TOWNSHIP OF ESQUIMALT STAFF REPORT
MEETING DATE: November 17, 2025 Report No. ADM-25-061
TO: Council
FROM: W. Matthew Sutcliffe, Senior Manager, Human Resources
SUBJECT: Council Policy Update - Employee Recognition (No. PER-02)
RECOMMENDATION:
Recommendation
That Council approve the amendments to Council Policy PER-02 Employee Recognition as outlined in Staff Report ADM-25-061.
Body
EXECUTIVE SUMMARY:
This Policy has been updated to incorporate changes in Canada Revenue Agency ("CRA") policy that allow for the provision of non-taxable gift cards provided certain conditions are met. The Employee Recognition Policy has been updated to incorporate the provision of gift cards and the conditions required to meet CRA guidelines.
BACKGROUND:
* Until a change in 2022 to the CRA policy, gift cards were treated as taxable income
* The 2022 change allows, under specific conditions, gift cards to be non-taxable
* These conditions are supportable by the Township, and gift cards can now be offered as a non-taxable gift for employee recognition purposes
* The Policy has been updated to include the provision of gift cards as recognition, and the conditions required to maintain such a gift as non-taxable
ANALYSIS:
Historically, gift cards have been considered by the CRA as "near cash," which resulted in them being considered taxable when provided to employees. In 2022, the CRA updated its policy and the rule now allows gift cards to be considered "non-taxable" provided that certain conditions are met. Those conditions are as follows:
* The card is for a specific retailer or a specific group of retailers
* The card cannot be converted to cash
* The employer maintains a record of:
o The name of the retailer
o The amount and date
o The reason for the gift
o The gift card is provided for a special occasion or recognition (and not performance)
* The employee does not receive more than $500 in non-cash gifts in a tax year
The Township provides gift cards in acco...
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