Principal Issues: Whether the assignment of an employee normally based in one location to a second location for up to XXXXXXXXXX years, is considered to be of a temporary nature for purposes of subsection 6(6). If the assignment is considered to be of a temporary nature, and the second location meets the definition of a special work site, would prepaying the periodic allowances that would normally be paid to the employee for the entire XXXXXXXXXX years be acceptable for purposes of subsection 6(6)? If the lump sum prepayment is not acceptable for purposes of subsection 6(6), how should it be recorded by the company and reported by the employee?
Position: The employee's employment in the second location would be of a temporary nature for purposes of subsection 6(6). The payment of the lump sum advance is not, in and of itself, unacceptable for purposes of subsection 6(6).
Reasons: Although the assignment to the second location is for a period exceeding two years, the employee would be returned to his or her substantive position in his or her home location at the end of XXXXXXXXXX years. Further, the employee's spouse would remain in the couple's principal residence in his or her home location during the duration of the employee's assignment. The company should periodically recognize a portion of the advance as an expense that covers the employee's periodic cost for board and lodging and for transportation while actually working at the special work site. In terms of taxation for the employee, while the payment of the lump sum advance is not, in and of itself, unacceptable for purposes of subsection 6(6), as the recipient of an interest-free employee advance, the employee would be in receipt of taxable employee benefits under subsection 80.4(1).