Corporate commuters could be saving thousands in provincial income tax

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This article was published 10/01/2018 (2848 days ago), so information in it may no longer be current.

Two Crown corporation executives who commute to Winnipeg from Calgary could be paying tens of thousands of dollars in income tax to Alberta instead of to the province that employs them.

Both Manitoba Hydro and Manitoba Liquor & Lotteries employ a vice-president who works in Winnipeg and goes home to Calgary on weekends.

The executives, through corporate spokespersons, declined comment Wednesday on whether they are considered Manitoba residents for income tax purposes. They also declined to say whether they held a Manitoba health card or driver’s licence or were registered to vote in the province.

Each would save in the neighbourhood of $10,000 a year in provincial income taxes by filing a tax return as an Alberta resident instead of as a Manitoban.

According to a public disclosure document filed last year, Manitoba Hydro vice-president of corporate communications and public affairs Siobhan Vinish earned $231,090 in 2016.

According to an online tax calculator, a person earning such a salary would pay $53,869 in federal tax and $35,065 in Manitoba tax. The same wage earner in Alberta would pay $24,066 in provincial tax.

Last spring, Manitoba Liquor & Lotteries hired Deanne Carson as vice-president of marketing and communications. Her salary was not disclosed, but could be in the same vicinity as Vinish’s, as she replaced two executives earning a combined $380,000 annually.

Tanis Olafson, a local chartered professional accountant, says a person could earn all their income in Manitoba and still be considered a resident of another province for tax purposes, depending on family and other considerations.

“It’s where your significant residential ties are. Just because you’re working here doesn’t necessarily make you a resident of Manitoba,” she said.

What’s important, she said, is where a person’s spouse and children are located, where their house is located, and which province has issued the medical card or driver’s licence in their wallet.

In the past, civic politicians have gnashed their teeth at the fact so many police officers live outside Winnipeg, meaning they don’t pay local property taxes. The Free Press reported in late 2016 almost 22 per cent of Winnipeg police officers — about 420 — lived beyond the Perimeter Highway.

Olafson noted while Manitoba may lose tax revenue when a worker commutes from another province to work here, the reverse is also true.

There are Manitobans, for example, who work in places such as Nunavut but are still considered Manitoba residents. And they also pay a higher provincial income tax rate than they would if they qualified as residents of Nunavut because the northern jurisdiction “has almost no provincial tax,” she said.

There are those who believe distant weekend commutes are not sustainable for the employees — or their employer — over the long term, while there are others who say that such arrangements are simply the way of the world these days.

Should a senior executive earning a public-sector wage be expected to be a Manitoba resident?

Asked for his opinion Wednesday, NDP Leader Wab Kinew said he is hesitant to criticize specific individuals because there may be “some personal situation” that necessitates a commute, such as a child not wanting to change schools.

“I don’t want to criticize any individuals because I don’t know their family situation. But as a rule of thumb, I think it’s good to have your public servants come from Manitoba because these are Manitoba jobs, and I think that people who are invested in our communities long-term are the sort of people that we want to make these public policy decisions on our behalf.”

larry.kusch@freepress.mb.ca