April 23, 2012

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Commentary by Tom Morton

A little known fact is that the salary received by the Governor General was not taxable, until now. Today the Finance Minister introduced an amendment to the Governor General’s Act to have the Governor General’s salary taxed in the year of receipt. Fortunately for the Governor General this will not affect his take-home pay – his salary has been adjusted so the after-tax amount received by the Governor General is no less that was previously paid tax free. To this end the Governor General will now be paid $270,602 per annum.

One has to ask, why change? The federal government is now paying more, but is collecting income taxes such that the net amount the Governor General is receiving is the same. Why go to the hassle of changing the law?  The Governor General’s income will now be taxed in Ontario.  Is this a way for the federal government to increase the tax base for Ontario to help them dig their way out of estimated $15.3 billion deficit projected for 2012?

Will we next see the Governor General’s salary bumped up over $500,000 just so he has to pay the new Ontario income tax on wealthy taxpayers (those earning more than $500,000), thus further helping Ontario’s deficit?  Will we also see another perquisite go to Quebec because they will feel left out as they would have been able to tax the income of the Governor General if the Governor General’s mansion had been located across the river in Hull?

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