Alain Guilbert v. Minister of National Revenue, 91 DTC 740, [1991] 1 CTC 2705 (TCC)

Dussault, T.C.J.:—This is an appeal from reassessments by the respondent dated July 8, 1988, concerning the appellant's 1984, 1985 and 1986 taxation years, by which the respondent included in the appellant's income the value of housing provided to the appellant free of charge by the newspaper Le Soleil during the years in question.

The main point in issue is whether the appellant may enjoy the benefit of the exception in subsection 6(6) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the"Act") and thus deduct from his income a reasonable amount as expenses for lodging "at a special work site” in accordance with the conditions set out in that provision.

In the alternative, and if it is found that subsection 6(6) of the “Act” does not apply, the appellant argues in his notice of appeal that the value of the benefit included in his income under paragraph 6(1)(a) must be revised downward for 1984 on the basis of eight months of occupation during that year and not ten months as established by the respondent in his notice of assessment.

Summary of the Facts

In April 1984, the appellant, who until that time had been the president of the newspaper La Voix de l'Est in Granby, accepted the position of editor-in- chief of the newspaper Le Soleil in Quebec City, which was owned by the Groupe Unimedia. While this job is by its very nature a permanent position, the appellant says that he accepted it only temporarily on the basis of an undertaking that he would be appointed chairman of the newspaper Le Droit in Ottawa, which was also owned by the Groupe Unimedia, within a relatively short time. The health of the chairman of Le Droit was declining at that time, it seems, and the appellant could reasonably have expected to be appointed to replace him within a few months or more.

The facts show that the appellant continued to occupy his position in Quebec city with Le Soleil until March 1987, some months after learning that he would not be getting the position he desired with Le Droit in Ottawa, since another person who was already a member of that newspaper's organization had been appointed instead of him. The appellant thus states that his stay in Quebec City had initially been seen as of an essentially temporary nature, that the duties assigned to him related more to the day-to-day administrative management than to the editing of the newspaper on a permanent basis, and that accordingly, one of the agreed upon conditions of employment had been that the newspaper would provide him, free of charge, with an apartment in Quebec City during his stay. The appellant also stated that this arrangement seemed to him to be preferable to staying in a hotel.

The appellant occupied a six-room apartment, with three bedrooms, provided by Le Soleil and located in the Jardins Mérici in Quebec city, starting in April 1984 and throughout 1985 and 1986. However, he testified that during the years in question he always maintained his principal residence in Domaine Chéribourg, in Orford township, where he returned on the weekend, and where moreover, his wife lived, she having a permanent job in Sherbrooke, Quebec. The appellants children, however, lived with him in the apartment in Quebec City during the school year, his daughter for one year and his son for two years during the period in question. Finally, the appellant stated that he had often been absent from Quebec City for business trips, conventions, conferences or other reasons during the years in question, so that he did not occupy the apartment made available to him for more than 50 per cent of the time during the period and, moreover, on occasion the apartment was used, at such times and even when he was there himself, as temporary housing for journalists or other members of the Le Soleil organization passing through Quebec City.

Analysis

The principle set out in paragraph 6(1)(a) of the Act is that there shall be included in computing the income of a taxpayer " “the value of board, lodging and other benefits of any kind whatever received or enjoyed by him in the year in respect of, in the course of, or by virtue of an office or employment, . . .”.

On the other hand, subsection 6(6) of the Act provides an exception to this principle of including the value of benefits in income from an office or employment, in the case of employment at a special work site or at a remote location. The part of subsection 6(6) of the Act which is relevant to this case read as follows, as it applied to 1984:

. . . there shall not be included any amount received or enjoyed by him in respect of, in the course of, or by virtue of his office or employment that is the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by him for,

(a) his board and lodging at

(i) a special work site [chantier particulier], being a location at which the duties performed by him were of a temporary nature and from which, by reason of distance from the place where he maintained a self-contained domestic establishment (in this subsection referred to as his" ordinary place of residence") in which he resided, he could not reasonably be expected to return daily to his ordinary place of residence, . . .

Since 1985, paragraph (a) has read:

(a) his board and lodging for a period at

(i) a special work site, being a location at which the duties performed by him were of a temporary nature, if he maintained at another location a self- contained domestic establishment as his principal place of residence

(A) that was, throughout the period, available for his occupancy and not rented by him to any other person, and

(B) to which, by reason of distance, he could not reasonably be expected to have returned daily from the special work site, . . .

Essentially, the appellant argues that during the years in question his work in Quebec City was” of a temporary nature", his place of work at Le Soleil must be considered to be analogous to a "special work site" and he always maintained his principal place of residence in Domaine Cherbourg, in Orford township in the Eastern Townships.

Counsel for the respondent argued that the appellant's work for Le Soleil was of a permanent nature, the newspaper's premises were not a "special work site” and the appellant's principal place of residence was in the Jardins Mérici in Quebec City, in the apartment provided by Le Soleil.

With respect to the meaning of the word "chantier" "work site"], counsel for the respondent referred to the usual meaning as found, inter alia, in the Petit Robert, which defines it as follows, using its modern meaning in context:

Lieu ou sont entassés des matériaux. V. Atelier, entrepôt. Chantier de construction; de démolition. Travailler sur un chantier. Chantier d'exploitation, d'abattage d'une mine.—Chantier naval. Ancienn. Au Canada, Exploitation forestière.—Habitation pour les bûcherons dans la forêt. Homme de chantier (Pop). Ouvrier forestier. V. Bûcheron. Faire chantier: abattre et scier des arbres.

[Translation]

Place where materials are stockpiled. See Shop, warehouse. Construction site; demolition site. Work on a site, Mine workings.—Shipyard. Archaic. In Canada, Forestry.—Lodging for lumberjacks in the forest. "Homme de chantier". Forestry worker. See Lumberjack. “Faire chantier": cut down and saw trees.

Counsel for the respondent also submits that in the context of the tax reform that applied starting in 1972 the scope of the earlier provision, which applied only to construction workers working on remote sites, was considerably broadened, and on this point referred to the Summary of 1971 Tax Reform Legislation*, and particularly to the following paragraphs:

Away from home expenses

Under existing law, construction workers at distant work sites may receive tax- free from their employers amounts covering expenses of transportation, board and lodging. The bill extends this to all employees.

The revision recognizes that many people besides construction workers must leave their normal residence and live and work temporarily at a place where they cannot reasonably be expected to establish homes for their wives and families.

The provision will apply, as it does now, only to an employee who leaves his ordinary residence. It will not apply to a single individual who does not maintain a permanent residence in which he supports a dependant. It is necessary that the employee be away from his ordinary residence for at least 36 hours and the work site must be far enough away that he could not reasonably be expected to return home daily.

Among those who will benefit are lumber and mining workers, oil well drillers, exploration crews, employees at isolated bases and those who work at remote construction sites but do not qualify as "construction workers”.

The Act is indeed complex, and contains numerous definitions. However, we cannot assume, in the absence of a special statutory definition, that the usual words used by Parliament must have a meaning different from the generally recognized meaning set out in current dictionaries. A" work site" is a "work site" and this expression cannot refer to just any place of work. The newspaper's premises are not, in my humble opinion, a work site, or a" special work site”, within the meaning intended by Parliament. By analogy, we could refer to the decision in Graham L. Harle, M.L.A., and Calvin E. Lee, M.L.A. v.

*The Honourable E.J. Benson, Minister of Finance, Summary of 1971 Tax Reform Legislation, page 10.

M.N.R., [1976] C.T.C. 2203; 76 D.T.C. 1151, cited by counsel for the respondent, which refused to recognize that provincial legislative buildings were "a special worksite”, or in French, “un chantier particulier”.

I will further add that a careful reading of paragraph 6(6)(a) of the Act indicates that expenses for board and lodging must have been incurred at a special work site*. It provides for the situations in which there are, at the work site or at least in the relatively immediate vicinity, appropriate premises for employees’ board and lodging, situations which are completely different from the one we must decide here.

Thus, even if I could accept that the appellant's work was "of a temporary nature" and he maintained his principal place of residence in Domaine Chér- ibourg in the Eastern Townships, I believe that the exception set out in subsection 6(6) of the Act does not apply in this case. The examples set out in the Summary of 1971 Tax Reform Legislation are not the basis of my opinion, but would confirm it if this were necessary.

Since the exception in subsection 6(6) of the Act does not apply, paragraph 6(1)(a) must apply. On this point, I believe that the respondent was correct to include in the appellant's income the value of the rent for the apartment in the Jardins Mérici which was provided to him free of charge by Le Soleil during 1984, 1985 and 1986, with the exception, however, of an amount corresponding to two months' rent for 1984, or the sum of $1,760. The appellant actually had the apartment available to him and his children during the years in question only from the end of April 1984 to the end of 1986. Moreover, my assessment of the evidence presented by the appellant does not permit me to reduce the value used by the respondent as the basis of the computation, that is, the value of the rent paid by Le Soleil for the apartment made available to the appellant.

For these reasons, the appeal with respect to the 1984 taxation year is allowed in that the amount of the taxable benefit must be reduced by $1,760; the assessment for 1984 is therefore referred back to the Minister for reconsideration and reassessment. The appeal for 1985 and 1986 is dismissed.

Appeal in the main dismissed.