A former foster parent from Victoria has launched a lawsuit against the province of B.C., CBC News has learned, claiming the province did nothing to help him fight Ottawa over a huge tax bill he didn't owe.

For two decades, Bud Webster took in extremely troubled teens who were difficult for other foster homes to handle. It was his full-time occupation.

For two decades, Bud Webster took in extremely troubled teens at his foster home. Then Revenue Canada said they wanted a share of the fees.
(CBC)

"All of my kids were violent, without exception," Webster told CBC News.

Eight years ago, Revenue Canada (now the Canada Revenue Agency, or CRA) suddenly demanded he pay three years worth of back taxes on $500,000 worth of pay he had received from the B.C. government.

"They didn't have a case from Day 1," said Webster, "It was a gross waste of money — their money and my money — taxpayers' money."

By federal law, fees paid to foster parents are supposed to be tax-exempt. But the CRA spent countless hours pursuing Webster through the courts, until finally relenting in the spring of 2007 and reducing the tax bill to zero.

The ordeal cost Webster $100,000 in legal bills, and eventually drove him to quit being a foster parent.  

"I was so depressed, I wanted to kill myself," said Webster, "Get up, get depressed, check my mailbox and find another threatening letter."

Webster is hoping his lawsuit against the B.C. government will force the province to pick up the huge tab for his legal fees.

Tom Christensen, B.C.'s Minister of Children and Family Development, told CBC News it is not the province's responsibility to help foster parents with their tax issues.
(CBC)

However, Tom Christensen, B.C.'s Minister of Children and Family Development, told CBC News on Friday it is not the province's responsibility to help foster parents with their tax issues.

"I'm concerned whenever a valuable foster parent chooses not to continue to be a foster parent but I think it's important to realize what the role of the Ministry of Children and Family Development is," said Christensen.

"We are not income tax advisers nor are we a taxing authority. That's Revenue Canada's job. We don't get involved in the tax matters of foster parents."

A spokesperson from the Canada Revenue Agency, meanwhile, refused to comment on Webster's situation when contacted by CBC News last month, because the agency doesn't talk about individual cases.

Told foster parent fees were tax-free

When he signed on as a foster dad 19 years ago, Webster said, Children and Family Development told him he wouldn't have to declare his government income for tax purposes. 

Federal law states that foster parents cannot be taxed on fees for their services, if they meet basic criteria for foster parenting, including residing with the foster children.

However, Webster bought a second house next door to his foster home, which he said served as a place for his biological children to live safely, away from the turmoil caused by the disturbed teens in foster care. 

Webster was well paid for his services, which he believed made CRA more suspicious of him. Foster parents who take in special needs children are generally paid more by the government because the children need more special services, such as anger management programs or tutoring. Because the youth in his care had multiple special needs, Webster's foster home had a staff, a budget and a carefully organized program. 

Court documents show that due to the fact that Webster had staff and a budget, at one point the CRA considered his residence to be a "business" for "profit." So, the tax auditors moved in.

"You'd have to be pretty stupid not to figure it out quickly," said Webster, "I lived there and the program dollars went to pay for the care of the kids."

Webster isn't the first foster parent to be hounded for years by Ottawa to pay taxes. Ontario foster parents Tom and Helen Brouwer also gave up foster parenting, after they were billed for $100,000 in back taxes.

It took six years before Revenue Canada admitted it made a mistake. At the time, in 2003, the agency pledged to make sure foster parents across Canada would be treated fairly and equitably.

Fight with CRA left him broke and defeated

"How successful I am, is thanks to him," said Joe Firetto, a former foster teen who lived with Webster and is now a gainfully employed adult.

Firetto was in and out of several foster homes and said none was nearly as effective and loving as Webster's. If it weren't for Webster, he might not have survived his youth, Firetto said.  

Joe Firetto, a former foster teen who lived with Webster, says he's in disbelief that so much money was spent chasing someone performing a service.
(CBC)

"I was just full of anger. I remember when I was younger I couldn't be happy. I was angry."

He says he can't believe Ottawa spent so much time and money chasing someone who was doing an important public service.

"How much money was he saving keeping kids out of jail?" asked Firetto, "If they want to talk about dollars, I do know it costs a lot of money for people to be in jail."

By the time Ottawa wiped out Webster's bill, he was wiped out, too. He quit foster parenting last year, mostly, he said, because he felt betrayed by the B.C. government, for not helping him with his fight.   

"I thought I was doing something valuable," said Webster, "And a lot of kids would tell you that I was. And I loved it. But, I was defeated."

He now believes raising troubled youth was easier than fighting Ottawa and he hopes it never happens to another foster parent again. "For me, part of the battle was to wipe this out for foster parents in Canada. Just end it."