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This translation was prepared by Tax Interpretations Inc. The CRA did not issue this document in the language in which it now appears, and is not responsible for any errors in its translation that might impact a reader’s understanding of it or the position(s) taken therein. See also the general Disclaimer below.
Principal Issues: [TaxInterpretations translation]
Does the new paragraph 8(1)(a) of the Act apply to municipal employees who, during the ice storm, were assigned to duties other than those they normally perform?
Position:
No.
Reasons:
The new paragraph 8(1)(a) of the Act limits the amount of the deduction to the amount of remuneration received by the employee while carrying out, on a voluntary basis, the activities listed in that paragraph. Based on the ordinary meaning of the word "volunteer", we are of the view that this paragraph applies only to employees who decide, voluntarily and without any obligation on the part of the employer, to perform the duties set out in subparagraph 8(1)(a)(ii) of the Act. Furthermore, we are of the view that an employee is not performing duties on a voluntary basis if it is stipulated in their employment contract or otherwise that the employee must participate in any way in the emergency measures established by their employer.
XXXXXXXXXX 5-990408
Ghislaine Landry, CGA
Attention: XXXXXXXXXX
March 5, 1999
Dear Sir/Madam,
Subject: Deduction for volunteers under paragraph 8(1)(a) of the Income Tax Act
This is in response to your letter of February 16, 1999, in which you sought our opinion on the above subject.
You described the situation of various of your employees who were assigned to specific tasks related to your municipality’s emergency response during the ice storm in January 1998. As your town was severely affected by that event, employees from various job groups were therefore called upon to address that crisis.
You state that those employees performed duties other than those agreed upon as part of their employment, and did so on irregular schedules, including day, evening and night shifts, from Monday to Sunday. You also provided us with some concrete examples of the situation:
• an office worker or a managerial staff member was assigned to reception, catering, accommodation or any other duties at the Disaster Relief Centre;
• an office worker was assigned to loading firewood to assist disaster victims;
• a managerial staff member was assigned to the Emergency Coordination Centre;
• a police officer was assigned to the Disaster Relief Centre to monitor the premises;
• a non-permanent firefighter was assigned to loading firewood to assist disaster victims;
• a blue-collar worker was assigned to clear the streets by collecting tree branches or breaking up ice.
QUESTION
You wish to know whether those employees would be entitled to the deduction provided for in the new paragraph 8(1)(a) of the Income Tax Act (the “Act”).
OUR COMMENTS
As stated in paragraph 22 of Information Circular 70-6R3 of December 30, 1996, when determining whether a completed transaction has received the appropriate tax treatment, that decision rests primarily with our Tax Services Offices following a review of all the facts and documents, which is generally carried out as part of an audit. Nevertheless, we offer the following general comments.
In October 1998, the Minister of Finance published Income Tax Legislative Proposals and Explanatory Notes. It was then proposed to grant a deduction for volunteers by adding paragraph 8(1)(a) to the Act, applicable to the 1998 and subsequent tax years. That paragraph provides for a maximum deduction of $1,000 for every employer of the taxpayer that is a government, a municipality or an administration. However, that deduction may not exceed the total of the amounts that the taxpayer receives from the employer during the year and which are:
“(i) included in the taxpayer’s income for the year from an office or employment, and
(ii) from the performance, as a volunteer, of the taxpayer’s duties as
(A) an ambulance technician,
(B) a firefighter, or
(C) a person who assists in the search or rescue of individuals or in other emergency situations, (…)”
This paragraph provides, however, that no amount may be so deducted in respect of the employer if the taxpayer is employed in the year, otherwise than as a volunteer, by the employer in connection with the performance of any of the duties referred to in subparagraph 8(1)(a)(ii) or of similar duties.
The deduction provided for in the new paragraph 8(1)(a) is therefore limited to the amount that the employee receives from their employer (and includes in their income) for performing, on a voluntary basis, the duties listed above. It is therefore necessary to determine whether the employee performs those duties on a voluntary basis.
The word “volunteer” is not defined in the Act and, consequently, reference must be made to its ordinary meaning. Le Nouveau Petit Robert defines the term ‘volontaire’ as follows: “qui résulte d’un acte de volonté (et non de l’automatisme, des réflexes ou des impulsions). Acte, activité volontaire.” The Concise Oxford Dictionary defines “volunteer”—the term used in the English text of the Act—as “person who spontaneously undertakes task etc.” The following definition is also found in Blacks’s Law Dictionary:
A person who gives his services without any express or implied promise of remuneration. One who intrudes himself into a matter which does not concern him,...
The following definition can also be found in The Dictionary of Canadian Law:
Any individual, not in receipt of fees, wages or salary for the services or assistance within the meaning of the Act, who renders services or assistance, whether or not that individual has special training to render the service or assistance, and whether or not the service or assistance is rendered by the individual alone or in conjunction with others.
Based on the above definitions, we are of the view that paragraph 8(1)(a) applies only to employees who decide, voluntarily and without being required to do so by their employer, to perform the duties set out in subparagraph 8(1)(a)(ii). In our view, an employee is not performing duties voluntarily if it is stipulated in their employment contract or otherwise that they must participate in any way in the emergency measures established by their employer.
In the situations you have presented to us, it is clear that the employees performed duties other than those they usually perform. However, we are of the view that the employees would not be entitled to the deduction provided for in the new paragraph 8(1)(a) since, based on the information provided, it does not appear to us that the employees performed those duties on a voluntary basis. The employees were assigned to those tasks by the employer.
Our comments are based on the legislative proposals published in October 1998 and may be subject to change if those proposals are not adopted as proposed.
We hope that these comments will be of use to you.
Best regards,
Michel Lambert, CA, M.Fisc.
for the Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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