On April 29, 2015, Canada Revenue Agency (“CRA”) released a technical interpretation (CRA # 2014-
0559501E5) describing what type of activities are likely to be considered “primary services” or “secondary
services”, in relation to the definition of “eligible volunteer firefighting services” in the Income Tax Act
(“ITA”). This CRA View is only available in French. While it does not address the search and rescue
volunteer credit under section 118.07 of the ITA, in 2014, the ITA was amended to allow volunteer
firefighters or volunteers who perform search and rescue services and who perform 200 hours of eligible
service to claim a tax deduction.
“Eligible volunteer firefighting service” is defined under subsection 118.06(1) of the ITA as:
services provided by an individual in the individual’s capacity as a volunteer
firefighter to a fire department that consist primarily of responding to and
being on call for firefighting and related emergency calls, attending
meetings held by the fire department and participating in required training
related to the prevention or suppression of fires, but does not include
services provided to a particular fire department if the individual provides
firefighting services to the department otherwise than as a volunteer.
In this CRA View, CRA was asked, in particular, whether activities such as monthly practices, including
simulations of interventions, and prevention visits, such as visits to homes to inspect fire alarm systems,
fall within the above definition. In response, CRA provided general comments concerning its
interpretation of 118.06(1). Although the ITA itself does not refer to “primary” or “secondary” services
in relation to the volunteer firefighter tax credit, CRA administers the credit by referring to the services in the above definition, i.e., responding to and being on call for firefighting and related emergency calls as a firefighter; attending meetings held by the fire department; and participating in required training related to the prevention or suppression of fire as “primary services”. Other activities are also eligible for the credit as “secondary services”, such as time spent repairing and maintaining vehicles and equipment used by the fire department. Generally, the number of hours devoted to primary services must exceed the number of hours devoted to secondary services. In this regard, CRA stated that assessing such activities will be a question of fact and that in this specific situation, the monthly practices may be primary services where they include a portion related to the prevention or extinguishing of fires, but that prevention visits or verification of fire alarms were secondary services as they are not included in the definition at 118.06(1) of the ITA.
This commentary is noteworthy as more provinces introduce similar legislation. For example, Manitoba
recently introduced a tax credit for volunteer firefighters as part of its 2015 Budget