Triples Tax Credit for Volunteer Firefighters, Rescuers

Summary#

This bill raises the federal non‑refundable tax credits for volunteer firefighters and search and rescue volunteers by changing the base amount from $3,000 to $10,000. It also broadens what counts as “eligible volunteer firefighting services” to include being available/on call, emergency and non‑emergency duties, and allows small payments that are not a liveable wage. The changes apply to the 2022 and later tax years (Bill Sections 1–2; Application).

• Raises the maximum federal tax reduction from 15% of $3,000 to 15% of $10,000 (from $450 to $1,500) per eligible filer (Bill Sections 1–2).
• Expands eligibility by recognizing on‑call time and non‑emergency duties as qualifying services for firefighters (Bill Section 1).
• Clarifies that volunteers may receive nominal pay and still qualify, as long as it is not a liveable wage (Bill Section 1).
• Applies retroactively to the 2022 tax year and onward (Application).
• Does not change other existing eligibility rules in these sections of the Income Tax Act (Bill Sections 1–2).

What it means for you#

• Households

  • If you are an eligible volunteer firefighter or search and rescue volunteer, your federal non‑refundable credit increases to 15% of $10,000, up to $1,500 per year, starting with the 2022 tax year (Bill Sections 1–2; Application).
  • Non‑refundable means it reduces taxes you owe, but it will not create or increase a refund if you owe no tax.
  • If you received a small honorarium or stipend for volunteering, you may still qualify as long as it is nominal and not a liveable wage (Bill Section 1).
  • If you filed your 2022 return before this change, you may need to adjust your return to claim the higher amount once the change is in force. Canada Revenue Agency processes would apply.

• Workers (volunteer firefighters and search and rescue volunteers)

  • On‑call availability and non‑emergency duties now count as eligible services for firefighters, which may make it easier to meet service criteria (Bill Section 1).
  • Search and rescue volunteers receive the same higher credit base ($10,000), computed at the “appropriate percentage” (the lowest federal tax rate) (Bill Section 2).
  • Other conditions in the Income Tax Act for these credits are not changed by this bill (Bill Sections 1–2).

• Local governments and volunteer organizations

  • No direct funding is provided. However, more members may qualify for the credit because on‑call and non‑emergency duties count (Bill Section 1).
  • You may be asked by volunteers to document their eligible service under existing CRA practices. The bill does not set new reporting steps.

Expenses#

Estimated net cost: Data unavailable.

• Key mechanics
  • New base amount: $10,000; computed at the “appropriate percentage” (lowest federal tax rate, 15% at present) (Bill Sections 1–2).
  • Maximum federal tax reduction per eligible filer rises from $450 (15% of $3,000) to $1,500 (15% of $10,000), an increase of $1,050 per year (Bill Sections 1–2).

• Total federal revenue impact: Data unavailable (no official fiscal note identified; number of eligible claimants not provided in the bill).

Proponents' View#

• Improves recognition and support for essential volunteers by tripling the base amount from $3,000 to $10,000, increasing the maximum federal tax reduction to $1,500 per year (Bill Sections 1–2).
• Expands what counts as service by including on‑call availability and non‑emergency duties for firefighters, reducing uncertainty about eligibility (Bill Section 1).
• Allows nominal pay without losing eligibility, which aligns the tax credit with common small honoraria practices in volunteer departments (Bill Section 1).
• Applies starting in 2022, delivering immediate relief to volunteers once implemented and allowing adjustments for 2022 returns (Application).
• Keeps administration simple by using the existing credit structure and the established “appropriate percentage” mechanism in the Income Tax Act (Bill Sections 1–2).

Opponents' View#

• Increases federal tax expenditures: each eligible filer could receive up to $1,050 more per year than before; the total revenue loss is unknown without claimant counts (Bill Sections 1–2; Data unavailable).
• Non‑refundable design limits benefits for lower‑income volunteers who owe little or no tax, which may blunt the policy’s reach among some volunteers.
• “Liveable wage” is not defined in the bill, creating ambiguity for volunteers, departments, and the Canada Revenue Agency about what level of remuneration disqualifies a claim (Bill Section 1).
• Broader definition of eligible services (e.g., on‑call time) could increase the number of claimants and raise costs, and may require more verification to prevent ineligible claims (Bill Section 1).
• Retroactive application to 2022 may require CRA system updates and amended returns, adding administrative workload and processing time (Application).