Value of housing was overestimated by school boards
Nunavik teachers win hefty tax rebates
Many teachers in Nunavik can look forward to big reimbursement cheques to compensate them for overpayments charged to them on federal and provincial tax returns.
Teachers who have been living in Kativik School Board housing for the past 10 years may be eligible for a reimbursement of up to $15,000 each, says the Northern Quebec Teachers Association.
The union, which represents 1,300 members in the Cree and Inuit school boards, fought successfully to reduce the amount of the taxable housing benefit for teachers living in subsidized housing.
The Canada Revenue Agency agreed to lower the taxable amount on the basis of an independent property evaluation.
Teachers pay only a small amount for housing, but a much larger amount – representing the full cost of the rental unit – is recorded as a benefit, and this is the amount teachers pay taxes on.
The union showed the taxable value of housing provided to teachers had been over-estimated by the Cree and Kativik school boards over the past 10 years.
This means teachers ended up paying too much tax on their housing.
"The ruling is also interesting for all employees whose employer furnishes housing in the Cree and Inuit communities," said union president Patrick D'Astous.
According to information supplied by the union, a KSB-supplied house was shown as a taxable benefit worth $942 a month in 2006, while the value of a KSB-supplied apartment was worth $380 a month (minus the rental contribution paid by teachers.)
The real market value, established by an independent evaluator, was much lower – only $580 a month for a house, and $329 a month for an apartment.
When rent is a taxable benefit in a job, and there's a difference between the market value evaluation and the rent charged, D'Astous said the lower figure should be the one used to calculate the taxable benefit.
But the KSB used to the higher figure to calculate what the subsidized housing was worth as a taxable benefit, so teachers, who paid taxes on more income then they should have, are now owed money from the government.
To get this overpayment back, teachers may face lots of paperwork, but all teachers with the KSB who live in school board-furnished housing could be eligible for a tax reimbursement of about $1,500 per year from 1995 to 2005.
About 35 teachers under the union had already officially filed most of the paperwork necessary for an adjustment on their taxes. They'll be first in line to receive some money, D'Astous said.
The union now wants the Canada Revenue Agency and Revenue Quebec to work with northern Quebec school boards to identify and reimburse the teachers who have paid too much tax on their housing over the past 10 years.
The union plans to help other teachers apply for a revision of their taxes so that they will be able to get a reimbursement.
And the union also wants the KSB to accept to adjust the amount they put on teachers' records of pay for 2007 to avoid more paperwork in the future.
The union estimates that the federal and provincial governments have collected several million dollars in taxes from its members over the past 10 years.
The NQTA calls this over-taxation is part of a package of "abusive practices" towards its teachers – particularly those hired from the South – which add to the difficulty of attracting and retaining teachers in northern Quebec.
He said housing provided to teachers in the North is moreover often in an "appalling state."
D'Astous said he's angry his union has fight to make governments understand that school boards must offer good living conditions and decent pay to keep teachers working at schools.