Employers Required to Report Private Dental Care Coverage on Tax Slips Starting 2023: CRA

The Canada Revenue Agency building is seen in Ottawa on April 6, 2020. The Canadian Press/Adrian Wyld

Employers offering private dental insurance must report the coverage on their 2023 tax slips, according to a tax notice issued by the Canada Revenue Agency on Nov. 16.

The notice, which follows the mandate of the federal Dental Care Measures Act, requires all employers who provide private dental care insurance, or dental service coverage of any kind, to report the benefits on T4 slips effective Dec. 31.

“This reporting requirement is mandatory beginning with the 2023 tax year, and will continue to be required on an annual basis,” said the notice, as first covered by Blacklock’s Reporter.

“Failing to report this information may result in financial penalties.”

The measure is being taken to track whether companies are dropping private coverage with the introduction of a public dental care program. Its notice said information related to “a payee or any of their family members” with regard to their eligibility to access dental benefits must be reported—be it from their current or previous employment.

The national dental care program was one of the conditions NDP Leader Jagmeet Singh and Prime Minister Justin Trudeau agreed on after the Liberals and NDP entered into a supply-and-confidence agreement in March 2022.

The Liberal government had said it would roll out an interim measure by the end of 2023 and planned to fully implement the Canadian Dental Care Plan (CDCP) by 2025.

Current grants, under the interim Canada Dental Benefit (CDB), pay up to $650 a year for two years tax-free for each child under 12 in households earning less than $70,000 a year. Families with income from $70,000 to $90,000 would qualify for reduced grants.

‘Potential Concern’

In October 2022, the Canadian Dental Hygienists Association (CDHA) testified that offloading of private plans by employers was a concern.

“In terms of the fear for employers to drop their plan, it is a real fear, but I think you either incentivize employers to maintain their dental benefits or you disincentivize them through large government fines and penalties if they take them away,” Ondina Love, CEO of the CDHA, told the Standing Senate Committee on National Finance.

Lynn Tomkins, then-president of the Canadian Dental Association (CDA), estimated that two-thirds of Canadians are covered through workplace insurance.

“That is something we wouldn’t want to see disrupted by any program that’s brought in,” Dr. Tomkins told the committee. “If employers were to start dropping their plans because there is some new federal plan, that is a potential concern.”

Health Canada said it was looking at ways to ensure employers who currently provide coverage continue to do so. The department was asked whether the feds had any means to monitor and prevent the practice of “clawing back” when it testified before the Standing Senate Committee on Social Affairs, Science and Technology on May 17 this year.

Lindy VanAmburg, director general responsible for the Dental Care Task Force within Health Canada’s Strategic Policy Branch, told the committee that there is “no current way to reliably determine who does and does not have employer-offered coverage.”

She noted at the time that T4 slips could possibly be a means to monitor private dental plans.

“The levers that exist in provinces—we’ve seen them used in Quebec, and in other places, where they can legislate and regulate the coverage that employers need to provide. That includes provincial and territorial jurisdiction,” Ms. VanAmburg said.

“So those levers won’t be available for a federally delivered plan, but it is something that we are concerned about, and looking at carefully as we finalize the design of the plan.”

Peter Wilson contributed to the report.