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One Tax for the CF.

Arron

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I know this might be somewhat of a dead horse, but has anyone addressed how the different provincial tax rates affects CF members? 

Late this year I was posted from a province with a low tax rate, to one with a very high tax rate.  As an outcome, as a family we are looking at owing into the 5 digits, and that is with 5 digits worth of RRSP's contributed for the year, and all on top of a large loss in take home pay.

I'm looking at bringing this up the chain as a grievance, because a posting is suppose to be "at no cost to the member".  And if PLD is calculated to each posting that includes tax rates.  Just because I live in one province on the 31st of December I pay for the whole year at that one location, even if i lived up until December 30th somewhere else.  PLD/IRP comes no where close to making up for this.

As well, due to living in one province with a high tax rate, you will continue paying a high tax rate if you go OUTCAN from that province.  This is really unfair for 2 members posted  for example to Germany.  One member is from Alberta and one from Quebec.  Even though they may be the same rank, same incentive, same trade, the one from Alberta will take home thousands more than the one from Quebec for the same job at the same place.  PLPD is an outdated system and does not take into affect anything like this, and is very blinded (or conceived in costs, or "politically correct" that no province is better than the other, or penny pinching or whatever) into taking this into account cost of living, or quality of life for those same 2 members if they are in Germany or in Alberta or Quebec or any other province.

Is this something that has been addressed, or being addressed?  Either a US military like system that the member decides their home state, or an averaged tax rate, or Ottawa tax rate for all CF members could fix this.  This is not a isolated problem, i know many people who have to pay thousands back because of a posting to another province, or some for doing the same job at the same location but one taking home more than the other.

Any information or help on this subject would be greatly appreciated,  I will share any and all information or outcome with everyone.  I do plan on approaching the C of C, ombudsman, member of parliament and so on to try to fix this problem for everyone.  So anything anyone could offer either pro or con would be appreciated.

There has to be a better way than forking out all this cost incurred due to being a CF member required to work anywhere at anytime.

* This is not a Quebec slam, or Alberta props.  I used them as an example because they are at opposite ends of the tax rate scale within Canada (of course  circumstances can alter this somewhat for top and bottom).

Canada Tax rates
http://www.cra-arc.gc.ca/tax/individuals/faq/taxrates-e.html

Quebec tax rates
http://www.taxtips.ca/qctax.htm#QCTaxRates

Alberta tax rates
http://www.taxtips.ca/abtax.htm
 
I haven't had this issue, but I can definitely understand where you are coming from. I wish you luck with trying to get it sorted out, as I suspect that you may need it given the beauracracy involved.
 
Are you trying to tell us that you lived in Alberta on Dec the 30th and got posted to Quebec on the 31st?  I have never heard of that being done before.

Sorry that you lost some money on taxes this year on your move from Alberta to Quebec.  I guess we should also feel sorry for when you move back to Alberta and get a wopping big refund.  I am also sorry that the two of you get more in PLD in Quebec than you get in Alberta. 

To the best of my knowledge, people posted to Germany all pay Taxes at the Ontario rate as living outside of Canada.  That is because their Mailing Address is one for Belleville, ON. 

But seeing as you are on a crusade for more money in your pocket, how about a plug for all those members of the CF in Ontario who have to pay OHIP (tax) deductions and not partake in the Plan or hold a OHIP Card. 

   
 
Tax everyone at the highest rate??..............................hehehe..... :warstory:
 
No he is just stating that CRA bases your taxes for the year on where you live on 31 Dec.  I know his pain, and can sympathize with the move and the associated loss of money.  It hits hard in the first year, but hopefully your PLD (which I have no clue is for the area) will make up for it.  I know your housing costs are somewhat better than what better than what we have here in Alberta!  My buddy is posted to St Jean and bought a house for $258,000 that would cost an easy 500 thousand here.


Sure Bruce I like it....just means a bigger tax return for moi!
 
Arron,
Unfortunately - tax policy changes aren't in the cards anytime soon.
In a probable election year, it would not be a popular issue for the provincial gov't and all others in the province (civies) wouldn't be impressed either.
As stated, while you reside in Quebec you will not pay FSS/QHOSP.  You do not have to pay the higher HST and regardless of owning or renting, your cost of living in Quebec will be much cheaper than living anywhere near the Oil patch.

Also living in Quebec, not much of a shoulder to cry on at this end or the room

Cheers & may 2007 be a better year than 2006
 
Actually Arron, I don't feel for you at all.  Many of us have been in that same situation, having been posted several times to new provinces, overseas, etc.  What are you going to cry about next?  Car Insurance rates be standardized across the Country for CF Members.  Home Owner Insurance be one flat rate across the country for CF members.  Medical Fees be standardized across the nation, so that all CF members pay and receive rebates, like in Alberta, and are not taxed like in Ontario.  Perhaps everyone in the CF should get the same PLD straight across the board, to the benefit of those in Ottawa who really get screwed big time.  Then there should also be a common flat rate for PMQ Rent across the country too.  How about we all get the same pay and benefits as those aboard ship, Sea Pay, cheap booze, cheap cigarettes, etc.  How about we do away with Spec Pay or even better create a new Spec Pay for everyone who puts their life on the line in the Cbt Arms.   Perhaps we should also change MATA/PATA Lve so that it isn't taxed the way it is; with no EI, but full pay for the full six months.   I suppose you want Canex to also give you bigger discounts in all of their concessions.   It would be nice if the world was a nice warm fuzzy place where everyone was equal and received everything on the same scale of issue and paid for it in an equal fashion, but I think that warm fuzzy world was created only in literature and it was called Communism.  We all know how miserably Communism failed in the real world.
 
Arron, you bring up some very good points. One fact that you mention is that posting are not supposed to be of any financial cost to the member. This point alone may very well help you with your issue if you should decided to bring it forward. Send a message to the Ombudsman, I am sure there office is extremely busy but will eventually get back to you with an answer. Best of luck, let us know how you make out. I am of to sunny Winnipeg this summer so I will also be caught in the Tax loophole this year.
 
SKIN052 said:
Arron, you bring up some very good points. One fact that you mention is that posting are not supposed to be of any financial cost to the member.

I think the two of you are stretching it with the references to "a Posting not being any financial cost to the member".  You will have to realize that this is not true.  Yes, there is a policy now in effect to cover some of the losses you may have in the sale of a home, which many did not have covered in the past, but it does not cover 100% of your losses.  The policies are not set up to "guarantee that the member does not have any financial costs put on them", but to aid in alleviating any excessive costs.  You are not getting a winfall or winning the Lotto here.

When it comes "Tax Time", Taxes have nothing to do with your move.  Taxes have to do with your wages earned.  That would include the taxable funds you earned on your move, but at the same time will not include the nontaxable funds that you got.  If you are not frugal with your money, don't cry that the Taxman was unfair to you.  Plan ahead and factor in the Taxes that you will likely have to pay.
 
So... Pay taxes as though you got sent to the worst place tax-wise, so that you are assured that an unexpected posting doesn't cost you? Anything that you overpay is like a lump sum at the end? But then, you are giving the government a tax-free loan, as someone mentioned in another thread about overpaying taxes...
 
This might be a plus if the Federal government levies a standard tax rate on CF members and then uses this approach in their recruiting drive...
 
Arron, Make sure you take your tax return to an accountant this year (no offence to HR Block type people - but you need someone who knows all the tax credits and deductions that you can use) to have some of your tax liability mitigated.  You may not be fully apprised of all the available credits and deductions so the amount you have in your head right now may be a lot smaller come filing time.  An accountant will also advise you how to maximise (or minimise) your financial gains and losses.  

For the next time, once posted, have your pay clerk adjust your tax deductions on your pay to reflect the new taxation bracket and the difference in what you  would have had to pay had you been a resident of the province for the entire year.  It doesn't quite hurt as much on a bi monthly basis as it does come April 30th with one large payment.   Same goes for anyone that is thinking about cashing in an RRSP, RSP, add some extra tax deduction on each pay - it won't hurt as much come tax time.  

You can try to advocate a change in the way the CCRA is applied to the CF's membership but I seriously doubt you'll get any where as it would require a legislative amendment and chances are a whole heap of pers in the lower provincial taxation levels would not be happy with you. As well, what you are arguing for is a reduction in the provincial income tax rates and that is far outside the realm of the your CoC, Ombudsman or MP to deal with.  Federal taxation rates are a 3 level percentage based on income amounts in incremental amounts.  It doesn't matter where you live in the country, it's all the same amounts.  17% - 21% - 26%  it's been those percentages since I can remember and  as I said, the difference is the provincial income tax liability.  

 
It won't happen. If the CF had a standard tax rate across the board one of two things would happen:

1) You would find yourself living in a province (like Quebec) paying less taxes than your neighbours which would not be fair seeing as you all enjoy the same provincial services.
2) You would find yourself living in a province (like Ontario) paying more taxes than your neighbours in which case you would be creating another thread to complain.

The only possible solution would be change the tax code for all Canadian residents. Change it so that in longer depends on where you live on the 31st of december but rather make it proportional as to where you lived and for how long. For example if you spent 6 months in Alberta and then 6months in BC then you would pay 6 months at the BC rate and 6 months at the Alberta rate of your total combined income. Is this a reasonable solution? I don't know, I am not a tax expert nor do I know if it could ever be implemented and if it did what other problems would it create.

This is not a CF only issue, it happens to everyone who moves in this country.
 
old man neri said:
This is not a CF only issue, it happens to everyone who moves in this country.
great point Old man, well said. Somewhat narrow minded of us to think this is a Forces only issues. Maybe more of a point to bring up to our MP's as opposed to the Ombudsman.
 
Arron,

Once upon a time i got posted from Petawawa to Edmonton......Taxes went down, i made lots of money, King Klein gave me some more.....life was good.  Then one day i got posted to Gagetown......the Government sent me a tax bill for $2500 bucks at the same time as i was buying myself a divorce.  That was a kick in the nuts.  Then i got posted to Greenwood and maintained the east coast tradition of taking it up the rear tax-wise.  All of a sudden , i get Posted west and at tax time, i get the proverbial s**t-load for a refund !!!! My pay check even went up $200 because of the lower tax rate.  All ballances out wouldnt you say ?

Add in there the fact that you get all your move expenses payed for, everything gets done for you , heck, you can even use the money provided by DND to buy down your mortgage interest rate.......

Dont foget that you get free health care, education money, you dont have to buy work clothes, etc, etc, etc.....

You have got nothing to complain about......
 
No this goes back to the several whiny threads on the "its not a new tax" health tax........
 
You know the list of things that you could standardize across the CF, (and you would also have to include the RCMP, then other Civil Servants,) is quite long and ranges from the quite trivial to the more 'expensive' in costs:

1.  A standard Licence Plate for all CF members.
2.  A standard Drivers Licence for all CF members and their families.
3.  A standard rent for PMQ's.
4.  A standard Insurance Policy for both Auto and Home.
5.  A standard PLD rate for all CF members.
6.  A standard Field/Sea allowance.
7.  A standard Pay (either no Spec Pay, or all Spec Pay).
8.  A standard Mess Dues.

The list could be endless.  Why stop with just Taxes? 

That or accept the fact that you are living in a different Region of Canada, on a Different Base, and all requirements are different, thereby causing all other matters that you are complaining about to be different too.  The standard of living varies across Canada.  Taxes and other Fees also vary as a result of these differences.  I am sure that the price of milk in Alberta does not match the price of milk in Quebec. 

I found it interesting that a Large Double Double in Ontario, with the GST and PST, is cheaper than a Large Double Double in Alberta, where there is only a GST.  I would have figured that a Lg DD would cost the same all across Canada, but no it doesn't.

 
George Wallace said:
2.  A standard Drivers Licence for all CF members and their families.


I'd like the idea of that one.  Something Canadian, vice being Provincial/Territorial.  I can see it coming in handy as we travel all over for courses, training etc.  I know an out-of-province license still works, but I'm sure I'm not the only one that gets questions and looks when you use it for ID for anything.  And also, isn't there a time period in which you have to change to the province you're residing in, or is that only your vehicle license?
 
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