Tax Deductions For Business Fines Must Stop:

MP Pat Martin Introduces Legislation

Ottawa - MP Pat Martin (Winnipeg Centre) has raised concerns in Parliament regarding the rationale for the Liberal government continuing to allow fines to be deducted from business taxes.

“This is outrageous,” said Martin. “Surely Parliament never intended to permit fines to be written off under tax statutes. This clearly undermines the law’s use of fines as a deterrence.”

Mr. Martin is concerned that the government delay will allow industry to write-off millions of dollars in fines.

“I cant deduct my traffic tickets, why can a business write off fines and penalties as a legitimate business deduction,” questions NDP MP Pat Martin

With tax season quickly approaching Canadians everywhere are looking for all the write-offs they can find. The recent court decision, favouring business write-offs of fines, has made that easier for errant businesses.

The supreme court ruled in 1999 that levies, fines and penalties imposed on a business are a legitimate tax deduction if incurred for the purposes of earning income. This is made possible by the fact that the Income Tax Act is silent on the treatment of any fines or penalties except ones imposed by the Income Tax Act itself. In 1994 steps were taken to stop the deduction of bribery expenses.

“This is discrimination of the worst kind,” Martin stated. “It’s taking advantage of Canadians, the poorest and most disadvantaged people in the country while making sure your buddies in business get to write-off fines for breaking the law. This is a disgrace.”

“We cannot afford another tax season of corporations using their fines as a tax deduction, or encouraging corporate leaders to treat financial penalties as the cost of doing business,” said Martin. 

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For information, please contact:

Pat Martin, MP (613) 992-5308