British Columbia Government To Repay Tax To Forest Workers

by Mike Godfrey, Tax-News.com, New York

03 December 2001

After a report, published last week from British Columbia Ombudsman Howard Kushner, recommending that Forest Renewal BC should pay all taxes, both provincial and federal, on benefits received by approximately 8,700 forest workers in its transition programme, the government has agreed to pay back $23 million to the workers.

'Although it was evident that participants were depending on Forest Renewal BC, the Crown Corporation failed to exercise sufficient care to avoid the negative financial impact on participants,' said Kushner.

A statement from the office of the Ombudsman explained that its findings were based on information provided to participants by Forest Renewal BC. According to the report it was reasonable for participants to reach the conclusion that funds were not taxable. 'There are people, particularly those in the low-income bracket, who could be in a worse situation than they were in prior to participating in the programme because they do not have savings to cover the unexpected tax bill,' added Kushner.

Forests Minister, Mike de Jong, told reporters that when in opposition he pledged to repay the workers back the taxes and he intends to fulfil that promise. 'For a lot of these people they woke up one day in 2000 and discovered that they had a tax liability that they weren't aware of, some of them between $5,000 and $10,000 at a time when they could least afford it,' he said.

Don Wright, Chief Executive Officer of Forest Renewal BC, acknowledged that 'there were many problems associated with the administration of the Forest Worker Transition Programme and we support the substantive findings of the Ombudsman's report. We further acknowledge that many participants of this programme ended up in difficult financial situations as a result of information provided to them by Forest Renewal BC.'

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