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November 13, 2020

The Honourable , P.C., M.P. Deputy Prime Minister and Minister of Finance Department of Finance Canada 90 Elgin Street Ottawa, ON K1A 0G5 Via email: [email protected]

LA FORMATION ET DE LA REPRÉSENTATION ET DE FORMATION LA

Re: Recommendation – Elimination of the T2200 Form – COVID-19

Dear Minister Freeland,

The Canadian Payroll Association appreciates that you and your Ministry continue to provide helpful support to members of the payroll profession during these difficult times. Please consider the following recommendation which would simplify the process of claiming home-office related expenses in response to the current influx of remote workers.

Policy Brief: Proposal to Eliminate the T2200 With over 6 million Canadians newly working from home due to the pandemic, in addition to the 1.8

million Canadians who typically work from home, the issue of claiming employment expenses is expected to be problematic for employees and employers alike.

The T2200 form has historically been a declaration of conditions of employment, certified by an

CONFORMITÉ DE LA PAIE AU MOYEN DE PAIE CONFORMITÉ DE LA

employer, to allow an employee to claim certain expenses. It has been accepted as an added burden ● to employers who have chosen to offer work from home arrangements to employees, but due to COVID-19, work from home guidelines were issued by governments, not employers.

This form adds undue administrative drain on employers at a time when they are already dealing with a very challenging year. It should therefore not fall onto Canadian employers to certify millions of ADVOCACY

forms as a result of a widespread situation that was not of their choosing. AND

Given the exponential increase of work-from-home employees due to COVID-19 and the volume of T2200 forms that would be required this year, the Canadian Payroll Association is concerned that this tax return form would pose significant challenges: EDUCATION For Government The pandemic has affected millions of Canadians, including government employees who are experiencing telework for the first time. As a result of essential relief measures and COVID-related

THROUGH payroll impacts, there will be an increased burden on (CRA) employees, including:  increased call centre volumes with questions from employers and working Canadians;  increased risk of claim errors by Canadians encountering this form for the first time;

 increased auditing of T1 income tax returns. COMPLIANCE

PAYROLL [2]

For Employees The majority of Canadians have never been exposed to this income deduction. Canadians newly working from home will be unknowledgeable on how to claim this on their T1 returns and will need to research:  the T2200 form or any temporary derivative created for 2020;  the T777 form to detail the expenses claimed;  the T4044 guide to help make sense of the types of expenses that can be claimed; &  income tax folio S4-F2-C2 to understand the workspace in home computation.

Individuals who generally complete and file their T1 tax return themselves may now require a tax accountant’s help, the costs of which may negate the financial benefit of the claim. There is also an added concern for employees that have been laid off during the pandemic from now shuttered businesses which would be unable to complete T2200 forms for past employees.

For Employers Most employers will have no experience with the T2200 process, adding an additional burden to what is already expected to be the most challenging year-end season in many years. Expected challenges for employers include:  an onslaught of assistance requests from employees asking for and receiving this form for the first time;  an unmanageable filing volume for larger employers (consider the large financial institutions with tens of thousands of employees suddenly working from home);  a considerable burden due to the manual nature of the form, as the T2200 or any derivative lacks a digital reporting option;  the effort likely outweighing the financial benefit to employees.

Recommended Solution The Canadian Payroll Association is recommending that the federal government eliminate the T2200 for the 2020 tax year due to increased work-from-home conditions during COVID-19. A significant impact of this proposed solution is that the elimination of COVID-related T2200s will save Canadian employers in excess of $194 million for 2020.

A simple and elegant solution to temporarily eliminate the T2200 for the 2020 tax year, this change only requires a letter of regulatory forbearance from the federal government stating that this form will not be required for 2020 personal tax filings.

This proposal is widely supported by the members of the Canadian Payroll Association including over 40,000 payroll professionals, payroll service and software providers, and major Canadian financial corporations, as well as other key stakeholder organizations such as the Canadian Chamber of Commerce and the Human Resources Professionals Association.

Please do not hesitate to contact me or our Director of Government and Legislative Affairs, Rachel Dobrin-De Grâce at 416.487.3380 x 126 or [email protected].

Sincerely,

Peter Tzanetakis President cc. Honourable Diane Lebouthillier, Minister of National Revenue Bob Hamilton, Commissioner of the CRA