N.S. Speaker attempting to recover taxes from extra payments made to staff

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HALIFAX - The fallout from Nova Scotia's political spending scandal widened Wednesday as letters were sent to the 52 members of the legislature confirming details of extra payments made to constituency staff.
House Speaker Charlie Parker said during a news conference that employees of provincial politicians who may owe taxes after receiving extra payments will be issued a T4 slip.
Parker said that, as far as he knew, no income tax had been paid on any of the money.
In a report earlier this month, auditor general Jacques Lapointe raised concerns about taxes potentially owed by constituency staff for extra payments they received between 2006 and 2009.
Lapointe found that 30 members made extra payments totalling almost $186,000 over that three-year period to their staff.
He also found that 44 members paid more than $410,000 to 157 staff who were not paid through the Speaker's Office.
Parker said all employees owing taxes would be issued a T4 for 2009 and past years to 2006, where possible.
"If not, a letter will go to that employee indicating the amount of employment income they had," he said.
The Speaker and several politicians distanced themselves Wednesday from remarks this week by former Tory member Len Goucher, who was quoted in media reports as saying he was urged to "use it or lose it" when it came to his expense accounts.
Goucher was identified in the auditor general's report as being the legislature's top spender with over $38,000 in total assets, including 12 printers and 11 computers.
"Absolutely not," said Parker, when asked whether his office had ever directed members to max out their expenses.
"In fact a large number of MLAs have not used their full amount of their constituency allowance."
Parker said that he returned about $20,000 he didn't spend last year to the government.
Interim Tory Leader Karen Casey said that unlike other expenses, which could be carried over into January of the following year, the now defunct technology fund expired in December.
"That distinction would have been made, but nobody ever said to me 'use it or lose it,' and in fact all three years I sent money back out of that technology budget," she said.
Parker said his office doesn't know which constituency staff were paid by their bosses or how much they received in years prior to rule changes made on Dec. 1.
"All expenses now have to come through the Speaker's Office and full deductions for CPP, EI and income tax will be taken off both the employee share and the employer share, so the system is accountable now," said Parker.
Before that he said the Speaker's Office would get an invoice for $500 for labour and it was paid out to a member as long as they were within the limits of their spending allowance.
Parker said his office has not heard from Revenue Canada about any taxes owing, but remained ready to co-operate should officials decide to investigate.
He added that because of the "sensitive nature" of the employer-employee relationship, it would be left up to individual members to decide how much information is released publicly.
Both opposition leaders later said they would not release which members made extra payments, but the Liberals confirmed that nine members were sent letters. The Conservatives said 21 past and current members, including ex-cabinet minister Ernie Fage, received letters.
Liberal Leader Stephen McNeil said he paid his constituency assistant an extra $4,000 over the last three years to cover overtime and expenses. He said he decided to release the details only after speaking to his assistant.
"I would caution anybody to be releasing personal information about other people's employees," said McNeil.
Casey also revealed that she paid out $3,000 over the last three years to her assistant, with a T4 only being issued for last year because of the rule changes.
Deputy premier Frank Corbett said after a caucus meeting that the NDP will release the details contained in the Speaker's information to his members Thursday.
Corbett would only say "it was a decision of caucus" when asked why his party had decided to deviate from the approach by the opposition and Speaker's Office.
"There was a few people we still haven't talked directly to, so that's why we're waiting for tomorrow morning," said Corbett.

Organizations: Revenue Canada, Conservatives, NDP

Geographic location: HALIFAX, Nova Scotia

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