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    Parking Taxable Benefit Assessment to Rise

    Parking Taxable Benefit Assessment to Rise

    The cost of parking on campus is about to go up. BCIT isn’t raising the rates, but the Canada Revenue Agency (CRA) is requiring BCIT to collect more tax on the deemed value of the benefit.

    The FSA collective agreement specifies at Article 7.8.2 that, “There shall be no change in parking fees except by mutual agreement of the Parties.” Parking fees, with the exception of the Downtown Campus which an arbitrator ruled was excluded from this provision, have not been increased in decades. FSA members pay $2-$5 a month for parking in Burnaby plus federal and provincial sales tax.

    In 2009, BCIT was instructed by CRA to assess income tax on the difference between what FSA members pay for parking and the Fair Market Value of parking on campus. By surveying local commercial lots and by accounting for a variety of other factors, BCIT estimated that value to be well below what students actually pay. Members using the parking benefit have paid tax on that amount since that time. The assessed taxable benefit on the Burnaby campus has ranged from $58.25 a month to $65.89. The actual tax each person pays on that amount varies according to their personal tax rate. Most members have been paying been between $12 and $17 a month in income tax because of the parking benefit. The FSA sought advice from a tax lawyer when this assessment was implemented and determined that we could not successfully challenge the decision.

    Last year, CRA came out with a new directive on how the Fair Market Value of parking is to be calculated. BCIT was instructed that the value of staff parking has to reflect the rates paid by students.  As a result, the assessed benefit will almost double, rising to $107.40-$111.21 per month as of November 1, 2016. The income tax paid by members will increase to $22-$29 per month. Each pay cheque for a member using the parking benefit will take an additional $5-6 hit, even though actual parking rates are not rising.

    As has been the case, members may be able to seek an exemption from the tax assessment by demonstrating that BCIT requires them to drive for work, that they have a disability, or that they are unable to access the parking benefit because they are on leave or some similar reason. Members in these circumstances are encouraged to contact BCIT’s Payroll office or the FSA office if Payroll does not accommodate their request.

    With salary increases being so meager under the provincial government’s mandate, increased taxes and fees easily eat up the gains made in bargaining even before we attempt to pay for the rising costs of living.

    To try to make the situation a bit better, the FSA proposed that BCIT eliminate the nominal parking fees altogether, given that they amount to less than $80,000 annually for our members. BCIT replied that the provincial government would not allow that change mid-contract. The FSA has also asked for improved parking services to make it easier for faculty and staff who face full lots if they arrive mid-morning. BCIT has not yet responded to that proposal.

    Leave a reply →
  • Posted by Keith Turner on September 15, 2016, 6:22 am

    So with this change, can we cancel our parking pass in mid year or are we locked in until 2017?

    Reply →
  • Posted by Alan on September 16, 2016, 10:50 am

    “There shall be no change in parking fees except by mutual agreement of the Parties.”

    So "Parties" now includes the provincial government? Have they even *asked*? Oh well, looks like this is something more to add to bargaining for next time!

    Reply →
    • Posted by Paul Reniers on September 22, 2016, 5:12 pm
      in reply to Alan

      For the record, the employer has not made a request to change parking rates in any recent round of bargaining, likely because they know how sensitive the issues is.

      Reply →
  • Posted by James on September 22, 2016, 3:30 pm

    I am mostly off campus over the summer months – could the FSA negotiate an option whereby I can avoid paying for these months? I also cycle to work frequently, a pass for the winter months is all I need, which could half my costs.

    Reply →
    • Posted by Paul Reniers on September 22, 2016, 5:15 pm
      in reply to James

      We put they question to BCIT about reducing the taxation for this benefit when it is not in use, as in summer periods. Given the tax consequences, it’s clearly time for passes to be used with more flexibility. They are researching this and will get back to us very soon.

      Reply →
  • Posted by Andrea Matthews on October 14, 2016, 10:28 am

    Thanks for the detailed explanation. This even further disadvantages those of us who are assigned to work at both the DTC and BBY. With no subsidized parking at the DTC, those of us who must drive pay $12.25/day at the BCIT lot and the full FSA rate for parking + taxable benefit in BBY. With more and more dayschool programs moving to the DTC, this will be an issue for FSA members who must travel back and forth between campuses. Prorated parking in BBY would help.

    Reply →
    • Posted by Paul Reniers on October 18, 2016, 3:47 pm
      in reply to Andrea Matthews

      That’s a very good point, Andrea. If you have to travel between two BCIT sites, BCIT should recognize that you need your vehicle for work, which is grounds for exemption from the tax. Check that out with your manager and we’ll pursue that exemption and the proration issue from the Finance/Payroll side.

      Reply →
  • Posted by Paul Reniers on October 31, 2017, 10:46 am

    That’s an interesting angle, Alan. The two things look pretty similar so it would seem to make sense that parking be treated like an employee discount. I expect some legal minds are exploring this avenue. My suspicion is that the reverse logic is more likely to be true: employee discounts should be treated like parking. Given that Federal Court has already supported treating the tax benefit as compensation and subject to income tax, I expect they might look at employee discounts the same way were CRA to choose to tax them. This decision isn’t an admission by the government that it can’t tax these benefits, just that it won’t at this time.

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