Correctional Service Canada340 Laurier Ave. W.Ottawa, Ontario K1A 0P9
Dear Sirs:
Re: Employment at Special Work Site
This is in reply to your recent correspondence which queries whether the provisions of subsection 6(6) of the Income Tax Act (the Act) are applicable to participants of your Department's "Correctional Officer Training Program" (COTP). Our understanding of the facts follow:
1. Applicants who successfully pass a screening interview are accepted into the COTP.
2. The training period is for twelve weeks. Correctional Service Canada considers the recruits to be in student status at this time and each receives a weekly training allowance based on current Air Traffic Control Student rates.
3. Training and Residency (room and meals) is provided by Correctional Service Canada at its existing staff training colleges.
4. Past experience and statistics indicate that most applicants, upon entering the program, are maintaining a principal residence. Most do not live in close proximity to the staff training colleges and cannot reasonably be expected to return to their principal residence after each day's training session.
5. Upon successful completion of the COTP, the recruits are offered indeterminate employment within Correctional Service Canada.
For the purposes of the Act, employment means the position of an individual in the service of some other person and "servant" or "employee" means a person holding such a position. While it is clearly a question of fact whether an individual is employed, or in the service of another person, it appears that participants in the COTP are employees for the purposes of the Act. As a result, the training allowance is salary or wages taxable under section 5 of the Act. The provisions of subsection 6(6) of the Act may be available to exempt from some participants' income the value of free room and board provided by Correctional Service Canada.
Subsection 6(6) of the Act is applied on a case by case basis. Where all of the criteria of subsection 6(6) of the Act are met, there is no requirement that the value of free board and lodging be included in the employee's income. In any case where a criterion of subsection 6(6) of the Act is not met, such as an employee is not maintaining a principal place of residence elsewhere or can be reasonably expected to return daily from the special work site to his principal residence, the value of the board and lodging benefit provided by the employer is required to be included in the employee's income by virtue of paragraph 6(1)(a) of the Act.
Individual circumstance will determine whether, by reason of distance, the employee cannot reasonably be expected to return daily to the place where a self-contained domestic establishment was maintained by that employee. The principal place of residence must remain available for the employee's occupancy during the period of training and not be rented out to any other person. Based on the facts provided by you, training is of a temporary nature. We presume that, upon completion of training, duties are to be performed at a location different from the training site. A copy of Interpretation Bulletin IT-9lR3 is enclosed which may answer other queries you may have regarding special work sites.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionLegislative and Intergovernmental Affairs Branch