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.
Question 62
Strike Pay
Based upon the decisions of the Federal Court Trial Division in O'Brien v. The Queen 85 DTC 5202 and the Supreme Court of Canada in Fries v. The Queen 90 DTC 6662:
a) does the Department consider the receipt of strike pay to be non- taxable to the recipient?
b) where a labour organization that is exempt from tax under paragraph 149(1)(k) of the Income Tax Act earns income from activities carried on by its members for which the members were not remunerated, will a subsequent distribution of the excess funds from this activity be income for tax purposes to the members? and
c) what type of organization does the Department consider to be a labour organization?
Department's Position
a) A member of a union who is on strike or locked out need not include in income payments of the type commonly referred to as "strike pay" that are received from the union, even if the member performs picketing duties as a requirement of membership. On the other hand, payments made by a union to its members for services performed during the course of a strike are included in income if the member is employed by, or is a consultant to, the union, whether permanently, as a member of a temporary committee or in some other capacity.
b) In the O'Brien case the members of the various unions involved received supplemental strike benefits resulting from a distribution of excess profits from a commercial venture operated by the unions, benefits which the Court held to be non-taxable. It is our view that the facts of that case were highly unusual and, accordingly, the Department is not prepared to comment on a general application of the Courts conclusions. In any similar case the particular circumstances surrounding the payment to members would have to be examined.
c) A labour organization is an organization that has as two of its main objects the regulation of relations between employers and employees and collective bargaining, but is not restricted to a trade union.
CTFAnnemarie HumenukNovember 1991
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