1.      Establishment and dismantlement fees

Amounts paid to establish or dismantle a blind trust or blind management agreement, including legal, accounting and other financial costs, are non-deductible outlays of the public office holder.  Any amounts received by a public office holder as reimbursement of these costs are not included in the public office holder’s income.

2.      Annual maintenance fees and/or administration fees

·        Where the amount reimbursed to a public office holder matches his or her actual costs for the annual maintenance or administration of the blind trust or blind management agreement, and the reimbursement flows through to the person actually paying such costs, being either the public office holder or the blind trust, no taxable benefit arises to the public office holder and no deduction of these reimbursed costs is permitted in computing the public office holder’s income or the blind trust’s income, nor is it taken into consideration in computing any gain or loss from the disposition of any property.

·        To the extent that they are reasonable, the annual maintenance or administration costs of a blind trust or blind management agreement and the fees for services as a trustee, that are paid by a public office holder and not reimbursed, may be deductible by the public office holder in the year incurred: first, against income paid or payable to the public office holder from the trust or management agreement in the year; and secondly, the remaining portion, if any, against all other income for the year.  Any excess will result in a non-capital loss and may be deducted against income of other years.  For additional information on deducting non-capital losses, a public office holder should consult his or her tax advisor.

·        Where a public office holder receives a reimbursement of costs incurred by someone other than the public office holder, such as a spouse, a holding company, the blind trust or the blind management agreement, and the public office holder does not reimburse the payer of such costs, the reimbursement will be a taxable benefit to, and must be reported by, the public office holder on his or her income tax return. 

3.      Other costs related to disposition of assets (Sale, conversion, transfer)

The “Ethics Commissioner” may determine that a public office holder must sell, convert or transfer certain assets, other than to a blind trust or blind management agreement.  Where the public office holder incurs costs related to such dispositions, he or she may be reimbursed for such costs.  Where the public office holder is reimbursed for costs incurred to sell, convert or transfer an asset or for costs incurred to have his or her name removed from federal or provincial registries of corporations, such reimbursement will not give rise to a taxable benefit to the public office holder.  Further, no deduction of these reimbursed costs is permitted in computing the public office holder’s gain or loss from the disposition of any property.  A public office holder should consult his or her tax advisor for the appropriate income tax treatment of these costs that have not been reimbursed.

4.      Publicly traded Securities held by Public Office Holder's RRSP

An expense incurred by an RRSP has to be paid by the RRSP.  A payment of RRSP expenses by a person other than the RRSP will generally be an RRSP contribution if paid by the annuitant or the annuitant's spouse or a gift if paid by any other person.  In the view of the Canada Revenue Agency, an exception to this general rule would be appropriate where the Government of Canada reimburses disposition costs where the public office holder (annuitant of the RRSP) has no choice regarding the mandatory disposition of property held in an RRSP.  There is no basis for an exception where the public office holder chooses, on his or her own, to have his or her RRSP dispose of property.