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 the tax credit will be available to individuals that pay a cash fare daily or purchase daily and weekly passes.
Position: No.
Reasons: The draft legislation indicates that an eligible public transit pass must provide the individual with the right to use public commuter transit services of a qualified Canadian transit organization on an unlimited number of occasions and on any day on which the public commuter transit services are offered during an uninterrupted period of at least 28 days.
Signed on October 3, 2006
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Dear Colleague:
Thank you for your letter received on September 5, 2006, concerning the 2006 Federal Budget proposal to provide a tax credit for public transit passes.
More specifically, you ask that the proposal be reconsidered to make the tax credit available to more than just monthly pass holders. You also indicate that for many part-time employees a monthly pass is not economical and that you are aware of some bus routes that operate on a "cash only" fare basis.
On August 31, 2006, the Honourable James M. Flaherty, Minister of Finance, released the legislative proposals to implement some of the 2006 Federal Budget proposals, including the proposal with respect to the public transit pass tax credit. The draft legislation to implement this proposal does indicate that an "eligible public transit pass" must provide the individual with the right to use public commuter transit services of a qualified Canadian transit organization on an unlimited number of occasions and on any day on which the public commuter transit services are offered during an uninterrupted period of at least 28 days. This means that the tax credit will not be available to individuals that pay a cash fare daily or to individuals who purchase daily and weekly passes.
The draft legislation for the 2006 Federal Budget proposals was released in draft form so that taxpayers would have an opportunity to consider it and comment before it is introduced in Parliament. I assure you that Minister Flaherty and Finance officials are aware of the concerns expressed on this issue.
Thank you again for having taken the time to write.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
Randy Hewlett
613-957-2049
2006-020432
September 14, 2006
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