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.
February 26, 2001
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your letter addressed to the Honourable Paul Martin, Minister of Finance, concerning payments made to Hong Kong Veterans of Canada. Mr. Martin sent Mr. Cauchon a copy of your letter on January 23, 2001.
The Canada Customs and Revenue Agency (CCRA) has previously considered the tax treatment of certain payments, called ex grazia payments, made by Veterans Affairs Canada to veterans or their surviving spouses. Special compensation was made to each living Hong Kong veteran, or surviving spouse, for the conditions that the veterans were made to endure while prisoners of the Japanese during the Second World War.
As well, Veterans Affairs Canada made ex gratia payments to the surviving veterans or their spouses of a small group of Canadian airmen for the three months in 1945 they spent incarcerated in Buchenwald Concentration Camp.
I am pleased to confirm that none of the ex gratia payments noted above will be subject to tax under the Income Tax Act.
I trust you will find this satisfactory.
Yours sincerely,
Bill McCloskey Assistant Commissioner Policy and Legislation Branch