Manitoba adds tax to monitoring services

Tuesday, June 1, 2004

WINNIPEG, Manitoba - Once July 1 rolls around, monitoring stations in Manitoba will no longer be exempt from provincial taxes.

In a move that aligns this western Canada province with other provinces in the country, Manitoba is instituting a 7 percent tax on security investigation services. Applications include armored car services, private investigations and building and electronic alarm monitoring.

“It’s kind of lining up with everyone else,” said Brad Revik, director of management and research for the Manitoba finance division.

The added tax on monitoring service - it is already taxed 7 percent by the federal government - caught the attention of the Canadian Security Association. Although the association is adamant that it does not want the provincial tax implemented, it is far more concerned with the government’s plans to tax contracts that have already been paid prior to the tax start date of July 1. For example, if a one-year contract begins on June 1, tax will still be implemented beginning July 1, even if the contract has been paid in full ahead of time. CANASA is arguing that for companies in this industry, the time to research and add tax to pre-paid contracts will be time-consuming and expensive.

“It is cumbersome for us to go back and try to get this money from our customers and find out who has paid,” said Kim Schellenberg, national vice president of CANASA and monitoring center director at AAA Alarm Systems. “A lot of these companies that are involved in CANASA, and in this industry, are small companies that just don’t have the manpower to go do this.”

The association has been communicating its concerns to the government and in a surprising move, officials with the Manitoba taxation division have made themselves readily available to address them and work towards a compromise.

“They have already made some movement, which is encouraging,” Schellenburg said. “They are trying to work with us, not against us.”

Refvik mentioned the tax would put an end to some monitoring centers’ common practice of trying to group other services under monitoring to save themselves and their customers money.

The finance division met with CANASA in the beginning of May and Schellenburg expected a decision on the pre-paid tax issue to be decided before the end of May. She said the organization had no plans at press time to take the issue further, but that may change. Regardless of the decision, both parties are willing to work toward a mutually beneficial conclusion.

“We don’t want the tax,” Schellenberg said. “But if we want to work together, we have to come to terms.”