2021-0916041E5 XXXXXXXXXX

Principal Issues: Whether ex-gratia payments received by individuals, under the proposed XXXXXXXXXX, would be included in the taxable income of the recipient.

Position: No.

Reasons: The ex-gratia payments, under the XXXXXXXXXX, will not constitute income from a source, and therefore, will not be taxable under the Income Tax Act.

Author: Brennan, Christopher
Section: 3, 56(1)(a)(ii), 56(1)(u)

XXXXXXXXXX                                                                2021-091604
                                                                                        C. Brennan, CPA, CA

December 15, 2021

Dear XXXXXXXXXX:

Re: XXXXXXXXXX

We are writing in response to your request dated November 2, 2021 regarding whether ex-gratia payments paid to certain individuals, under the proposed XXXXXXXXXX will be included in income of the recipients under the Income Tax Act (the “Act”).

It is our understanding that the proposed XXXXXXXXXX will recognize, and express gratitude for, the efforts of former XXXXXXXXXX workers and employees of other Canadian organizations or Canadian Government Institutions who, in XXXXXXXXXX. We understand that the XXXXXXXXXX will recognize each eligible individual with a symbolic one-time ex-gratia payment of $ XXXXXXXXXX.

Based on the information you have provided, as to the nature of the proposed XXXXXXXXXX, it is our view that the ex-gratia payments will not constitute income from a source, and therefore, will not be taxable under the Act.

We trust our comments will be of assistance.

Yours truly,



Lita Krantz, CPA, CA
Manager - Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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