Cuddie v. R., 98 DTC 1822, [1998] 3 CTC 2232 (TCC)

Bell T.C.J.:

This is one of eleven appeals commenced by members of the Royal Canadian Mounted Police force (“RCMP”) respecting employment expense deductions. As the issue is the same in each case, the only difference being the type of expenses that were claimed, these Reasons for Judgment will apply to all eleven appeals.

Issue:

The issue is whether the expenses claimed by the Appellant are deductible pursuant to the provisions of paragraph 8(1 )(z) of the Income Tax Act (“Act”).

Facts:

The Appellant Thomas Cuddie conducted the appeal on behalf of all eleven Appellants. He gave evidence that he had deducted the expenses incurred by him in respect of haircuts, a pager and basic telephone service. He testified that members of the force were obliged to have their hair cut or arranged at a certain length and that each member had to have a basic telephone service which he described as a land telephone. By that he obviously meant a fixed telephone line as opposed to a cellular telephone. He also claimed expenses with respect to pager rentals. He testified that the force supplied a minimal number of pagers and that it was not only inconvenient but inappropriate in some circumstances not to have a pager in continuous possession. He explained that if he was expecting a call, for example, from an informant, the informant might well call that pager number when some other policeman was in possession of the pager. The only way, he testified, that he could have assurance of continuous use of a pager was to make arrangements for acquiring one himself. He testified also that this applied to the other Appellants.

Additional matters in respect of which expenses were made by some Appellants were gloves, flashlights and handcuff keys. Cuddie’s evidence was that in certain cases it was necessary for members to purchase special gloves and that the flashlights issued by the RCMP force were of inferior quality and could easily break. He said that it was essential that they have reliable flashlights and hence the necessity to purchase same. He also testified that some members bought an extra set of handcuff keys for convenience. In two of the cases under appeal, amounts which were unexplained and unsubstantiated were claimed.

Analysis and Conclusion:

Section 8 of the Act provides for deductions from a taxpayer’s income from an office or employment. The description of deductible amounts is clearly set forth in paragraphs 8( 1 )(o) through (g). Subsection 8(2) provides that except as permitted by section 8 no deductions shall be made in computing income from an office or employment. The other subsections are not material to this appeal.

It is clear that the only paragraph which could possibly afford these Appellants a deduction is 8(1 )(/). The pertinent part of it reads as follows:

(1) In computing a taxpayer’s income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:

(iii) the cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for, ...

to the extent that the taxpayer has not been reimbursed, and it not entitled to be reimbursed in respect thereof;

The question arises, therefore, as to whether pagers, telephones, haircuts, gloves, flashlights and handcuff keys are “supplies” that were consumed. It is not necessary to determine whether they were required by the contract of employment to supply and pay for those items if they were not supplies that were consumed.

In Thibault v. Minister of National Revenue (1986), 86 D.T.C. 1542 (Eng.) (T.C.C.), this Court determined that clothing could be considered to be “supplies” but could not be “consumed”. In Komarniski v. Minister of National Revenue (1980), 80 D.T.C. 1134 (T.R.B.) this Court determined that tools were not “supplies” but were equipment, the cost of which was not deductible. Judge Tremblay referred to the case of Luks v. Minister of National Revenue (1958), 58 D.T.C. 1194 (Can. Ex. Ct.) in which Thurlow, J., then a Judge of the former Exchequer Court of Canada, in discussing the distinction between “supplies” and “equipment” said,

“Supplies” is a term the connotation of which may vary rather widely, according to the context in which it is used. In s. 11 ( 10)(c) it is used in a context which is concerned with things which are consumed in the performance of the duties of employment. Many things may be consumed in the sense that they may be worn out or used up in the performance of duties of employment. The employer’s plant or machinery may be worn out. The employee’s clothing may be worn out. His tools may be worn out. And materials that go into the work, by whomsoever they may be provided, may be used up. “Supplies” is a word of narrower meaning that “things” and in this context does not embrace all things that may be consumed in performing the duties of employment, either in, the sense of being worn out or used up. The line which separates what is included in it from what is not included may be difficult to define precisely but in general, I think its natural meaning in this context is limited to materials that are used up in the performance of the duties of the employment. It obviously includes such items as gasoline for a blow torch but, in my opinion, it does not include the blow torch itself. The latter, as well as tools in general, falls within the category of equipment.

In Brownlee v. Minister of National Revenue (1978), 78 D.T.C. 1571 (T.R.B.), this Court determined that the word “supplies” did not include items of individual dress such as a police officer’s uniforms. It determined that the uniforms were not “consumed” in the normal comprehension of that term. It went further and said that even if the uniforms were “supplies that were consumed”, they were not “consumed” directly in the performance of the duties of the office or employment. The foregoing positions are confirmed in McLeavy v. Minister of National Revenue (1954), 54 D.T.C. 136 (Can. Tax App. Bd.) and Drobot v. Minister of National Revenue (1987), 87 D.T.C. 371 (T.C.C.).

The submissions made by the Appellant Cuddie were logical, and in the circumstances described by him, well based. I have no doubt, from my appraisal of him, about his sincerity and about his credibility. However, the statutory test that must be met is strict. The legislature, in using the words “supplies that were consumed” posed a firm requirement for deduction. The New Shorter Oxford English Dictionary defines “consume” as,

That has been consumed.

and defines consumed, inter alia, as

Destroyed by or like fire or (formerly) disease; cause to vanish (away), as by evaporation.... Use, so as to destroy; take up and exhaust; use up.... Eat up, drink down; devour.

The expenses incurred by the Appellants simply did not result in supplies being consumed. Accordingly, the appeals are dismissed.

Appeal dismissed.