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: Are Youth Prorgrams employment income ?
Position: CPP/EI should respond
Reasons:
August 8, 1997
Headquarters Headquarters
CPP/UI Eligibility Division C. Tremblay
(613) 957-2744
Attention: R. Laviqne
971255
Youth Employment Initiatives - Internship Program
We are writing in response to the correspondence you sent us from Human Resources Development Canada ("HRDC") requesting the Department's position on the taxability of the earnings/allowances paid to the participants as a result of the above program. You advise that you have already provided HRDC with the Department's position in respect of CPP and EI.
Programs similar to the one enclosed have previously been commented on by this Directorate. We note that this program will be funded from the Consolidated Revenue Fund and, in our view, the academic or off job training portion of the program would be included in computing the participant's income from a source and subject to tax. Allowances that provide income support in respect of a period when the participant is receiving classroom instruction would qualify under the Department's definition of a bursary, and consequently, would be given tax treatment under paragraph 56(1)(n) of the Act. You have advised them that the amounts paid to participants during the work experience segment constitutes an employee/employer relationship and consequently the participants would be subject to tax under subsection 5(1) of the Act. Further, assistance provided directly by HRDC or a coordinator during the work experience segment would be considered income from a source under subsection 3(a) of the Act.
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1997
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