Napanee financial adviser presenting petition to fix Indigenous retiree tax issue

Article content

A Napanee-based financial planner has initiated a petition to the Government of Canada, asking that it make some basic changes to tax forms to help Indigenous people in Canada file their tax-exempt retirement income tax each year without fear of undue reassessment.

In his petition, which was opened for signatures on Sept. 5 and will close on Jan. 3, 2024, Tim Reynolds of L&A Financial says the country’s Indigenous tax-exempt population is “overrepresented in reassessment claims, placing great strain on the community and on government resources.”

Article content

Article content

The petition is asking the Canadian government to alter tax forms to differentiate tax-exempt income from taxable income; to implement a method to record tax-exempt CPP contributions each year; and to ensure that “any and all tax-exempt returns, especially those belonging to Indigenous Canadians, are handled in an efficient and timely manner.”

“The petition itself is asking that issues be resolved for Indigenous people across Canada,” he told the Whig-Standard in a recent interview. “The first issue is to update the CPP deduction recording system to recognize when contributions have been made for an individual from tax-exempt income. The second issue that we’re looking to fix is for the government to update current tax slips to recognize when retirement income has been received from tax-exempt retirement sources.”

Article content

Article content

Reynolds says many Indigenous retirees receive notices of reassessment six to 18 months after filing their taxes.

That reassessment process is being unnecessarily triggered, Reynolds says, because the available tax forms do not provide a checkbox to point out that income is tax-exempt.

That’s a discrepancy that could be easily fixed, Reynolds believes.

“While they’re in their working years, Indigenous individuals, if their income is tax-exempt from employment on a reserve, the T4 slip they receive from their employer has a box available to be used to claim it as exempt income,” he said. “So while they’re working, they don’t have these reassessments happen to them, because the T4 slip was fixed decades ago to allow to list tax-exempt income.”

Article content

Currently, the only solution for this reassessment situation is to have “qualified help,” Reynolds said.

“The current fix is we have to go to bat for them,” he said. “We have a system in place how we package stuff up, we do a letter and send it in to (Canada Revenue Agency), and a couple other fixes where we’ve learned how to get the reassessment reassessed. They really need to have a tax preparer who knows how to do their taxes and have a financial adviser assisting them that understands the actual problem and how to fix it.”

For those who don’t have someone fighting on their behalf, Reynolds says there can be tax consequences.

“I’ve heard of a few individuals that paid taxes that they didn’t actually owe, but they didn’t know what else to do,” he said. “They paid, and they shouldn’t have.”

Article content

Reynolds has been personally involved since 2009 in assisting residents of the Tyendinaga Mohawk Territory, alongside tax professionals, with getting reassessments reversed.

“We’d love to see this problem solved, and we’re also worried that there are other Indigenous people, both locally and across Canada, that are facing this problem essentially yearly and don’t know how to fight it, nor who to go to for help and the knowledge they need in getting it resolved,” he said.

“When an individual reaches retirement, they should be able to enjoy their golden years. Right now, many Indigenous individuals are spending time each year stressed unnecessarily, both financially and emotionally, because of these reassessments. If we can get the Department of Finance and the federal government to fix these issues, then they can finally enjoy their retirement, as the rest of the retirees in Canada get to, without having to go through this issue.”

Article content

Reynolds hopes people will take time to sign the petition and get the issue before the Canadian government.

“At the end of the day, we need 500 signatures to get it recognized and have the government have to make a statement on it,” he said. “If we can get (thousands of signatures) on this thing, I don’t know how they would ignore making these changes. That’s really what this is about — trying to get as many signatures as we can out there and raising awareness on this issue across Canada.”

[email protected]

Our website is the place for the news from Kingston and the surrounding region. Please bookmark thewhig.com and sign up for our newsletter at www.thewhig.com/newsletters.

Article content