CUTA Reinforces Call for Tax Law Changes to Support Employer-Provided Transit Passes - UK Transit Benefit Programs Begin

    An open letter to:

    The Honourable James M. Flaherty
    Minister of Finance
    Department of Finance Canada

    TORONTO, Nov. 27 /CNW/ -

    Dear Minister Flaherty,

    The Canadian Urban Transit Association (CUTA) would like to draw your
attention to a new development in Great Britain that supports CUTA's call for
changes in Canada's tax law to allow for employer-provided transit benefits,
also known as "tax-free transit benefits". Being used in Britain since earlier
this year, transit benefits are a strategy used to promote public transit use,
reduce emissions and reduce oil consumption. CUTA has called for the
introduction of tax-free transit benefits in Canada since the early 1990's.
    CUTA is again calling on your government to support tax law changes to
allow this initiative as a non-taxable benefit. The proposal for a National
Transit Strategy, endorsed by CUTA and other stakeholders, calls for increased
incentives to encourage transit use. Employer-provided transit passes would
offer Canadians greater reason to choose transit for their urban travel needs.
    The tax-free transit benefit idea was initially considered a US
initiative, where it has been in place for over 25 years with increasing
popularity. The recent British development is already gaining significant
attention and is seen as an important new tool for addressing traffic
congestion and greenhouse gas concerns.
    The program allows employees paying top-rate taxes to save 41% on their
travel costs because gross income tax and national insurance is not taken from
pre-tax funds; accordingly, basic rate employees save 33%. Employers also save
12.8% for the foregone national insurance tax.
    In the US, transit benefits can be either an employee-paid pre-tax
deduction, or an employer-paid tax-free benefit. Presently, the US provisions
allow up to $110 per month tax-free. Effective January 1, 2008 the maximum
benefit will become $115, and legislation to increase it to $200 per month has
been introduced in both the US Senate and House of Representatives. Transit
benefit programs now serve all major US transit markets, and it is estimated
that well over 1 million US transit riders receive tax-free transit fares.
    In Canada, public transit accounts for approximately 11% of work-related
travel. Each 1% increase in transit ridership will reduce greenhouse gas
emissions by almost 12,000 tonnes.
    Tax-free employer passes have been a good idea for years and their
introduction in Canada would be complementary to the transit pass credit your
government introduced last year. We are pleased to see that Britain
appreciates this and are setting an international example of the success we
would also like to see in Canada. CUTA is calling on the federal government in
Ottawa to take steps to make this benefit an important part of Canada's
transport, environmental and tax policies in the near future.


    Michael Roschlau
    CUTA President & Chief Executive Officer

    Copy:  The Honourable Lawrence Cannon
           Minister of Transport, Infrastructure and Communities

    The Canadian Urban Transit Association (CUTA) is the national association
representing public transit systems, suppliers to the industry, government
agencies, individuals and related organizations in Canada.

For further information:

For further information: Maureen Shuell, Director of Communications,
(416) 365-9800 ext. 105 (office),

Organization Profile

Canadian Urban Transit Association

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890