Citation: 2013 TCC 322
Date: 20131022
Docket: 2012-4890(IT)I
BETWEEN:
BRIGATTA M. LANGELIER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Favreau J.
[1]
This is an appeal by
way of the informal procedure against a reassessment dated November 28, 2011
made by the Minister of National Revenue (the "Minister") under the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended (the “Act”)
in respect of the appellant's 2010 taxation year.
[2]
By way of the November
28, 2011 reassessment, the Minister disallowed the $8,502 claimed as moving
expenses by the appellant in her 2010 income tax return because the appellant did
not move in order to earn income from employment at a new work location.
[3]
In her notice of
appeal, the appellant explained that she sold her house and moved 70 kilometres
to the City of Edmonton, to keep her job with her employer and therefore continuing
to earn employment income.
[4]
The following
assumptions of fact were agreed upon by the appellant:
(a) prior to
the 2010 taxation year, the appellant resided at RR 1, Site 10, Box 20, Calahoo, Alberta, TOG 0J0;
(b) on August
14, 2010, the appellant moved to #216 – 11230 104 Avenue N.W., Edmonton, Alberta, T5K 2X8;
(c) the
appellant was continuously employed by Incoming Attitude Ltd. from 1996 throughout
the 2010 taxation year;
(d) during her
period of employment with Incoming Attitude Ltd., the appellant carried out her
work duties at 12011 – 32 Street N.E., Edmonton, Alberta, T6S 1G8.
[5]
The appellant testified
at the hearing. She explained that she started working for the Encore Group of
Companies in 1996 as an accountant. In 2006, Incoming Attitude Ltd., which was
previously operated as a division of the Encore Group of Companies, was
incorporated. Incoming Attitude Ltd. was providing accounting, dispatching and
invoicing services to other companies in the Encore Group of Companies.
[6]
The appellant also stated
that from 1996 to 2004, she lived in Edmonton and that from 2004 to 2006, she
lived in Spruce Grove, an area close to Edmonton. In 2006, she moved to Calahoo, Alberta, which is about 61 kilometres from her work location. In 2010, she
moved back to Edmonton because she had new responsibilities as a result of the
considerable growth of the Encore Group of Companies. The appellant's new
responsibilities included the transfer of financial and accounting data from an
old software to a new software and the training and supervision of a newly
hired payroll clerk. The appellant also alleged that the title of her new
position had changed to "Accounting Administration".
[7]
The evidence shows that
there was no increase in salary nor in employment benefits for the 2010
taxation year as a result of the change in her duties and her working hours had
been gradually reduced to the standard 40 hours per week in 2012 when a
full-time payroll clerk was hired.
Issue
[8]
The only issue to be
decided is whether the appellant moved from her old residence to the new
residence to enable herself to be employed at a location in Canada and therefore be entitled to a moving expense of $8,502 for the 2010 taxation year.
Respondent's Position
[9]
The respondent submits
that the appellant did not have a "new work location" within the
meaning of subsection 248(1) of the Act during the 2010 taxation year
and thus did not move from the old residence to the new residence to enable
herself to be employed at a "new work location". Therefore, the
appellant's move to the new residence is not an "eligible relocation"
within the meaning of subsection 248(1) of the Act and no part of the
amount of $8,502 claimed in respect of moving expenses is deductible pursuant
to subsection 62(1) of the Act in computing the appellant's income for
the 2010 taxation year.
Appellant's Position
[10]
The appellant submits
that she moved from her old residence to the new residence to enable her to be
employed at a "new work location" since she was assigned new duties with
the same employer at the same work location, where she worked before and after
the move.
Analysis and Conclusion
[11]
The deductibility of
"moving expenses" is determined by subsection 62(1) of the Act
which reads as follows:
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.
[12]
The definition of
"moving expenses" is not relevant in this instance as the nature and
quantum of the expenses incurred by the appellant are not contested. There is
also no dispute that the appellant's new residence was more than
40 kilometres closer to her work than her former residence.
[13]
The concept of
"eligible relocation" for the purpose of subsection 62(1) of the Act
is defined in subsection 248(1) of the Act in the following manner:
"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 definition referred to
as “the new work location”), or
. . .
(b) both the
residence at which the taxpayer ordinarily resided before the
relocation (in section 62 and this subsection referred to as “the old
residence”) and the residence at which the taxpayer ordinarily resided after
the relocation (in section 62 and this subsection referred to as “the new
residence”), are in Canada, and
(c) 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
except
that, in applying subsections 6(19) to (23) and section 62 in respect of a
relocation of a taxpayer who is absent from but resident in Canada, this definition shall be read without reference to the words "in Canada" in subparagraph (a)(i), and without reference to paragraph (b);
[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.
[20]
The business card filed
by the appellant as evidence that her job title had changed to Accounting
Administration had no date on it, so it is not possible to determine when the
change in job title took place.
[21]
It is also clear from
the evidence that the appellant had no increase in salary nor in employment
benefits for the period from August 2010 to December 31, 2010. It also appears
that the appellant reduced her working hours for the same pay.
[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).
[24]
For these reasons, the
appeal is dismissed.
Signed at Ottawa, Canada, this 22nd day of October 2013.
"Réal Favreau"
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