Lib­er­als need to sort tax­able ben­e­fit mess

Ottawa Sun - - COMMENT -

Just as the blow­back from the busi­ness tax changes is­sue dies down, the Lib­er­als have found them­selves in a sim­i­lar mess. This one could cost min­i­mum-wage work­ers across the coun­try.

Over the week­end, re­ports emerged that Canada Rev­enue Agency was chang­ing the rules around tax­able ben­e­fits. It looked like they had qui­etly re­vised rules such that re­tail work­ers would be taxed on dis­counted prod­ucts they pur­chase.

Talk about nickel and dim­ing the lit­tle guy. Why do this? It’s a so­lu­tion to a prob­lem that doesn’t ex­ist.

Plus it would be a need­less headache for busi­nesses them­selves, tasked with re­port­ing these fig­ures in an­nual fil­ings.

But on Wed­nes­day the govern­ment came out say­ing this is the case of the CRA go­ing rogue and that the Lib­er­als didn’t ap­prove these changes.

“This doc­u­ment was not ap­proved by the min­is­ter and we are deeply dis­ap­pointed that the agency posted some­thing that has been mis­in­ter­preted like this,” John Power, spokesper­son for Na­tional Rev­enue Min­is­ter Diane Le­bouthillier, said Wed­nes­day in a state­ment to the Cana­dian Press.

“The agency is­sued a guid­ance doc­u­ment that does not re­flect our govern­ment’s in­ten­tions and the min­is­ter of na­tional rev­enue has in­structed of­fi­cials to clar­ify the word­ing.”

The new word­ing in the tax fo­lio doc­u­ment re­leased by CRA had said “the value of the dis­count is gen­er­ally in­cluded in the em­ployee’s in­come.” That line, and sim­i­lar sen­tences that would take money out of the pockets of re­tail work­ers, will now be re­moved, ac­cord­ing to the de­part­ment.

How­ever, we know this is­sue was pre­vi­ously flagged to CRA and politi­cians. Why are they only act­ing now?

In late Septem­ber, Re­tail Coun­cil of Canada V-P Karl Lit­tler told the House of Com­mons fi­nance com­mit­tee about con­cerns he raised with CRA. All he got was a generic re­sponse.

“If these ben­e­fits were truly sub­stan­tial ad­di­tions to in­come, that could per­haps be un­der­stood, but they are typ­i­cally of small value in each in­stance and even over the course of the year,” Lit­tler told the com­mit­tee. “To be taxed on these will re­duce in­come for front-line work­ers, or they will be for­gone al­to­gether to avoid the tax con­se­quences.”

How long have politi­cians known? And can the Lib­er­als pledge this bad idea is com­pletely gone for good? That would be wise.

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