Backgrounder - Additional Tax Relief for Canadian Armed Forces Personnel and Police Officers

The Government of Canada provides tax relief to members of the Canadian Armed Forces (CAF) and police officers deployed on international high- and moderate-risk operational missions. This tax relief recognizes the special contribution that CAF members and police officers make to international peace and stability while serving their country abroad.

Eligible CAF members and police officers may claim a deduction against taxable income in respect of income earned while deployed on such missions. The maximum amount that an individual may deduct in a taxation year cannot exceed the highest level of pay earned by a non-commissioned member of the CAF.

For personnel deployed on high-risk missions i.e., missions assessed by the Department of National Defence as carrying a risk score between 2.50 and 4.00 tax relief is automatically provided for the period over which the mission is assessed as being high-risk. For moderate-risk missions i.e., missions carrying a risk score between 2.00 and 2.49 tax relief is provided when the mission has been designated by the Minister of Finance, and for the period over which the mission is assessed as being moderate-risk.

The deduction is currently not available for CAF members and police officers deployed on international operational missions carrying a risk score lower than 2.00.

Proposal for Additional Tax Relief

The Government proposes to extend this tax deduction automatically to all CAF members and police officers for the period over which they are deployed on an international operational mission, regardless of the risk score associated with the mission.

In addition, the Government proposes to increase the maximum amount that an individual may deduct in a taxation year to the highest level of pay earned by a Lieutenant-Colonel of the CAF.

These measures will apply to the 2017 and subsequent taxation years.

Cost

It is estimated that these measures will provide additional federal tax relief totalling $85 million over the 2017-18 to 2021-22 period.