Bigger Tax Credit for Volunteer Responders

Summary#

This bill raises the federal non‑refundable tax credits for volunteer firefighters and search and rescue volunteers. It increases the credit base from $3,000 to $10,000, starting with the 2022 tax year and onward (Sections 1–2; Application). The rest of the eligibility rules in the Income Tax Act stay the same.

• Increases the maximum federal tax reduction from CAD $450 to CAD $1,500 per eligible filer at the current 15% rate (Sections 1–2; “appropriate percentage” means the lowest federal personal rate).
• Applies retroactively to 2022; past returns may need adjustment to receive the higher amount (Application).
• Keeps existing eligibility (for example, at least 200 hours of eligible services in the year, as certified) and non‑refundability (Income Tax Act s.118.06 and s.118.07).
• You cannot claim both the firefighter and search and rescue credits in the same year; existing rules continue to apply (Income Tax Act s.118.06(3), s.118.07(3)).

What it means for you#

• Households and individual volunteers

  • If you performed at least 200 hours of eligible volunteer firefighting in 2022 or later, your maximum federal tax reduction rises from $450 to $1,500 per year, a $1,050 increase (Section 1).
  • If you performed at least 200 hours of eligible search and rescue volunteer services in 2022 or later, your maximum federal tax reduction rises from $450 to $1,500 per year, a $1,050 increase (Section 2).
  • The credit is non‑refundable. If you owe little or no federal tax, you may not get the full benefit (Income Tax Act s.118.06, s.118.07).
  • Eligibility rules (such as the 200‑hour requirement and certification by the organization) are unchanged (Income Tax Act s.118.06(2), s.118.07(2)).
  • You cannot claim both credits in the same year, and existing restrictions continue to apply if you claim the separate emergency‑volunteer honorarium exclusion; you must choose under current law (Income Tax Act s.118.06(3), s.118.07(3), s.81(4)).
  • Because it applies to 2022 and later, you may file an adjustment to past returns to receive the higher amount if already claimed (Application).

• Local governments and communities

  • No direct funding flows to municipalities. Any retention or recruitment effects would be indirect, through volunteers receiving larger federal tax relief (Sections 1–2).

• Businesses

  • No direct impact.

Expenses#

Estimated net cost: Data unavailable.

• No official fiscal note found. The bill changes the credit base only; it does not appropriate funds.
• Mechanical effect per eligible filer at current rates:
  • Previous maximum federal tax reduction: $3,000 × 15% = CAD $450.
  • New maximum federal tax reduction: $10,000 × 15% = CAD $1,500.
  • Incremental federal revenue loss per full claimant: CAD $1,050/year (Sections 1–2; “appropriate percentage”).
• Total fiscal impact depends on the number of eligible claimants and their tax liability in each year (Data unavailable).
• Retroactive application to 2022 implies a one‑time increase in refunds/reassessments for prior years (Application; Data unavailable).

Proponents' View#

• Larger credit better reflects volunteers’ time and costs. Raising the base to $10,000 increases the maximum federal relief to $1,500 per year, which proponents say can help with fuel, training, and equipment expenses (Sections 1–2).
• Helps retain and recruit volunteers in rural and remote areas that rely on volunteer firefighters and search and rescue teams. The 200‑hour threshold keeps the credit targeted to active volunteers (Income Tax Act s.118.06(2), s.118.07(2)).
• Retroactive application to 2022 provides immediate relief for recent years, which proponents argue supports volunteers facing higher costs since 2022 (Application).
• Keeps administration simple. It changes only the credit amount and leaves existing definitions and certification processes in place (Sections 1–2; s.118.06, s.118.07).

Opponents' View#

• Reduces federal revenue. Each full claimant receives $1,050 more per year, but there is no published total cost estimate; critics warn the aggregate loss could be material without clear offsets (Sections 1–2; Data unavailable).
• Non‑refundable design limits help for the lowest‑income volunteers, who may not owe enough federal tax to benefit fully. The bill does not change this feature (Income Tax Act s.118.06, s.118.07).
• Retroactive application to 2022 may increase Canada Revenue Agency workload for reassessments and delay refunds, with uncertain administrative costs or timelines (Application; Data unavailable).
• Benefits are not tied to measured need or specific expenses; anyone meeting the 200‑hour threshold receives the same amount, which may reduce cost‑effectiveness compared with direct support or refundable credits (Income Tax Act s.118.06(2), s.118.07(2)).