The Issue:
Finance Minister Paul Martin plans to retroactively amend the Excise Tax Act (GST/HST) affecting school boards on their provision of student transportation services.

In October 2001, the Federal Court of Appeal unanimously ruled that, in the test case before them, school boards could claim 100% of input tax credits for the commercial activity of providing student transportation. School boards had been receiving 68% of input tax credits prior to the decision.

The test case covered a four-year period of claims by 29 Quebec school boards, and claims for other time periods and for numerous other school boards were pending. Finance Minister Paul Martin's proposed plans to retroactively change the Excise Tax Act (to the GST implementation date of January 1991) will deny school boards their rightful claims as dictated by the Federal Court of Appeal decision

Key Messages:

• The government is planning to retroactively change tax rules for school boards.
• Changing the rules retroactively is not fair. Abide by the court's decision instead of avoiding it
• Other boards in Quebec and across Canada suspended proceedings for their cases in anticipation of the test case decision. This move was to save all - including the federal government - from unnecessary expenses. Now this proposal will penalize them by robbing those boards of their legitimate claims.
• Show that the federal government is a supporter of public education, not a detractor.
• This issue will affect boards in every province. The financial impact for cash-strapped school boards is significant