travel insurance prices canada

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Compare cheap  travel insurance quotes in Canada. 

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Your travel insurance questions, answered.

Why do i need travel insurance.

We know international travel is fun and exciting, but it can also be unpredictable. Sometimes you're operating in a different culture, in a different language, and with a different medical system. Whether it's damaged luggage or a serious health emergency, travel insurance can help keep you safe if things go wrong while you're away from home.

Travel insurance is likely the last thing on your mind while you're mapping out your getaway, but medical emergencies and logistical snafus can happen anywhere. So it's a good idea to buy a policy that covers you. We'll help you compare offers from Canada's leading travel insurance providers and bring you the cheapest travel insurance possible – just like that.

Why compare with LowestRates.ca?

We bring you the best rates from the top travel insurance providers. Simply provide a few quick details about you and your trip, then click 'Compare' to see the best travel insurance quotes available – just like that.

I’ve already left for my vacation. Can I still purchase travel insurance coverage?

The short answer is probably not. Most insurers will not allow you to purchase coverage for your vacation while you're on said vacation.

But who decides when a vacation officially begins, anyway? There’s no universal standard, so it may be worth a quick call to your insurance provider to clarify.

If you’re travelling by plane, for instance, some insurers might say your vacation begins once you’ve gone through customs. For others, it might begin as soon as you check-in at the airport.

Most companies will let you purchase insurance up until the day before your departure — you may even be able to purchase it on the day of (in your Uber, on the way to the terminal).

If you’ve already left your home province, a smattering of insurers offer after-departure insurance. But this kind of policy typically comes with a hefty list of conditions and it can be pricey.

Generally speaking, don’t leave insurance-buying until the last minute. But if you do, call your insurer and see what they can offer you.

Do I need travel insurance to travel between provinces in Canada?

Yes, you need travel insurance for trips within Canada . Why? Because while you are covered under your home province’s health care plan when you travel out of province, your coverage will be limited. Every provincial health care system is different and the cost of medical procedures varies by province. That means if you require health care while travelling within Canada, your existing coverage will only pay the equivalent of what that medical service would cost in your home province. For example, an Ontarian who requires emergency surgery in British Columbia will only be covered for what that surgery costs in Ontario — you may be forced to pay thousands of dollars more to make up the difference.

Your provincial plan also does not cover the following services while you’re out-of-province:

• Prescription drugs
• Dental emergencies
• Medical transportation back home
• Emergency air or ground transportation

While some provinces have billing agreements, not all of them do. That’s why it’s important to stay covered even inside Canada. Travel insurance is an affordable alternative to the costs you could incur if you experience a medical emergency.

If I have personal property stolen while I'm travelling, will my travel insurance policy cover it?

The simple answer is yes: your property is covered by your insurance policy, but only up to a certain dollar amount. Even within the same policy, coverage can vary depending on the item. For example, the amount of coverage that a policy extends to electronics might be different than the coverage you’ll get for sports equipment

Keep in mind that there are often specific items that insurance companies won’t cover. Make sure to check what these items are with your insurance provider.

If you didn’t get travel insurance and your items are stolen, it becomes more challenging, but not impossible, to get reimbursed. If your belongings were stolen at a hotel, and it can be proven that the hotel was at fault, the establishment will compensate you up to a certain amount. If items are missing from your checked-in luggage after a flight, most airlines will allow you to file a claim with them.

What types of travel insurance are available?

All inclusive travel insurance.

A comprehensive policy that offers emergency medical coverage plus insurance against logistical problems, like lost or stolen baggage, trip cancellations, and travel interruptions. Since all inclusive insurance has the most extensive coverage, premiums tend to be higher than for other travel policies.

Trip cancellation and interruption insurance

This insurance reimburses you for your flight and travel expenses if you have to cancel your trip for a covered reason. Some policies also pay benefits for food and lodging costs if your trip is interrupted or delayed. Those policies may even cover you if your tour operator suddenly files for bankruptcy.

Single trip insurance

Emergency medical coverage for one trip, which you can take any time within a 365-day period.

Multi-trip insurance

Emergency medical coverage for any number of trips taken within 1 year. Also known as annual travel insurance.

Top-up insurance

Purchased by travellers who already have insurance for a portion, but not for the entire duration, of their trip. Top-up insurance takes effect after the original coverage lapses.

After-departure insurance

Few insurance companies offer insurance that covers you when you’ve already left for vacation. Why? It raises a lot of red flags for risk-averse insurers whose priority is to guard against fraudulent claims — medical costs in foreign countries can be expensive. For your application to be accepted, you must not have seen a doctor since departing, you must not be showing symptoms of illness, and you must be covered under a provincial health insurance plan.

For all Travel Insurance quotes you will be directed to RATESDOTCA where you will be able to compare quotes from top insurance companies.

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HelloSafe » Travel Insurance

Best travel insurance in Canada for 2024

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Travel, whether for leisure, business, or work, has become integral to our modern lives. While it opens doors to diverse experiences, travel insurance is crucial in providing peace of mind against unforeseen expenses like medical emergencies and trip disruptions, particularly during unpredictable events.

But choosing the right travel insurance can be a challenge and demands careful consideration of factors like coverage, individual needs, exceptions, and more. We've got you covered.

In this guide, we take you through everything from coverage types and costs to the best plans and how to find cheap travel insurance. You can use our comparator at the top of this page to compare plans, get free quotes , and find a policy that truly fits your needs.

Top 10 travel insurance Canada plans

• soNomad travel insurance: Straightforward and affordable
• Allianz travel insurance: Affordable Plans Starting At $27
• Tugo travel insurance: Tailored solutions
• Destination travel insurance: Specialized coverage
• Manulife travel insurance: Flexible policies
• Blue Cross Travel Insurance Canada: Flexible plans for every need
• CAA travel insurance: Best for CAA members
• RBC travel insurance: Coverage from a reputed bank
• TD travel insurance: High coverage limits
• BCAA travel insurance: Budget-friendly options

Before we explore the best plans in the market, let's look at the basics of this coverage first.

What is travel insurance?

Travel insurance is a policy that protects your investment in a trip. It reimburses for financial losses of a canceled or interrupted trip, as well as emergency medical care during travel, emergency evacuation, damage to a rental car, lost luggage, and more. The medical care component is critical in a country like Canada. Out-of-province care costs more and offers less than in patients' home province.

It takes different forms. You can purchase it as an individual policy or as an add-on to a travel purchase like a flight. It may even be included as a credit card benefit when you use yours to make a travel purchase.

What is international travel insurance?

International travel insurance is a subset of travel insurance, specifically tailored for trips abroad, while the latter can cover domestic and international trips. The key difference is that international coverage is designed to address the unique challenges and risks associated with international journeys, such as medical emergencies, visa issues, and currency exchange, in addition to covering the same aspects as standard travel coverage, like trip cancellations and lost baggage.

How does travel insurance work?

Here's how it typically works:

• Purchase a Policy: Before your trip, you buy a policy, specifying the coverage, trip duration, and other relevant details.
• Traveling: During your trip, if you encounter covered events like medical emergencies, trip cancellations, lost baggage, or other unexpected issues, you can contact your insurance provider or its 24/7 assistance line.
• Claim Submission: Submit a claim with the required documentation, such as medical bills or receipts for lost items, to your insurer for reimbursement.
• Reimbursement: If your claim is approved, the insurance provider reimburses you for eligible expenses, helping you manage unexpected costs and disruptions during your travels.

What does travel insurance cover?

What is covered depends on the insurer and the level of coverage you choose. It commonly covers emergency medical care, trip cancellation, trip interruption, and lost or damaged baggage.

Travel insurance is customized based on the needs of your specific trip. A basic plan covering just flight cancellation may be fine if you already have supplemental individual medical coverage and are traveling within Canada. On the other hand, if you are planning a ski trip to the French Alps, a comprehensive plan with emergency medical care and evacuation back home could help set your mind at ease if you experience a bad fall on the slopes.

Manulife’s CoverMe is one of the most popular providers in Canada, and here is what their Single Trip All-inclusive plan offers:

What does it not cover?

Common exclusions typically include:

• Pre-existing Medical Conditions: Coverage may not extend to pre-existing medical conditions without a specific waiver or rider.
• High-Risk Activities: Activities like extreme sports or dangerous hobbies may require additional coverage or be excluded.
• Traveling Against Advisories: Trips to countries under travel advisories or travel restrictions may not be covered, depending on the policy.

What are the different types of travel insurance?

The most common categories are:

• Baggage insurance - Did you make it to that Caribbean island or European capital, but your luggage did not? It does not have to ruin your trip. This insurance will give you some spending money to get essentials due to a delay or replace it in case it is lost.
• Emergency medical insurance - You cannot put a price on your health. This protects you if you get injured or sick while away.
• Trip cancellation - Have an emergency back home before your trip? If you are unable to travel, this coverage will reimburse what you spent on nonrefundable travel.
• Trip interruption - Miss a connection flight? Maybe you need to return home early? That is okay, you are covered. This is similar to trip cancellation insurance but covers you during a trip rather than before it.
• All-inclusive policies - Want to be prepared for anything? These policies include all of the above insurance types.

Finally, consider how much you will be traveling in the year. Single-trip and annual coverage options exist. Annual plans may save you money if you intend to travel two or more times per year.

What is travel medical insurance?

Travel medical insurance provides coverage for medical emergencies during your trip, including doctor's visits, hospitalization, and emergency medical evacuation. It is a subset of travel insurance, which covers a wider range of risks such as trip cancellations, lost baggage, and non-medical aspects of travel. You can often purchase stand-alone medical coverage if you primarily need health-related coverage for your trip.

How much is travel insurance?

A basic plan for a 30-year-old single traveler could be as little as $26 for a week, while a comprehensive plan could cost that same traveler $125.

How much travel insurance costs depends on the length of your trip, the destination, the desired coverage, and your age. We recommend plans that include emergency medical coverage.

How much is travel insurance in Canada?

On average, a basic single-trip policy for a one-week trip may cost around $25 to $50 CAD for an individual, while an annual multi-trip policy can range from $100 to $300 CAD. More comprehensive coverage or longer trips can increase the cost. Seniors and individuals with pre-existing conditions may pay higher premiums.

It's essential to compare quotes from different providers to find a policy that suits your needs and budget. Try our comparison tool below to get free personalized travel insurance quotes for your upcoming trip. Compare rates, explore options, and find the best policy for you in just seconds.

Prepare for your trip Compare. Choose. Save.

What does travel insurance for seniors cover?

Travel insurance for seniors offers increased medical coverage over other plans and coverage for stable pre-existing conditions. It works like any other emergency medical insurance plan but is adapted to the needs of senior travelers.

Leading plans medical travel insurance for seniors Canada plans offer:

You can use our comparator at the top of this page to find the best Canadian travel insurance for seniors based on their unique needs. It only takes a few steps and you have free quotes in seconds.

How much is travel insurance for Canadian seniors?

The cost of travel insurance for Canadian seniors can vary based on factors like age, health, destination, and trip duration. On average, a comprehensive single-trip policy for a senior traveler may range from $50 to $200 or more, while an annual multi-trip plan could cost approximately $300 to $1,000 or higher, depending on coverage limits and individual circumstances. Pre-existing conditions may also alter the coverage you can access.

What is the best travel insurance for visitors to Canada?

Leading Canadian travel insurance companies offer medical travel insurance to visitors. These can be perfect for non-residents in the country on vacation, business, or visiting family. These plans can be a lifeline for people living in Canada who have not yet qualified for public healthcare.

The best travel insurance for visitors to Canada depends on the traveler’s needs. Additionally, plans may be available to them from their home country.

Is it mandatory to have travel insurance to visit Canada?

No, you do not need private travel coverage to visit Canada. It is not mandatory for all visitors to Canada, but it is highly recommended. Canada's public healthcare system does not cover visitors, and some provinces may require health insurance for entry. Having travel coverage provides financial protection and peace of mind for medical emergencies and unexpected events. Policies and requirements can change, so check with Canadian authorities for the latest information.

Good to know

If you are sponsoring a parent or grandparent to visit you in Canada, did you know that you are required to purchase super visa insurance? Learn more and compare the best super visa insurance plan in Canada in our super visa guide .

How to get the cheapest travel insurance Canada plans?

So how to get travel insurance? Most importantly, how to get the most affordable plans? Follow these 5 steps to get the best deals.

• Compare Multiple Quotes: Obtain quotes from various insurance providers to find the best price for your desired coverage.
• Choose Essential Coverage: Select coverage that matches your specific travel needs, avoiding unnecessary add-ons.
• Consider Annual Policies: If you travel frequently, annual policies often offer more value than single-trip coverage.
• Review Deductibles: Higher deductibles can lower your premium, but be prepared to pay more in case of a claim.
• Utilize Membership Discounts: Check if your memberships or affiliations offer discounted coverage options.

While finding the cheapest travel insurance Canada plan or to other regions may seem like a daunting process, we've got you covered. You can simply use our free comparator below to compare plans, and coverage, check on discounts, and get free quotes in no time.

When should I buy travel insurance?

Travel insurance can be purchased anytime between booking and departure, but we recommend buying a plan at the same time that you book your trip.

Booking as soon as possible ensures greater protection. The ideal time to purchase is right after making your initial trip payment, typically within 10-21 days. Buying it early allows you to access coverage for pre-existing medical conditions and other benefits . You can often obtain last-minute insurance up to the day before departure, but some coverages may be limited.

But when is it too late to buy travel insurance? Once you've begun your trip or used any part of it, you generally cannot purchase coverage for trip cancellations or interruptions. However, annual multi-trip policies can be purchased at any time, with coverage beginning from the policy's start date.

What are the best travel insurance plans in 2024?

Please note that the specific coverage, terms, and pricing may vary based on individual circumstances and plan options. It's essential to review the policies in detail and obtain personalized quotes to make an informed decision for your needs. You can do that using our comparator below. Compare multiple plans and get free quotes in no time right here.

Other popular companies include the following :

You can find more on these options by clicking on them:

• AMA travel insurance
• CIBC travel insurance
• Costco travel insurance Canada
• BMO travel insurance (also includes BMO World Elite Mastercard travel insurance)
• Medipac travel insurance
• Medoc travel insurance
• World nomads travel insurance
• Scotiabank travel insurance

What are the FAQs on travel insurance Canada plans?

How does credit card travel insurance work.

Travel coverage is a benefit on many credit cards. It is worth checking what your card includes before purchasing a separate policy. You may already have sufficient coverage.

Credit cards with travel insurance usually only cover expenses purchased on that card. Buy your plane tickets on one card, but the hotel on another? The first company will not reimburse you for a hotel issue. Additionally, terms and exclusions may be more restrictive than a standalone plane. Credit card travel insurance is a wonderful benefit, but weigh whether its coverage is sufficient for you and your trip.

The best travel insurance credit cards have offerings like this:

Does travel insurance cover COVID-19?

Many plans now specifically cover COVID-19 cancellation and medical expenses or offer stand-alone COVID travel insurance. They may reimburse costs incurred from a mandatory quarantine, COVID-19 medical expenses, and trip interruption and cancellation . Some specific COVID plans only cover COVID-19 expenses and do not automatically include coverage for other medical needs.

It is worth verifying details carefully before deciding on a Covid-19 travel insurance policy. Covid-19 coverage and news change frequently, so check with your service providers for the latest information.

There are a few important points to consider:

• Coverage may be explicitly excluded in your policy if the destination countries or regions are under an “avoid non-essential travel” or “avoid all travel” advisory at the time of purchase.
• Your Covid-19 vaccination status may affect your coverage. If you are unvaccinated by choice, your insurer may declare your claims ineligible.

Do I need private health care coverage when traveling outside Canada?

Yes, we always recommend travel medical insurance when traveling abroad. Healthcare prices and standards can be very different while traveling. Some public provincial plans offer some coverage, but it may be insufficient. Your provincial plan covers may only pay what the cost would be back at home, not the actual price at your destination. Even then, you likely have to pay out-of-pocket and request reimbursement later.

In some countries, healthcare facilities may request treatment upfront. They may refuse treatment if you are unable to pay. This alone makes emergency medical insurance extremely valuable.

Do I need travel insurance to USA from Canada?

Getting a private travel protection plan is highly recommended when traveling from Canada to the USA, as it provides essential medical coverage. Medical expenses in the USA can be exorbitant, and without insurance, a simple hospital visit can lead to substantial bills, potentially running into thousands of dollars.

For example, a basic emergency room visit for minor treatment might cost around $1,000 to $2,000 , while more serious medical procedures or surgeries can lead to bills that range from $10,000 to tens of thousands of dollars, or even more for complex surgeries or prolonged hospital stays.

Do I need travel insurance within Canada?

We recommend getting medical travel insurance Canada plans while traveling within the country. Specific plans are available for domestic travelers. While Canadian citizens and residents are guaranteed basic emergency care by the Canada Health Act, this does not include prescription drugs and ambulance services. Your OHIP coverage from Ontario will not cover you for a private hospital, laboratory, or paramedic services while visiting British Columbia.

Additionally, payment for medical services may be required upfront, leaving you responsible for seeking reimbursement from your home province upon your return. Canadian residents traveling within Canada may qualify for a discount on their medical travel insurance.

When traveling outside of your province or territory without adequate coverage, you assume risk. Note that you may already have sufficient coverage if you have a supplemental individual or group private health insurance policy.

Want to protect yourself while traveling in Canada? Compare the best travel insurance medical plans anonymously today using our comparator at the top of this page.

What does travel insurance for snowbirds cover?

Travel medical insurance for snowbirds commonly covers the following medical expenses:

• Medical treatments
• Prescription medications
• Paramedics and ambulance rides
• Repatriation to Canada
• Emergency dental care

Snowbird insurance policies do not usually cover elective treatments. Those should wait until you have returned to Canada.

But who are Snowbirds? Snowbirds are people who travel to warmer climates during the cold Canadian winter. They are usually retirees. Therefore, getting adequate protection for their travels is particularly important for these groups. Many of them go to warm parts of the United States, the country with the world’s highest medical care costs.

Snowbirds may be more at risk for a medical emergency while away due to the length of their trips and underlying health conditions.

To learn more, see our guide to snowbird travel insurance.

How do I buy travel insurance online?

The easiest way to purchase a travel plan is by using an online comparison tool like ours. See rates and coverage options quickly without giving up personal data. Alternatively, you may purchase it through an agent, a broker, your private individual or group health insurer, or a travel credit card.

How much travel insurance do I need?

The amount of coverage you need depends on various factors, including the destination, duration, and activities of your trip. As a general guideline, consider coverage for emergency medical expenses, trip cancellations, and lost baggage.

Aim for a coverage amount that provides financial protection for potential unexpected costs while keeping your budget and specific travel plans in mind. It's essential to balance adequate protection with affordability.

What is the best travel insurance for cancer patients?

The best protection plan for cancer patients depends on individual circumstances, including the stage of cancer and current health. It's advisable to look for insurance providers that specialize in covering pre-existing medical conditions, offer comprehensive coverage, and have experience handling cancer-related claims.

Companies like Allianz and IMG Global among others often provide options for travelers with pre-existing conditions, including cancer*. However, it's essential for cancer patients to compare policies, disclose their medical history accurately, and consider consulting their healthcare providers when selecting the most suitable coverage.

Does travel insurance cover cruises?

Yes, travel coverage plans frequently cover cruises. When shopping for a plan, be sure to verify that yours offers cruise coverage. To give an example, RBC offers two popular examples, their Deluxe and TravelCare (for seniors) packages.

They cover:

• Cruise cancellation or interruption due to mechanical failure or weather
• Catch-up costs for a missed departure due to a canceled flight
• Unused shore excursion tickets (due to illness or injury)
• Last-minute cancellations due to a covered reason
• Lost luggage, passports, and medications
• Eligible emergency medical expenses
• 24-hour worldwide emergency medical and travel assistance
• Repatriation costs

See our guides on travel insurance in Canada:

• Is soNomad insurance best for you? Review 2024
• Is Red Cross Travel Insurance Good in 2024?
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Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.

This message is a response to . Cancel

I have had BCAA travel insurance in the past and nothing has changed regarding my medical needs. Am I able to apply for insurance without having to go through all the questions again?

Hi Marylou, Thank you for reaching out to us. You should be able to renew your policy without having to go through the whole process again. Here is a link to help you with the same. https://www.bcaa.com/Apps/Travel/FullTravelMedical/Renewal Please feel free to reach out to us if you have any further doubts. Thank you!

I am wanting a quote for travel/medical insurance

Hi Patricia, You can use the comparator tool at the top of the page to find the perfect insurance policy for you. You can then contact the company of your choice directly to get a quote.

Have a nice day, The HelloSafe team

If we go to Portugal for one week and France for another, do we buy separate insurance?

Hi Julie, It depends. Some insurances contracts cover any trips in a given period, while others are meant to cover a specific destination. You can use the comparison tool at the top of the page to find the perfect contract for you and ask for a quote.

Hello, how are you? Does travel insuance covering breast biospys overseas?

Hi Nour, Each travel insurance covers different medical services. Please contact the insurer of your choice for more detail about a potential contract.

Does anybody ever answer the phone at caa Ins. Tried several times and waited half hr or more with no response. I am member but find this very irritating.

Hi Brian, We are not related to CAA Insurance and therefore we cannot help you.

Canada Travel Insurance

Travel insurance for canada: a guide for us travelers .

From exploring Banff National Park's breathtaking landscapes to experiencing Toronto's vibrant culture or the historic sites of Quebec City, Canada offers a wide range of popular locations and activities. However, before you dive into your adventure, there's a crucial detail to address: securing your travel insurance. 

Discover all the ins and outs of travel insurance for Canada in this guide.   We've got you covered with details on costs, requirements, essential coverage, COVID-19 restrictions, and some handy tips for your trip. 

What should your Travel insurance cover for a trip to Canada? 

How does travel insurance work for canada, do i need travel insurance for canada , how much does travel insurance cost for canada .

• Travel Insurance Requirements for Canada 

Are there any COVID-19 restrictions for US Visitors? 

Are there any required travel vaccinations for canada , traveling with pre-existing medical conditions , our suggested axa travel protection plan .

At a minimum, your travel insurance to Canada should cover trip cancellation, trip interruption and emergency medical expenses. Regarding international travel, the US Department of State outlines key components that should be included in your travel insurance coverage.   AXA Travel Protection plans are designed with these minimum recommended coverages in mind.    

• Medical Coverage – The top priority is making sure your health is in order. With AXA Travel Protection, you can have access to quality healthcare during your trip overseas in the event of unexpected medical emergencies.    
• Trip Cancellation & Interruptions – Assistance against unexpected trip disruptions can dampen the mood, AXA Travel Protection offers coverage against unforeseen events.   
• Emergency Evacuations and Repatriation – In situations where transportation is dire, AXA Travel Protection offers provisions for emergency evacuation and repatriation.   
• Coverage for Personal Belongings – AXA offers coverage for your belongings with assistance against lost or delayed baggage.   
• Optional Cancel for Any Reason – For added flexibility, AXA offers optional Cancel for Any Reason coverage, allowing you to cancel your trip for non-traditional reasons.  Exclusive to Platinum Plan holders. 

In just a few seconds, you can get a free quote and purchase the best travel insurance for Canada.

Let’s say you’re exploring Ottawa's stunning architecture or skiing down Banff's slopes with AXA Travel Protection. If you were to fall ill or face an unexpected travel hiccup, AXA Travel Protection steps in to help support you. Whether assisting in medical transportation or finding the best alternative for a trip delay, AXA Travel Protection ensures you’re supported in your time of need.  

How AXA Travel Protection Can Benefit Visitors to Canada 

Here’s the entire list of benefits travelers can have access to with an AXA Travel Protection Plan: 

Medical Benefits: 

• Emergency Medical Expenses: Should you fall ill or have an accident during your trip, your policy may offer coverage for medical expenses, including hospital stays and doctor's fees. 
• Emergency Evacuation & Repatriation: In case of a serious medical emergency, your policy may include provisions for evacuation to the nearest appropriate medical facility or repatriation. 
• Non-Emergency Evacuation & Repatriation : In non-medical crises (e.g., political unrest), your policy may cover evacuation or repatriation, subject to policy terms.   

Baggage Benefits: 

• Luggage Delay: If the airline delays your checked baggage, your policy might offer reimbursement for essential items like clothing and toiletries. 
• Lost or Stolen Luggage: In the unfortunate event of permanent loss or theft of your luggage, your policy may offer reimbursement for its value, assisting you in replacing your belongings.   

Pre-Departure Travel Benefits: 

• Trip Cancellation: You may be eligible for reimbursement if you cancel your trip due to a sudden illness or injury. 
• COVID-19 Travel Insurance: Coverage is available for trip cancellation and medical expenses related to COVID-19, subject to policy terms and conditions. 
• Trip Delay: If your flight faces delays due to unforeseen circumstances, you may have coverage for additional expenses such as meals and accommodations.   

Additional Optional Travel Benefits:

• Rental Car (Collision Damage Waiver): Exclusive to Gold & Platinum plan policy holders, this optional benefit gives travelers extra coverage on their rental car against damage and theft. 
• Cancel for Any Reason: Exclusive to Platinum plan policy holders; this optional benefit gives travelers more flexibility to cancel their trip for any reason outside of their standard policy. 
• Loss Skier Days: Exclusive to Platinum plan policy holders, this optional benefit offers reimbursement to mitigate some costs associated with pre-paid ski tickets that you or your traveling companion cannot use due to specified slope closures. 
• Loss Golf Days: Exclusive to Platinum plan policy holders, this optional benefit offers reimbursement to mitigate the expenses linked to prepaid golf arrangements that you or your travel companion are unable to utilize due to specified golf closures.   

Americans aren't required to purchase domestic or international travel insurance to visit Canada. But it’s still highly recommended to have a travel insurance plan before embarking on your next trip.  

Why? There are several reasons: 

• Medical Emergencies: Your health is a top priority. If you face a sudden illness or injury in Canada, travel insurance offers the means to receive prompt and quality medical care.    
• Lost Baggage: Airlines sometimes mishandle baggage, and the last thing you want is to be without essentials in an unfamiliar place. Travel insurance offers to cover the cost of replacing necessary items, allowing you to continue on.   
• Flight Delays: Travel disruptions like flight delays can happen. If you miss a connecting flight or incur additional expenses due to delays, travel insurance can help cover the costs. 

In general, travel insurance to Canada costs about 3 – 10% of your total prepaid and non-refundable trip expenses. The cost of travel insurance depends on two factors for AXA Travel Protection plans: 

• Total Trip cost: The total non-prepaid and non-refundable costs you have already paid for your upcoming trip. This includes prepaid excursions, plane tickets, cruise costs, etc.   
• Age: Like any other insurance type, the correlation is rooted in increased health risks associated with older individuals. It's important to note that this doesn't make travel insurance unattainable for older individuals. 

With AXA Travel Protection, travelers to Canada will be offered three tiers of insurance: Silver, Gold , and Platinum . Each provides varying levels of coverage to cater to individual's preferences and travel needs. 

Travel Insurance requirements for Canada 

Travel insurance is not mandatory for US travelers coming to Canada, but having coverage for medical emergencies is a smart move. It's also worth checking if your visa, entry requirements, or tour operator call for extra coverage.   

As of October 2023, Canada has eliminated all COVID-19 entry requirements. However, it's crucial to be mindful of your health. If you develop COVID-19 symptoms before your trip, consider postponing your travel plans to Canada. Having Cancel for Any Reason as part of your travel insurance plan becomes invaluable in such a scenario. This optional benefit provides the flexibility to cancel your trip, even for a reason beyond standard coverage.   

Canada does not have specific vaccine requirements for travelers. However, due to COVID-19, travel requirements may change from time to time. Stay up-to-date on vaccine requirements and recommendations by consulting official sources such as the Government of Canada's website.   

Traveling with pre-existing medical conditions can complicate your plans, but with AXA Travel Protection, we're here to support you during your trip.   Our Gold and Platinum  plans offer coverage for pre-existing medical conditions.  The Platinum plan, in particular, is our highest-offered choice for travelers who want our highest coverage limits and optional add-ons, 

What does this mean for you? If you've got a medical condition hanging around, you can qualify for coverage under our Gold and Platinum plans with a pre-existing medical condition , so long as it’s within 14 days of placing your initial trip deposit and in our 60-day look-back period. We're here to ensure you travel easily, no matter your health situation.   

AXA presents travelers with three travel plans – the Silver Plan , Gold Plan , and Platinum Plan , each offering different levels of coverage to suit individual needs. Given that Canadian hospitals often do not accept U.S. health insurance or Medicare, we genuinely recommend travelers consider purchasing any of these plans, particularly for the crucial coverage they offer for emergency accident and sickness medical expenses.  

The Platinum Plan is your go-to choice if you're looking for extra coverage aligned with the Canadian experience. " Cancel for Any Reason " offers greater flexibility for those unexpected twists in your travel plans and the " Rental Car (Collision Damage Waiver) " offers assistance when you're out exploring Canada's stunning landscapes in a rental car. 

Additionally, part of the Platinum Plan is the " Lost Skier Days " benefit, offering potential reimbursement if ski resorts unexpectedly close due to ever-changing snow conditions. These perks make the Platinum Plan an excellent option for anyone seeking comprehensive protection during their exciting Canadian adventures. 

FAQs about Canada Travel Insurance   

1. can you buy travel insurance after booking a flight .

Absolutely, travelers have the option to purchase travel insurance for Canada after they've booked their flights.  

It's advisable to purchase travel insurance for your trip as soon as you have made your initial trip deposit (prepaid and non-refundable trip costs.)   AXA Travel Protection offers coverage as soon as you purchase your protection plan. We can give coverage against unforeseen events before you leave for your trip.   Additionally, our policies offer coverage for preexisting medical conditions and Cancel for Any Reason if you purchase your protection within 14 days of making your initial trip deposit. 

2. Do US citizens need travel insurance to Canada? 

Travel insurance to Canada from the USA is not mandatory, but it is highly recommended. While Canada’s healthcare system is fantastic, it might not cover all your medical expenses as a non-resident and medical bills can add up fast.  

3. What type of medical conditions does AXA Travel Protection cover?  AXA covers three types of medical expenses: 

• Emergency medical expenses 
• Emergency evacuation & repatriation 
• Non-medical emergency evacuation & repatriation 

Emergency medical expenses are unexpected incidents that arise, such as broken bones, burns, unexpected illnesses, and allergic reactions.  Emergency evacuation and repatriation can cover your immediate transportation home in the event of an accidental injury or illness.     Non-medical emergency evacuation and repatriation can cover evacuation assistance when you immediately leave a destination for non-medical-related events. These could be things like natural disasters or civil unrest.   

Disclaimer: It is important to note that Destination articles are for editorial purposes only and are not intended to replace the advice of a qualified professional. Specifics of travel coverage for your destination will depend on the plan selected, the date of purchase, and the state of residency. Customers are advised to carefully review the terms and conditions of their policy. Contact AXA Travel Insurance if you have any questions.  AXA Assistance USA, Inc.© 2023 All Rights Reserved.  

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Best travel insurance in Canada

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You’ve packed your bags, mapped your itinerary, and set your “out of office” message – it’s vacation time! But what about travel insurance?

According to a 2019 study by the Travel Health Insurance Association of Canada, 13% of Canadians aren’t sure if they have travel insurance before they go on vacation. Of those who have bought insurance, 17% don’t know what their policy covers.

As a professional travel writer, I find this rather alarming. Canadian health insurance is not valid outside Canada, and your provincial or territorial health plan may not cover all the costs even if you’re travelling domestically. If you suffer an accident or get sick abroad, unexpected medical bills can bankrupt you. It’s why the Canadian government  advises all travellers to buy travel insurance , and I never leave the country without it. Whether you’re taking a two-week trip or a gap year abroad, every one needs the best travel insurance in Canada, regardless of age, health status, destination, or length of vacation.

World Nomads: Best for thrill seekers

Designed for adrenaline lovers with wanderlust, World Nomads insures a long list of adventure sports, activities and volunteer/work experiences, as well as sporting equipment delay/loss/theft. You also get access to a 24/7 hotline that provides information that adventure travellers may need: weather reports and travel advisories, assistance locating the nearest trail, and finding a gear shop.

The standard policy covers emergency medical expenses up to $5 million, emergency dental, trip cancellation/interruption/delay, baggage delays/theft/damage, and more. The downside: you must be under 66 years of age to qualify.

CAA Travel Insurance: Best for families

A long-trusted Canadian institution, CAA travel Insurance offers flexible travel plans to suit every type of traveller and vacation, but their policies are particularly great for families. Their stand-alone emergency medical policy of up to $5 million in health coverage is extremely comprehensive, even including medical repatriation, emergency dental, and reimbursements for pet care and kenneling.

The Vacation Package Plan provides full cancellation/interruption insurance – ideal for prepaid, all-inclusive vacation packages – as well as family transportation and escort of children during emergencies. Anyone can buy CAA travel insurance, but members get a 10% discount.

CAA’s emergency medical plans also now include coverage for COVID-19-related illnesses for vaccinated customers. Coverage is up to $2.5 million if partially vaccinated and up to $5 million if fully vaccinated.

Blue Cross: Best for seniors and retirees

Blue Cross has been around for more than 70 years, and 1 in 4 Canadians utilize its travel insurance. Blue Cross’s emergency medical covers up to $5 million. It has special “snowbird” travel insurance packages designed for Canadians who head to warmer climates each year, making Blue Cross ideal for retirees.

Part of the package is the recently launched Serenity Service. This free perk provides a range of benefits if your flight is delayed, including access to an airport lounge or even a hotel room (depending on the length of the delay). Pre-existing conditions are generally not covered.

Travel CUTS Bon Voyage Insurance: Best for budget travellers

Starting at only $1.36 a day, Travel CUTS Bon Voyage Insurance offers very affordable travel insurance packages, and it’s personally been my “go-to” travel policy for years. Yes, it’s geared toward students (e.g., you can swap your travel dates at no charge due to an exam schedule conflict), but anyone between 15 and 50 years of age can purchase a policy.

The standard package includes hospital and medical up to $1 million, dental care, air ambulance evacuation, flight accident, accidental death or dismemberment, and trip interruption/cancellation insurance. Adventure and extreme sports are also covered.

Manulife CoverMe: Best for Canadians with pre-existing medical conditions

Manulife CoverMe offers highly comprehensive Canadian travel insurance packages for those travelling as a family, a visitor to Canada, or a student. You also get access to the TravelAid mobile app, which provides directions to the nearest medical facility and local emergency telephone numbers.

However, the stand-out feature is arguably TravelEase – a special policy designed to cover fully disclosed medical conditions. For travellers with pre-existing conditions, it insures a bunch of expenses for health services and transportation. It provides up to $10 million in emergency medical benefits – a unicorn in the travel insurance world.

Medipac Travel Insurance: Best for emergency medical assistance

Medipac is one of the only travel insurance companies out there that is staffed by their own team of trained medical professionals, via their Medipac Assistance hotline. Medipac’s medical professionals are your first point of contact in an emergency medical situation. This service is also helpful for dealing with foreign medical systems and helping to prevent unnecessary expenses when dealing with a large deductible.

Medipac offers several competitive features for their travel insurance plans, including no age limits, a claim-free discount, and a 90-day stability period for most pre-existing conditions. If your pre-existing medical condition isn’t covered by a standard Medipac insurance plan, Medipac also offers personalized, underwritten insurance policies to help you meet your needs.

Medipac is offering a 5% Vaccine Discount to clients who have received a minimum of one dose of a COVID-19 vaccine, as well as the new MedipacMAX option. This COVID insurance option provides maximum coverage of up to $5 million USD for COVID-19, in addition to its other benefits.

Allianz Travel Insurance: Best for frequent travellers

Touted as a world leader in the Canadian travel insurance and assistance industry, Allianz Travel Insurance is a major provider of travel insurance, corporate assistance, and concierge services. It seeks to help its customers find solutions to various travel-related problems. Allianz Travel has partnered with many reputable companies, including travel agencies, airlines, resorts, websites, event ticket brokers, corporations, universities, and credit card companies.

Allianz Travel Insurance is a great choice for anyone looking for travel insurance. Its single-trip plans are perfect for those leaving home and visiting another destination (or destinations) before going back home. Its parent company, Allianz Global Assistance, has five plans to choose from, all offering different levels of protection and coverage.

Allianz Travel Insurance’s annual/multi-trip plans are perfect for both personal and professional travelers who take multiple trips in a year. It offers four distinct options to choose from.

Will my provincial insurance be valid overseas?

No! If you get sick or injured overseas, the Canadian government will not cough up a dime to cover your medical costs. Here are the sobering facts:

• Canadian public health insurance is not valid outside of Canada.
• Foreign hospitals can be extremely expensive and may demand payment before treating you.
• The Canadian government will not pay a Canadian’s medical bills for an illness or accident suffered abroad. You’re on the hook for footing the bill!

Will my provincial insurance work in another province/territory?

Flash your valid provincial health card in another part of Canada, and you’ll likely be covered for some of the same services insured by your home provincial plan. This is because the provinces and territories (except Quebec) signed an agreement whereby the host province foots the bill for any medically necessary health care services and gets reimbursed by the home province later.

However, that doesn’t mean you’re completely out of the woods. Depending on your destination, a slew of other services may not be covered, such as an ambulance, hospital transfer, prescription drugs, transportation back to your home province, and procedures not currently approved by your home plan.

Plus, since Quebec wasn’t a signatory to the interprovincial billing agreement, you’ll likely be charged for any medical bills incurred there. For this reason, it’s recommended that you buy extra travel insurance (or verify your  credit card’s travel insurance coverage ) to cover any uninsured health care services that may crop up during your trip.

What does the best travel insurance in Canada cover?

Every travel insurance policy is different and what’s covered depends on how much you’re willing to pay for coverage. Typical medical services that you can expect to be covered include:

• Emergency hospital and medical costs
• Ambulance and air ambulance costs
• Outpatient services
• Physician and laboratory costs
• Prescription drugs
• Direct payment to the hospitals and doctors caring for you
• Assistance with bringing a family member to your bedside
• Air ambulance or commercial repatriation home
• Return of your vehicle if you are ill and have to come home

Additional benefits may include:

• Trip cancellation for non-refundable monetary losses
• Trip interruption
• Baggage loss, rental car damage, out-of-pocket expenses
• Accidental death and dismemberment

How much coverage do I need?

Securing a policy with a minimum of $1M maximum payable is a safe bet. But don’t just look at the numbers when choosing a policy – read the fine print. Every insurer has a list of situations in which coverage is not provided, otherwise known as “exclusions.” Check whether your provider includes coverage or has provisions for the following:

• Pre-existing medical conditions: According to the International Association for Medical Assistance to Travelers, a pre-existing condition is “something that happened (or started to happen) before you were insured.” Some policies may cover claims relating to pre-existing conditions that are “stable and controlled,” but read the definitions carefully. If you don’t declare a condition, the entire policy could be invalidated!
• Medical evacuation: Ensure the policy covers medical evacuation to the nearest hospital and/or to Canada and the costs of a medical escort to accompany you to your final destination.
• Repatriation in case of death: On the grim side, ensure that your plan covers the preparation and return of your remains to Canada.
• Adventurous Activities: If you plan on engaging in “high-risk” activities on your trip, you may need to shell out extra dough for a more comprehensive plan. Many policies don’t cover “risky” activities, such as skiing or snowboarding “out of bounds,” skydiving, scuba diving, white-water rafting, mountaineering, or participation in any rodeo activity. To cover your bases, ask questions and get specifics before purchasing a policy.

You may have to pay more to have these things included, but a few extra bucks may be worth it for peace of mind.

Should I buy “a la carte” travel insurance or get a travel credit card with free insurance?

A credit card with travel insurance is always a good thing to carry in your wallet. The  best travel credit cards in Canada  usually cover everything from emergency medical costs to trip cancellation/interruption to flight delay to rental car insurance, which could save you a wad of cash.

The  Scotiabank Gold American Express ® Card  has saved my butt a few times, and I’ve filed several travel-related claims through my card. I cancelled my trip to Portugal a few years ago due to a death in the family, and I got a full refund on my hotel deposit and flights for myself, my husband, and my baby. It totally justified the $120 annual fee.

That being said, don’t rely on your credit card to take care of all your travel insurance needs. It usually includes a basic policy, meaning it offers low (or no!) travel medical insurance as part of the package. Like any travel insurance company policy, you’ve really got to read the fine print and understand the conditions of your policy to avoid sticky situations.

For instance, the Scotiabank Gold American Express ® Card requires a cardholder to have charged at least 75% of trip expenses to make a trip cancellation/interruption insurance claim. So if you book an all-inclusive vacation for $5,000 and then cancel due to illness, at least $3,750 must have been charged onto your AMEX to qualify for a claim. If you didn’t do that, you’re out of luck.

Can I still purchase insurance if i’ve already started my vacation?

The short answer: most insurance providers won’t cover you after your departure date. However, a handful of insurers (such as World Nomads) will allow you to purchase a policy while already overseas. Just know that it can come with sky-high costs and/or conditions: World Nomads has a 48-hour waiting period before coverage kicks in. The bottom line? It’s always best to buy travel insurance before leaving the country.

Can I get travel insurance for part of a trip?

Some plans offer insurance coverage options that will allow you to customize your coverage, but you’ll have to research to find one that works for your unique circumstances. Alternatively, you could take out an insurance policy for each destination and/or segment of your trip.

For instance, you could get a World Nomads policy for the two weeks you’re scuba diving in Australia, followed by a basic Travel CUTS Bon Voyage insurance to cover a month-long trip to Europe. However, when you buy Canadian travel insurance, you must select a trip start and end date – meaning you must know the exact dates for travelling to those places.

Should I carry a printout of my policy with me at all times?

I recommend carrying the travel insurance card in your wallet and locking it up in the hotel safe with other important travel documents like my passport. But don’t rely totally on paper: Wallets get lost or stolen, luggage can be delayed or M.I.A., and papers are easy to misplace when you’re on the road. My advice is to send a copy of the policy to your email and save it on your iCloud or another storage system that can be accessed anywhere, anytime.

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About our author

Lisa Jackson is a freelance personal finance and travel journalist, editor, and blogger who contributes to various online and print media outlets in Canada and abroad, including The Globe & Mail, Toronto Star, Islands Magazine, Fodors, BRIDES, Huffington Post Canada, CAA Magazine, The Food Network, West Jet Magazine, NUVO Magazine, and many others. When she's not writing from her home office, she's busy globe-trotting to new destinations in search of her next story.

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Do You Really Need Travel Insurance?

How do travel and medical travel insurance work, what factors affect travel insurance rates.

Like other types of insurance, rates will vary by provider and the type of coverage you need. Some factors that play a role in your travel insurance rate are:

• Where you are traveling to
• The kinds of activities you will be doing
• How many people are traveling with you
• How many past claims you have filed, if any
• Your desired coverage

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Best Travel Insurance Canada: Protect Your Trip with Comprehensive Coverage

Georgia Straight Team

April 15, 2024

The demand for travel insurance has noticeably risen, largely because of the impact of the Covid-19 pandemic. Numerous Canadian travelers have faced the chaos and financial hardships induced by the pandemic, thereby realizing the vital role of travel insurance.

According to the Canadian Life & Health Insurance Association, the Canadian travel insurance industry paid out $950 million in claims in 2020 due to trip cancellations caused by the pandemic. Insured travelers were reimbursed for their lost flights, cancelled hotel rooms, and missed reservations, while those without travel insurance lost thousands of dollars.

To help travelers choose the best insurance plan for their needs, this guide compares the top travel insurance plans for 2023. The comparison includes coverage options, costs, and post-Covid-19 protection. By comparing these plans, travelers can make informed decisions and enjoy their trips with peace of mind.

What is Travel Insurance?

Travel insurance is a type of insurance policy that safeguards your investment in a trip. It provides coverage for financial losses incurred due to a cancelled or interrupted trip, emergency medical care during travel, emergency evacuation, damage to a rental car, lost luggage, and more. Medical care coverage is particularly important in Canada, where out-of-province care is more expensive and offers less coverage than in the patient’s home province.

Travel insurance can be purchased as an individual policy or added on to a travel purchase, such as a flight. Some credit cards also offer travel insurance as a benefit when used to make a travel purchase.

What Does Travel Insurance Cover?

The coverage provided by travel insurance varies depending on the insurer and the level of coverage selected. However, most travel insurance policies typically cover the following:

• Emergency medical care: This covers the cost of medical treatment in case of an accident or illness during the trip.
• Trip cancellation: This covers the cost of the trip if it is cancelled due to unforeseen circumstances such as illness, injury, or death.
• Trip interruption: This covers the cost of the trip if it is interrupted due to unforeseen circumstances such as illness, injury, or death.
• Lost or damaged baggage: This covers the cost of replacing or repairing lost or damaged baggage.

When selecting a travel insurance plan, it is important to consider the specific needs of the trip. For example, a basic plan covering just flight cancellation may suffice if the traveler already has supplemental individual medical coverage and is traveling within Canada. However, a comprehensive plan with emergency medical care and evacuation coverage may be necessary for a ski trip to the French Alps.

Manulife’s CoverMe is one of the most popular travel insurance providers in Canada. Their Single Trip All-inclusive plan offers comprehensive coverage, similar to other comprehensive travel insurance plans. When selecting coverage, it is important to evaluate the level of risk, the availability of healthcare in the destination, and the affordability of a cancelled trip.

What Are the Different Types of Travel Insurance?

Travel insurance is a must-have for any traveler. It protects you from unexpected events that can ruin your trip. There are several types of travel insurance available, each with its own unique benefits. Here are the most common ones:

• Baggage insurance – This type of insurance covers you if your luggage is lost or delayed. It provides you with some spending money to purchase essentials or replaces your lost items.
• Emergency medical insurance – This essential type of travel insurance covers you in case you get injured or sick while away. It ensures that you receive the medical attention you need without worrying about the cost.
• Trip cancellation – If you need to cancel your trip due to an emergency back home, this coverage will reimburse you for the nonrefundable travel expenses.
• Trip interruption – If you miss a connection flight or need to return home early, this insurance will cover you during your trip.
• All-inclusive policies – These policies include all of the above insurance types. They provide comprehensive coverage, making them ideal for those who want to be prepared for anything.

When purchasing travel insurance, consider how much you will be traveling in the year. Single-trip and annual coverage options exist. Annual plans may save you money if you intend to travel two or more times per year.

How much does travel insurance cost?

The cost of travel insurance varies depending on several factors such as age, destination, length of trip, and desired coverage. For instance, a 30-year-old single traveler could pay as little as $26 for a week with a basic plan, while a comprehensive plan could cost up to $125. It is advisable to opt for plans that include emergency medical coverage. To find the best policy for you, it is recommended to use a comparison tool to get personalized travel insurance quotes.

When to Consider Buying Travel Insurance

It is recommended to purchase travel insurance at the same time you book your trip to ensure greater protection. Waiting until later may put your investment at risk if something happens between booking and purchasing insurance. Keep in mind that once a problem arises, it is too late to buy insurance. Therefore, it is best to buy travel insurance as soon as possible to avoid losing your investment.

How Credit Card Travel Insurance Works

Credit card travel insurance is a benefit that comes with many credit cards. Before purchasing a separate policy, it is worth checking what your card includes, as you may already have sufficient coverage. However, keep in mind that you are typically only covered for expenses purchased on that credit card. If you buy your plane tickets on one card and your hotel on another, the first company will not reimburse you for a hotel issue. Additionally, terms and exclusions may be more restrictive than a standalone policy. The best travel credit cards offer comprehensive coverage, including trip cancellation, trip interruption, emergency medical coverage, and more.

Does Travel Insurance Cover COVID-19?

Many travel insurance plans now offer coverage for Covid-19-related expenses, including cancellation and medical expenses. Some plans even offer stand-alone Covid-19 travel insurance. However, it is important to carefully verify the details of the policy before purchasing, as coverage may be explicitly excluded if the destination country or region is under an “avoid non-essential travel” or “avoid all travel” advisory at the time of purchase. Additionally, Covid-19 vaccination status may affect coverage, as insurers may declare claims ineligible for those who are unvaccinated by choice.

It is also important to note that specific Covid-19 plans may only cover Covid-19-related expenses and not automatically include coverage for other medical needs. As Covid-19 coverage and news change frequently, it is recommended to check with service providers for the latest information.

Below is a summary of what travel insurance may cover for Covid-19-related expenses:

• Reimbursement for costs incurred from mandatory quarantine
• Coverage for Covid-19-related medical expenses
• Trip interruption and cancellation coverage

Overall, it is advisable to carefully review the policy details and consult with service providers to ensure adequate coverage for Covid-19-related expenses.

Do I need private health care coverage when travelling outside Canada?

When travelling abroad, it is always recommended to have travel medical insurance. Healthcare prices and standards can vary significantly, and some public provincial plans may offer insufficient coverage. Even if your provincial plan covers some expenses, it may only pay what the cost would be back at home, not the actual price at your destination. In some cases, you may have to pay out-of-pocket and request reimbursement later.

In countries like the United States, treatment can be exceedingly expensive, with an average overnight stay in a hospital costing around $14,000 CAD. Private health care coverage can help cover these costs and prevent financial strain.

Moreover, in some countries, healthcare facilities may request payment upfront and refuse treatment if you are unable to pay. This makes emergency medical insurance extremely valuable, as it can ensure that you receive the necessary treatment in case of an emergency.

Do I Need Travel Insurance Within Canada?

While the Canada Health Act guarantees basic emergency care to Canadian citizens and residents, it does not cover prescription drugs and ambulance services. Therefore, it is recommended to have medical travel insurance while travelling within Canada.

It is important to note that OHIP coverage from Ontario will not cover private hospital, laboratory, or paramedic services while visiting British Columbia. In addition, payment for medical services may be required upfront, leaving the traveller responsible for seeking reimbursement from their home province upon their return.

Canadian residents travelling within Canada may qualify for a discount on their medical travel insurance. One popular insurer offers a 50% discount compared to their abroad plans.

Travellers who do not have adequate travel insurance while travelling outside of their province or territory assume the risk of paying out-of-pocket for medical expenses. It is recommended to compare the best travel insurance medical plans anonymously to protect oneself while travelling in Canada.

It is important to check if one already has sufficient coverage through a supplemental individual or group private health insurance policy.

What is the Best Travel Insurance for Visitors to Canada?

When it comes to choosing the best travel insurance plan for visitors to Canada, it is important to consider the individual needs of the traveller. Many leading Canadian insurance companies offer medical travel insurance plans that can be tailored to meet the unique requirements of non-residents in the country for vacation, business, or visiting family.

It is also worth noting that some visitors may already have insurance plans available to them from their home country.

Good to Know

If you are sponsoring a parent or grandparent to visit Canada, it is mandatory to purchase super visa insurance. This insurance is designed to provide medical coverage for a minimum of one year and can be renewed for up to 10 years. It is important to compare different super visa insurance plans to find the best one that suits your needs. Check out our super visa guide for more information and comparisons.

What are the top travel insurance companies?

The best travel insurance company for an individual depends on their specific needs and travel plans. In Canada, popular private health insurance companies that offer travel insurance include 21st Century, Allianz, AMA, BCAA, BMO, CARP, CIBC, Desjardins, GMS, Goose, Johnson (Medoc), Manulife CoverMe, Medipac, RBC, Scotiabank, TD, and World Nomads. It is important to compare coverage and prices to find the best fit for each individual’s travel needs.

What Travel Insurance for Seniors Covers

Travel insurance for seniors provides increased medical coverage and coverage for pre-existing conditions. Leading plans offer emergency medical insurance adapted to the needs of senior travellers. Coverage includes:

• Increased medical coverage compared to other plans
• Coverage for stable pre-existing conditions

Note that coverage may vary depending on the specific plan and provider.

What Does Travel Insurance for Snowbirds Cover?

Snowbirds, who are often retirees travelling to warmer climates during the Canadian winter, need to ensure they have appropriate travel medical insurance. Such insurance policies commonly cover medical treatments, prescription medications, paramedics and ambulance rides, repatriation to Canada, and emergency dental care. However, elective treatments are not usually covered by snowbird insurance policies and should wait until the traveller returns to Canada.

It is important to note that snowbirds may be more at risk for a medical emergency while away due to the length of their trips and underlying health conditions. Additionally, many snowbirds travel to warm parts of the United States, which has the world’s highest medical care costs. Therefore, having adequate travel insurance is crucial to avoid potential financial burdens and ensure access to necessary medical care.

How to Purchase Travel Insurance Online

The simplest way to buy travel insurance is by using an online comparison tool. This tool allows you to compare rates and coverage options quickly without revealing personal data. Alternatively, you may purchase travel insurance through a travel agent, an insurance broker, your private individual or group health insurer, or a travel credit card.

Does Travel Insurance Cover Cruises?

Travel insurance plans frequently offer coverage for cruises. When looking for a plan, it is important to ensure that it includes coverage for cruise travel insurance. For instance, RBC offers two popular packages, namely Deluxe and TravelCare (for seniors), which cover a range of scenarios:

• Cruise cancellation or interruption due to mechanical failure or weather
• Catch-up costs for a missed departure due to a cancelled flight
• Unused shore excursion tickets (due to illness or injury)
• Last-minute cancellations due to a covered reason
• Lost luggage, passports, and medications
• Eligible emergency medical expenses
• 24-hour worldwide emergency medical and travel assistance
• Repatriation costs

It is crucial to review the policy details to confirm the extent of coverage and any limitations or exclusions.

See Our Guides on Travel Insurance in Canada:

HelloSafe provides comprehensive guides on travel insurance in Canada. These guides aim to help travelers understand the importance of having travel insurance and the different types of coverage available to them. The guides also provide information on how to choose the right travel insurance plan based on their needs and budget.

The guides cover a wide range of topics related to travel insurance, including:

• The benefits of having travel insurance
• Types of travel insurance coverage
• Choosing the right travel insurance plan
• Travel insurance for seniors
• Travel insurance for students
• Travel insurance for families
• Travel insurance for adventure sports
• Travel insurance for pre-existing medical conditions

HelloSafe’s travel insurance guides are written by experts in the field who have years of experience in the insurance industry. They provide clear and concise information that is easy to understand, making it easier for travelers to make informed decisions about their travel insurance needs.

In addition to the guides, HelloSafe also offers a comparison tool that allows travelers to compare travel insurance plans from multiple providers. This tool helps travelers find the best travel insurance plan that meets their specific needs and budget.

Overall, HelloSafe’s guides and tools provide travelers with the information they need to make informed decisions about their travel insurance needs.

Frequently Asked Questions

Who is the best travel insurance provider in canada.

There is no one-size-fits-all answer to this question, as the best travel insurance provider in Canada will depend on your specific needs and circumstances. However, some of the top travel insurance providers in Canada include Manulife, Allianz Global Assistance, and Travel Guard.

What are the best options for travel health insurance in Canada?

When it comes to travel health insurance in Canada, some of the best options include Blue Cross, Manulife, and RSA Travel Insurance. These providers offer comprehensive coverage for medical emergencies, including hospitalization, medical evacuation, and repatriation.

What factors should I consider when choosing a travel insurance company?

When choosing a travel insurance company, it is important to consider factors such as coverage options, price, customer service, and reputation. You should also consider the specific needs of your trip, such as the duration, destination, and activities you will be participating in.

Are there any travel insurance companies that specialize in coverage for trips to the United States?

Yes, there are several travel insurance companies that specialize in coverage for trips to the United States. These include Allianz Global Assistance, Blue Cross, and RSA Travel Insurance.

Which travel insurance companies offer the most comprehensive coverage?

Some of the travel insurance companies that offer the most comprehensive coverage include Manulife, Allianz Global Assistance, and Travel Guard. These providers offer a range of coverage options, including emergency medical coverage, trip cancellation and interruption coverage, and baggage loss and delay coverage.

What are the differences between travel insurance plans offered by different companies?

The differences between travel insurance plans offered by different companies can vary widely. Some of the key differences to look for include coverage options, price, deductibles, and exclusions. It is important to carefully review the terms and conditions of each policy to ensure that you are getting the coverage you need at a price you can afford.

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Vacation, Trip & Travel Insurance for Canada

In this article:, canadian travel insurance.

As the world's second-largest country spanning 9.9 million square kilometres, Canada offers a vast and diverse landscape with endless vacation options. From the rugged beauty of the Rocky Mountains to the stunning coastline of Newfoundland and Labrador, there's something to suit every traveller's taste.

Despite this, many people may overlook the need for travel insurance when planning their Canadian adventure. However, purchasing a policy is imperative, particularly when travelling outside of your home province.

If you venture to a different province, your provincial health insurance may not cover you. Therefore, if you were to fall ill or sustain an injury whilst on holiday, you could be left with an exorbitant bill.

Moreover, travel insurance can extend beyond emergency medical coverage and provide protection in unexpected situations. For instance, if you have to cancel your trip due to an unforeseen illness or injury, some policies will reimburse you for any non-refundable costs. Additionally, if you need to shorten your trip and return home early, your policy may cover the unused travel expenses.

To ensure a stress-free vacation, it is crucial to compare coverage and invest in a suitable travel insurance policy. With so many options available, it's important to do your research and find a policy that meets your specific needs and budget. By taking the time to secure the right coverage, you can relax and fully enjoy all that Canada has to offer.

Do I need travel insurance for Canadian vacations?

Even if you have provincial health coverage, it's imperative to note that having travel medical insurance when travelling within Canada offers many benefits. This is because there might be costs that your provincial plan won't cover, or different limits, in addition to variations in Government Health Insurance Plan coverage between provinces. In fact, having travel medical insurance can provide you with a peace of mind as you embark on your journey within Canada.

Considerations and benefits of having travel medical insurance when travelling within Canada are vast. Firstly, it covers prescription drugs, which is a huge relief if you require medication during your trip. Moreover, it covers outpatient services, physician and laboratory costs, air ambulance or commercial repatriation to your home province, and hospital costs related to drug and diagnostic services. In addition, it also offers assistance with bringing a family member to your bedside, direct payment to the hospitals and doctors caring for you, and return of your vehicle if you are ill and have to be repatriated home via other transport.

Sorting out good travel insurance is an important consideration for any Canadian travelling within Canada. It's a small investment that can pay off in a big way in terms of peace of mind, protection and financial savings.

What does Canadian travel insurance cover?

If you're a Canadian looking to purchase travel insurance for travel within Canada, it's important to take a moment to consider what kind of coverage you need. Outside of the medical-related benefits, you should also consider having Trip Cancellation and Trip Interruption Insurance to cover non-refundable costs for items like hotel accommodation or the costs associated when a trip has to be cut short for an unexpected return home.

But what about other unexpected events? What might happen if your baggage was lost or stolen ? Or if you were to miss an internal flight, a ferry, or even a train due to circumstances beyond your control? In these scenarios, your travel insurance coverage can help make sure you're not out of pocket.

When looking at Canadian travel insurance policies, make sure to understand the coverage limits and any exclusions that may apply. For example, many policies will not cover extreme sports or activities that are considered to be high-risk. If you're planning on doing any activities that may be considered high-risk, be sure to purchase a policy that offers coverage for those activities.

In general, Canadian travel insurance policies will cover emergency medical expenses . However, if you want more comprehensive coverage, you can consider all-inclusive policies that also include coverage for trip cancellation and interruption, lost or stolen baggage, and travel delays. Some policies will even offer coverage for rental car insurance, personal liability, and 24-hour emergency assistance. Be sure to read the policy documents carefully to understand what is and is not covered.

Regardless of the specific coverage you choose, the key element of travel insurance for Canada is that it is there to provide coverage for unexpected costs and scenarios when you are away from home. Whether it's a medical emergency, a cancelled flight, or lost luggage, having travel insurance can provide peace of mind and protect you from financial losses.

Compare quotes today

If you're planning a trip within Canada, it's always a good idea to consider travel insurance. Whether you're travelling for leisure or business, unexpected incidents can happen, and it's best to be prepared. At Compare Your Travel Insurance, we offer a variety of travel insurance options to choose from, so you can find the right coverage that suits your needs.

When selecting travel insurance, it's important to weigh your options carefully. If you're only travelling once, a single-trip policy may be the best choice for you. However, if you're a frequent traveller, an annual policy may provide more value for your money. We're here to help you compare your options and make the right decision for your situation.

Our goal is to ensure that you have the right level of coverage to protect you while you discover Canada. We understand that every traveller has unique needs, which is why we offer a personalized approach to finding the right travel insurance policy for you. Our online quote comparison tool makes it easy to compare options and find the right policy that fits your budget.

Don't wait until it's too late. Protect yourself and your trip by getting the right travel insurance coverage today. Get started by comparing quotes and finding the perfect policy for your needs.

There are many costs that might not be covered by your provincial plan or there may be different limits - so if you are planning to travel outside of your home province it is worth considering travel insurance.

This depends on the rules of your home province. Some provinces allow you to be outside for a total of 182 days in a calendar year while others may allow up to 212 days. While you may be able to obtain coverage up to these durations, travel insurance will only be valid as you remain a resident of your home province and have a valid Government health insurance plan.

A deductible is the amount that must be paid by you before the insurer begins to pay. For example, if your plan has a $500 deductible, and you have an accident that incurs medical costs of $2,000, you will have to pay the first $500 and your insurer would cover the additional $1,500 (or up to your coverage limits).

Deductibles can vary by coverage section and by insurer.

Your Government health plan does not provide coverage for medical expenses incurred outside of Canada (some provincial plans provide very limited reimbursement for out-of-province medical bills). Travel insurance provides coverage for unexpected medical emergencies and related expenses incurred outside of Canada (and your home province). Travel insurance needs to be purchased prior to departing your home province.

We can help you compare travel insurance coverage if you're a Canadian resident & covered by a Government Health Insurance Plan in your province or territory of residence for the entire duration of your trip.

You are not travelling against the advice of a physician, been diagnosed with a terminal illness, metastatic cancer, require kidney dialysis or travelling to get medical treatment or advice abroad.

You have not been prescribed or used home oxygen in the last twelve months, undergoing investigative treatment for shortness of breath or chest pain.

You have never had a bone marrow, stem cell or organ transplant and do not require assistance with activities of daily living as a result of a medical condition or state of health.

Don't just take our word for it...

See what other travellers like you have to say about our service.

Warren holds over 19 years of experience in the travel insurance industry. He enjoys telling the stories of people and places which is fed by his love of travel. Warren is an active member of the Travel Health Insurance Association of Canada (THIA) to better educate the Canadian traveller on the benefits of travelling protected.

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• Key takeaways

Does US health insurance work in Canada?

Our best travel insurance for visitors to canada, canada entry requirements & travel information, why should i get travel insurance for my trip to canada, what types of travel insurance do i need for canada, what doesn’t travel insurance for a trip to canada cover, how much does travel insurance for canada cost, tips for choosing the best travel insurance for canada, canada travel insurance faqs, related topics.

Travel Insurance to Canada: Tips & Quotes for US Visitors

• Based on our research, our top picks for Canada travel insurance come from Tin Leg, Seven Corners, Generali Global Assistance, Travel Insured International, and IMG . ( skip ahead to view these insurance plans )
• It is a good idea to purchase Canada travel insurance because US private insurance and Medicare will not work in Canada .
• Despite having a robust public health system, there is no free health insurance in Canada for visitors.
• If you are without a travel insurance policy, any medical treatment you receive while in Canada will leave you out of pocket .
• The most basic policy you should acquire is one that covers both travel medical insurance and medical evacuation coverage.
• To help you find the right travel insurance for your trip to Canada, try using an online comparison tool . This way you can get multiple quotes and compare your options easily in one place.

Whether you’re planning to visit Niagara Falls, hike through Banff National Park, or show off your French accent outside of France in Montreal, Canada is an ideal travel destination.

You don’t even need a visa for trips lasting less than 180 days , so it’s also relatively easy to plan a Canadian vacation. That said, it’s important to plan for emergencies.

When travelling to Canada insurance reimburses some of your expenses if you have to cancel your trip for a covered reason. It may also cover losses associated with delays, rental car damage, rental car theft, or problems with your baggage.

To help you plan a hassle-free trip, we researched the requirements for traveling from the United States to Canada. Find out why we recommend comprehensive travel insurance for your trip.

Our top picks for the best canada travel insurance

• Tin Leg: Best for High Medical Coverage
• Seven Corners: Best Coverage for Pre-Existing Conditions
• Generali Global Assistance: Best Basic Coverage
• Travel Insured International: Best for Medical Evacuation Coverage
• IMG: Best for Travelers Aged 80+

Our top picks for the best travel insurance for Canada

Seven Corners

Generali global assistance.

US government health plans such as Medicare, Medicaid, Tricare, and the State Children’s Health Insurance Program will not pay for health care while in Canada . This includes treatment such as hospital visits and the supply of prescription drugs.

The only exceptions to these rules are where you require emergency medical treatment within the US and the closest hospital is across the Canadian border. Also, if you are passing through Canada between Alaska and a US state and a medical emergency arises.

Best for High Medical Coverage

Why we like it.

Editor's take

Tin Leg’s Gold policy is renowned for offering top-quality travel insurance at reasonable prices and at a competitive rate.

AM Best rates all of Tin Leg’s policies at A- or higher when it comes to their financial strength and Tin Leg’s Gold plan is no different. What makes this policy stand out is its great medical and evacuation coverage limits, all offered at an affordable price.

With both trip cancellation and interruption coverage offered for numerous instances, including COVID-19, you will covered should the worst happen while visiting Canada. The high coverage of $500,000 for emergency medical expenses and up to $500,000 in emergency medical evacuation coverage both make the Tin Leg Gold policy a popular travel insurance choice.

Read our full review

• Excellent primary coverage for medical expenses
• High limit for emergency evacuation coverage
• Optional cancel for any reason (CFAR) coverage available
• Comes with coverage for hurricanes and inclement weather
• Coverage for pre-existing conditions is available if purchased within 14 days of the trip deposit
• Baggage delay coverage requires a 24-hour waiting period
• Low coverage limits for baggage and personal effects

Best Coverage for Pre-Existing Conditions

This Trip Protection Choice plan from Seven Corners offers great all-around coverage at a competitive price. Although at the lower end of the price spectrum, Trip Protection Choice provides travelers to Canada with a reassuring $500,000 in primary medical coverage. To match this high level of coverage, this plan from Seven Corners also offers $1 million in medevac and repatriation coverage, which is some of the highest around.

Further popular additions include trip cancellation, interruption, and delay coverage, accidental death & dismemberment coverage, baggage damage and loss coverage, and a 14-day money-back guarantee.

Trip Protection Choice is a great choice for those with pre-existing conditions. The pre-existing conditions waiver stipulates you can be covered if:

• The policy payment & enrollment form is received within 20 days of the initial trip payments/deposits and within 15 days of payment for any subsequent travel arrangements added to your trip
• You or your traveling companion are medically able to travel and at the time your premium is paid based on the assessment of a physician.
• Offers coverage for pre-existing conditions
• Money-back guarantee
• Cancellation & Interruption coverage standard
• Covers action sports & equipment
• Cancel for any reason not included standard
• Must meet waiver for pre-existing conditions to be covered

Best Basic Coverage

Generali Global Assistance offers high coverage limits for medical expenses, emergency dental expenses, emergency medical evacuation coverage, and so much more for your visit to Canada. With an A rating from AM Best, it is no wonder that Generali Global Assistance is one of the more popular choices when it comes to travel insurance.

Generali Global Assistance’s Standard plan is fantastic for those who are looking for basic coverage at an affordable price. Offering both trip cancellation and interruption, this standard plan is perfect for countering those unforeseen circumstances.

Other Standard plan perks include $1,000 per person in baggage coverage, up to $50,000 in medical coverage, and $250,000 in medical evacuation coverage.

• Lowest cost of all Generali Global Assistance plans
• 24/7 emergency travel assistance included
• Telemedicine included
• Lower coverage than other Generali plans
• Pre-existing conditions are not covered by the Standard plan
• No coverage for accidental death and dismemberment during on-land travel

Best for Medical Evacuation Coverage

Travel insured international.

Travel Insured International’s Worldwide Trip Protector offers superior coverage and is ideal for those looking to take a trip over the border to Canada. This plan covers 100% of the insured trip cost due to cancellation, 150% of the insured trip cost due to interruption, and $1,500 for trip delays.

A popular perk is the Worldwide Trip Protector $500 coverage for baggage delays after only 3 hours. When it comes to medical coverage, Worldwide Trip Protector provides $100,000 of secondary medical coverage and $1 million of evacuation coverage - ideal if the worst should happen in the Canadian wilderness.

• Travel delay coverage kicks in after just six hours
• Generous $150,000 non-medical evacuation coverage
• CFAR and IFAR coverage not included
• Baggage delay coverage only kicks in after 12 hours
• No rental car coverage

Best for Travelers Aged 80+

IMG’s iTravelInsured Travel LX Basic is a great plan for travelers of all ages and offers fantastic coverage for surprisingly low prices. For example, with this plan, you will be covered for up to $500,000 of primary emergency medical coverage - meaning you won’t be out of pocket and waiting for a reimbursement while traveling.

This plan also comes with travel cancellation, interruption, and travel delay coverage as well as $40,000 in rental car damage protection included. Protection for baggage delays and baggage loss also comes standard.

Elderly travelers to Canada will also see the appeal of the iTravelInsured Travel LX Basic’s ‘look-back period of 60 days’ This means it only considers pre-existing conditions as “an illness, disease, or other condition during the 60-day period immediately prior to the date your coverage begins.”

• 10-day money back guarantee
• Generous limits for trip delays, emergency evacuation, and more
• Coronavirus-related medical expenses covered
• Rental car coverage included
• Recently developed pre-existing conditions may not be covered
• CFAR and IFAR coverage only available as an add-on with premium plans

The table below provides an overview of entry requirements and travel information for your trip to Canada from the United States, according to the US Department of State .

Do I need a passport to visit Canada?

Yes. Under the Western Hemisphere Travel Initiative , all U.S. citizens must present a valid passport when crossing the US-Canada border.

Do I need to be vaccinated to go to Canada?

No. Canada travel restrictions don’t include any vaccine-related requirements for American citizens .

Do Americans need travel insurance in Canada?

You may not have to use your travel insurance in Canada, but, it’s worth bearing in mind that you won’t be financially covered for medical expenses if you require emergency care.

That means that the Canadian government will charge you for any treatment received and you could be left out of pocket should anything unexpected happen. This is also the case even if the services or medications provided would normally be covered in the United States.

When planning your visit to Canada, insurance may not be top of mind. However, an emergency can happen at any time, making travel insurance helpful in the following situations:

• Accidents: If you’re in a car accident, fall down the stairs at your hotel, or injure yourself while sightseeing, travel medical insurance will cover the cost of diagnosing and treating your injuries.
• Illnesses: Even if you’re healthy, there’s a chance you could come down with food poisoning, develop appendicitis, or display symptoms of another serious illness while you’re in Canada. If this happens, your American health insurance won’t foot the bill, nor will Canada’s publicly funded health care system. Travel insurance will cover your medical expenses, including X-rays, blood tests, CT scans, physical exams, and medications.
• Cancellations : No matter how much planning you do, there’s always a chance that you’ll have to cancel your trip due to an emergency. If you don’t have travel insurance, you may not be able to get any of your money back.
• Medical evacuation : If your travel plans include rural areas with limited access to health care services, you may need to be evacuated to another area. Travel insurance often includes coverage for medical evacuations.

Hazards in Canada’s national parks

Canada is home to 38 national parks. These great expanses of wilderness are incredible places to explore and are populated with wildlife of all kinds. These parks offer great opportunities to hike, ski, climb, and camp. As we can see from the official Canadian National Park website , they are also volatile regions, susceptible to extreme weather fronts and close encounters with potentially dangerous animals.

Travel insurance for emergency medical evacuation, medical coverage, and adventure sports coverage are a must while exploring the vastness of the Canadian wilderness. However, not all plans automatically cover adventure activities, so it is important to compare plans before purchasing.

Wildfire season

Wildfire season in Canada typically runs from May through to October. In recent years, particularly in the west of the country, Canada has begun to experience far more extreme and prolonged wildfires. While predicting the movement of wildfires and their effects can be difficult, downloading local alert apps and keeping yourself updated via government websites all help avoid any disastrous situations.

Ensure your travel insurance policy has high-quality emergency evacuation and trip cancellation insurance. This will allow you to be far more prepared and flexible should wildfires affect your vacation plans.

Winter weather

Canada’s winter weather can be some of the most extreme in all of North America and the beginning of 2024 brought one of the worst snow storms of recent years . Having high-quality emergency evacuation and trip cancellation insurance will ensure you are covered should your trip be hit by heavy snow storms and adverse weather conditions.

Winter sports

Canada is famous the world over for its winter sports. Numerous tourists come to Canada every year to experience the thrill of skiing, snowboarding, and riding snowmobiles on its many trails. As highlighted in Canada’s official government website on the issue, you should take extreme caution by avoiding closed trails and keeping up-to-date with local weather reports, especially where there is a risk of avalanches and winter storms.

Similarly to those exploring Canada’s grand national parks, it’s advisable to ensure your policy offers adventure sports coverage and emergency medical evacuation coverage, should the worst happen during your trip.

Travel insurance plans are typically divided into two distinct categories:

Medical-based travel insurance

• Comprehensive travel insurance

What is included in your overall coverage depends on the type of policy you purchase.

The most basic level of travel insurance for Canada visits should be a policy that is medical-based. Medical insurance for Canada is often the cheapest level of insurance you can buy. Medical insurance will cover you should you experience any illness or accidents during your vacation.

As noted above, Medicare and other US private insurers won’t cover you while you are in Canada, so those without medical-based travel insurance will be left out of pocket should the worst happen. Therefore, when visiting Canada, health insurance should be at the top of your travel checklist.

Medical-based travel insurance policies usually cover two separate coverage limits for medical emergencies and emergency medical evacuations:

• Emergency medical insurance : At a minimum, we recommend getting a plan that provides health insurance for visitors to Canada. Travel medical insurance covers a wide range of health care expenses. For example, if you develop a health condition after eating contaminated food, travel medical insurance should cover the cost of blood tests, IV fluids, and other types of medical care.
• Medevac insurance: You may be used to having a hospital within just a few miles of your home. When you’re traveling, that’s not always the case, especially if you plan to spend time in a national park or hunt in the Canadian wilderness. Medical evacuation insurance , or medevac, pays to transport you to the nearest suitable medical facility if you develop a serious illness or injury during your trip.

Medical plans will not include far more in-depth travel insurance add-ons such as trip cancellations or trip cost reimbursement. If you require this additional coverage, you will need to purchase a more comprehensive travel insurance plan.

Comprehensive travel coverage

When selecting a travel insurance policy, you have the option of purchasing plans that reimburse you for non-refundable prepaid trip expenses and plans that don’t. You may want to be insured for things such as trip cancellations, trip interruptions, travel delays, and the loss of personal items. If this is the case, you will need to select an insurance policy that covers you for trip cost reimbursement.

Some medical-based plans may reimburse you for a canceled or interrupted trip if it is the result of a pre-covered illness or injury. However, your trip may be interrupted or canceled based on unforeseen events such as a terrorist attack or natural disaster. In this case, you will need to purchase a policy that covers cancellation and interruption coverage for prepaid, nonrefundable expenses to make a claim.

Further below , you will see a cost example that shows the difference in prices of medical-based plans versus comprehensive travel insurance coverage.

Optional Add-ons

Some travel insurance for Canada vacations will also offer cancel for any reason (CFAR) insurance . With this type of coverage, you can cancel your travel plans for any reason at all and still get back around 50% to 75% of your prepaid travel expenses. Including this will allow you far more flexibility should you change your Canadian vacation plans.

Generally speaking, most travel insurance policies exclude coverage for the following scenarios:

• Claims resulting from illegal activities
• Claims related to medical tourism
• Injuries resulting from intoxication from drugs or alcohol
• Cancellations due to fear COVID-19 (See COVID-19 travel plans)

Aside from the highly obvious reasons, some travel insurance providers will also include restrictions are the following situations :

• Pre-existing medical conditions: Unless you have a waiver, most travel insurance plans do not cover pre-existing conditions . To qualify for a waiver, you typically must purchase your travel insurance plan within 14 to 15 days of making your initial trip deposit.
• Adventure sports : Standard travel insurance plans won’t usually cover injuries associated with skiing, rock climbing, and other adventure activities you may do on your Canadian vacation. If you plan to do these types of activities, make sure to purchase coverage that includes these types of sports.
• Pregnancy-related care: Regular wellness care and normal delivery are not covered by travel insurance. However, emergency care that you require while traveling while pregnant may still be covered.
• Non-emergency medical care :Non-emergency procedures that can wait until you return home are not covered by travel insurance.

Travel Insurance for a trip to Canada can cost as little as around $1 per day for the cheapest, most basic coverage . For more comprehensive plans, you can expect to pay around $8 to $10 per day.

To compare the cost of travel insurance , we got price quotes from a few popular companies.

We used the following details to obtain quotes:

• Destination: Canada
• Age: 35 years old
• Trip length: 7 days
• Trip cost: $2,000
• Date September, 2024

The table below shows quotes for basic travel insurance plans.

Cost Example Where Travel Insurance Plan Doesn’t Reimburse the Full Trip Cost

While searching for a travel insurance plan, you may wish to have more comprehensive protection for your trip to Canada. To give you an idea of how much this costs, we compared quotes for plans that reimburse the full cost of a trip for the table below.

Cost Example Where Travel Insurance Plan Reimburses the Full Trip Cost

When searching for travel insurance, keep in mind that several factors impact how much you’ll pay.

Factors that influence the cost of travel insurance include:

• Your age: Even if you’re in good health, your risk of developing medical problems increases as you age. Insurance companies charge higher premiums for travel insurance for seniors to account for their increased risk.
• The cost of your trip: The more you spend on your trip, the more an insurance company is likely to owe you if you have to file a claim. Therefore, insurers charge more to cover expensive trips.
• The length of your trip: The longer you plan to travel, the more you can expect to pay for travel insurance.
• Your destination: Your insurance company may charge more for some destinations than others, increasing your cost of coverage.

Before you purchase travel insurance for your trip to Canada, follow these tips to find the best plan :

Shop around and compare

Just because a plan has the highest premium doesn’t mean it offers the best coverage. Use the LA Times Comparison Tool to determine which company offers the most benefits at the lowest price.

Think about additional coverages you may need

Travel insurance doesn’t usually cover injuries associated with skiing, rock climbing, and other adventure activities. If you plan to do one of these activities, look for a plan that includes extra coverage.

Adjust your transportation plans

Travel insurance doesn’t cover trip delays unless you’re traveling via a common carrier. You may want to adjust your transportation plans to ensure that you’re eligible for this type of coverage.

Purchase a policy early

You may be able to get a better deal on travel insurance if you purchase a plan as soon as you make your initial trip deposit.

Do I need travel insurance to visit Canada?

You are not legally required to buy travel insurance to visit Canada, but it should be a top priority. You should always purchase travel insurance before you travel outside the United States. This type of insurance reimburses you for expenses associated with trip cancellation, trip delays, and other travel issues, limiting your losses.

Can I use my US health insurance in Canada?

No. Both private and government-sponsored health insurance plans only cover expenses incurred in the United States.

Do I need travel health insurance for Canada?

It’s a good idea to purchase travel medical insurance before you go abroad. This type of insurance covers emergency transportation, physical exams, diagnostic tests, medications, surgical procedures, and other health expenses. Most travel insurance plans will also include coverage for COVID-19 as standard.

Can Americans travel to Canada without a COVID-19 test?

No. Canada no longer requires tourists from the United States to take a COVID-19 test or quarantine before entering the country.

What happens if I get sick in Canada?

If you get sick in Canada and don’t have travel medical insurance, you will have to pay for your own hospital or medical services. This is why it’s so important to purchase travel insurance with medical coverage before you embark on your trip.

Sarah Stasik is well versed in personal finance thanks to her previous role as a Revenue Cycle Manager for a Fortune 500 healthcare company. Using her inside knowledge and expertise, Sarah often covers topics ranging from insurance and the economics of private healthcare to personal finance and small business management.

Over the past 12 years, Sarah has contributed to numerous publications in the personal and small business finance sector, including content on budgeting, bankruptcy, small business accounting, and financial tech. Her writing focuses on making complex or seemingly daunting financial topics more accessible and providing helpful, relevant resources for readers.

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Canadians are optimistic about travel in 2024: Blue Cross Travel Study

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Enjoy the confidence and peace of mind with Blue Cross when exploring Canada or around the world

#1 in Travel Insurance

Out-of-province emergency medical expenses are not generally covered by your provincial medical plan and these expenses can be financially overwhelming.

For millions of Canadians, comprehensive emergency travel coverage offered by Blue Cross has become an essential part of their holiday plans.

As a recognized symbol of health care globally, being trusted, professional and familiar is what you need in your coverage provider when travelling out of province.

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Canadians are optimistic about travel in 2024

The cost of travel is on the rise, but that isn’t stopping most Canadians from planning a vacation.

A ccording to a new study from Blue Cross , Canadians spent an average of $4,200 on their last vacation, and 94 per cent feel the cost of travelling is increasing .

H owever , the 2024 Blue Cross Travel Study also reveals that more Canadians are feeling optimistic about travel and are planning more trips this year.   

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What is travel insurance?

There are two main types of travel insurance: travel medical insurance and trip cancellation/interruption insurance .

Travel medical insurance can help to cover the cost of medical care if you become sick or injured while travelling. It can also help to cover the cost of travel if you need to be transported to a hospital in another country. This is the most common type of travel insurance.

Trip cancellation/interruption insurance can help to reimburse you for the cost of your trip if you have to cancel due to an unforeseen circumstance, such as illness or bad weather, or other situations that may delay or cancel your trip (lost baggage, transportation delays, etc).

If you are planning a trip from your home in Canada, or planning on travelling to Canada, it is important to ensure you have travel insurance before you depart. This will help to protect you from unexpected costs if something goes wrong on your trip and give you peace of mind such accidents or delays will not be a financial burden.

Learn more about travel insurance

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them.

Who needs travel insurance?

There is a wide array of insurance needs for both those visiting Canada, and travelling away from it. They include:

Inbound travellers

• Visiting Canada from another country
• Super visa applicants
• International students studying in Canada
• Foreign workers or work permit holders working in Canada
• Amateur athletes competing in Canada

Outbound travellers

• Snowbirds (seniors vacationing away from Canada for the winter)
• Canadians vacationing abroad

What are the different types of travel insurance available in Canada?

Depending on where you call home, and the reason and length of your travel, there are several different kinds of travel insurance available.

Residents of Canada need travel insurance for trips abroad. While you public healthcare or group health insurance covers medical emergencies at home, an accident or medical emergency while you are out of country can be very costly.

Those visiting Canada from outside the country also need travel medical insurance. While Canada does have a robust public healthcare system, these services do not extend to non-residents of the country. If you are ill or injured during your trip to Canada, you will be responsible for the costs of doctor's visits, emergency care, prescription, and more.

Super visa insurance

Parents and grandparents or Canadian citizens and permanent residents are eligible for a special Canadian visa called the super visa. This visa allows them to enjoy an extended stay in Canada for as long as 2 years. A mandatory stipulation of super visa approval is holding a medical insurance policy to cover and illnesses or accidents that can occur during this trip. Super visa insurance is a widely available insurance policy that caters to the specific needs and requirements for super visa eligibility.

Snowbirds are retired Canadians who spend the winter season abroad to avoid Canada’s colder months. As a snowbird, it’s important to make sure you have the right travel insurance in place before you head south for the winter, as you will not qualify for public health insurance at your destination.

International students often need emergency health insurance wherever they choose to complete their studies. This includes both Canadians studying abroad and students completing their education in Canada. Emergency travel medical insurance ensures one can focus on their studies knowing they won’t have to deal with an unforeseen medical bill.

Foreign workers visiting Canada for temporary or permanent employment will not have immediate access to public health care. Travel medical insurance will cover you if you get sick or injured while working in Canada.

25 Companies, 20,000 Options, 1 Way to Compare and Save

Who offers the best travel insurance in Canada?

At PolicyAdvisor, we partner with the country’s best travel insurance providers to present you with the most choice and best option for your insurance needs. Whether you are vacationing abroad, visiting Canada for an extended trip, or sponsoring a super visa application for a loved one, we’re here to help guide you to best provider.

Some of our partners include:

• Tugo (iA Financial Group)
• Group Medical Services (GMS)
• 21st Century Travel Insurance Limited
• Destination Canada

Get instant quotes from Canada’s top travel insurance companies

Why should you buy travel insurance?

Whether for a vacation abroad or a visit to Canada, travel medical and health insurance is very important.

For Canadian travelling abroad

• Canadian public health care or your provincial health insurance plan may not cover medical expenses while you are outside Canada
• Your work or group benefits health plan may not cover, or only cover a portion, of the costs of your medical bills abroad
• Foreign medical facilities are generally expensive and often require immediate payment
• Some hospitals and clinics in foreign countries will refuse treatment if you do not have enough insurance coverage or funds to pay for your treatment

For those visiting Canada

• You are not covered under any of Canada's public healthcare plans
• Treatment for medical emergencies and prescriptions may require cash payments
• Your home country's public health care offering generally does not cover trips abroad
• Travel medical insurance can cover a broad range of potential situations, including emergency room visits, transportation back to your home country, and prescription drug and dental costs

Frequently asked questions

How much does travel insurance cost?

The cost of travel insurance is determined by many variable factors including the type of insurance you purchase, your age, the duration of the trip, and the amount of coverage you are getting. A rule of thumb is travel insurance should typically cost 5% of your trip. Of course, these costs can increase for extended stays like super visa insurance , insurance for snowbirds, and insurance for students or foreign workers.

Can't I just use credit card travel insurance?

While knowing there is a built-in insurance component to your credit card provides great peace of mind, it sometimes falls short of comprehensive travel coverage. Insurance from credit cards usually has a cap on the amount of coverage it provides and is not intended to cover you for medical emergencies that may occur on an extended trip. Moreover, credit card travel insurance is also limited in that its coverage typically only extends to those parts of your trip you paid for using that credit card.

An independently purchased travel insurance policy ensures you are covered for your entire trip and whatever may happen during its duration.

Does travel insurance cover pre existing conditions?

Most travel medical insurance policies do not cover a pre-existing medical condition by default.

In some cases, if you have shown no symptoms or diagnosis of a pre-existing medical condition for 180 days prior to the effective date of the policy and have not had treatment for the condition during that time, it will not be considered a pre-existing condition during your coverage period.

As well, some conditions may get excluded from your travel medical insurance coverage during the underwriting process. A pre-existing condition exclusion could include a heart condition, kidney condition, form of dementia,

Lastly, some providers offer policies that will cover pre-existing conditions, though the premium will be higher to compensate for the added risk.

Can you get a refund for travel insurance?

You can typically get a refund for a travel insurance policy as long as you cancel the coverage before the departure date of your trip.

Is travel insurance mandatory?

Most travel insurance is not mandatory, though encouraged as foreign medical expenses can add up quickly. Without travel medical insurance you are personally responsible for any medical expenses you incur during your time away from your home country.

Some travel insurance policies are mandatory. For instance, super visa insurance is mandatory for super visa applicants to get approved for their policy, and an in-force policy is compulsory for the duration of your stay in Canada using the super visa.

Does provincial healthcare cover you when travelling abroad?

No, a public healthcare plan from your province or territory does not cover medical emergencies that happen outside of Canada. Much like how Canada’s public healthcare does not cover those who do not reside in Canada, the healthcare in countries outside of Canada has no reciprocal agreement to treat travelers. Canadians are expected to pay out of pocket for any health or medical procedures they need when outside of Canada.

Thus, it is important to have an in-force travel medical insurance policy when travelling outside of Canada and your home province.

Can I get travel insurance after I have left Canada?

Yes, it is possible to get some coverage, though there will most likely be exclusions on your policy. Many providers in Canada or abroad will offer you emergency medical travel insurance if you have already left Canada but wish to purchase coverage.

However, the policy generally will not be active until 48 hours after you purchase the coverage. This waiting period is designed to prevent someone from acquiring a policy after they have been injured or hospitalized with an illness.

Should I buy an individual policy for each trip I have planned or an annual travel policy?

If you travel abroad often (more than twice per year) it may be worthwhile to purchase an annual travel policy. Many providers offer annual options for their travel medical insurance policies, which can save you money on premiums and eliminate the need to arrange separate insurance policies for each trip you take or each leg of a multi-trip journey. Many Canadians travel during winters to warmer climates ( snowbirds ), it is advisable to buy multi-trip / annual travel insurance for such needs. Speak with our advisors to see if an annual travel insurance policy makes sense for your plans.

Top Travel Insurances for Canada You Should Know in 2024

Byron Mühlberg

Monito's Managing Editor, Byron has spent several years writing extensively about financial- and migration-related topics.

Links on this page, including products and brands featured on ‘Sponsored’ content, may earn us an affiliate commission. This does not affect the opinions and recommendations of our editors.

Canada is a massive country known for its natural splendour, including the Rocky Mountains, the Northern Lights, and Niagara Falls, as well as its energetic cities like Toronto, Montreal, and Vancouver. Although travelling to Canada can be an accessible holiday destination for many people, out-the-pocket healthcare costs in the country tend to be expensive, so it's a very good idea to arrive there with travel insurance under your belt.

Luckily, online global insurances (known as 'insurtechs') specialize in cost-savvy travel insurance to Canada and other countries worldwide. Our list below explores the four services we believe provide the best deals for young travellers, adventurers, everyday holidaymakers looking for comprehensive but affordable coverage, and longer-term expats.

Canada Insurance Profile

Here are a few of the many factors influencing the scope and cost of travel insurances for Canada:

Best Travel Insurances for Canada

• 01. Should I get travel insurance for Canada? scroll down
• 02. Best medical coverage: VisitorsCoverage scroll down
• 03. Best trip insurance: Insured Nomads scroll down
• 04. Best mix for youth and digitial nomads: SafetyWing scroll down
• 05. FAQ about travel insurance to Canada scroll down

Heading to Canada soon? Don't forget to check the following list before you travel:

• 💳 Eager to dodge high FX fees? See our picks for the best travel cards in 2024.
• 🛂 Need a visa? Let iVisa take care of it for you.
• ✈ Looking for flights? Compare on Skyscanner !
• 💬 Want to learn the local language? Babbel and italki are two excellent apps to think about.
• 💻 Want a VPN? ExpressVPN is the market leader for anonymous and secure browsing.

Do I Need Travel Insurance for Canada?

No, there's currently no legal requirement to take out travel insurance for travel to or through Canada.

However, regardless of whether or not it's legally required, it's always a good idea to take our health insurance before you travel — whether to Canada or anywhere else. For what's usually an affordable cost , taking out travel insurance will mitigate most or all of the risk of financial damage if you run into any unexpected troubles during your trip abroad. Take a look at the top five reasons to get travel insurance to learn more.

With that said, here are the top three travel insurances for Canada:

VisitorsCoverage: Best Medical Coverage

Among the internet's best-known insurance platforms,  VisitorsCoverage  is a pioneering Silicon Valley insurtech company that offers comprehensive medical coverage for travellers going abroad to Canada. It lets you choose between various plans tailored to meet the specific needs of your trip to Canada, including coverage for medical emergencies, trip cancellations, and travel disruptions. With its easy online purchase process and 24/7 live chat support, VisitorsCoverage is a reliable and convenient option if you want good value and peace of mind while travelling abroad.

• Coverage 9.0
• Quality of Service 9.0
• Pricing 7.6
• Credibility 9.5

VisitorsCoverage offers a large variety of policies and depending on your needs and preferences, you'll need to compare and explore their full catalogue of plans for yourself. However, we've chosen a few highlights for their travel insurance for Canada:

• Policy names: Varies
• Medical coverage: Very good. Includes coverage for doctor and hospital visits, pre-existing conditions, repatriation, mental health-related conditions, and many others.
• Trip coverage: Excellent - but only available for US residents.
• Customer support: FAQ, live chat and phone support
• Pricing range: USD 25 to USD 150 /traveller /month
• Insurance underwriter: Lloyd's, Petersen, and others
• Best for: Value for money and overall medical coverage

Insured Nomads: Best Trip Coverage

Insured Nomads is another very good travel insurance option, especially if you're adventurous or frequently on the go and are looking for solid trip insurance with some coverage for medical incidents too. With Insured Nomads, you can choose the level of protection that best suits your needs and enjoy a wide range of benefits, including 24/7 assistance, coverage for risky activities and adventure sports, and the ability to add or remove coverage as needed. In addition, Insured Nomads has a reputation for providing fast and efficient claims service, making it an excellent choice if you want peace of mind while exploring the world.

• Coverage 7.8
• Quality of Service 8.5
• Pricing 7.4
• Credibility 8.8

Insured Nomads offers three travel insurance policies depending on your needs and preferences. We go through them below:

• Policy names: World Explorer, World Explorer Multi, World Explorer Guardian
• Medical coverage: Good. Includes coverage for doctor and hospital visits, pre-existing conditions, repatriation, and many others.
• Trip coverage: Good. Includes coverage for trip cancellation and interruption, lost or stolen luggage (with limits), adventure and sports activities, and many others.
• Customer support: FAQ, live chat, phone support
• Pricing range: USD 80 to USD 420 /traveller /month
• Insurance underwriter: David Shield Insurance Company Ltd.
• Best for: Adventure seekers wanting comprehensive trip insurance

SafetyWing: Best Combination For Youth

SafetyWing is a good insurance option for younger travellers or digital nomads because it offers flexible but comprehensive coverage at a famously affordable price. With SafetyWing, you can enjoy peace of mind knowing you're covered for unexpected medical expenses, trip cancellations, lost or stolen luggage, and more. In addition, SafetyWing's user-friendly website lets you manage your policy, file a claim, and access 24/7 assistance from anywhere in the world, and, unlike VisitorsCoverage, you can even purchase a policy retroactively (e.g. during a holiday)!

• Coverage 7.0
• Quality of Service 8.0
• Pricing 6.3
• Credibility 7.3

SafetyWing offers two travel insurance policies depending on your needs and preferences, which we've highlighted below:

• Policy names: Nomad Insurance, Remote Health
• Medical coverage: Decent. Includes coverage for doctor and hospital visits, repatriation, and many others.
• Trip coverage: Decent. Includes attractive coverage for lost or stolen belongings, adventure and sports activities, transport cancellation, and many others.
• Pricing range: USD 45 to USD 160 /traveller /month
• Insurance underwriter: Tokyo Marine HCC
• Best for: Digital nomads, youth, long-term travellers

How Do They Compare?

Interested to see how VisitorsCoverage, SafetyWing, and Insured Nomads compare as travel insurances to Canada? Take a look at the side-by-side chart below:

Data correct as of 4/1/2024

FAQ About Travel Insurance to Canada

Travel insurance typically covers trip cancellation, trip interruption, lost or stolen luggage, travel delay, and emergency evacuation. Some travel insurance packages also cover medical-related incidents too. However, remember that the exact coverage depends on the insurance policy.

No, you'll not be required to take out travel insurance for Canada. However, we strongly encourage you to do so anyway, because the cost of healthcare in Canada can be high, and taking out travel insurance will mitigate some or all of the risk of covering those costs yourself if you need medical attention during your stay.

Yes, medical travel insurance is almost always worth it, and we recommend taking out travel insurance whenever visiting a foreign country. Taking out travel insurance will mitigate some or all of the risk of covering those costs yourself in case you need medical attention during your stay. In general, we recommend VisitorsCoverage to travellers worldwide because it offers excellent value for money and well-rounded travel and medical benefits in its large catalogue of plans.

Health insurance doesn't cover normal holiday expenses, such as coverage for missed flights and hotels, but in case you run into medical trouble while abroad, it may cover some or all of your doctor or hospital expenses while overseas. However, not all health insurance providers and plans offer coverage to customers while abroad, and that's why it's generally best to take out travel insurance whenever you travel.

Although there's overlap, health and travel insurance are not exactly the same. Health insurance covers some or all of the cost of medical expenses (e.g. emergency treatment, doctor's visits, etc.) while travel insurance covers non-medical costs that are commonly associated with travelling (e.g. coverage for missed flights, stolen or lost personal belongings, etc.).

The cost of travel insurance depends on several factors, such as the length of the trip, the destination, the age of the traveller, and the level of coverage desired. On average, travel insurance can cost anywhere between 3% and 10% of the total cost of the trip.

A single-trip travel insurance policy covers a specific trip, while an annual one covers multiple trips taken within a one-year period. An annual policy may be more cost-effective for frequent travellers.

Yes, you can sometimes purchase travel insurance after starting your trip, but it is best to buy it before the trip begins to ensure maximum coverage. If you do need to buy insurance after you've started your trip, we recommend VisitorsCoverage , which offers a wide catalogue of online trip and medical insurance policies, most of which can be booked with immediate effect. Check out our guide to buying travel insurance late to learn more.

Yes, you can most certainly purchase travel insurance for a trip that has already been booked, although we recommend purchasing insurance as soon as possible aftwerwards to ensure all coverage is in place before your journey begins. Check out our guide to buying travel insurance late to learn more.

See Our Other Travel Insurance Guides

Looking for Travel Insurance to Another Country?

See our recommendations for travel insurance to other countries worldwide:

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• The average travel insurance premium this week is $284.79, down about 3% compared to last week.
• For travel in the United States, the average premium is $92 to $399.
• Travel insurance protects against delayed baggage, trip cancellation, and more.

The average cost of travel insurance fluctuates throughout the year, based on demand and whether or not school's in session. Also keep in mind that where you're traveling and how many people are taking the trip will affect your exact premium.

The average travel insurance premium this week is about the same compared to last week.

Travel insurance rates this week:

• Average premium: $284.79
• Average trip cost: $6,698.23
• Average trip length: 16 Days

Understanding Travel Insurance

Travel insurance plans can cover both domestic and international travel. It could protect against something as familiar as delayed baggage (experts estimate 85% of lost luggage is returned to its owner within 48 hours) or as complicated as trip cancellation.

The benefits and limitations of travel insurance vary based on the company and plan. Above all else, this insurance coverage offers peace of mind.

Some credit cards offer a limited amount of travel insurance annually. If you need clarification on what your credit card offers, contact your provider to verify. These plans are great for cancellations and interruptions but may not cover more costly losses associated with unexpected medical expenses or emergency evacuations.

Individual travel insurance plans include this and much more. Travel insurance protects travelers from the unexpected when away from home.

Average Cost of Travel Insurance by Destination

Some countries are naturally more expensive travel destinations due to higher flight and lodging costs, which could increase travel insurance costs. Travel insurance will generally cost 5% to 10% of your total trip price, according to SquareMouth.

Here's how the prices stack up:

Source: SquareMouth

How Far in Advance to Purchase Travel Insurance

According to an AAA travel survey , 88% of travelers say that reimbursement after a trip cancellation is the most valuable benefit of trip insurance.

According to data gathered by SquareMouth in the last six months, travelers tend to purchase trip cancellation travel insurance 53 days before their trip. Meanwhile, travelers without trip cancellation insurance will buy a policy approximately 16 days before their trip. Regardless of when you buy, cancellation protection can kick in to protect you against the unexpected.

Average Cost of Travel Insurance by Age

A traveler's age is a significant factor in determining the cost of travel insurance. The older a traveler is, the higher travel insurance premiums are. For instance, a senior traveler may need more insurance for health-related emergencies than a millennial.

When calculating your travel insurance premium, travel insurance providers consider the likelihood of a medical emergency.

Get your free travel insurance quote with SquareMouth »

Travel Insurance Rate Tips

How much does travel insurance typically cost.

Travel insurance rates through most providers fall between 4% and 8% of the total trip cost. Like the cost of flights, cruises, etc., rates may vary substantially based on the season, your original location, your destination, and other factors. This week, the average cost of a policy was close to $300.

How can I save money on travel insurance?

To save money on travel insurance, tailor your policy to your specific needs and avoid unnecessary extras. You should also shop around to compare quotes from multiple insurers. Opting for an annual plan if you're a frequent traveler, checking existing coverages from other insurance policies or credit card benefits, and choosing a policy with a higher deductible can significantly lower your premiums. Always read the fine print to understand your coverage fully, ensuring you don't pay for redundant or irrelevant features.

Where are the cheapest places to buy travel insurance?

To find affordable travel insurance, consider using online comparison websites like SquareMouth or InsureMyTrip to see rates from various providers. Other ways to save include purchasing directly from insurance companies, exploring package deals from travel agencies or airlines, utilizing included coverage from credit card benefits, and checking for discounts through membership organizations such as AAA or AARP.

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Travel Insurance

Cheapest travel insurance of April 2024

Mandy Sleight

Heidi Gollub

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

Updated 9:52 a.m. UTC April 11, 2024

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WorldTrips is the best cheap travel insurance company of 2024 based on our in-depth analysis of the cheapest travel insurance plans. Its Atlas Journey Preferred and Atlas Journey Premier plans offer affordable travel insurance with high limits for emergency medical and evacuation benefits bundled with good coverage for trip delays, travel inconvenience and missed connections.

Cheapest travel insurance of 2024

Why trust our travel insurance experts

Our team of travel insurance experts analyzes hundreds of insurance products and thousands of data points to help you find the best travel insurance for your next trip. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content . You can read more about our methodology below.

• 1,855 coverage details evaluated.
• 567 rates reviewed.
• 5 levels of fact-checking.

Best cheap travel insurance

Top-scoring plans

Average cost, medical limit per person, medical evacuation limit per person, why it’s the best.

WorldTrips tops our rating of the cheapest travel insurance with two plans:

• Atlas Journey Preferred is the cheaper travel insurance plan of the two, with $100,000 per person in emergency medical benefits as secondary coverage and an optional upgrade to primary coverage. It’s also our pick for the best travel insurance for cruises .
• Atlas Journey Premier costs a little more but gives you $150,000 in travel medical insurance with primary coverage . This is a good option if health insurance for international travel is a priority.

Pros and cons

• Atlas Journey Preferred is the cheapest of our 5-star travel insurance plans.
• Atlas Journey Premier offers $150,000 in primary medical coverage.
• Both plans have top-notch $1 million per person in medical evacuation coverage.
• Each plan offers travel inconvenience coverage of $750 per person.
• 12 optional upgrades, including destination wedding and rental car damage and theft.
• No non-medical evacuation coverage.

Cheap travel insurance for cruises

Travel insured.

Top-scoring plan

Travel Insured offers cheap travel insurance for cruises and its Worldwide Trip Protector plan gets 4 stars in our rating of the best cruise travel insurance .

• Worldwide Trip Protector offers $1 million in emergency evacuation coverage per person and a rare $150,000 in non-medical evacuation per person. It also has primary coverage for travel medical insurance benefits, which means you won’t have to file medical claims with your health insurance first.
• Cheap trip insurance for cruises.
• Offers a rare $150,000 for non-medical evacuation.
• $500 per person baggage delay benefit only requires a 3-hour delay.
• Optional rental car damage benefit up to $50,000.
• Missed connection benefit of $500 per person only available for cruises and tours.

Best cheap travel insurance for families

Travelex has the best cheap travel insurance for families because kids age 17 are covered by your policy for free when they’re traveling with you.

• Free coverage for children 17 and under on the same policy.
• $2,000 travel delay coverage per person ($250 per day) after 5 hours.
• Hurricane and weather coverage after a common carrier delay of any amount of time.
• Only $50,000 per person emergency medical coverage.
• Baggage delay coverage is only $200 and requires a 12-hour delay.

Best cheap travel insurance for seniors

Evacuation limit per person

Nationwide has the best cheap travel insurance for seniors — its Prime plan gets 4 stars in our best senior travel insurance rating. However, Nationwide’s Cruise Choice plan ranks higher in our best cheap travel insurance rating.

• Cruise Choice has a $500 per person benefit if a cruise itinerary change causes you to miss a prepaid excursion. It also has a missed connections benefit of $1,500 per person after only a 3-hour delay, for cruises or tours. But note that this coverage is secondary coverage to any compensation provided by a common carrier.
• Coverage for cruise itinerary changes, ship-based mechanical breakdowns and covered shipboard service disruptions.
• Non-medical evacuation benefit of $25,000 per person.
• Baggage loss benefits of $2,500 per person.
• Travel medical coverage is secondary.
• Trip cancellation benefit for losing your job requires three years of continuous employment.
• No “cancel for any reason” (CFAR) upgrade available.
• Missed connection coverage of $1,500 per person is only for tours and cruises, after a 3-hour delay.

Best cheap travel insurance for add-on options

AIG offers the best cheap travel insurance for add-on options because the Travel Guard Preferred plan allows you to customize your policy with a host of optional upgrades.

• Travel Guard Preferred upgrades include “cancel for any reason” (CFAR) coverage , rental vehicle damage coverage and bundles that offer additional benefits for adventure sports, travel inconvenience, quarantine, pets, security and weddings. There’s also a medical bundle that increases the travel medical benefit to $100,000 and emergency evacuation to $1 million.
• Bundle upgrades allow you to customize your affordable travel insurance policy.
• Emergency medical and evacuation limits can be doubled with optional upgrade.
• Base travel insurance policy has relatively low medical limits.
• $300 baggage delay benefit requires a 12-hour delay.
• Optional CFAR upgrade only reimburses up to 50% of trip cost.

Best cheap travel insurance for missed connections

TravelSafe has the best cheap travel insurance for missed connections because coverage is not limited to cruises and tours, as it is with many policies.

• Best-in-class $2,500 per person in missed connection coverage.
• $1 million per person in medical evacuation and $25,000 in non-medical evacuation coverage.
• Generous $2,500 per person baggage and personal items loss benefit.
• Most expensive of the best cheap travel insurance plans.
• No “interruption for any reason” coverage available.
• Weak baggage delay coverage of $250 per person after 12 hours.

Cheapest travel insurance comparison

How much does the cheapest travel insurance cost?

The cheapest travel insurance in our rating is $334. This is for a WorldTrips Atlas Journey Preferred travel insurance plan, based on the average of seven quotes for travelers of various ages to international destinations with a range of trip values.  

Factors that determine travel insurance cost

There are several factors that determine the cost of travel insurance, including:

• Age and number of travelers being insured.
• Trip length.
• Total trip cost.
• The travel insurance plan you choose.
• The travel insurance company.
• Any add-ons, features or upgraded benefits you include in the travel insurance plan.

Expert tip: “In general, travelers can expect to pay anywhere from 4% to 10% of their total prepaid, non-refundable trip costs,” said Suzanne Morrow, CEO of InsureMyTrip.

Is buying the cheapest travel insurance a good idea?

Choosing cheaper travel insurance without paying attention to what a plan covers and excludes could leave you underinsured for your trip. Comparing travel insurance plans side-by-side can help ensure you get enough coverage to protect yourself financially in an emergency for the best price. 

For example, compare these two Travelex travel insurance plans:

• Travel Basic is cheaper but it only provides up to $15,000 for emergency medical expense coverage. You’ll also have to pay extra for coverage for children.
• Travel Select will cost you a bit more but it covers up to $50,000 in medical expenses and includes coverage for kids aged 17 and younger traveling with you. It also offers upgrades such additional medical coverage, “cancel for any reason” (CFAR) coverage and an adventure sports rider that may be a good fit for your trip.

Reasons to consider paying more for travel insurance 

Make sure you understand what you’re giving up if you buy the cheapest travel insurance. Here are a few reasons you may consider paying a little extra for better coverage. 

• Emergency medical. The best travel medical insurance offers primary coverage for emergency medical benefits. Travel insurance with primary coverage can cost more than secondary coverage but will save you from having to file a claim with your health insurance company before filing a travel insurance claim.
• Emergency evacuation. If you’re traveling to a remote location or planning a boat excursion on your trip, look at travel insurance with a high medical evacuation insurance limit. If you are injured while traveling, transportation to the nearest adequate medical facility could cost in the tens to hundreds of thousands. It may make sense to pay more for travel insurance with robust emergency evacuation coverage. 
• Flexibility. To maximize your trip flexibility, you might consider upgrading your travel insurance to “ cancel for any reason” (CFAR) coverage . This will increase the cost of your travel insurance but allow you to cancel your trip for any reason — not just those listed in your policy. The catch is that you’ll need to cancel at least 48 hours before your trip and will only be reimbursed 50% or 75% of your trip expenses, depending on the plan. 
• Upgrades. Many travel insurance plans have optional extras like car rental collision and adventure sports (which may otherwise be excluded from coverage). These will cost you extra but may give you the coverage you need. 

How to find the cheapest travel insurance

The best way to find the cheapest travel insurance is to determine what you’re looking for in a travel insurance policy and compare plans that meet your needs.

 “Travel insurance isn’t one-size-fits-all. Every trip is different, and every traveler has different needs, wants and concerns. This is why comparison is key,” said Morrow.

Consider the following factors when comparing cheap travel insurance plans.

• How often you’re traveling. A single-trip policy may be the most cost-effective if you’re only going on a single trip this year. But a multi-trip travel insurance plan may be cheaper if you’re going on multiple international trips throughout the year. Annual travel insurance policies cover you for a whole year as long as each trip doesn’t exceed a certain number of days, usually 30 to 90 days. 
• Credit card has travel insurance benefits. The best credit cards offer perks and benefits, and many offer travel insurance-specific benefits. The coverage types and benefit limits can vary, and you must put the entire trip cost on the credit card to use the coverage. If your trip costs more than the coverage limit on your card, you can supplement the rest with a cheaper travel insurance plan.
• The coverage you need. When looking for the best travel insurance option at the most affordable price, only buy extras and upgrades you really need. A basic plan may only provide up to $500 in baggage insurance, but if you only plan to take $300 worth of clothes and accessories, you don’t need to pay more for higher coverage limits.

Is cheap travel insurance worth it?

Cheap travel insurance can be worth it, as long as you understand the plan limitations and exclusions. Taking the time to read your policy, especially the fine print, well before your trip can ensure there won’t be any surprises about what’s covered once your journey begins.

“If a traveler is looking for coverage for travel delays, cancellations, interruptions, medical and baggage — a comprehensive travel insurance policy will provide the most bang for their buck,” said Morrow. But if you’re on a tight budget and are only worried about emergency medical care and evacuation coverage while traveling abroad, stand-alone options are cheaper.

Before buying travel insurance, you should also consider what your health insurance will cover. 

“Most domestic health insurance plans, including Medicare, will not cover medical bills abroad,” said Morrow. Even if you’re staying stateside, you may find value in an affordable travel insurance plan with medical coverage if you have a high-deductible health plan (HDHP). 

A cheap travel insurance plan is better than none at all if you end up in a situation that would have covered some or all of your prepaid, nonrefundable trip expenses.

Methodology

Our insurance experts reviewed 1,855 coverage details and 567 rates to determine the best travel insurance . From those top-scoring travel insurance plans, we chose the most affordable for our rating of the cheapest travel insurance.

Insurers could score up to 100 points based on the following factors:

• Cost: 40 points. We scored the average cost of each travel insurance policy for a variety of trips and traveler profiles.
• Medical expenses: 10 points. We scored travel medical insurance by the coverage amount available. Travel insurance policies with emergency medical expense benefits of $250,000 or more per person were given the highest score of 10 points.
• Medical evacuation: 10 points. We scored each plan’s emergency medical evacuation coverage by coverage amount. Travel insurance policies with medical evacuation expense benefits of $500,000 or more per person were given the highest score of 10 points.
• Pre-existing medical condition exclusion waiver: 10 points. We gave full points to travel insurance policies that cover pre-existing medical conditions if certain conditions are met.
• Missed connection: 10 points. Travel insurance plans with missed connection benefits of $1,000 per person or more received full points.
• “Cancel for any reason” upgrade: 5 points. We gave points to travel insurance plans with optional “cancel for any reason” coverage that reimburses up to 75%.
• Travel delay required waiting time: 5 points. We gave 5 points to travel insurance policies with travel delay benefits that kick in after a delay of 6 hours or less.
• Cancel for work reasons: 5 points. If a travel insurance plan allows you to cancel your trip for work reasons, such as your boss requiring you to stay and work, we gave it 5 points.
• Hurricane and severe weather: 5 points. Travel insurance plans that have a required waiting period for hurricane and weather coverage of 12 hours or less received 5 points.

Some travel insurance companies may offer plans with additional benefits or lower prices than the plans that scored the highest, so make sure to compare travel insurance quotes to see your full range of options.

Cheapest travel insurance FAQs

When buying travel insurance, cheapest is not always the best. The most affordable travel insurance plans typically offer fewer coverages with lower policy limits and few or no optional upgrades. Add up your total nonrefundable trip costs and compare travel insurance plans and available features that cover your travel expenses. This strategy can help you find the cheapest travel insurance policy that best protects you from financial loss if an unforeseen circumstance arises.

Get the coverage you need: Best travel insurance of 2024

According to our analysis, WorldTrips , Travel Insured International and Travelex offer the best cheap travel insurance. Policy coverage types and limits can vary by each travel insurance provider, so the best way to get the cheapest travel insurance plan is to compare several policies and companies to find the right fit for your budget.

A good rate for travel insurance depends on your budget and coverage needs. The most comprehensive travel insurance plan is usually not the cheapest. But cheap trip insurance may not have enough coverage or the types of coverage you want. Comparing different levels of coverage and how much they cost can help you find the best cheap insurance for travel. 

The average cost of travel insurance is between 5% to 6% of your total travel expenses for one trip, according to our analysis of rates. However, you may find cheaper travel insurance if you opt for a plan with fewer benefits or lower coverage limits. How much you pay for travel insurance will also depend on the number of travelers covered, their ages, the length of the trip and any upgrades you add to your plan.

Travel insurance covers nonrefundable, prepaid trip costs — up to the policy coverage limits — when your trip is interrupted or canceled for a covered reason outlined in your plan documents. Even the cheapest travel insurance policies usually provide coverage for:

• Medical emergencies.
• Trip delays.
• Trip interruption.
• Trip cancellation.
• Lost, stolen or damaged luggage.

However, if you’re looking to save on travel insurance, you can shop for a policy that only has travel medical insurance and does not include benefits for trip cancellation .

Even when you buy cheap travel insurance, you can often use upgrade options to customize your policy to meet your specific needs. 

Some common travel insurance add-ons you may want to consider include:

• Rental car damage coverage. 
• Medical bundle.
• Security bundle.
• Accidental death and dismemberment coverage.
• Adventure sports bundle.
• Pet bundle.
• Wedding bundle.
• “Cancel for work reasons” coverage.
• “Interruption for any reason” (IFAR) coverage.
• “Cancel for any reason” (CFAR) coverage .

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy . The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Mandy is an insurance writer who has been creating online content since 2018. Before becoming a full-time freelance writer, Mandy spent 15 years working as an insurance agent. Her work has been published in Bankrate, MoneyGeek, The Insurance Bulletin, U.S. News and more.

Heidi Gollub is the USA TODAY Blueprint managing editor of insurance. She was previously lead editor of insurance at Forbes Advisor and led the insurance team at U.S. News & World Report as assistant managing editor of 360 Reviews. Heidi has an MBA from Emporia State University and is a licensed property and casualty insurance expert.

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2024 federal budget's key takeaways: Housing and carbon rebates, students and sin taxes

Budget sees nearly $53b in new spending over the next 5 years.

What's in the new federal budget?

Social sharing.

Finance Minister Chrystia Freeland today tabled a 400-page-plus budget her government is pitching as a balm for anxious millennials and Generation Z.

The budget proposes $52.9 billion in new spending over five years, including $8.5 billion in new spending for housing. To offset some of that new spending, Ottawa is pitching policy changes to bring in new revenue.

Here are some of the notable funding initiatives and legislative commitments in budget 2024.

Ottawa unloading unused offices to meet housing targets

One of the biggest pillars of the budget is its housing commitments. Before releasing the budget, the government laid out what it's calling Canada's Housing Plan — a pledge to "unlock" nearly 3.9 million homes by 2031.

The government says two million of those would be net new homes and it believes it can contribute to more than half of them. 

It plans to do that by:

• Converting underused federal offices into homes. The budget promises $1.1 billion over ten years to transform 50 per cent of the federal office portfolio into housing.
• Building homes on Canada Post properties. The government says the 1,700-plus Canada Post offices across the country can be used to build new homes while maintaining postal services. The federal government says it's assessing six Canada Post properties in Quebec, Alberta and British Columbia for development potential "as a start."
• Rethinking National Defence properties. The government is promising to look at redeveloping properties and buildings on National Defence lands for military and civilian use.
• Building apartments. Ottawa is pledging a $15 billion top-up to the Apartment Construction Loan Program, which says it will build 30,000 new homes across Canada.

Taxing vacant land?

As part of its push on housing, the federal government also says it's looking at vacant land that could be used to build homes.

It's not yet committing to new measures but the budget says the government will consider introducing a new tax on residentially zoned vacant land. 

• Freeland's new federal budget hikes taxes on the rich to cover billions in new spending
• Are you renting with no plans to buy? Here's what the federal budget has for you

The government said it plans to launch consultations on the measure later this year.

Help for students 

There's also something in the budget for students hunting for housing.

The government says it will update the formula used by the Canada Student Financial Assistance Program to calculate housing costs when determining financial need, to better reflect the cost of housing in the current climate.

The government estimates this could deliver more aid for rent to approximately 79,000 students each year, at an estimated cost of $154.6 million over five years.

• Updated Federal budget's funding boost for defence spread out over multiple years
• Liberals pledge $9B in new money for Indigenous communities in 2024 budget

The government is also promising to extend increased student grants and interest-free loans, at an estimated total cost of $1.1 billion this year.

Increase in taxes on capital gains

To help cover some of its multi-billion dollar commitments, the government is proposing a tax hike on capital gains — the profit individuals make when assets like stocks and second properties are sold.

The government is proposing an increase in the taxable portion of capital gains, up from the current 50 per cent to two thirds for annual capital gains over $250,000. 

New investment to lead 'housing revolution in Canada,' Freeland says

Freeland said the change would impact the wealthiest 0.1 per cent.

There's still some protection for small businesses. There's been a lifetime capital gains exemption which allows Canadians to exempt up to $1,016,836 in capital gains tax-free on the sale of small business shares and farming and fishing property. This June the tax-free limit will be increased to $1.25 million and will continue to be indexed to inflation thereafter, according to the budget.

The federal government estimates this could bring in more than $19 billion over five years, although some analysts are not convinced.

Disability benefit amounts to $200 per month 

Parliament last year passed the Canada Disability Benefit Act, which promised to send a direct benefit to low-income, working-age people with disabilities. 

Budget 2024 proposes funding of $6.1 billion over six years, beginning this fiscal year, and $1.4 billion per year ongoing, for a new Canada Disability Benefit.

Advocates had been hoping for something along the lines of $1,000 per month per person . They'll be disappointed.

According to the budget document, the maximum benefit will amount to $2,400 per year for low income individuals with disabilities between the ages of 18 and 64 — about $200 a month.

• Federal government plans to lease public lands for construction through new housing strategy
• Alberta premier says she's prepared to take Ottawa to court over housing deals

The government said it plans for the Canada Disability Benefit Act to come into force in June 2024 and for payments to start in July 2025.

Carbon rebate for small businesses coming 

The federal government has heard an earful from small business advocates who accuse it of reneging on a promise to return a portion of carbon pricing revenues to small businesses to mitigate the tax's economic costs.

• What's behind the carbon tax, and does it work?
• Federal government scales back carbon tax rebates for small businesses

The budget proposes to return fuel charge proceeds from 2019-20 through 2023-24 to an estimated 600,000 businesses with 499 or fewer employees through a new refundable tax credit.

The government said this would deliver $2.5 billion directly to Canada's small- and medium-sized businesses.

Darts and vape pods will cost more 

Pitching it as a measure to cut the number of people smoking and vaping, the Liberals are promising to raise revenues on tobacco and smoking products.

• Just Asking  wants to know:   What questions do you have about quitting smoking or vaping? Do you think sin taxes will encourage smoking cessation?  Fill out the details on  this form  and send us your questions ahead of our show on April 20.

Starting Wednesday, the total tobacco excise duty will be $5.49 per carton. The government estimates this could increase federal revenue by $1.36 billion over five years starting in 2024-25.

The budget also proposes to increase the vaping excise duty rates by 12 per cent effective July 1. That means an increase of 12 to 24 cents per pod, depending on where you live. 

• 'Stay the hell away from our kids': Health minister vows to restrict nicotine pouches — but how?

Ottawa hopes this increase in sin taxes will bring in $310 million over five years, starting in 2024-25.

More money for CBC 

Heritage Minister Pascale St-Onge has mused about redefining the role of the public broadcaster before the next federal election . But before that happens, CBC/Radio-Canada is getting a top-up this year. 

The budget promises $42 million more in 2024-25 for CBC/Radio-Canada for "news and entertainment programming." CBC/Radio-Canada received about $1.3 billion in total federal funding last year.

The government says it's doing this to ensure that Canadians across the country, including rural, remote, Indigenous and minority language communities, have access to independent journalism and entertainment.

Last year, the CBC announced a financial shortfall, cut 141 employees and eliminated 205 vacant positions. In a statement issued Tuesday, CBC spokesperson Leon Mar said the new funding means the corporation can balance its budget "without significant additional reductions this year."

Boost for Canada's spy agency 

As the government takes heat over how it has handled the threat of foreign election interference, it's promising more money to bolster its spy service.

The Canadian Security Intelligence Service is in line to receive $655.7 million over eight years, starting this fiscal year, to enhance its intelligence capabilities and its presence in Toronto.

• CSIS chief defends his spies' work after PM casts doubt on reliability of agency's reports
• Trudeau says it's his job to question CSIS intelligence, call out 'contradictions'

The budget also promises to guarantee up to $5 billion in loans for Indigenous communities to participate in natural resource development and energy projects in their territories.

These loans would be provided by financial institutions or other lenders and guaranteed by the federal government, meaning Indigenous borrowers who opt in could benefit from lower interest rates, the budget says. 

ABOUT THE AUTHOR

Catharine Tunney is a reporter with CBC's Parliament Hill bureau, where she covers national security and the RCMP. She worked previously for CBC in Nova Scotia. You can reach her at [email protected]

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Liquidity risks at Canadian life insurance companies

Introduction.

Life insurers, like many asset managers, use fixed-income markets to implement their investment strategies. A key quality of fixed-income markets is liquidity. In a liquid market, participants can trade quickly at prevailing prices. This allows asset managers to use securities as collateral or sell them to manage their risk of not meeting short-term cash or collateral obligations, known as liquidity risk. 1

However, during periods when many market participants seek liquidity at the same time, the demand for liquidity may overwhelm the capacity or willingness of intermediaries, like bank-owned dealers, to provide it. This risk has come into focus for practitioners and policy-makers since the COVID-19 crisis, the episode of extreme market stress at the onset of the COVID‑19 pandemic in March 2020. 2 At that time, central banks around the world intervened to restore market liquidity, including by opening new emergency lending facilities for a wide range of market participants. 3

Understanding the potential behaviour of market participants during such episodes can help central bankers develop policy. The Bank of Canada has therefore been deepening its understanding of how various types of market participants manage their liquidity risks and the potential impact of their actions on fixed-income markets. This work has included analyzing mutual funds, hedge funds and pension funds. 4

We conducted two rounds of interviews with representatives from four of the largest Canadian life insurers and analyzed several data sources to investigate how life insurers’ business model results in liquidity risks and how they manage this risk. 5 Specifically, we use three data sources:

• the National Balance Sheet Accounts (NBSA) from Statistics Canada, which include aggregated balance sheet information for all Canadian life insurers
• life insurers’ investment returns from the Office of the Superintendent of Financial Institutions (OSFI), which include granular information on assets and derivative positions for the three largest OSFI-regulated insurance companies—Manulife, Sun Life and Canada Life
• the Market Trade Reporting System from the Canadian Investment Regulatory Organization, which contains detailed, dealer-reported information about Canadian bond trades, including those involving life insurers

For clarity, we indicate on each chart that the samples of life insurance companies differ across these data sources.

In brief, we find that the two most important liquidity risks that Canadian life insurers must manage are unexpected payouts resulting from policyholder behaviour and margin calls from derivatives. We examine the effects on insurers from the COVID‑19 crisis and the period of rising interest rates in 2022, which serve as case studies in liquidity risk management. We find that the two liquidity risks did not materialize significantly in either period, which allowed life insurers to continue their typical investment pattern of purchasing long-dated corporate and provincial bonds. These purchases provide an important source of funding for Canadian bond issuers, which supports market liquidity and the real economy.

Life insurers are among the largest institutional investors in Canada

Life insurers are companies that, as the name implies, specialize in providing life insurance and related products. The sector has a small number of large companies that individually manage assets of comparable value to those of some of Canada's big pension funds. This makes life insurers among the largest institutional investors in Canada, managing around $1 trillion of financial assets associated with their Canadian business lines as of the first quarter of 2023 ( Chart 1 ). A large proportion of these assets are fixed-income securities, mainly bonds ( Chart 2 ). 6 Therefore, life insurers can alleviate or exacerbate strains on liquidity in fixed-income markets through their transactions.

Chart 1: Life insurance companies are among the largest institutional investors in Canada

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Alternatively, the data is available for download in:

Life insurers sell financial products that are typically of two types:

• life insurance
• investments such as annuities and mutual funds

These products offer future payoffs to holders, which creates liabilities for life insurers. To meet these future obligations, insurers invest the cash they receive from their clients.

Overall, Canadian life insurers manage roughly equal proportions of assets associated with each type of product. Investment products are often managed in distinct funds, and their liquidity risks come primarily from investor redemptions. Mutual funds manage this risk in a similar way, a topic that the Bank has analyzed in the past. 7 We therefore focus our analysis on life insurance products because they present liquidity risks that are unique to life insurers.

Canadian life insurers use bonds and derivatives to match assets and liabilities

Understanding the risks inherent in life insurers’ business models is helpful for understanding their liquidity risks and how they manage them. 8 A key risk from the business model comes from the long time horizons over which life insurance contracts pay out. Insurers estimate these horizons, which can be several decades, by using actuarial modelling of policyholders’ longevity and morbidity. This means life insurance products have relatively high duration, meaning they are sensitive to changes in interest rates. This can create a significant risk for life insurers if assets and liabilities respond differently to interest rates. For example, a drop in interest rates could increase the present value of an insurer’s liabilities by more than the increase in the value of an insurer’s assets, making it more difficult for the insurer to meet its obligations to policyholders.

Life insurers choose assets with similar durations and liquidity to hedge the risks from their liabilities. This practice, known as asset-liability management (ALM), aims to immunize insurers against interest rate risk. In Canada, it also helps to satisfy regulatory capital requirements, which are established by OSFI or Autorité des marchés financiers (AMF) for insurers headquartered in Quebec. 9 ALM typically matches an insurer’s assets and liabilities to the average duration and a range of specific durations to protect against relative changes in long- and short-term interest rates. The latter practice is called key rate duration management.

Fixed-income securities are natural investments for life insurers’ ALM since these securities can have a high duration like life insurance products ( Chart 2 , panel a). Among these securities, Canadian life insurers hold primarily long-term corporate or provincial bonds ( Chart 2 , panel b). Regular cash premiums from policyholders are typically invested into these instruments as quickly as possible, making life insurers a stable source of funding for bond issuers. Provincial bonds and, to a greater degree, corporate bonds are less liquid than Government of Canada (GoC) bonds but have the benefit of higher yields. Despite the relative illiquidity of such bonds, these holdings do not expose insurers to large liquidity risks because their liabilities are also relatively illiquid, as will be explained in the section on liquidity risks .

Life insurers also invest in foreign fixed-income assets and alternative assets with high duration, such as infrastructure, real estate, private debt and private equity. These assets help insurers diversify their portfolios and can, to some extent, substitute for high-duration domestic corporate and provincial bonds, which can be in limited supply ( Chart 2 , panel a). These alternative assets also tend to offer insurers higher yields than bonds.

Chart 2: Life insurers’ assets are concentrated in fixed-income securities, most of which are corporate bonds

Composition of total assets and fixed-income assets as at the end of the first quarter of 2023

Note: Figures include the market value of life insurers’ Canadian-domiciled branches but not life insurers’ mutual funds. Sources: Office of the Superintendent of Financial Institutions and Bank of Canada calculations Last observation: 2023Q1

Life insurers also use derivatives to hedge exposures to risks. These exposures are from two main sources:

• residual interest rate risk
• investment assets risk

Securities and alternative assets with durations similar to those of insurance products are often in limited supply. One reason is that bond issuers rarely raise public debt with terms greater than 30 years while some insurance liabilities have longer terms. Life insurers therefore use derivatives such as interest rate swaps and bond forwards to extend the duration of their portfolios ( Chart 3 ). We find that the average term to maturity of these derivatives is typically long, ranging from 5 to just under 15 years. This means that interest rate derivatives typically carry risks comparable with those of bonds of similar terms to maturity, particularly for interest rate derivatives.

In addition to extending duration, derivatives are well suited to quickly adjust mismatches in duration between assets and liabilities because they are relatively liquid and do not require significant initial cash outlays. These quick adjustments can be needed when the values of assets and liabilities respond differently to a large change in interest rates or other economic conditions, causing their durations to become misaligned. This is called convexity risk, which investors can hedge by using certain derivatives like swaptions.

Derivatives also serve to hedge risks not related to interest rates. For example, investing in foreign assets to match domestic liabilities produces currency risk. Life insurers typically hedge this risk by using cross-currency swaps or currency forwards, which are the second-largest class of derivatives for life insurers ( Chart 3 ). Large investments in corporate bonds expose life insurers to default risk. However, credit derivatives, which provide protection against default, make up less than 1% of the notional value of derivatives held by insurers.

Chart 3: Life insurers use derivatives to hedge against interest rate and foreign exchange risks

Note: Figures include the derivative securities of life insurers’ Canadian-domiciled branches but not life insurers’ mutual funds. Sources: Office of the Superintendent of Financial Institutions and Bank of Canada calculations Last observation: 2023Q1

Life insurers face two main liquidity risks

The business model and investment strategy of Canadian life insurers give rise to two main liquidity risks:

• lower-than-expected cash inflows if a policyholder temporarily or permanently stops paying their premiums—known as a lapse
• higher-than-expected cash outflows if contracts are redeemed before maturity—known as a surrender
• margin requirements on derivatives that can increase the need to deposit cash or securities to protect a derivatives counterparty against potential losses in the event of default

Policyholders’ behaviour may trigger a need for liquidity when economic conditions stress household finances. Policyholders typically cannot lapse or surrender a policy without facing a penalty. Life insurance liabilities can therefore be considered to be relatively illiquid. However, if economic conditions cause widespread unemployment or income loss, the resulting lapses or surrenders could impose large, immediate and unexpected cash outflows on an insurer.

Margin calls on derivatives may become unexpectedly large when the underlying risk factors, such as interest rates or exchange rates, change sharply or become volatile compared with their historical levels. Life insurers are typically positioned in interest rate and foreign exchange derivatives such that a simultaneous rise in interest rates and a weakening of the Canadian dollar would increase margin requirements.

Life insurers use liquidity coverage ratios to manage risks

We heard in our interviews that Canadian life insurers manage liquidity risks by holding a buffer so that they can meet unexpected liquidity draws. Insurers often use a liquidity coverage ratio (LCR) to estimate how large the buffer should be, similar to the framework used by banks, pension funds and other asset managers. An LCR compares the value of the buffer to the total value of possible and expected liquidity draws in a stressed scenario over a given time period. While a standardized LCR is a regulatory requirement for banks, it is not for insurance companies. This means that its specifications may vary across companies. For example, some companies may use an LCR that is based on past stressed periods to prepare for unexpected liquidity needs. Others may take a broader approach that incorporates expected liquidity needs such as operational cash flows. Companies may also have different definitions of a high-quality liquid asset. A typical LCR can be represented as:

\(\displaystyle LCR\) \(\displaystyle=\, \frac{cash + high\ quality\ liquid\ assets + other\ liquidity\ sources}{surrenders + margin\ calls+other\ potential\ outflows}\) \(\displaystyle,\)

where, other liquidity sources in the numerator can include relatively illiquid or volatile assets that are discounted appropriately, committed credit lines with banks and expected cash contributions from policyholders within the LCR time horizon. Therefore, policyholder lapses affect the numerator by reducing expected cash contributions. In the denominator, other potential outflows may include life insurance claims, payments needed for maturing debt and capital needed for private assets. As with other liquidity sources, these inflows or outflows can vary across insurance companies.

Life insurers seek to always keep their LCRs substantially above one so that they can meet significant draws on their liquidity. The assets in buffers may differ across insurers but are typically composed of cash and relatively liquid securities like GoC or provincial bonds and bills, which represent about 20% of insurers’ financial assets ( Chart 4 ).

Chart 4: Liquid assets of the largest life insurers have been relatively stable over time

Responses from interviewees indicate that insurers typically use conservative assumptions to calibrate LCRs. Potential cash outflows are often projected using:

• multiple horizons, such as 10 days, 30 days or longer
• observations from past episodes of stress
• large hypothetical shocks to interest rates, credit spreads and policyholders’ mortality

Correlations between pricing factors, such as interest rates and exchange rates, are usually assumed to produce worst-case outcomes despite any historical tendencies to mitigate liquidity draws. In addition, life insurers make assumptions about the appropriate discount to apply to an asset’s value to capture the fact that prices may be worse in stressed situations. For example, they will assume that the value of provincial bonds will decline by more than the value of GoC bonds during periods of stress.

Life insurers continued purchasing bonds during recent periods of stress

The COVID‑19 crisis in 2020 and the period of rising interest rates in 2022 serve as case studies to better understand how life insurers managed their two main liquidity risks. The number of lapses and surrenders could have been unusually high during the COVID‑19 crisis because of widespread lockdowns that caused employment and income losses for millions of Canadians. Margin requirements on insurers’ derivative positions could have also been higher due to the volatility in financial markets during the COVID‑19 crisis and then again as interest rates rose in 2022.

The life insurers we spoke to indicated that they did not experience large lapses or surrenders from policyholders during the COVID‑19 crisis. Even so, they increased monitoring of their liquidity positions and tested their ability to withstand a potentially higher number of lapses, surrenders and payouts. They also extensively modelled changes in mortality rates from the COVID‑19 pandemic to prepare for a potential increase in payouts, although these did not become a significant draw on liquidity.

During the COVID‑19 crisis, total margin requirements for the three largest Canadian life insurers were not unusually large because the margins for interest rate and foreign exchange derivatives were offsetting ( Chart 5 ).

Chart 5: Market values of interest rate and foreign exchange derivatives offset during the COVID-19 crisis

Market value reflects profits and losses on derivatives contracts due to movements in their underlying price factors and is a proxy for the magnitude and direction of margin requirements. The offsetting market values observed in the first quarter of 2020—the peak of the COVID‑19 crisis—were driven by a decline in interest rates and a strengthening of the US dollar, which are typical movements in these markets during turmoil. In the first quarter of 2020, the three largest Canadian life insurers received margin on interest rate derivatives as the market value of these derivatives increased by $1.5 billion. This mitigated the effect of needing to post margin on foreign exchange derivatives, whose market value decreased by $3 billion.

Given that liquidity risks did not materialize at the peak of the crisis, life insurers continued purchasing long-term corporate and provincial bonds. They did this by rebalancing their portfolios out of short- and medium-term GoC bonds and using regular cash inflows from life insurance premiums.

We find that life insurers sold close to $2 billion worth of GoC bonds and purchased around $5 billion worth of corporate and provincial bonds ( Chart 6 , panel a). They sold bonds in the 2- and 5-year sectors and purchased bonds in the 10- and 30-year sectors ( Chart 6 , panel b).

This activity provided cash to bond sellers and issuers at a time when the demand for cash was high. 10 It also added to overall GoC bond selling during the COVID‑19 crisis when markets were stressed. However, any effect on market liquidity was likely small since around 80% of insurers’ sales of GoC bond took place between February 18 and March 6, the three weeks before the period of peak market illiquidity. 11

Chart 6: Life insurers continued purchasing bonds during peak of COVID-19 crisis

Cumulative net purchases, daily

Note: 30-year refers to any bond with a term greater than 10 years. Data presented include all Canadian life insurance companies and Canadian securities only. Sources: Market Trade Reporting System and Bank of Canada calculations Last observation: April 30, 2020

Similarly, the three largest Canadian life insurers made net purchases of $3.3 billion worth of bonds in secondary markets during the first half of 2022 as interest rates increased. This happened even though the margin requirements for interest rate and foreign exchange derivatives did not offset. During this period, the market value of these life insurers’ derivatives declined by $4.5 billion ( Chart 7 ). Even so, the larger margin requirements did not undermine the ability of the three largest Canadian life insurers to purchase bonds in secondary markets. This may be because the increase in interest rates was gradual and somewhat anticipated, allowing insurers to prepare for liquidity needs without disrupting their regular patterns of investing contributions from policyholders.

Chart 7: Life insurers’ bond purchases remained stable during the period of rising interest rates

Unlike other asset managers who broadly sold bonds during the COVID‑19 crisis, life insurers bought bonds. In addition, the period of rising interest rates in 2022 did not greatly affect life insurers’ usual investment pattern of stable bond purchases. While this behaviour could change under different market conditions, the findings nonetheless provide insights into the nature and severity of past periods of market turmoil that life insurers were able to withstand. This work deepens the Bank’s understanding of market stress and how various participants react during these periods. These insights combined with those the Bank has collected about other asset managers inform the design of the Bank’s policies and facilities.

• 1. For a discussion of pension fund liquidity management see G. Bédard-Pagé, D. Bolduc-Zuluaga, A. Demers, J.-P. Dion, M. Pandey, L. Berger-Soucy and A. Walton , “ COVID‑19 crisis: Liquidity management at Canada’s largest public pension funds ,” Bank of Canada Staff Analytical Note No. 2021-11 (May 2021).[ ← ]
• 2. For an in-depth description of the COVID‑19 crisis in Canada, see J.-S. Fontaine, C. Garriott, J. Johal, J. Lee and A. Uthemann, “ COVID‑19 Crisis: Lessons Learned for Future Policy Research ,” Bank of Canada Staff Discussion Paper No. 2021-2 (February 2021).[ ← ]
• 3. For a summary of the Bank of Canada’s liquidity facilities during the COVID crisis, see G. Johnson, “ A Review of the Bank of Canada’s Market Operations related to COVID‑19 ,” Bank of Canada Staff Discussion Paper No. 2023-6 (March 2023).[ ← ]
• 4. Recent work by the Bank of Canada on asset managers includes J. Sandhu and R. Vala, “ Do hedge funds support liquidity in the Government of Canada bond market? ” Bank of Canada Staff Analytical Note No. 2023-11 (August 2023), and G. Ouellet Leblanc and R. Shotlander, “ What COVID‑19 revealed about the resilience of bond funds ,” Bank of Canada Staff Analytical Note No. 2020-18 (August 2020).[ ← ]
• 5. We are grateful for the generous cooperation of Manulife, Sun Life, Canada Life and Industrial Alliance in this work.[ ← ]
• 6. This excludes assets managed on behalf of their clients, such as mutual funds.[ ← ]
• 7. To learn more about how mutual funds manage liquidity, see G. Ouellet Leblanc and R. Arora, “ How do Canadian Corporate Bond Mutual Funds Meet Investor Redemptions? ” Bank of Canada Staff Analytical Note No. 2018-14 (May 2018).[ ← ]
• 8. While we focus on economic considerations in this description, accounting and regulation can also influence life insurers’ investment strategies.[ ← ]
• 9. OSFI and the AMF impose harmonized capital requirements to ensure solvency for life insurance companies. Insurers regulated by OSFI must satisfy the Life Insurance Capital Adequacy Test. Insurers regulated by AMF must satisfy capital adequacy requirements for life and health insurance.[ ← ]
• 10. For more details, see Bank of Canada, " Fixed-income market liquidity ," Financial System Review—2022 (June 9, 2022).[ ← ]
• 11. For more on market illiquidity, see J.-S. Fontaine, H. Ford and A. Walton, " COVID‑19 and bond market liquidity: alert, isolation and recovery ," Staff Analytical Note No. 2020-14 (July 2020).[ ← ]

Bank of Canada staff analytical notes are short articles that focus on topical issues relevant to the current economic and financial context, produced independently from the Bank’s Governing Council. This work may support or challenge prevailing policy orthodoxy. Therefore, the views expressed in this note are solely those of the authors and may differ from official Bank of Canada views. No responsibility for them should be attributed to the Bank.

DOI: https://doi.org/10.34989/san-2024-7

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2024 Federal Budget analysis

On April 16, 2024, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the government’s budget. The budget:

• increases the capital gains inclusion rate from 1/2 to 2/3, effective June 25, 2024 (up to $250,000 of annual gains for individuals will continue to benefit from the 1/2 inclusion rate)
• raises the lifetime capital gains exemption to $1.25 million and introduces a new 1/3 inclusion rate for up to $2 million of certain capital gains realized by entrepreneurs
• confirms previously announced alternative minimum tax proposals effective January 1, 2024, but softens the impact of these proposals on charitable donations
• provides design and implementation details for the clean electricity investment tax credit
• introduces accelerated capital cost allowance (CCA) for, and relief from interest deductibility limitations for debt incurred to fund the construction of, certain purpose-built rental housing
• provides immediate expensing for the cost of certain patents and computer equipment and software
• gives the Canada Revenue Agency (CRA) additional information gathering powers

This Tax Insights discusses these and other tax initiatives proposed in the budget.

Tax measures

Capital gains inclusion rate.

• Lifetime Capital Gains Exemption

Canadian Entrepreneurs’ Incentive

• Alternative Minimum Tax

Employee Ownership Trust Tax Exemption

Volunteer firefighters tax credit and search and rescue volunteers tax credit, mineral exploration tax credit for flow-through share investors.

• Canada Child Benefit

Disability Supports Deduction

Charities and qualified donees.

• Home Buyers’ Plan

Qualified Investments for Registered Plans

Deduction for tradespeople’s travel expenses, indigenous child and family services settlement, clean electricity investment tax credit, ev supply chain investment tax credit, clean technology manufacturing investment tax credit.

• Accelerated Capital Cost Allowance

Interest Deductions and Purpose-Built Rental Housing

Taxing vacant lands to incentivize construction, confronting the financialization of housing, halal mortgages, non-compliance with information requests, synthetic equity arrangements, mutual fund corporations, canada carbon rebate for small business, avoidance of tax debts, reportable and notifiable transactions penalty, manipulation of bankrupt status.

• Scientific Research and Experimental Development

International

Crypto-asset reporting, withholding for non-resident service providers, international tax reform.

• Extending GST Relief to Student Residences

GST/HST on Face Masks and Face Shields

Previously announced, personal tax measures.

The budget proposes to increase the capital gains inclusion rate from 1/2 to:

• 2/3 for dispositions after June 24, 2024 for corporations and trusts, and
• 2/3 for the portion of capital gains realized after June 24, 2024 in excess of an annual $250,000 threshold for individuals

The $250,000 annual threshold would apply to capital gains realized by an individual, either directly or indirectly via a partnership or trust, net of:

• current year capital losses
• capital losses of other years applied to reduce current year capital gains, and
• capital gains in respect of which the Lifetime Capital Gains Exemption (LCGE), the proposed Employee Ownership Trust Exemption or the proposed Canadian Entrepreneurs’ Incentive is claimed

As a result, the following rates will apply to capital gains earned by individuals in excess of the $250,000 threshold who are subject to the top marginal income tax rate (i.e. on taxable income exceeding: $355,845 in Alberta, $252,752 in British Columbia, $1,103,478 in Newfoundland and Labrador, $500,000 in the Yukon and $246,752 in all other jurisdictions).

The budget also proposes to decrease the stock option deduction to 1/3 to align with the new capital gains inclusion rate.  Individuals would continue to benefit from a deduction of 1/2 of the taxable benefit up to a combined $250,000 for both employee stock options and capital gains.

The inclusion rate for net capital losses carried forward and applied against capital gains will be adjusted to reflect the inclusion rate of the capital gains being offset.   

Transitional rules will apply to taxation years that begin before June 25, 2024 and end after June 24, 2024 such that capital gains realized before June 25, 2024 would be subject to the 1/2 inclusion rate and capital gains realized after June 24, 2024 (net of any losses) would be subject to a 2/3 inclusion rate. The $250,000 threshold will not be prorated for individuals in 2024 and will apply only against capital gains incurred after June 24, 2024.

Additional details will be provided in the coming months.   

Earning capital gains through a Canadian-controlled private corporation (CCPC)

In most jurisdictions, the increase in the capital gains inclusion rate makes it less attractive for individuals to earn capital gains in excess of $250,000 through a CCPC instead of directly. The  Appendix shows the resulting income tax deferral (prepayment) and the tax cost for an individual who realizes capital gains in excess of $250,000 and pays tax at the top tax rate.

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Lifetime Capital Gains Exemption (LCGE)

The budget proposes to increase the LCGE on eligible capital gains from $1,016,836 to $1,250,000 for dispositions that occur after June 24, 2024. The indexing of the LCGE to inflation will resume in 2026.

The budget introduces the Canadian Entrepreneurs’ Incentive, which will reduce the taxes on capital gains from the disposition of shares by eligible individuals which meet the following conditions:

• at the time of the sale the share was a share of a small business corporation owned directly by an individual
• used principally in an active business carried on primarily in Canada by the CCPC or a related corporation
• certain shares or debts of connected corporations, or
• a combination of these assets
• the individual was a founding investor and the individual held the share for a period of five years prior to the disposition
• at all times since the share subscription until the time immediately before the sale, the individual directly owned shares with a fair market value (FMV) of more than 10% of the FMV of all of the issued and outstanding shares of the corporation and shares entitling the individual to more than 10% of the votes
• throughout the five year period before the disposition the individual was actively engaged in a regular, continuous and substantial basis in the activities of the business
• the share does not represent a direct or indirect interest in a professional corporation, a corporation whose principal asset is the reputation or skill of one or more employees, or a corporation that carries on certain types of businesses including a business operating in the financial, insurance, real estate, food and accommodation, arts, recreation, or entertainment sector, or providing consulting or personal care services
• the share must have been obtained for fair market value consideration

The incentive would provide a capital gains inclusion rate of one half of the prevailing inclusion rate on up to $2 million in capital gains per individual during their lifetime. The $2 million limit will be phased in over 10 years by increments of $200,000 per year reaching $2 million by January 1, 2034.  

Applying the proposed 2/3 inclusion rate would result in an inclusion rate of 1/3 for qualifying dispositions.  This will apply in addition to the LCGE.

This measure would apply to dispositions that occur after December 31, 2024.

Alternative Minimum Tax (AMT)

The 2023 budget announced amendments to change the calculation of the AMT. Draft legislative proposals were released for consultation in the summer of 2023. (For more information, see our Tax Insights “ Proposed changes to the alternative minimum tax: How will it affect individuals and trusts ”.)

The budget proposes to revise the proposed charitable donation tax credit claim to allow individuals to claim 80% when calculating AMT (as opposed to the previously proposed 50%).

The budget also proposes additional amendments to the AMT proposals including:

• allowing deductions for the Guaranteed Income Supplement, social assistance and workers compensation payments
• fully exempting employee ownership trusts (EOTs) from the AMT, and
• allowing certain disallowed credits under the AMT to be eligible for the AMT carry-forward (i.e. the federal political contribution tax credit, investment tax credits (ITCs), and labour-sponsored funds tax credit)

The amendments would apply to taxation years that begin after December 31, 2023.

The budget also proposes certain technical amendments to the AMT legislative proposals to exempt certain trusts for the benefit of Indigenous groups.

The 2023 budget proposed tax rules to create EOTs. The 2023 Fall Economic Statement proposed to exempt $10 million of capital gains on the sale of a business to an EOT subject to certain conditions.

The budget introduces the conditions for this exemption. The exemption will be available to an individual (other than a trust) on the sale of a business to an EOT where the following conditions are met:

• the individual, a personal trust of which the individual is a beneficiary, or a partnership in which the individual is a member, disposes of shares of a corporation that is not a professional corporation
• the transaction is a qualifying business transfer (as defined in the proposed rules for EOTs) in which the trust acquiring the shares is not already an EOT or a similar trust with employee beneficiaries
• throughout the 24 months immediately prior to the qualifying business transfer, the transferred shares were exclusively owned by the individual claiming the exemption, a related person, or a partnership in which the individual is a member; and over 50% of the FMV of the corporation’s assets were used principally in an active business
• at any time prior to the qualifying business transfer, the individual (or their spouse or common-law partner) has been actively engaged in the qualifying business on a regular and continuous basis for a minimum period of 24 months
• immediately after the qualifying business transfer, at least 90% of the beneficiaries of the EOT are resident in Canada

Where multiple individuals dispose of shares to an EOT as part of a qualifying transfer and meet the conditions above, they may each claim an exemption, however the total exemption in respect of the sale cannot exceed $10 million. The individuals would have to agree on the allocation of the exemption.

If an EOT has a disqualifying event within 36 months of the transfer, the exemption claim will be retroactively denied. If this occurs more than 36 months after a transfer the EOT will be deemed to realize a capital gain equal to the total exempt capital gains. A disqualifying event would result where an EOT loses its status as an EOT or if less than 50% of the FMV of the qualifying business shares is attributable to assets used principally in an active business at the beginning of two consecutive years of the corporation.

The EOT, any corporation owned by the EOT that acquired the transferred shares, and the individual will need to elect to be jointly and severally, or solitarily liable for any tax payable by the individual as a result of an exemption being denied due to a disqualifying event occurring during the first 36 months.  

For the purposes of the AMT calculation the capital gain on the transfer would be subject to an inclusion rate of 30% (consistent with the inclusion rate for capital gains eligible for the LCGE).            

An individual’s normal reassessment period as it relates to this exemption is proposed to be extended by an additional three years.

The budget also proposes to expand qualifying business transfers to include the sale of shares to a workers cooperative corporation, provided it meets certain conditions.

These measures will apply to qualifying dispositions of shares that occur between January 1, 2024 through December 31, 2026.

The budget proposes to double the volunteer firefighters tax credit and the search and rescue volunteers tax credit to $6,000 for the 2024 and subsequent taxation years; this increases the maximum annual tax savings to $900.

The budget proposes to extend the eligibility for this credit for an additional year, so that it will apply to flow-through share agreements entered into before April 1, 2025.

Canada Child Benefit (CCB)

A CCB recipient is no longer eligible to claim the CCB in respect of a child in the month following the child’s death. The budget proposes to extend eligibility for the CCB to six months after the child’s death, provided the individual continued to be eligible for the CCB.

The budget proposes to extend the list of expenses recognized for the disability supports deduction.

It also provides that expenses for service animals, as defined under the medical expense tax credit (METC) rules, will be recognized under the disability supports deduction. The individual will choose whether to claim under the METC or the disability supports deduction.

A foreign charity may register as a qualified donee for a 24-month period where it received a gift from His Majesty in right of Canada and it is pursuing certain activities in the national interest of Canada.  The budget proposes to extend the eligibility of a foreign charity to be considered a qualified donee from 24 months to 36 months.  The foreign charity would also be required to submit an annual information return to the CRA that would be made publicly available. The extension will apply to foreign charities registered after April 16, 2024. The reporting requirements will apply to taxation years beginning after April 16, 2024.        

The budget also proposes to simplify the issuance of official donation receipts by removing certain requirements.

Home Buyers’ Plan (HBP)

To help first-time home buyers, the budget proposes to:

• increase, from $35,000 to $60,000, the amount that an eligible home buyer can withdraw from their Registered Retirement Savings Plan (RRSP) under the HBP, without subjecting the withdrawal to tax, to buy or build a qualifying home (i.e. a first home or a home for a specified disabled individual), effective for the 2024 and subsequent calendar years, for withdrawals made after April 16, 2024
• temporarily extend the repayment grace period by three years, to five years, under the HBP, so that eligible home buyers who withdraw from their RRSP between January 1, 2022 and December 31, 2025 will have up to five years before they need to start repayments to their RRSP

Registered plans (RRSPs, Registered Retirement Income Funds, Tax-Free Savings Accounts, Registered Education Savings Plans, Registered Disability Savings Plans, First Home Savings Accounts, and Deferred Profit Sharing Plans) can invest only in qualified investments for those plans. Qualified investments include mutual funds, publicly traded securities, government and corporate bonds and guaranteed investment certificates. Over the years the qualified investment rules have been expanded to include additional investments for certain plans and to reflect the introduction of new types of plans, but there are inconsistencies and the qualified investment rules are difficult to understand in some cases.

Specific issues are currently under consideration. Stakeholders are invited to submit comments by July 15, 2024 as to how the qualified investment rules can be modernized on a prospective basis to improve the clarity and coherence of the registered plans regime.

Eligible tradespeople and apprentices in the construction industry are currently able to deduct up to $4,000 in eligible travel and relocation expenses per year by claiming the labour mobility deduction for tradespeople. A private member’s bill (Bill C-241) was introduced to enact an alternative deduction for certain travel expenses of tradespeople in the construction industry, with no cap on expenses, retroactive to the 2022 taxation year.

The budget announces that the government will consider bringing forward amendments to the Income Tax Act (ITA) to provide a single, harmonized deduction for tradespeople’s travel that respects the intent of Bill C-241.

The budget proposes to amend the ITA to exclude from taxation the income of the trusts established under the First Nations Child and Family Services, Jordan’s Principle, and Trout Class Settlement Agreement. This will also ensure that payments received by class members as beneficiaries of the trusts will not be included when computing income for federal income tax purposes.

This measure will apply to the 2024 and subsequent taxation years.

Business tax measures

The 2023 budget proposed a refundable ITC for clean electricity, equal to 15% of the capital cost of eligible property. The 2024 budget provides the design and implementation details of the ITC, including the eligibility criteria. It also includes special rules for property that generates electricity from natural gas with carbon capture and property used to transmit electrical energy between provinces or territories, as well as details of the compliance and recovery process.

The ITC will be available only to eligible Canadian corporations, which are defined as:

• taxable Canadian corporations and pension investment corporations
• provincial and territorial Crown corporations (subject to additional requirements)
• corporations owned by municipalities or Indigenous communities

Property eligible for the ITC includes equipment used to generate electricity from:

• solar, wind or water energy (certain class 43.1 property, but hydroelectric installations would not be subject to a capacity limit)
• concentrated solar energy (as defined for the purposes of the proposed clean technology ITC)
• nuclear fission, including heat generating equipment (as defined for the purposes of the proposed clean technology ITC, without the generating capacity limits and other certain requirements of that credit)
• geothermal energy, including heat generating equipment, if it is used exclusively for that purpose (excluding equipment that is part of a system that extracts fossil fuel for sale)
• specified waste materials, as part of a system

Eligible property also includes equipment that is:

• stationary electricity storage equipment and equipment used for pumped hydroelectric energy storage (excluding any that uses a fossil fuel in operation)
• part of an eligible natural gas energy system (special rules apply)
• used for transmission of electricity between provinces and territories (special rules apply)

Previously proposed labour requirements must be met to qualify for the 15% ITC, otherwise a 5% ITC is available. The ITC will be subject to potential repayment obligations, repayable in proportion to the FMV of the particular property when it has been converted to an ineligible use, exported from Canada, or disposed of.

The ITC will be available for new eligible property (i.e. has not been used for any purposes before its acquisition) that is acquired and becomes available for use after April 15, 2024 and before 2035 in respect of projects that did not begin construction before March 28, 2023.

The budget introduces the EV supply chain ITC, equal to 10% of the cost of buildings used in Canada in the following electric vehicle supply chain segments:

• electric vehicle assembly
• electric vehicle battery production
• cathode active material production

To qualify for the ITC, the taxpayer (or member of a group of related taxpayers) must claim the clean technology manufacturing ITC (CTMITC) in all three of the segments (or must claim the CTMITC in two of the three segments and hold at least a qualifying minority interest in an unrelated corporation that claims the CTMITC in the third segment – the building costs of the unrelated corporation would also qualify for the new ITC).

The ITC is effective for property that is acquired and becomes available for use after December 31, 2023. The ITC will be reduced to 5% for 2033 and 2034 and 0% after 2034. Design and implementation details of the ITC will be provided in the 2024 Fall Economic Statement.

The 2023 budget proposed a clean technology manufacturing ITC, and draft legislative proposals were released in December 2023. The 2024 budget proposes to update the clean technology manufacturing ITC for production of qualifying minerals (such as copper, nickel, cobalt, lithium, graphite and rate earth elements) that occur at polymetallic projects (i.e. projects engaged in the production of multiple minerals) by:

• clarifying that the value of qualifying materials will be used as the appropriate output metric when assessing the extent to which property is used (or expected to be used) for qualifying mineral activities producing qualifying materials
• modifying eligible expenditures to include investments in eligible property used in qualifying mineral activities that are expected to produce primarily qualifying materials at mine or well sites, including tailing ponds and mills located at these sites (50% or more of the financial value of the output comes from qualifying materials)

A safe harbour rule will apply to the recapture rule for all qualifying mineral activities, to mitigate against the effects of mineral price volatility on the potential recapture of the ITC, the details of which will be provided at a later date.

Accelerated Capital Cost Allowance (CCA)

Purpose-built rental housing.

The budget provides an accelerated CCA of 10% for new eligible purpose-built rental projects that begin construction after April 15, 2024 and before January 1, 2031, and are available for use before January 1, 2036.

Eligible property will be new purpose-built rental housing that is a residential complex:

• with at least four private apartment units, or 10 private rooms or suites, and
• in which at least 90% of residential units are held for long-term rental

The Accelerated Investment Incentive (AII), which suspends the half-year rule, will continue to apply to eligible property put in use before 2028. The accelerated CCA will not apply to renovations of existing residential complexes, but new additions to an existing structure will be eligible. Projects that convert existing non-residential real estate into a residential complex will be eligible.

Productivity-enhancing assets

The budget provides immediate expensing (i.e. a 100% first-year CCA deduction) for property that is acquired after April 15, 2024 and becomes available for use before January 1, 2027, for the following CCA classes of assets:

• class 44 (patents or rights to use patented information for a limited or unlimited period)
• class 46 (data network infrastructure equipment and related systems software)
• class 50 (general-purpose electronic data-processing equipment and systems software)

The accelerated CCA will be available only for the year in which the property becomes available for use. For a short taxation year, the accelerated CCA must be prorated and will not be available in the following taxation year. Property that becomes available for use after 2026 and before 2028 will continue to benefit from the AII.

Property that has been used (or acquired for use) for any purpose before it is acquired by the taxpayer will be eligible for the accelerated CCA only if both of the following conditions are met:

• neither the taxpayer nor a non-arm’s length person previously owned the property, and
• the property has not been transferred to the taxpayer on a tax-deferred “rollover” basis

The excessive interest and financing expenses limitation (EIFEL) rules restrict a Canadian taxpayer’s deductions for interest and financing expenses, based upon a percentage of its “tax-EBITDA” (i.e. its taxable income, adjusted for items such as interest expenses, depreciation and amortization). For a discussion of the EIFEL rules, see our  Tax Insights “ Bill C-59 ─ Excessive interest and financing expenses limitation (EIFEL) regime .” The EIFEL rules currently include a single sector-specific exemption, for certain interest and financing expenses relating to public-private partnership (P3) infrastructure projects. The budget proposes to extend this election, on an elective basis, for certain interest and financing expenses relating to arm’s length financing that is used to build or acquire certain purpose-built rental housing located in Canada. This exemption will be effective for taxation years beginning after September 30, 2023, consistent with the EIFEL rules more generally. However, this exemption will be available only for expenses incurred before January 1, 2036.

The government is concerned that some landowners are holding residentially zoned vacant land as a speculative investment. The budget announces that the government will consider introducing a new tax on residentially zoned vacant land to spur development. The government will launch consultations later this year.

In March 2024, the government began consultations on how federal policies can better support the needs of all Canadians seeking to become homeowners. The government will provide an update in the 2024 Fall Economic Statement.

The budget announces the government’s intention to restrict the acquisition of existing single-family homes by very large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.

The budget announces that the government is exploring new measures to expand access to alternative financing products for home purchasers, such as halal mortgages. These measures could include changes in the tax treatment of these products or a new regulatory regime for financial service providers, while ensuring adequate consumer protections are in place.

The budget proposes several amendments to the CRA’s information gathering provisions in the ITA, with the intent of enhancing the efficiency and effectiveness of tax audits and facilitating the collection of tax revenues on a timelier basis. These changes include:

• allowing the CRA to issue a new type of notice, referred to as a “notice of non-compliance” and to levy a monetary penalty
• permitting the CRA to specify that any required information (oral or written) or documents be provided under oath or affirmation
• imposing a penalty when the CRA obtains a compliance order against a taxpayer, and
• extending the stop the clock rules (which suspend the counting of days in the assessment limitation period), so that these rules apply when a taxpayer seeks judicial review of any requirement or notice issued to the taxpayer by the CRA in relation to the audit and enforcement process, and during any period that a notice of non-compliance is outstanding

Analogous amendments are also proposed to other federal tax statutes administered by the CRA. The budget also proposes certain technical amendments to ensure the rules meet their policy objectives.

These amendments would come into force upon royal assent of the enacting legislation.

The ITA allows a corporation to deduct the amount of any dividends received on a share of a corporation resident in Canada, subject to certain limitations.

One of these limitations is an anti-avoidance rule that denies the dividend received deduction in connection with synthetic equity arrangements. Synthetic equity arrangements include arrangements in which a person receives a dividend on a share, but all or substantially all of the risk of loss and opportunity for gain or profit (the “economic exposure”) in respect of the share are provided to another person.

Where a taxpayer enters into a synthetic equity arrangement in respect of a share, the taxpayer is generally obligated to compensate the other person for the amount of any dividends paid on the share. This compensation payment may result in a tax deduction for the taxpayer in addition to the dividend received deduction. Unless the anti-avoidance rule applies to deny the dividend received deduction, a tax loss would generally arise as a result of the two deductions.

The anti-avoidance rule incorporates certain exceptions, including where the taxpayer establishes that no tax-indifferent investor has all or substantially all of the economic exposure in respect of the share. An associated exception is also available for synthetic equity arrangements traded on a derivatives exchange.

The budget proposes to remove the tax-indifferent investor exception (including the exchange traded exception) to the anti-avoidance rule. This measure would prevent taxpayers from claiming the dividend received deduction for dividends received on a share in respect of which there is a synthetic equity arrangement.

This measure would apply to dividends received after December 31, 2024.

A mutual fund is a type of investment vehicle that allows investors to pool their money and invest in a portfolio of investments without purchasing the investments directly. A mutual fund corporation is a mutual fund organized as a corporation that meets certain conditions set out in the ITA.

The ITA includes special rules for mutual fund corporations that facilitate conduit treatment for investors (shareholders). For example, these rules generally allow capital gains realized by a mutual fund corporation to be treated as capital gains realized by its investors. In addition, a mutual fund corporation is not subject to mark-to-market taxation and can elect capital gains treatment on the disposition of Canadian securities.

To qualify as a mutual fund corporation under the ITA, a corporation must satisfy several conditions, including that it must be a “public corporation”. A corporation can meet this condition if a class of its shares is listed on a designated stock exchange in Canada. A corporation that is controlled by a corporate group may satisfy this condition, and qualify as a mutual fund corporation, even though it is not widely held. The government is concerned that this could allow a corporate group to use a mutual fund corporation to benefit from the special rules available to these corporations in an unintended manner.

Although the government believes this planning can be challenged based on existing rules in the ITA, the budget proposes specific amendments to the ITA to preclude a corporation from qualifying as a mutual fund corporation where it is controlled by or for the benefit of a corporate group (including a corporate group that consists of any combination of corporations, individuals, trusts, and partnerships that do not deal with each other at arm’s length). Exceptions would be provided to ensure that the measure does not adversely affect mutual fund corporations that are widely held pooled investment vehicles.

This measure would apply to taxation years that begin after 2024.

The budget introduces the Canada Carbon Rebate for Small Business, to return a portion of the federal backstop pollution pricing fuel charge proceeds collected from a province. This will be an automatic refundable tax credit for CCPCs with less than 500 employees in Canada in the calendar year in which the fuel charge begins. The tax credit in respect of the 2019-20 to 2023-24 fuel charge years will be available to a CCPC that files a tax return for its 2023 taxation year by July 15, 2024 (with similar timelines for future fuel charge years).

The tax credit amount:

• is determined for each applicable province in which the eligible corporation had employees in the calendar year in which the fuel charge year begins; and
• is equal to the number of persons employed by the eligible corporation in the province in that calendar year multiplied by a payment rate specified by the Minister of Finance for the province for the corresponding fuel charge year

The ITA includes an anti-avoidance rule that is intended to prevent taxpayers from avoiding payment of their tax liabilities by transferring their assets to non-arm’s length persons. The effect of this tax debt avoidance rule is to make the transferee jointly and severally, or solidarily, liable with the transferor for the transferor’s tax debts, to the extent that the value of the property transferred exceeds the amount of consideration given by the transferee for the property.

The ITA contains a number of rules that address various planning techniques employed by taxpayers attempting to circumvent the tax debt avoidance rule, as well as a penalty for those who engage in, participate in, assent to, or acquiesce in planning activity that they know, or would reasonably be expected to know, is tax debt avoidance planning.

The budget includes a new specific measure to address tax debt avoidance planning (although the government believes this planning can also be challenged based on existing rules in the ITA). The measure would apply in the following circumstances:

• there has been a transfer of property from a tax debtor to another person
• as part of the same transaction or series of transactions, there has been a separate transfer of property from a person other than the tax debtor to a transferee that does not deal at arm’s length with the tax debtor, and
• one of the purposes of the transaction or series is to avoid joint and several, or solidary, liability

Where these conditions are met, the property transferred by the tax debtor would be deemed to have been transferred to the transferee for the purposes of the tax debt avoidance rule. This would ensure that the tax debt avoidance rule applies in situations where property has been transferred from a tax debtor to a person and, as part of the same transaction or series, property has been received by a non-arm’s length person. The penalty applicable to those who participate in tax debt avoidance planning would also be extended to this proposed new rule.

In many cases, tax debt avoidance planning is facilitated by a planner who receives a significant fee, which is effectively funded by a portion of the avoided tax debt. The courts have held that a taxpayer who engages in tax debt avoidance planning is normally not jointly and severally, or solidarily, liable for the portion of the tax debt that has effectively been retained by the planner as a fee. The budget proposes that taxpayers who participate in tax debt avoidance planning be jointly and severally, or solidarily, liable for the full amount of the avoided tax debt, including any portion that has effectively been retained by the planner.

Similar amendments would be made to comparable provisions in other federal statutes.

These measures would apply to transactions or series of transactions that occur after April 15, 2024.

The ITA includes a general rule providing that a person who fails to file or make a return or comply with certain specified rules is guilty of an offence, and liable to penalties of up to $25,000 and imprisonment for up to a year. The mandatory disclosure rules in the ITA also include specific penalties that apply in these circumstances, making the application of this general penalty provision unnecessary.

The budget therefore proposes to remove from the scope of the general penalty provision the failure to file an information return in respect of a reportable or notifiable transaction under the mandatory disclosure rules.

This amendment would be deemed to have come into force on June 22, 2023, which is the day the enhanced mandatory disclosure rules received royal assent.

Under the ITA, losses and other tax attributes that arise from expenditures for which a taxpayer did not ultimately bear the cost are generally not recognized. The ITA contains a set of debt forgiveness rules that apply where a commercial debt is settled for less than its principal amount. These rules generally reduce tax attributes by the amount of debt that is forgiven and, where tax attributes have been fully reduced, the rules cause an income inclusion equal to half of the remaining forgiven amount. The ITA also contains a rule that entitles an insolvent corporation to a corresponding deduction to offset all or part of an income inclusion from the debt forgiveness rules.

Bankrupt taxpayers are generally excluded from these debt forgiveness rules. Instead, a separate loss restriction rule applies to extinguish the losses of bankrupt corporations that have received an absolute order of discharge.

The government is concerned that some taxpayers have sought to manipulate the bankrupt status of an insolvent corporation, with a view to benefiting from the exception in the debt forgiveness rules while also avoiding the loss restriction rule applicable to bankrupt corporations. This planning seeks to preserve the losses and other tax attributes of the insolvent corporation (which would otherwise be eliminated upon the forgiveness of its debts), so that these attributes can be acquired and used by a profitable corporation. This planning is the subject of a designated transaction under the notifiable transactions element of the mandatory disclosure rules.

Although the government believes that manipulation of bankrupt status can be challenged based on existing rules in the ITA, the budget proposes a specific legislative measure to address this issue: repealing the exception to the debt forgiveness rules for bankrupt corporations and the loss restriction rule applicable to bankrupt corporations. This change would subject bankrupt corporations to the general rules that apply to other corporations whose commercial debts are forgiven. The bankruptcy exception to the debt forgiveness rules would remain in place for individuals. While bankrupt corporations would be subject to the reduction of their loss carryforward balances and other tax attributes upon debt forgiveness, as insolvent corporations they could qualify for relief from the debt forgiveness income inclusion rule provided under the existing deduction for insolvent corporations.

These proposals would apply to bankruptcy proceedings that are commenced on or after April 16, 2024.

Scientific Research and Experimental Development (SR&ED)

The government launched a consultation on the existing SR&ED tax incentives on January 31, 2024, which closed on April 15, 2024. The budget announces a second phase of consultations, to focus on specific policy parameters, explore how Canadian public companies could become eligible for the enhanced SR&ED ITC and inform how additional funding announced by the budget can support future enhancements to the SR&ED program. Further details of the consultation will be released on the Department of Finance Canada website at a later date.

International tax measures

The Organisation for Economic Co-operation and Development (OECD) has developed a framework for the automatic exchange of tax information relating to transactions in crypto-assets, the Crypto-Asset Reporting Framework (CARF). The budget proposes to implement the CARF in Canada. The new reporting rules will apply to crypto-asset service providers that are resident in Canada, or carry on business in Canada, and that provide services effectuating exchange transactions in crypto-assets. These service providers will need to report certain information regarding their customers and crypto-asset transactions. The budget also includes proposed amendments to the Canadian rules implementing the OECD’s Common Reporting Standard, including changes relating to electronic money products and central bank digital currencies. These measures will apply to 2026 and subsequent calendar years.

A person who makes a payment to a non-resident for services rendered in Canada is currently required to withhold 15% of the payment and remit that amount to the CRA. This is intended to serve as a prepayment of tax that the non-resident may ultimately owe in Canada. Certain non-residents do not owe Canadian tax for these services, e.g. due to exemptions in tax treaties, or exemptions for specific activities like international shipping. In these circumstances, the CRA may provide an advance waiver from the withholding obligation for specific transactions, or the non-residents may apply for refunds of amounts that have already been withheld. The budget proposes to give the CRA legislative authority to grant single waivers that cover multiple transactions occurring over a specific time period, where certain conditions are satisfied. This measure will take effect upon royal assent of the enacting legislation.

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting has developed a two-pillar plan to reform the international tax system, as part of the “BEPS 2.0” initiative. On October 8, 2021, Canada and 135 other countries in the Inclusive Framework committed to adopt this plan (for a discussion on that commitment, see our  Tax Insights  “ The new international tax framework and Canada’s digital services tax ”). The budget provides an update on the two pillars of this international tax reform initiative.

Pillar One will introduce new rules for allocating taxing rights between countries to address challenges raised by the digital economy. These rules will generally apply to multinational enterprises (MNEs) with annual revenue above €20 billion and profit margins above 10%. The right to tax a portion of these MNEs’ profits will be reallocated to market countries (i.e. the countries where the MNEs’ users and customers are located).

The budget reaffirms Canada’s commitment to bringing Pillar One into effect as soon as a critical mass of countries is willing to participate. In the meantime, Canada is moving ahead with its plan to enact the Digital Services Tax (DST). Implementing legislation for the DST is currently before Parliament in Bill C-59. The DST will take effect beginning in calendar year 2024, with the first year covering taxable revenues earned since January 1, 2022. (For a discussion of the DST, see our  Tax Insights  “ Digital Services Tax: One step closer to becoming a reality .”)

Pillar Two will introduce a 15% global minimum tax. This tax will generally apply to MNEs with global revenues of at least €750 million. These MNEs will be required to compute their effective tax rate (ETR) in each country where they operate. If the ETR for a particular country is below 15%, a top-up tax will be imposed, to raise that ETR to 15% (this top-up tax may be reduced by a substance-based income exclusion, which is computed based on the payroll costs and net book value of tangible assets located in the jurisdiction). Draft legislative proposals for a Global Minimum Tax Act to implement the Pillar Two regime in Canada were released for public comment in August 2023 (for a discussion of those proposals, see our  Tax Insights  “ Canada releases draft Global Minimum Tax Act ”). The budget states that Canada is moving forward with this implementing legislation and intends to introduce it in Parliament soon.

Sales tax measures

Extending goods and services tax (gst) relief to student residences.

On September 14, 2023, the government announced that it would temporarily remove the GST from new purpose-built rental housing projects (i.e. apartment buildings, student housing and senior residences built specifically for long-term rental accommodation) by implementing an Enhanced (100%) GST Rental Rebate for new qualifying purpose-built rental housing projects (for more information, see our  Tax Insights  “ Enhanced GST rental rebate for rental apartments that begin construction after September 13, 2023 ").

To ensure that universities, public colleges and school authorities can also claim the Enhanced (100%) GST Rental Rebate for student residences that are built for short-term use, the budget proposes to amend the  Excise Tax Act  to allow them to apply the normal GST/Harmonized sales tax (HST) rules that apply to other builders (i.e. paying GST/HST on the final value of the building) in respect of new student housing projects.

The budget also proposes to relax the rebate conditions so that universities, public colleges and school authorities that operate on a not-for-profit basis (i.e. those that would currently qualify for the Public Service Body rebates under the GST/HST) can claim the 100% rebate in respect of any new student residence that they acquire or construct provided it is primarily for the purpose of providing a place of residence for their students.

The proposed measures would apply to student residences that begin construction after September 13, 2023 and before 2031, and that complete construction before 2036.

The budget proposes to repeal the temporary zero rating of certain face masks or respirators and certain face shields under the GST/HST for supplies made after April 30, 2024.

Previously Announced Measures

The budget confirms that the government will proceed with the following previously announced measures, as modified to take into account consultations, deliberations and legislative developments since their announcement or release:

• legislative proposals released on December 20, 2023, which include measures relating to the clean hydrogen ITC, the clean technology manufacturing ITC, concessional loans and short-term rentals
• legislative and regulatory proposals announced in the 2023 Fall Economic Statement, which include measures relating to the Canadian journalism labour tax credit, the expansion of eligibility for the clean technology and clean electricity ITC, the GST/HST joint venture election rules and the Underused Housing Tax
• legislative and regulatory amendments to implement the Enhanced (100%) GST Rental Rebate for purpose-built rental housing announced on September 14, 2023
• the carbon capture, utilization and storage and the clean technology ITCs and labour requirements related to certain “clean economy” ITCs
• enhancing the reduced tax rates for zero-emission technology manufacturers
• flow-through shares and the critical mineral exploration tax credit – lithium from brines
• Retirement Compensation Arrangements
• strengthening the Intergenerational Business Transfer framework
• the income tax and GST/HST treatment of credit unions
• a tax on repurchases of equity
• modernizing the General Anti-Avoidance Rule
• global minimum tax and DST
• technical amendments to GST/HST rules for financial institutions
• providing relief in relation to the GST/HST treatment of payment card clearing services
• extending the quarterly duty remittance option to all licensed cannabis producers
• revised Luxury Tax draft regulations to provide greater clarity on the tax treatment of luxury items
• technical tax amendments to the ITA and the Income Tax Regulations
• legislative amendments to implement changes discussed in the transfer pricing consultation paper released on June 6, 2023
• tax measures announced in the 2023 budget, including the dividend received deduction by financial institutions
• substantive CCPCs
• technical amendments to the ITA and Income Tax Regulations
• legislative amendments to implement the hybrid mismatch arrangements rules announced in the 2021 budget

The budget also reaffirms the government’s commitment to move forward, as required, with technical amendments to improve the certainty and integrity of the tax system.

Integration – Capital gains ($)

(taxation year ended December 31, 2024, and $10,000 of capital gains earned after June 24, 2024)

This table shows:

• the income tax deferral (prepayment) if capital gains in excess of $250,000 are earned and retained in a corporation as opposed to being earned directly by an individual
• the tax (cost) if the after-tax corporate income is paid out as a dividend to the shareholder in 2024

The table assumes:

• the individual is in the top marginal tax rate
• no capital gains deductions are available
• the non-taxable portion of the capital gain is distributed as a tax-free capital dividend
• the taxable dividend paid is sufficient to generate a full refund of refundable tax 

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Tax Insights: 2024 Federal budget ─ Supporting housing, raising taxes

Dean Landry

National Tax Leader, PwC Canada

Tel: +1 416 815 5090

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