PSAC Pay Equity Bulletin

More Tax Information For Quebec Residents

PSAC has selected a test case to challenge whether or not the interest payments on pay equity adjustments should be taxable. Details on filing a Notice of Objection to the Canada Customs and Revenue Agency (CCRA) can be found in Pay Equity Bulletin 44 and Pay Equity Bulletin 49.

Quebec residents who wish to object to paying the tax on interest payments need to take some additional steps to those outlined in the Bulletins above.

When you filed your Quebec tax return last year, you would have declared the amount of pay equity interest on Line 130 of the tax form. Once you received your Notice of Assessment from Revenue Quebec, you were in a position to file a Notice of Objection at the provincial level. In addition to a Notice of Objection to CCRA, Quebec residents must also file an additional objection with the Quebec Revenue Ministry. The objection form - Notice of Objection (http://www.revenu.gouv.qc.ca/eng/formulaires/mr/mr-93_1_1-v.asp) must be filed within 90 days of the mailing date of your Notice of Assessment from the Quebec Revenue Ministry, or within one year after the filing-due date, whichever is later. For most members, this date will be April 30, 2002.

The reasons for your objection are the same as those for your federal Notice of Objection:

I object to the Minister's assessment of $_____________, which represents presettlement interest on the monies due to me under the federal government's pay equity settlement, as taxable income. I take the position that such monies are not subject to tax and therefore ought not to be included in the calculation of my taxable income. The interest on this back pay is compensation for the discrimination suffered by myself and as such is not taxable. In addition, given the treatment of other similar types of presettlement interest, such as interest on wrongful dismissal awards, it is inappropriate to tax this type of settlement interest which is of the same nature.

You should also ask to have your objection held in abeyance pending a decision by the Tax Court of Canada on similar Notices of Objection filed with CCRA.

While we believe that the information above is accurate, we have been unable to confirm it with Revenue Quebec.