Comments to Ontario Minister of Finance on the retroactive amendment of Retail Sales Tax Act.

On June 20, 2008, Tax Executives Institute submitted the following comments to Dwight Duncan, Minister of Finance for the Province of Ontario, concerning the retroactive amendment of the Retail Sales Tax Act to overturn a taxpayer-favorable decision of the Ontario Court of Appeals. The comments were prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Phil W. Riley of ArcelorMittal Dofasco Inc.

On behalf of Tax Executives Institute (TEI or Institute), I write to register TEI's objection to the decision to retroactively amend sections 1(1) and 7(1)41 of the Retail Sales Tax Act. Although the new legislation has been characterized as necessary to ensure the result originally intended by the legislature, in reality the new provisions represent nothing more than the government's effort to overturn, without the benefit of any consultation, an unfavourable court decision. Even if the substance of the new provisions could be justified as sound tax policy, the retroactive enactment of the legislation violates core principles underlying Ontario's tax regime--namely, fairness and predictability. Accordingly, we urge that the legislation be re-considered.

Background

TEI is the preeminent association of business tax executives. The Institute's more than 7,300 professionals manage the tax affairs of the leading 3,200 companies in Canada, the United States, Europe, and Asia and must contend daily with the planning and compliance aspects of business tax laws in Canada and these other areas. TEI's first Canadian chapter was founded in Toronto over a half century ago, and Canadians constitute 10 percent of the Institute's worldwide membership, with our Canadian members belonging to chapters in Toronto, Montreal, Calgary, and Vancouver. In addition, many of our non-Canadian members are employed by companies with substantial activities in Canada.

As a broad-based association of tax professionals, TEI is concerned with issues of tax policy and administration and is dedicated to working with government agencies in Canada, including the provinces, as well as in the United States and elsewhere, to reduce the costs and burdens of tax compliance and administration to our common benefit. We are convinced that the administration of the tax laws in accordance with the highest standards of professional competence and integrity, as well as an atmosphere of mutual trust and confidence between business and government, will promote the...