Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether a transportation pass with a privately owned company could qualify for the public transit tax credit.
Position: Question of fact.
Reasons: An eligible public transit pass entitles the holder to use the "public commuter transit services" of a "qualified Canadian transit organization" during an uninterrupted period of at least 28 days. The phrase "public commuter transit services" is defined in the ITA as return-trip transportation services offered to the general public within Canada for a period of at least five days per week by means of bus, ferry, subway, train, or tram. Secondly, a company will be considered a "qualified Canadian transit organization" provided it is authorized under the laws of Canada or the Province to carry on the business of public commuter transit services through a permanent establishment in Canada.
August 8, 2007
XXXXXXXXXX
Dear XXXXXXXXXX:
I am writing in reply to your correspondence addressed to XXXXXXXXXX, concerning the public transit pass credit. I received a copy of your correspondence from the Office of the Honourable James M. Flaherty, Minister of Finance, on July 3, 2007.
To be eligible for the public transit pass credit, a taxpayer must purchase an "eligible public transit pass", which entitles the holder to use the "public commuter transit services" of a "qualified Canadian transit organization" during an uninterrupted period of at least 28 days. Each of the foregoing italicized phrases has a distinct meaning and whether your particular arrangement meets each of these requirements is a question of fact.
You indicate that you commute to and from work using the services of the XXXXXXXXXX and pay a monthly fee of $XXXXXXXXXX by way of payroll deduction to do so. It therefore appears likely that you acquire a monthly transit pass of some sort that would qualify for purposes of the credit. In addition, provided the XXXXXXXXXX is authorized under the laws of Canada or the Province to carry on the business of public commuter transit services through a permanent establishment in Canada, it will meet the requirement of being a "qualified Canadian transit organization". Finally, the phrase "public commuter transit services" is defined in the Income Tax Act to mean return-trip transportation services offered to the general public within Canada for a period of at least five days per week by means of bus, ferry, subway, train, or tram. It is not clear from your correspondence what mode of transportation is offered by the XXXXXXXXXX. However, I can confirm that transportation services offered in a commuter van or car would not be considered to meet this requirement.
Questions about public commuter transit services offered in commuter vans have arisen on prior occasions and have been brought to the attention of the Department of Finance Canada. Making legislative changes to expand the eligibility rules for the credit falls under the responsibility of that department.
I trust the information I have provided will be of assistance.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Renee Shields
613 957-2049
2007-024409
July 10, 2007
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