Give Volunteer Firefighters the Credit
Ontario should replicate what other provinces have already offered to their volunteers. Doing so would finally make the federal tax credit a benefit to volunteers
In 2011, the federal government set out to offer a small boost to volunteer firefighters by offering a federal tax credit worth up to $450 per year. While well-intentioned and received with appreciation, what was offered with one hand by the federal government was unintentionally taken away, in part, by the Ontario government.
CLAC has been advocating to set this right. But first, a bit of context. In Ontario, 410 of the province’s 444 municipalities are served by 19,000 volunteer firefighters. More and more often, municipalities struggle to find and keep volunteers.
For most municipalities, the cost of onboarding—which includes testing, training, as well as providing them properly fitting bunker gear—can exceed $10,000 for each new recruit. Turnover has a direct and significant impact on tight municipal budgets, especially in small communities.
Volunteers are the lifeblood of most rural and suburban departments, and those communities rely heavily on the selfless service of these brave men and women. In exchange for the interrupted holidays and weekends, the hundreds of hours of training, the time spent keeping equipment and emergency vehicles in a constant state of readiness, as well as the wear and tear on their own vehicles, the average volunteer firefighter receives a modest honorarium of $3,000 to $4,000 per year.
Volunteers don’t sign up to serve because of the paycheque. But the small financial recognition issued by their municipality, town, or village offers a small but effective incentive and thanks for serving.
The 2011 federal tax credit provides up to $450 of value, provided the volunteer serves at least 200 hours in that year. Until 2011, volunteers were only eligible for a tax exemption of $1,000 on their volunteer honorarium.
The new $450 tax credit is of slightly greater value, but it comes instead of the tax exemption. As a result of foregoing the exemption, a volunteer’s taxable income is effectively increased and that increase is subject to the home province’s tax rate.
The additional tax revenue collected by the province was an unintended consequence of the federal credit. Most provinces recognized this and so they also introduced provincial tax credits that were equal to or greater than the tax revenue they had inadvertently received. Ontario took no such steps and so volunteers in this province received no actual benefit from the 2011 tax credit.
CLAC has been attempting to bring this oversight to the government’s attention through various submissions, and most recently in a letter to Ontario’s minister of finance. CLAC believes that Ontario should replicate what other provinces have already offered to their volunteers. Doing so would finally make the federal tax credit a benefit to volunteers.
This small and relatively inexpensive measure would enhance the value of the volunteer honorarium, without impacting the already strained municipal tax base in the regions that rely on volunteers. It would also put money back into the pockets of volunteers that, before 2011, the province did not previously collect.
This change would be good public policy and a small but effective gesture to signal respect for volunteers—all wrapped up in a modest provincial tax credit.