage includes a link to the kilometric rates for each Canadian province and territory.
I trust the information I have provided will help you respond to your constituent.
Yours sincerely,
Kerry-Lynne D. Findlay P.C. Q.C. M.P.
Minister of National Revenue
Nancy Shea-Farrow
(905) 721-5099
2014-055580