REASONS
FOR JUDGMENT
Masse D.J.
[1]
This is an appeal from a reassessment for the
2012 taxation year whereby the Minister of National Revenue (the“Minister”) disallowed the Appellant’s deduction for
moving expenses in the amount of $31,188.
Factual Context
[2]
The factual context for this matter is quite
straightforward. Prior to May 2012, the Appellant resided in the Greater Toronto Area. His address
was 24 pale Moon Crescent, Toronto, Ontario.
[3]
He was working for Mold‑Masters
(2007) Ltd. (“Mold‑Masters”) as an hourly‑paid CAM Programmer, a skilled technical
position. Mold‑Masters is situated at 233 Armstrong Avenue, Georgetown, Ontario.
[4]
On May 30th, 2012, Mold‑Masters offered the Appellant an internal company
promotion to become a CAD/CAM Developer in the CAM department, to take effect
June 11th, 2012 (see Exhibit A-1). On May 31st, 2012,
the Appellant accepted this promotion. Exhibit A-1 describes the new
position as a “lateral transfer” in the same
department. The Appellant continued to report to the same person as before and “all terms and conditions outlined in the Employment Agreement
signed by you on March 13th, 2010 remain unchanged and
therefore in full force and effect”. However, the Appellant went from an
hourly‑rated position to a salaried
position. The CAM department is the same department he was working in
previously but now involved some increased responsibilities. The Appellant, in
his new position, was still required to report to and work at the Georgetown
facility. The Appellant believed that, by virtue of his expanded
responsibilities, he should move closer to his work location. Consequently, on
June 1st, 2012 he moved his family to Milton, Ontario. It
is clear that he had committed to this move prior to accepting his promotion. His new address was 396 Kincardine Terrace, Milton, Ontario.
[5]
It is not disputed that the distance between the
Appellant’s old residence and his work location is more than 40 kilometres
greater than the distance between the Appellant’s new residence and work
location as a result of his relocation. It is also not disputed that the
location of the Appellant’s place of work did not change either before or after
his promotion or after his move to the Milton residence.
[6]
There is no evidence that the Appellant would
have lost his employment or his opportunity for a promotion if he did not move.
There is no evidence that Mold‑Masters
required the Appellant to move in order to continue working there in his new
position. The Appellant moved because he believed that he should be closer to
work, not because he had to.
[7]
In computing tax payable for the 2012 taxation
year, the Appellant claimed a deduction of $31,188 for moving expenses. The
Appellant was not reimbursed by Mold‑Masters
for any of these expenses. The Minister initially accepted the deduction as
claimed and assessed the Appellant accordingly. However, by way of Notice of
Reassessment dated July 11th, 2013, the Appellant was
informed that the Minister reassessed his 2012 taxation year and disallowed the
full amount of the claimed moving expenses.
[8]
On September 18th, 2013,
the Appellant filed a Notice of Objection. The Minister confirmed the
reassessment by way of Notice of Confirmation dated March 4th, 2014.
Hence, the appeal to this Court.
[9]
The issue to be decided is whether the
Appellant’s residential move was an “eligible relocation”
as defined in subs. 248(1) of the Income Tax Act, R.S.C., 1985, c. 1
(5th supp.), as amended (the “Act”),
for the purposes of claiming a tax deduction for moving expenses pursuant to subs. 62(1)
of the Act.
Legislative Provisions
[10]
The relevant provisions of the Act are as
follows:
62(1) Moving expenses — There
may be deducted in computing a taxpayer’s income for a taxation year amounts
paid by the taxpayer as or on account of moving expenses incurred in respect of
an eligible relocation, to the extent that
(a) they were not paid on the taxpayer’s behalf in respect of, in the
course of or because of, the taxpayer’s office or employment;
(b) they were not deductible because of this section in computing
the taxpayer’s income for the preceding taxation year;
(c) the
total of those amounts does not exceed
(i) in any case described in
subparagraph (a)(i) of the definition “eligible relocation” in
subsection 248(1), the total of all amounts, each of which is an amount
included in computing the taxpayer’s income for the taxation year from the
taxpayer’s employment at a new work location or from carrying on the
business at the new work location, or because of subparagraph 56(1)(r)(v)
in respect of the taxpayer’s employment at the new work location, and
(ii) in any case described in subparagraph (a)(ii)
of the definition “eligible relocation” in subsection 248(1), the total of
amounts included in computing the taxpayer’s income for the year because of
paragraphs 56(1)(n) and (o); and
(d) all
reimbursements and allowances received by the taxpayer in respect of those
expenses are included in computing the taxpayer’s income.
. . .
248(1) Definition — In this Act,
“eligible relocation” means a relocation
of a taxpayer in respect of which the following apply:
(a) the
relocation occurs to enable the taxpayer
(i) to carry on a business or to
be employed at a location (in section 62 and this definition referred to
as “the new work location”) that is, except if the taxpayer is absent
from but resident in Canada, in Canada, or
. . .
(b) the
taxpayer ordinarily resided before the relocation at a residence (in section 62
and this definition referred to as “the old residence”) and ordinarily resided
after the relocation at a residence (in section 62 and this definition
referred to as “the new residence”),
(c) except
if the taxpayer is absent from but resident in Canada, both the old residence
and the new residence are in Canada, and
(d) the
distance between the old residence and the new work location is not less
than 40 kilometres greater than the distance between the new residence and
the new work location; [emphasis added]
Analysis
[11]
In Moreland v. The Queen, 2010 TCC 483,
2010 DTC 1338, [2011] 2 CTC 2068, the taxpayer, who
worked for the Royal Canadian Mounted Police, was assigned new employment
duties and was moved to a new location in her workplace in the same building.
She moved to a new residence that same year and she sought to deduct her moving
expenses that were in excess of $26,000. The change of residence was for the
purpose of being closer to her workplace. The deduction for moving expenses was
disallowed and she appealed to this Court. The only issue was whether the
taxpayer moved from the old residence to the new residence to enable herself to
be employed at a location in Canada. The taxpayer argued that she changed the
physical location of her work, even though it was in the same office complex
and so she moved in order to enable herself to be employed at a “new work location”. Justice Bédard dismissed her
appeal, holding that the taxpayer did not meet the “new
work location” requirement set out in subs. 62(1) of the Act.
The wording of the Act clearly contemplates, or requires, that there be
a “new work location” (meaning a different work
location), in order for the taxpayer to qualify for the moving expense
deduction. He observed at paragraph 13:
[13] In the
present case, the Appellant changed physical work locations (offices) to
perform new duties (assigned by the same employer) within the same office
complex at 255 Attwell Drive in Etobicoke, Ontario. So the question to be
answered is the following: Does this constitute a move to a "new work
location"? I am of the opinion that the term "new work
location" means the actual business location, that is, the actual place,
building or site at which the taxpayer is employed. Even if the phrase
"new work location" is not to be interpreted rigidly, I cannot
imagine that Parliament’s intent was to permit a taxpayer who goes from a job
on the seventh floor of a building to a new job (with the same employer) on the
sixth floor of the same building to deduct moving expenses. In the present
case, the Appellant did not met [sic] the "new work location"
requirement, consequently none of the moving expenses totalling $26,087.90
claimed by the Appellant were deductible pursuant to subsection 62(1) of
the Act in computing her income for the 2007 taxation year.
[12]
A bit more than a year later, Justice Webb
of this Court (as he then was), gave a new gloss to the meaning of “new work location” in the case of Wunderlich v. The
Queen, 2011 TCC 539, 2012 DTC 1040. This is a case upon
which the Appellant places great reliance. In Wunderlich, the employer
was at all times located in Burlington, Ontario. The taxpayer, who was living
in Toronto, accepted a promotion while still employed with the same employer.
He determined that he would need to move closer to his place of work. The
taxpayer and his family then moved to Oakville which was 50 kilometres closer
to his workplace than was his former residence. In computing his taxes, he
claimed moving expenses but these were disallowed. The taxpayer appealed and
Justice Webb allowed the appeal holding that the term “the new work location”, as that term is used in the
definition of “eligible relocation” in subs. 248(1)
of the Act, is simply a location in Canada where the taxpayer is
employed. There is no reference in the part of the subsection in which the
definition is found to any requirement that the location be a “new” location.
[13]
Justice Webb discussed the changes in the
wording of subs. 62(1) of the Act that were brought about by
amendments enacted by S.C. 1984, c. 45, s. 21, and by S.C. 1999,
c. 22, subs. 17(1). Justice Webb then stated:
[10] The
requirements related to the location of the work and the old residence and the
new residence were moved to the definition of “eligible relocation” in
subsection 248(1) of the Act, which is quoted above. The
requirement that the taxpayer must have “commenced …to be employed” has been
changed to a “relocation [that] occurs to enable the taxpayer…to be employed”.
[11] The
argument of the Respondent is that the Appellant was employed by the same
employer prior to his promotion in 2007 and his move in 2008 and therefore
there was no “old work location” nor was there a “new work location”. The requirement
for an “old work location” was based on the comments of then
Chief Justice Christie in Bracken, above. It seems to me that
the comments of then Chief Justice Christie in Bracken, above, were
based on the Act as it read in 1981. Since the Act was amended in
1984 to remove the requirement that a taxpayer cease to be employed at a
particular location and therefore removed the requirement for an “old work
location”, it seems to me that there is no longer any requirement that there
must be an “old work location”.
[12] With
respect to the requirement related to a “new work location”, the expression
that is defined is “new work location”. This expression is defined within the
definition of “eligible relocation” in subsection 248(1) of the Act.
“Eligible relocation” is defined, in part, as follows:
“eligible
relocation” means a relocation of a taxpayer where
(a) the relocation occurs to enable the taxpayer
(i) to carry on a business or to
be employed at a location in Canada (in section 62 and this subsection referred
to as “the new work location”),
[13] Therefore
“the new work location”, as defined in the definition of “eligible relocation”
in subsection 248(1) of the Act, is simply a location in Canada
where the taxpayer is employed. There is no reference in the part of the
subsection in which the definition is found to any requirement that the
location be a “new” location. If instead the provision were to read:
“eligible
relocation” means a relocation of a taxpayer where
(a) the relocation occurs to enable the taxpayer
(i) to carry on a business or to
be employed at a new work location in Canada,
then it would be
necessary to determine how the words “new” and “work” would modify the location
and how they would affect the determination of whether a particular location is
a new work location. However this is not how the provision reads. The provision
refers to “a location in Canada” [at which the person is employed] which is
referred to as “the new work location”. If the provision, instead of stating
that it is referred to as “the new work location”, were to state that it is
referred to as “the work location” or “the specified location”, then “the work
location” or “the specified location” would have the same meaning as would be
ascribed to “the new work location” as only the label for the expression would
be changed, not the meaning assigned to that label. The words used as part of
the phrase should not be used to interpret the phrase when the phrase is
defined in the Act.
[14] The Appellant relied on the decision
of Justice C. Miller in Gelinas v. The Queen, 2009 TCC 111 (CanLII), 2009 DTC 1091, [2009] 4 C.T.C. 2232. In that case the taxpayer changed her job from a part-time job
to a full-time job. Justice C. Miller found
that there was no requirement that there be an “old work location” and found
that the change in the taxpayer’s job from a part-time job to a full-time job
was sufficient to allow the taxpayer to claim moving expenses, even though the
Appellant was employed by the same employer.
[14]
Justice Favreau in Langelier v. The
Queen, 2013 TCC 322, 2013 DTC 1256, [2014] 3 CTC 2231,
discussed the jurisprudence leading up to Wunderlich, supra, and
arrived at a different conclusion than did Justice Webb. In Langelier,
the taxpayer sold her house and moved 70 kilometres away to enable her, so
she claimed, to keep her job with her employer and therefore continuing to earn
employment income. Her claim to deduct moving expenses was disallowed by the
Minister and she appealed to the Tax Court of Canada. Justice Favreau
dismissed her appeal. Even though the taxpayer was given new or expanded
responsibilities, there was no evidence that her physical work location had
changed. Justice Favreau observed the following:
[14] The
concept of "the new work location", as defined in the definition of
"eligible relocation" in subsection 248(1) of the Act has
been given a different interpretation by the Tax Court of Canada.
[15] In
certain cases, the concept of "the new work location" has been
interpreted as simply meaning a location in Canada where the taxpayer is
employed because there is no requirement that the location be "new"
in the definition found at subsection 248(1) of the Act. In Gelinas
v. The Queen, 2009 TCC 111 Justice C. Miller found that
the change from part-time to full-time was sufficient to allow the taxpayer to
claim moving expenses, even though the appellant was employed by the same
employer. In Wunderlich v. The Queen, 2011 TCC 539, in which
case the taxpayer accepted a promotion and felt that he needed to be closer to
his workplace as a result of his new managerial responsibilities, Justice Webb
found that the relocation had occurred to enable the taxpayer to be employed in
Canada, even though the employment commenced in 2004 and the move occurred in
2008.
[16] In other
cases, such as in Grill v. The Queen, 2009 TCC 5 and in Moreland
v. The Queen, 2010 TCC 483, the Court considered that the words
of the Act clearly contemplated or required that there be a "new work
location" for a taxpayer to qualify for the moving expenses deduction. The
judge in each of these cases, Justice Bédard in Moreland and
Justice Little in Grill, both agree with Chief Judge Christie’s (as
he then was) interpretation of subsection 62(1) of the Act made in Bracken
v. Minister of National Revenue, 84 DTC 1813 (T.C.C.), despite
the fact that subsection 62(1) was subsequently amended by S.C., 1984,
c. 45, S. 21 (applicable with respect to relocations occurring after 1983)
and by S.C., 1999, c. 22, subsection 17(1) (applicable after 1997).
[17] In Bracken,
cited above, Chief Judge Christie established four conditions that a
taxpayer must meet in order to qualify for a deduction for moving expenses
under subsection 62(1). On page 1819, Chief Judge Christie
stated the following:
. . .
My reading of
subsection 62(1) is that it contemplates the existence of four separate
elements: old work location, new work location, old residence and new
residence, and the comparison of two distances, i.e. the distance from the old
residence to the new work location with the distance from the new residence to
the new work location the former of which must exceed the latter by 40 or more
kilometers in order for the moving expenses to be deductible. . . .
[18] In Grill,
cited above, Justice Little concluded that the appellant's work location
did not change and in Moreland, cited above, Justice Bédard
concluded that a change of office to a different floor in the same office
building to perform new duties, assigned by the same employer, did not
constitute a move to a "new work location".
[19] In the
present case, there is no evidence that the appellant’s physical work location
had changed, and that she occupied a new position as a result of her new
managerial responsibilities.
. . .
[22] Based on
the modern approach of interpretation of taxing statutes, as enunciated by the
Supreme Court of Canada in Canada Trustco Mortgage Co. v. Canada,
2005 SCC 54, I do not believe that Parliament’s intent was to
permit a taxpayer to deduct moving expenses in circumstances where a taxpayer
performed new duties with the same employer at the same business location.
[23] Based on
the above facts, I am unable to find that the appellant’s claim for the
2010 moving expenses falls within the ambit of subsection 62(1). [emphasis
added]
[15]
I find the reasoning of Justice Favreau
in Langelier, supra, to be most persuasive. I am of the view
that Parliament has intentionally chosen to use the word “new”
in the expression “new work location” as used in
the definition of “eligible relocation” in subs. 248(1)
and subs. 62(1) of the Act. The expression “the
new work location” appears several times in both subs. 62(1) and subs. 248(1)
of the Act. Each word in an enactment must be given meaning. It cannot
be concluded that the word “new” as used in these
provisions of the Act are merely surplusage. Had Parliament intended the
phrase “new work location” to mean “a location in Canada where the taxpayer is employed” then
Parliament would have so stated without resorting to unnecessary descriptive
words like “new”. Had Parliament so intended, it
would have removed the word “new” from subs. 248(1)
and subs. 62(1) at the same time it enacted the amendments in 1984 and in 1999.
Parliament chose not to do so and so it must have intended for the word “new” to have some meaning. I am of the view that
the word “new” must mean a different work
location. To repeat Justice Favreau’s dictum in Langelier, supra,
“I do not believe that Parliament’s intent was to
permit a taxpayer to deduct moving expenses in circumstances where a taxpayer
performed new duties with the same employer at the same business location.”
This is exactly the situation that we have at hand. The Appellant in the case
at hand got a promotion, which involved the performance of new duties, but he
was with the same employer and he worked at the same location.
Conclusion
[16]
Based on the above, I am unable to find
that the Appellant’s residential move was an “eligible
relocation” as defined in subs. 248(1) of the Act for the
purposes of claiming a tax deduction for moving expenses pursuant to subs. 62(1)
of the Act.
[17]
For all of the foregoing reasons, this appeal is
dismissed.
Signed at Kingston, Ontario, this 14th day of May 2015.
“Rommel G. Masse”
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