Hello, same issue. Ufile is allowing the Ontario Seniors Care At home Tax Credit for large medical expenses paid at a LTC home that does NOT pay full municipal taxes. Amounts paid to a nursing home for medical care are eligible medical expense and it's flowing through to the Ontario Credits form ON479. I agree with JimG that the Ontario government may not have intended that someone in a nursing home be eligible for this credit that is intended to help people stay in their home.
Update: I called the CRA. The employee I spoke with checked reference guide and said she didn't see a problem with it.