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Don Martin: Feds fumble on employee discounts a display of supersized political stupidity
A server at McDonald's gets 50 per cent off four regularly priced menu items per day. Managers and overnight staff are entitled to a free meal.
The updated edict from the Canada Revenue Agency clearly indicated that, while this is an extreme example, discounts and freebies were taxable benefits and must be declared as such on company and individual tax forms.
In other words, the government unleashed a Big Mac tax attack.
Incredibly, it took three days of pushback and confusion before the agency’s minister and the prime minister figured out that taxing a discounted hamburger for hungry minimum-wage earners was a lousy public relations concept and an administrative nightmare.
Their first priority: Summon a bus and throw staff under the wheels.
There’s something to be said about blaming the department. There are more than 4,000 staff in the federal public service assigned to communications. A lot of them are castoffs from the decimated field of journalism who should be able to spot a PR disaster before it hits the headlines.
But while bureaucrats did the actual rollout of this head-shaker of a tax grab, the minister and her staff deserve space under the bus for overlooking what was really a scandal two weeks in the making.
It was at a finance committee meeting on September 27 where incredulous MPs and a retail council executive openly trash-talked employee discounts becoming taxable as a joke which would quickly be called down.
It was not. And for that, blame the minister’s office.
As of today, the backpedaling is complete, although even the Prime Minister seems to have miscommunicated matters by tweeting that no employee discounts will be taxed.
Trouble is, a lot of employment perks ARE taxed and rightly so, including corporate stock price discounts.
So unless Justin Trudeau is proposing to expand tax-exempt status to sweetheart executive discounts, he’ll have to clarify his clarification.
Meanwhile, the image will stick of a government which didn’t make an innocent mistake in trying to tax the service and hospitality for their penny-ante perks. They were just caught in the act, cranking the volume from the howl of protest now forcing the government’s major rethink to planned business tax changes.
Eliminating tax loopholes for the upper crust is food for thought. But taxing the kid flipping burgers for tuition? Well, that serving of political stupidity is supersized.