15 September 1989 Income Tax Severed Letter AC74300 - Association of Professional Executives of the Public Service of Canada

September 15, 1989

Barbara Darling                         Anne-Marie Bourgeois
Director                                Rulings Directorate
Registered Directorate                  957-8974

Subject:  Association of Professional Executives
          of the Public Service of Canada

This is in reply to your memorandum of August 17, 1989, wherein you requested our opinion with respect to the deductibility of membership fees paid to the Association of Professional Executives of the Public Service of Canada (APEX).

Subparagraph 8(1)(i)(i) of the Income Tax Act states that "amounts paid by the taxpayer in the year as annual dues the payment of which was necessary to maintain a professional status recognized by statute. The fees would therefore not be deductible under subparagraph 8(1)(i)(i) of the Act.

Subparagraph 8(1)(i)(iv) of the Income Tax Act states that "amounts paid by the taxpayer in the year as annual dues to maintain membership in an association of public servants the primary object is to promote the improvement of the members' conditions of employment or work" are deductible. A review of the Constitution of APEX shows that the object of APEX is to foster professional enrichment, a sense of collegiality as well as a sense o service to Canada, among members of the management category of the Public Service of Canada.

We do not feel the conditions of subparagraph 8(1)(i)(iv) have been met, namely the one which states the primary object is to promote the improvement of the members' conditions of employment or work.

In our view the words "improvement of the members' conditions of employment" contemplate the type of activities normally undertaken by a union or employees' association in seeking to improve the working conditions of its members, such as negotiating with an employer for improvements in salaries, hours of work, vacation leave, job security, pension benefits and other items normally covered by a contract of employment. We would agree that APEX is an association of public servants, but since its object does meet one of the conditions of subparagraph 8(1)(i)(iv), the membership fees paid would not be deductible by the members.

Director Bilingual Services & Resources Industries Division Rulings Directorate