The city will not receive a GST rebate of more than $137,000 after the Supreme Court of Canada declined to hear the city's appeal of an earlier Federal Court of Canada decision that it is not entitled to the rebate.

The Supreme Court does not give reasons for its decisions not to hear cases; it simply stated this case is dismissed with costs.

In August 2012, Federal Court Judge Georgette Anne Sheridan handed down her ruling on the bonuses paid out between 2004 and 2007.

The issue centred around whether the city is entitled to a GST rebate for the Yukon bonus it provided to employees for round-trip airfare and travel expenses Outside.

An agreed statement of facts presented in the case showed that in 2009, the city's rebate claim of $137,399.80 for the Yukon bonus between 2004 and 2007 was denied.

The city had paid out bonuses totalling:

• in 2004, $547,201.42 with a GST rebate claim of $35,798.22;

• in 2005, $545,635.69 with a GST rebate claim of $35,695.79;

• in 2006, $577,974.54 with a GST rebate claim of $32,715.54; and

• in 2007, $586,361.04 with a GST rebate claim of $33,190.25.

The case came down to a section of the Excise Tax Act governing circumstances where a municipality can receive a rebate.

Looking at a previous court case involving ExxonMobil, Sheridan agreed that "... there is little dispute that the payment of the Yukon Bonus Travel Allowance was based on similarly valid management objectives.

"The question, however, is whether the Yukon flights acquired with the Yukon Bonus Travel Allowance were sufficiently connected to the (city's) activities to preclude a finding under the first prong of the ExxonMobil test that they were for the employees' exclusive personal use.”

In her ruling, Sheridan stated her agreement with the city that flights through the Yukon bonus "are not quite on the same footing” as incidental moving costs for ExxonMobil.

"... it somehow rankles to equate the purchase of school uniforms for the children of corporate executives with annual flights for municipal employees out of an officially recognized remote community.

"What the Yukon flights do have in common with the incidental moving costs, however, is a tenuous link to the activities of the employer. Indeed, the Yukon flights were intended to give the employees a break from their regular employment duties in the North; they allowed the employees to spend their time as they wished in southern centres far removed from their place of work. In this regard, the Yukon flights bore little resemblance to the funded travel more typically related to business activities, for example, to meet with clients or to attend professional conferences or job interviews.”

While the city compared the bonus with meal allowances or a break room, Sheridan noted in her decision that the break rooms and meals are used while employees are required to be on the job and, therefore, there is "a functional connection” between them and employment duties.

The Yukon bonus lends itself to exclusive personal use, Sheridan noted before dismissing the case.

The city appealed its case first to the Federal Court of Appeal in June.

"We have not been persuaded that Justice Sheridan erred in law or in fact in deciding as she did,” stated that decision. "On the contrary, we agree with her decision, substantially for the reasons she gave. This appeal will be dismissed with costs.”

Following that decision, the city took the matter to the Supreme Court of Canada, which this week released its ruling that it will not hear the case.

Valerie Anderson, the city's manager of financial services, said in an interview this morning the case won't have any impact on residents' taxes.

As she explained, the case was pursued by Fair Tax, a company that has taken tax matters to court before and won for the city.

In this case Fair Tax came to the city asking if it wanted to pursue the case, providing lawyers.

In such cases, if the city wins, Fair Tax gets a percentage of the award, and if it doesn't, the city doesn't pay anything.

In the past, Fair Tax has been successful in pursuing city matters, so when it approached the city with this matter, officials decided to move forward with it.

Outside of staff time to pull documents needed for the case and sending an employee to Vancouver to testify, it hasn't cost the city anything.

As well, it won't impact the budget in a significant way, Anderson stressed, noting the employee who testified in Vancouver was there on other city business as well.