Snowbirds may soon be allowed 8 months in U.S., but could risk provincial health benefits
U.S. lawmakers ponder law to allow Canadians to stay longer without paying U.S. income tax
There is one group of foreigners who are being embraced by American lawmakers with open arms: Canadian snowbirds.
Despite heightened tensions around the U.S. border, a bipartisan bill currently before Congress would allow Canadians — and Canadians only — over the age of 55 to stay south of the border for up to eight months of the year, provided they own a home or have signed a rental agreement for the duration of their stay.
The legislation, if passed, would exempt these Canadian residents from filing U.S. taxes despite the longer stay, as they would still be considered "nonresident aliens" by the Internal Revenue Service.
Current limit is 182 days
Currently, if a snowbird spends more than 182 days in the U.S. they are considered a resident and are subject to U.S. taxes on their worldwide income. Even worse, prolonged, unauthorized stays beyond six months could result in an outright travel ban for up to 10 years.
However, while the U.S. could be prepared to allow older Canucks to stay longer — and in turn spend more of their money while vacationing in Arizona, California, Florida or the like — some provinces still have restrictions on how long a person can be out of the province and retain their health insurance, a key consideration for any senior.
Many snowbirds aren't aware they risk losing their provincial coverage if they spend long periods of time outside the country, and it can take months to have coverage restored when they return.
There is a patchwork of policies throughout Canada as residents of some provinces have much less freedom to travel than some of their fellow residents.
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As a result of concerted lobbying efforts by the Canadian Snowbirds Association over the last five years, British Columbia, Manitoba, Alberta, New Brunswick, Nova Scotia, Northwest Territories and Saskatchewan have all amended their policies to allow residents to be temporarily absent for up to seven months, while still retaining their health coverage.
Ontarians, too, can keep their health benefits and be out of the province for up to 212 days (roughly seven months) in any 12-month period while Nunavut and the Yukon are comparatively lax and have no residency requirements. Newfoundland and Labrador requires its residents live in the province for just four months of the year, while in Quebec and P.E.I. a person has to be present for six months plus one day to maintain their coverage.
Evan Rachkovsky, the director of research and communications at the Canadian Snowbirds Association, said his organization will push provinces to harmonize their residency requirements should the U.S. bill pass.
Consistency urged on health benefits
"We would like to see consistency across the board and we would like to see every province get to that threshold [of eight months] to allow Canadians greater flexibility when travelling to the U.S., and elsewhere abroad," Rachkovsky said.
Rachkovsky doesn't foresee opposition from the provinces, because the health expenditures of snowbirds in the U.S. are largely covered by private travel health insurance. Insurers pick up the tab, while the hit to provincial health coffers is relatively low.
The Canada Health Act calls for portability, including for emergency health services provided outside of Canada, but P.E.I. and the three territories are the only jurisdictions that reimburse residents for out-of-country emergency services at provincial rates.
"For snowbirds, the health coverage they get is actually a scaled-down version of the coverage they would get in Canada," he said, noting Ontario will only reimburse a maximum of $400 per day for a hospital stay in the U.S., while the average rate is many times that amount.
U.S. motivated by jobs, snowbird spending
The motivations are largely economic for the congressmen backing the bill — officially titled "Promoting Tourism to Enhance our Economy Act" — and they have framed the loosened visitor restrictions as a no-brainer because of the expected financial windfalls for Sun Belt states.
"Increased tourism from Canada will spur job growth in towns across the United States," Democratic Congressman Albio Sires said after introducing the bill last month. "Allowing our neighbours to spend more time to enjoy what our country has to offer will help small businesses and expand the economy."
"This contributes a great deal to the economy in Florida," Republican Congressman Ted Yoho, who represents northern stretches of the Sunshine State, added. "Canada is one of America's closest allies and her citizens contribute millions of dollars to the U.S. economy. This bill will provide an incentive for additional tourism from Canada in the future and will strengthen the bond between our two nations."
Rachkovsky said if, and when, the bill reaches the floor of the House of Representatives he doesn't expect any opposition from either party.
According to a report drafted by the Canadian Consulate in Miami, Canadians purchase a sizable amount — six per cent — of all homes sold in Florida and inject nearly half a billion dollars annually into the economy through property taxes.
Canadians own some 500,000 properties in Florida alone, while 700,000 of them spend at least 31 days at a time in that state every year.
As reported by the National Post, a separate and similarly worded bill, introduced by Republican Congresswoman Elise Stefanik last fall, calls for the creation of a snowbird visa, to "support many small businesses, grow jobs, and foster an even closer relationship," with Canada, she said. (Stefanik's bill has a lower age requirement of just 50 and older.)
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