PSAC Pay Equity Bulletin

Appealing tax assessments on pay equity interest

Recently, many of our members have received tax assessments which indicate that the interest which they received pursuant to the 1999 pay equity settlement will now be subject to taxation.  Included with this information is a form stating that the member may appeal if they so choose.

The taxability of these interest payments was the subject of the Burrows case, a recent PSAC appeal to the Tax Court.  The decision in this matter was received in late 2005, and is the subject of the PSAC bulletin below:

http://www.psac-afpc.org/what/payequity/bulletins/bull-63-e.shtml

Unfortunately, the Tax Court did not accept our arguments, and a Supreme Court of Canada case decided after our arguments were submitted precluded the possibility of a further appeal.

We cannot make a general recommendation that our members file appeals.  It is always possible for an individual to file his or her own appeal with respect to personal tax circumstances, at his or her own cost.  Because the law has now been decided by the Tax Court, we can offer little hope of success for an appeal which simply attempts to re-litigate the Burrows issues.  The PSAC does not accept that the taxation of interest on pay equity awards is either just or fair, but, sadly, the law does not reflect this view.