+ RMA Rural Municipalities
of Alberta

Resolution 13-00F

Municipal Automobile Taxable Benefits

January 1, 2000
Expiry Date:
December 1, 2003
Active Status:
Vote Results:

WHEREAS certain municipal employees are required to be on call and are provided an automobile by the employer for this purpose;AND WHEREAS having certain municipal employees on call is vital to the operations of a municipality in the event that unpredictable emergency situations arise where quick response times are required, and this response is severely hindered if an employee must first attend to his place of work to obtain a suitable automobile;AND WHEREAS Revenue Canada deems that personal use of an automobile is a taxable benefit to be calculated by applying a per-kilometre charge for operating costs plus a reasonable standby charge;AND WHEREAS Revenue Canada deems that a municipal employee being on call does not reduce the taxable benefit; AND WHEREAS adding these taxable benefits to the employees’ earnings would cause undue financial hardship to these employees;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the provincial government to lobby the Government of Canada to allow the use of municipal automobiles by municipal employees that are on call without this use being considered a taxable benefit.

Member Background:

In many municipalities, it is crucial that certain employees be on call on a 24-hour basis. In these situations, it is not uncommon for the municipal employer to provide the employee with an automobile to take to and from work in case an emergency situation arises that requires a quick response. In rural municipalities it is not practical for an employee to go to his place of work, pick up a suitable vehicle and proceed to the problematic location.Revenue Canada, however, deems that the use of the vehicle to go to and from work is a taxable benefit regardless of whether or not an employee is on call. The taxable benefit is to be calculated by incorporating both a per kilometre operating cost and a reasonable standby charge. This type of taxable benefit can cause financial hardship on an employee.Municipal employees are very restricted in the use of the municipal-owned vehicles that they are allowed to take back and forth to work. This restriction can even become a nuisance for an employee and can hardly be termed a personal benefit.

RMA Background:

The AAMDC has no resolutions currently in effect on this issue.However, the association has informally supported the intent of this resolution in discussions with the Federation of Canadian Municipalities and federal government officials.Note that AAMDC auditor Ian McConnan will be presenting an information workshop on various taxation and accounting issues, including the use of municipal vehicles by employees, during the 2000 AAMDC fall convention.

Provincial Ministries:
Federal Ministries and Bodies:
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