Finance committee  I can't really speak to the cost involved in making those kinds of changes. I'm not sure this is a change that would require.... I don't know whether it would require changes to the software that's currently used. As I said before, it's addressing a really narrow situation, so I suspect it may be consistent that there may not be changes required to the software, but I can't really speak to that.

Finance committee  As I said, in general for income tax changes they are prospective when they are tightening. I think that in general that's considered to be fair, because taxpayers can structure their affairs in accordance with the law. If the law is changed, then in general it's usually appropriate to do that on a prospective basis, but sometimes there may be special circumstances that warrant a tightening change being made on a retroactive basis.

Finance committee  In the income tax context, it's not typical to make them on a retroactive basis. My expertise is in income tax, and I can't, off the top of my head, think of a retroactive income tax amendment.

Finance committee  Again, I think this language is consistent with other employment benefit provisions. I don't think this is an issue that arises with respect to the employment benefit rules in general. I think it's normal under the Income Tax Act to look at the circumstances in which a benefit is provided, to assess whether that relates to employment and to tax the benefit on that basis.

Finance committee  No. The amendment applies to tax years that begin after 2022. The amendment was released for consultation last summer with a package of technical amendments. Typically, in most cases with respect to income tax when tightening changes are made, they're made on a prospective basis based on the date when the changes are announced.

Finance committee  I can't speak to the amendment you're talking about, but like I said, in general for income tax amendments we normally make them prospective if they're tightening. I can't speak to that other amendment.

Finance committee  I don't think that would be a reasonable interpretation of the provision, no.

Finance committee  I think that's an example of a situation where the amendment might make a difference to whether the benefit is included in employment.

Finance committee  Yes, that's the purpose of the amendment. The fact is that if that's happening, it would suggest that a car is being provided as a consequence of employment. The amendment is being made so that there isn't the ability for taxpayers to put in place some sort of arrangement that has another entity provide the car and then try to take the position that....

Finance committee  The main rule that provides that employee benefits have to be included in income looks at whether benefits are received as a result of employment. The standby charge rules are really like a subset of those rules that calculate how you determine the employment and how you determine the amount of the benefit.

Finance committee  If they're related, it would be caught. If they're not related, it would not be caught.

Finance committee  If companies are related, then they are deemed to deal not at arm's length. “Arm's length” is broader than “related”, because if you're not related, you can also be considered not to deal at arm's length as a result of other factors. If you're related, you're not at arm's length, but you could also be not at arm's length even if you're not related.

Finance committee  They could be at arm's length or they could not be at arm's length. The relationship between the two companies isn't directly relevant to the test. The car is being provided as a consequence of the employee's employment. Practically, the relationship would likely be relevant factually to that determination, but technically, that relationship is not directly relevant.

Finance committee  I think the way the amendment has been drafted is consistent with the way other rules that deal with employee benefits are drafted, which generally look at whether the benefits are being provided in the course of employment. They're not necessarily specific as to who's providing the benefit.

Finance committee  Yes. There are specific rules that deal with specific kinds of benefits, but in general, if a benefit is something that's provided to someone in the course of their employment, then it is a benefit to them regardless of who is providing the amount for the thing.