On Thursday morning April 26, 2018 members of the BC Building Trades along with our Boilermaker’s tax adviser, Mr. Hugh Woolley of Lewis and Co, met with a panel of 6 CRA officials at the IBEW office in Port Coquitlam to discuss the issues surrounding the recent tax audits and assessments that are running rampant throughout our industry. Present for the Boilermakers were Business Representatives Jordan Streng and Rob Kappel.
The meeting started with the CRA panel presenting an “educational” power point presentation full of facts and links regarding how a Canadian citizen can object to an assessment if they disagree, and where they can obtain information on the processes required to do so. They wanted us to know that the “Employer Compliance Audit” that they had performed was standard protocol, and that everything that was reviewed by their auditors was done within the guidelines of the Income Tax Act as per the CRA’s interpretation of the Act.
The Bargaining Council wasted no time in countering with our arguments in support of our members, and in defiance of the interpretations now being used by the CRA. The Council argued that if the interpretation of “reasonable” by both the employers and the unions was in such contravention with the CRA’s interpretation, then surely they could provide guidance on how to bring it back into compliance. We received no direct answers by representatives of the CRA to specific questions put forward by the Council, but rather they were answered with nothing more than a patronizing “we are only applying the existing legislation”.
Our tax adviser Mr. Woolley also spoke to the particulars of the Income Tax Act, and produced CRA documentation defending the way in which these allowances have been treated as reasonable in the past, and stated the simple fact that the CRA is wrong in this situation and that we have acted in accordance with the Act. We couldn’t have agreed more. Mr. Woolley served within the ranks of the CRA earlier in his career and he spoke passionately in support of the Council and its members and was hard to ignore. He questioned the panel on a series of issues and one in particular, a 2013 opinion response letter that was issued by the CRA (see attached, click here). Contained within the letter was a response on how the CRA considered reasonableness as being: “an allowance that approximates the transportation expenses incurred by an employee would generally be reasonable…” Mr. Woolley argued that due to the ambiguity of both the terms “Reasonable and Allowance”, that it was patently unreasonable for the CRA to take the position that the Unions and their members and Employers were in non-compliance. He argued that the term “Allowance” is in no way explicitly defined as pertaining to a reimbursement of actual costs, and for the CRA to interpret it as such was completely unreasonable.
The Council then asked for clarity on what the CRA does consider reasonable, as some of the Bargaining Council members have language within their agreements that almost mirror the CRA language as being a reasonable expense, such as portal to portal travel allowance using the CRA road rate, yet these members were also being re-assessed. The CRA had no definitive answer nor were they willing to supply such an answer, as it appeared that any direct questions would be met with either simplified responses or none at all.
Over the course of the next hour or so, we repeatedly requested clarity on a go forward basis so that we could leave the meeting with something resembling an answer on how to alleviate this burden from continuing over and over. Although nothing was directly conveyed or inferred by the CRA on a clear path forward, it must be mentioned that in attendance on behalf of the CRA were two higher ranking officials from Ottawa who appeared to be listening very attentively to the urgency that was being communicated by all the Council members in attendance.
We finished the discussions with the overtime meal allowance issue and the impracticality of the $17 dollar amount. We requested to know when the dollar amount was set at the current amount and when, if ever, it had been reviewed for change. The cost of living consistently climbs yet the cost of a meal doesn’t? I challenged every panel member to go to any restaurant and find a meal that could be purchased for 17 dollars and let us know where. The Council explained the history surrounding the slow integration of the meal allowance and the removal of the actual supplied meal, and questioned that if an Employer was to bring in a meal at the cost of $25 a person, would that amount be tax deductible for the Employer as it was the cost for food? If so, and it was reasonable for the employer to deduct that amount, why would the employees be treated any different? The CRA countered with questions around LOA or Room/Board. The Council rebutted and asked the CRA for their opinion regarding jobs that offer the over-time meal allowance but neither of the LOA or room plus provisions. The response was that they were unable to provide guidance on the matter.
The Council requested a follow up meeting so that many of the questions that were asked on Thursday could be clarified or a response offered, however the CRA was adamant that they would sooner arrange follow up dialogue through informal conversations arranged through the Boilermakers than commit to a date to meet again.
Our overall impression of the meeting held today was that the CRA came prepared to defend their actions and to try and simplify our concerns. With such an overwhelming amount of positive dialogue in support of the Council and the membership it represents, I feel that it would be impossible for further discussion not to take place within the CRA regarding this matter. Of an important note: As I walked the members of the CRA out of the office, it was passed along that having 2 representatives from Ottawa present who have a direct line with the federal ministry is a good thing, and that the Minister allegedly has a file on his desk regarding this matter and that a report of what transpired today would have to be filed with the Minister.
What this all means about the impact the Council had with the CRA today remains unknown, but we will say this:
The entire Building Trades Council who represent a multitude of honest and hardworking tradespeople within the Province of British Columbia has taken a very firm stand in regards to this matter and will stop at nothing to have our voices heard in whatever format it takes to finalize a formal resolve to this situation. We know that this is undoubtedly a battle of attrition, and much like the grievance process it offers no immediate resolve. However, being unified in this Province, and more importantly across Canada, and with the National Building Trades now involved and having this matter being brought before Ottawa, we have let the CRA know we will not go silent on this matter!
We encourage every member to continue to use the resources that become available to us and want everyone to know that we will continue to update everyone as the information becomes available. We are hopeful that within a period of time we will be contacted by an official within the CRA, hopefully to offer up more definitive and practical responses to the very diplomatic and thought out questions that were put forward on Thursday, but in the meantime please continue to file your notice of objections with the CRA, and it can only help us if you contact your local MP too.
Fraternally,
Jordan Streng – Rob Kappel