Government announces deployed CAF and police personnel to receive exemption from federal income taxes

All members deployed on international operations, regardless of the hardship and risk score, will be exempted from federal income taxes, according to a new government proposal announced on May 18 by Defence Minister Harjit S. Sajjan, Finance Minister Bill Morneau, and Public Safety Minister Ralph Goodale.

“When our women and men in uniform deploy internationally, they and their families make great sacrifices on our behalf. Military families are the strength behind the uniform, and we must do more to acknowledge that our people are our most important asset. The Government of Canada will recognize their sacrifices with these important tax relief measures,” said Harjit Sajjan, Defence Minister.

The tax relief, which also applies to police officers deployed on international operational missions, will be up to and including the pay level of lieutenant colonel. Those above the rank of lieutenant colonel will have only a portion of their pay taxed.

The measure will be retroactive to Jan. 1 of this year.

“I am very pleased to provide further recognition of the special contribution that Canadian Armed Forces members and police officers make to international peace and stability while serving their country abroad,” said Bill Morneau, Minister of Finance.

The tax relief was instated in 2004 to recognize the contributions of Canadian Armed Forces members and police officers to international peace and stability while serving their country.

Currently, tax relief is automatically provided for missions carrying a risk score between 2.5 and 4.00. Moderate risk missions, receiving a score between 2.00 and 2.49, receive tax relief when the mission has been designated by the Minister of Finance, and for the period over which the mission is assessed as being moderate-risk.

Under the proposed new plan, the hardship and risk score will only be used to determine hardship and risk allowance, not tax relief.

“The government is proud of the important work our police do abroad to support peace and stability in parts of the world that badly need both. We will provide further recognition of their tireless work by providing additional tax relief when they are deployed abroad,” stated Ralph Goodale, Minister of Public Safety and Emergency Preparedness.

The measures will apply to the 2017 and subsequent taxation years. It will provide additional federal tax relief totalling $85 million over the 2017-18 to 2021-22 period.

The measure is a part of other administrative changes and new measures in Canada’s new Defence Policy which will be made public on June 7.

READ MORE: General Vance issues statement regarding proposed tax relief policy