Finance department asks taxing questions

Published December 1, 1999

If church bureaucrats narrowly avoided stepping into a mess, federal civil servants haven’t.

After losing ? badly ? a tax case involving nearly 50 ministers of various religions who Revenue Canada wanted to deny a tax deduction, the finance department (which sets taxation policy) is proposing that clergy who don’t live in church-provided housing should no longer be able to deduct rent or fair rental value. Instead, the department proposes that the employer ? the church ? should figure out what’s a fair deduction, so long as it’s between $10,000 and half of the individual’s non-housing pay.

This is a burden to employers, fails to set out any principles that should guide employers, sets up the potential for conflict between employer and the individual and, finally, draws an employer into an individual’s tax return, a dangerous move.

It also signals that the government is trying to subtly shift the responsibility of housing for religious leaders from one that is shared with society as a whole to one that will eventually be entirely the responsibility of the employer. For small Anglican congregations, this might have costly consequences.

The simple solution is to allow eligible ministers to deduct fair rental value between $10,000 and up to half their non-housing pay. It keeps the matter out of the hands of the employer and in the hands of the individual taxpayer, which is where it belongs.


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