UPDATE: The federal government has instructed the Canada Revenue Agency to remove a controversial tax policy interpretation that would have seen employees taxed for discounts they get at work.
CRA continues to win over the working class in Canada.
Canada Revenue Agency plans to start taxing people on their employee discount if it’s not available to the public.
“Who are they going after here? Are they really arguing that the kid flipping burgers down the road here isn’t paying his fair share? Is he really saying that the teenager getting the deal on basketball shoes isn’t paying her fair share? This is crazy,” Todd MacKay, Canadian Taxpayer Federation Prairie Director, said.
Businesses are worried the change will create an administrative nightmare, Marilyn Braun-Pollon, Canadian Federation of Independent Business vice president, said.
“This is something they’ve been able to attract and retain employees with these types of discounts, and also it will also be another tax for lower income Canadians,” she said.
“In reality it’s not going to work. If they create this kind of burden on employers, particularly small businesses, they’re just going to take away these benefits and the government’s not going to get taxes on zero benefits,” MacKay said.
MacKay is also concerned that those who work in retail clothing stores who are required to wear company clothes might not be able to afford the bill.
Economics professor Jason Childs said the tax change could increase employee theft.
“If you’re a restaurant worker, and you’re like, ‘I can’t afford to pay the income tax on the employee discount, I’m just going to swipe this burger on the way by,’ that’s a problem,” he said.
Opposition Leader Andrew Scheer calls the change mean-spirited and petty.
“You’ve got a government that’s desperate for cash, they’ve got massive deficits with no plan to get back to balanced budgets, and they’re literally going after everything,” Scheer said.
In a statement, Revenue Minister Diane Lebouthillier did not say she would change or even review this new interpretation though she did say she was not targeting those in the retail sector and would work to clarify the issue.
The tax changes are expected to take effect Jan. 1.