A not-for-profit organization described in s. 149(1)(l) (the “Organization”) operates in two different regions and maintains two establishments, one in each of these regions. Board meetings generally occur every two months, in an evening, and alternate between the two locations. They work full-time in other employment or carry on a business. In addition to their attendance fees (which are taxable under s. 6(1)(c)), the Organization pays a travel allowance to those who must travel between regions to attend meetings.
Directors occasionally participate in events held outside the regions where the Organization operates. In these situations, the Organization reimburses directors for their accommodation, meals and travel expenses. As a way of thanking and encouraging directors to participate in these events, the Organization may provide them with tickets to performances, festivals, or other entertainment during their free evenings at a particular event. The Organization may also invite one or more of its directors and other stakeholders to concerts or a box at hockey games in order to develop business relationships and contacts for the purposes of the Organization's activities. CRA stated:
In this case, it appears to us that meal expenses paid by the Organization for its directors at meetings of its Board of Directors and the reimbursement of travel expenses to directors attending events held outside the regions where the Organization operates may not be taxable benefits to the extent that the payment or reimbursement of the expense is primarily for the benefit of the Organization and the payment or reimbursement of the expense does not constitute a taxable benefit to the employee.
Finally, it appears to us that the value of tickets to shows, festivals or other entertainment activities that the Organization provides to its directors to thank them and encourage them to participate in events or activities could be a taxable benefit under paragraph 6(1)(a) if it results in an economic benefit or profit for them or if it constitutes a form of remuneration for the services they have rendered.