Tax Credits for Ferry Commuters

The federal budget 2006 would allow individuals to claim a non-refundable tax credit for the cost of monthly public transit passes or those passes of a longer duration (e.g., annual passes). Public transit will include transit by local bus, streetcar, subway, commuter train, commuter bus and local ferry.

A note issued by the Federal Government proposes that, starting with the 2007 taxation year, an electronic payment card will be eligible for the transit tax credit where that card is used by an individual for at least 32 1-way trips during an uninterrupted period of 31 days [source: Legislative Proposals and Explanatory Notes to Implement Remaining Budget 2007 Tax Measures, published by the Federal Minister of Finance, October 2007]

The credit for a taxation year will be calculated by reference to the lowest personal income tax rate for the taxation year (i.e. 15.5% for the 2007 and subsequent taxation years). It will be claimable by the individual or the individual’s spouse or common-law partner in respect of eligible transit costs of the individual, the individual’s spouse or common-law partner, and the individual’s dependent children that are under 19 years of age.

Question: Is BC Ferries planning to adapt its fare offerings to allow passengers to take advantage of the new federal tax credit for the cost of monthly transit passes by local ferry? If so, how soon could the changes be made?

BC Ferries’ response

October 29, 2007

  • BC Ferries will launch a new card-based electronic payment method in the spring of 2008 (which the Commission understands will be suited to the new Federal tax provision above);
  • the Smart Media card is an electronic swipe card that can be loaded with dollars and redeemed for travel on BC Ferries instead of using cash, credit cards or prepaid paper tickets;
  • Dollars loaded onto the card can be transferred to other accounts, allowing user to share with others;
  • Card users travelling on BC Ferries’ minor routes will also have access to the same fares currently offered through prepaid ticket books by simply loading a minimum dollar amount onto the card;
  • The new card will also offer loss protection, which is not available with the current prepaid paper tickets;
  • BC Ferries has been consulting for some time regarding the implementation of the new card.