APPLYING TRANSIT TAX CREDIT TO VAN POOLS (2007)

In the 2006 Federal budget the government developed a Public Transit Pass Tax Credit. The intent of this tax credit is to provide an incentive for commuters to use public transit with the goal of reducing traffic congestion and air pollution.

The challenge for Chamber members is that in terms of modes applicable for the tax credit the federal government’s has defined public transit as limited to “buses, streetcars, subways, commuter trains and local ferries.” Unfortunately, not all commutes are serviced by these forms of public transit.

The Chamber believes that the limited definition used for the Tax Credit limits its effectiveness by omitting other forms of public transit that are significant movers of commuters in communities across BC and across Canada, particularly van pools.

Many communities across BC that are not served by ‘public transit’ rely on organizations that provide passenger vehicles which allow commuters to pool their commute using only one vehicle. Private companies also often provide transportation as a cost to employees or at least as a taxable benefit. The individual cost is usually significantly higher than the cost of a monthly transit pass ($140 versus $65).

The Canada Revenue Agency has recently ruled that “…a monthly pass for a seven to eight-passenger commuter van or a four-passenger car would not qualify for the credit since the transportation would not be ‘by means of bus, ferry, subway, train, or tram.’”

The Chamber has been a strong advocate of the need for a Public Transit Tax Credit as a critical incentive to reduce the use of single occupancy vehicles for commuting to and from work. Having said that our members have been clear, without a recognition that many are not served by the limited definition currently employed (particularly those that travel from outlying or remote communities into urban areas) by the federal government the ability of the credit to have a marked and demonstrable impact on individual car journeys will continue to be limited.

THE CHAMBER RECOMMENDS

That the Federal Government extend the current tax credit given to holders of public transit passes to include commuters that join a credited non-profit van pool for the same purpose or who pay for company provided transportation to an from a work site.