18 February 1997 External T.I. 9640195 - 70218

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether amounts paid by members of a bargaining unit can be deductible as union dues.

Position:

Depends if they meet the definition of trade union.

Reasons:

Subparagraph 8(1)(i)(iv) states amounts must be paid to a trade union.

	                                	964019
XXXXXXXXXX	                               Jacques E. Grisé
(613) 957-2059
February 18, 1997

Dear XXXXXXXXXX:

Re: Annual Dues

This is in reply to your letter of December 2, 1996 requesting our views on the possible deduction under section 8 of the Income Tax Act of annual dues for union-related activities of your bargaining unit.

You indicate that your administrative staff bargaining unit does not have the right to strike since it is not certified as a trade union under the Ontario Labour Relations Act. A mediation-arbitration process, nevertheless, is available in the event that an impasse is reached during negotiations. Under your collective agreement, the parties must share equally the remuneration and expenses of the mediator-arbitrator. A similar rule applies if a grievance over the interpretation of a collective agreement is submitted to an arbitration board.

To financially support these union-related activities, the XXXXXXXXXX members of your administrative staff bargaining unit have decided to establish a fund. This fund will be funded in the form of annual membership dues of $XXXXXXXXXX for each member. You are concerned as to whether the $XXXXXXXXXX can be claimed as a tax deduction, provided that the procedures described in Interpretation Bulletin IT-103R are followed.

In order for annual dues described in your letter to be deductible pursuant to subparagraph 8(1)(i)(iv) of the Income Tax Act, they must be paid to maintain membership in a trade union. The trade union must be as defined by section 3 of the Canada Labour Code, or any provincial statute providing for the investigation, conciliation or settlement of industrial disputes. Accordingly, if the purpose of your bargaining unit, as set out in its constitution, includes the regulation of relations between employees and employers, it would fall within the above definition of trade union. If such is the case, annual membership fees paid to the trade union would be deductible providing the procedures set out in IT-103R are followed.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch