# 2021-312 Pay and Benefits, Deduction of income tax at source

Case summary

F&R Date: 2022-12-12

The grievor claimed that the Canadian Armed Forces (CAF) provided him with inaccurate information indicating that he would be eligible for Value Added Tax (VAT) and Excise Duty refund benefits upon being posted outside of Canada (OUTCAN). The grievor argued that as a result of his reliance on this information, he was placed in a position of unexpected and ongoing financial hardship.

The Director General Compensation and Benefits, acting as the Initial Authority (IA), rejected the grievance, noting that the grievor's eligibility for VAT and Excise Duty refunds, while posted OUTCAN, was outside of the administration of the CAF. As such, the IA refused to consider the grievance application under the CAF grievance system.

The Committee found that, in accordance with subsection 35(2) of the National Defence Act, the Treasury Board (TB) establishes the conditions for payment of allowances to CAF members. The Committee found no provision to refund any OUTCAN VAT in the TB allowance scheme for the CAF. Finally, the Committee found that the grievor had failed to demonstrate that the CAF had caused him any prejudice through negligent misrepresentation and, therefore, he was not aggrieved.

The Committee recommended that the Final Authority not afford redress.

FA decision summary

The Director Canadian Forces Grievance Authority, acting as FA, agreed with the Committee that there had been no negligent misrepresentation. However, he found that the TB allowance scheme included the payment of Post Living Allowance (PLA) to the grievor and that the design of PLA included in part offsetting the higher cost of items subject to VAT. The FA agreed with the Committee's recommendation to not grant redress.