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Changes to GST Policy Could Impact Municipal Cost-Share Agreements

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September 11, 2019 at 12:10 pm - Home, MyTownToday.ca
By Erika Chorostil

The Town of Whitecourt has thrown their support behind the Town of Peace River in an appeal against a recent CRA ruling.

A new policy by the Canada Revenue Agency could see Intermunicipal Cost Sharing Agreements become subject to GST, affecting municipalities across Alberta and Canada, including Whitecourt.

Whitecourt Council received a letter from Peace River stating that a recent CRA audit on Peace River revealed that some of the shared services the Town provided were now subject to tax, and the Town owed $600,000 back to the government.

Peace River is appealing the CRA’s decision and has contacted the Federation of Canadian Municipalities (FCM), Rural Municipalities Association (RMA), the Alberta Urban Municipalities Association (AUMA) and the Northern Alberta Development Council (NADC). Peace River is also asking for support from other towns with Cost Sharing Agreements, including Whitecourt, to write letters of support in the Town’s appeal process.

Whitecourt Mayor Maryann Chichak says the CRA’s new policy is concerning and they will support Peace River with a written letter while they await the outcome of their case.

In terms of what the GST policy could mean for the future of Whitecourt’s Cost Sharing agreements, Mayor Chichak says Council is not sure yet what those implications could look like or how it would affect the Town and its partners.

“It’s unclear for our agreements where we would stand on them right now. It’s really unclear at this point in time what the final answer or number would be.”

Chichak did say that going forward, as the Town continues to work on new agreements with their partners, that it is something to be aware of and prepare for in case of any future rulings.

 

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