441-01522 (Taxation)

We, the undersigned residents of the County of Essex and City of Windsor, draw the attention of the Government of Canada to the following:

• Workforce WindsorEssex has identified that over 6,000 residents of Essex County and Windsor commute to work outside of Canada;
• During the COVID-19 pandemic, the Government of Canada strongly encouraged "non-essential" commuters to refrain from crossing the border and implemented a variety of compliance measures to enforce this position;
• Private industry in the United States changed their work rules in support of the Government of Canada's position to allow many employees to work for home;
• The Canada Revenue Agency granted employees in this position a waiver for tax years 2020 and 2021 that allowed them to continue receiving foreign tax credits for certain deductions that would normally only apply to a Canadian resident physically working in the United States;
• The prolonged border restrictions made work-from-home or a hybrid work model the norm, and a return to pre-COVID work rules is highly unlikely;
• The Canada Revenue Agency did not grant a similar waiver for tax year 2022;
• Employers in the United States do not have a consistent, well-defined, or widespread means of allocating certain payroll taxes among two jurisdictions; and
• The lack of a waiver will significantly reduce disposal income among residents of Essex County and Windsor, and other border communities across Canada, while increasing overall Government of Canada revenue by a statistically insignificant amount.

Therefore, your petitioners (those who are impacted by these circumstances, or who are relatives, friends, or neighbours of those who are impacted by these circumstances) call upon the government of Canada to:

• Rewrite the tax laws of Canada and renegotiate any concomitant tax treaties with the United States to recognize 401-K contributions and FICA (Social Security and Medicare) payroll taxes as foreign tax credits in Canada for Canadian residents employed in the United States regardless of whether those employees physically work at a site in the United States, from their home, or a combination of both; and
• Reinstate the temporary waiver with respect to 401-K contributions and FICA payroll taxes retroactive to January 1, 2022 until such time as the tax laws of Canada and any concomitant tax treaties with the States have been updated to reflect the continuing reality of work-from-home and hybrid work models.