Principal Issues: Whether a transportation pass with a privately-owned company could qualify for the public transit pass tax credit.
Position: Question of fact.
Reasons: A "qualified Canadian transit organization" under the draft legislation is a person authorized under a law of Canada or a province to carry on the business of public commuter transit services through a permanent establishment in Canada and therefore, does not necessarily preclude transportation services offered by a privately-owned company.
November 22, 2006
XXXXXXXXXX
Dear Colleague:
Thank you for your letter received on October 2, 2006, written on behalf of one of your constituents, in which you ask whether an individual who purchases a transportation pass with a privately-owned company could qualify for the public transit pass tax credit when the pass will be "punched" daily for each round-trip taken.
On August 31, 2006, the Honourable James M. Flaherty, Minister of Finance, released the legislative proposals to implement some of the remaining 2006 Federal Budget measures, including the public transit pass tax credit. For purposes of the credit, an "eligible public transit pass" is a document that provides an individual with the right to use the "public commuter transit services" of a "qualified Canadian transit organization" on an unlimited number of occasions and on any day on which the public commuter transit services are offered during an uninterrupted period of at least 28 days. "Public commuter transit services" generally means return-trip transport services offered to the general public within Canada for a period of at least five days per week by means of bus, ferry, subway, train, or tram. A "qualified Canadian transit organization" is a person authorized under a law of Canada or a province to carry on the business of public commuter transit services through a permanent establishment in Canada. While transportation services offered by a privately-owned company may qualify for the tax credit, the pass you described does not appear to provide an individual with an unlimited number of trips within a month and would therefore not qualify.
The draft legislation for the 2006 Federal Budget proposals was released in draft form so that taxpayers would have an opportunity to consider it and comment before
it is introduced in Parliament. I am therefore forwarding your letter to Minister Flaherty for his consideration.
I trust that this will assist you in responding to your constituent.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
c.c.: The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
House of Commons
Ottawa ON K1A 0A6
Randy Hewlett
613-957-2049
October 13, 2006
2006-020928