Citation: 2012TCC272
Date: 20120725
Docket: 2011-3106(IT)I
BETWEEN:
ANTONIO LUIS TAINO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The Appellant lived in Whitby, Ontario and commuted to work in downtown Toronto each day by taking the GO train
in 2009. The Appellant purchased tickets that were each valid for ten rides for
$64.25 (for the first part of 2009) and $66.75 (for those purchased on March
27, 2009 and thereafter). The issue in this appeal is whether the amounts
expended by the Appellant for these tickets in 2009 will qualify for the public
transit tax credit as provided in the Income Tax Act (the “Act”).
[2]
In The Budget Plan 2007
tabled in the House of Commons on March 19, 2007, the public transit tax credit
and then proposed changes to this credit were described as follows:
Strengthening Our Commitment
to Promoting Public Transit
Canada’s New
Government is acting to deliver real reductions in air pollutants, greenhouse
gas emissions and harmful substances in our communities.
Budget 2006 introduced the public transit tax credit
to encourage individuals to make a sustained commitment to public transit use
by providing a credit for the purchase cost of monthly public transit passes, or
passes of a longer duration. This measure, widely welcomed by Canadians, will
be strengthened under Budget 2007 as a means to continue to reward those who
make a sustained commitment to public transit.
Some transit authorities are planning to replace
their monthly passes with user-friendly and innovative cost-per-trip fare
products that will help improve accessibility to transit. To ensure that
individuals continue to be encouraged to use public transit, Budget 2007
proposes to extend the public transit tax credit to include electronic fare
cards that are used for at least 32 one-way trips in a monthly period. Transit
authorities will need to track and certify usage and cost.
Further, the public transit tax credit will be
provided where four weekly passes are purchased consecutively. This change will
also help low-income individuals who may not be able to afford the financial
commitment of a monthly pass to take advantage of the credit.
[3]
While the Appellant did
make a sustained commitment to public transit throughout 2009 as he took the GO
train from his home in Whitby, Ontario to his place of work in downtown Toronto
every working day, the Appellant’s entitlement to the public transit tax credit
for the amounts he expended on the tickets he purchased in 2009 must be
determined based on the wording of the applicable provisions of the Act
in 2009.
[4]
The public transit tax
credit is provided in section 118.02 of the Act. Subsection 118.02(2) of
the Act provides as follows:
(2)
For the purpose of computing the tax payable under this Part by an individual
for a taxation year, there may be deducted the amount determined by the formula
A × B
where
A is
the appropriate percentage for the taxation year; and
B is
the amount determined by the formula
C – D
where
C is the total of all amounts each of which is the portion
of the cost of an eligible public transit pass or of an eligible electronic
payment card, attributable to the use of public commuter transit services in
the taxation year by the individual or by a person who is in the taxation year
a qualifying relation of the individual, and
D is the total of all amounts each of which is the amount of
a reimbursement, allowance or any other form of assistance that any person is
or was entitled to receive in respect of an amount included in computing the
value of C (other than an amount that is included in computing the income for
any taxation year of that person and that is not deductible in computing the
taxable income of that person).
[5]
In order to qualify for
the credit, an individual must either purchase an “eligible public transit
pass” or use an “eligible electronic payment card”, which are defined in
subsection 118.02(1) as follows:
“eligible
electronic payment card” means an electronic payment card that is
(a)
used by an individual for at least 32 one-way trips, between the place of
origin of the trip and its termination, during an uninterrupted period not
exceeding 31 days, and
(b)
issued by or on behalf of a qualified Canadian transit organization, which
organization records and receipts the cost and usage of the electronic payment
card and identifies the right, of the individual who is the holder or owner of
such a card, to use public commuter transit services of that qualified Canadian
transit organization.
“eligible
public transit pass” means a document
(a)
issued by or on behalf of a qualified Canadian transit organization; and
(b)
identifying the right of an individual who is the holder or owner of the
document to use public commuter transit services of that qualified Canadian
transit organization
(i)
on an unlimited number of occasions and on any day on which the public commuter
transit services are offered during an uninterrupted period of at least 28
days, or
(ii)
on an unlimited number of occasions during an uninterrupted period of at least
5 consecutive days, if the combination of that document and one or more other
such documents gives the right to the individual to use those public commuter
transit services on at least 20 days in a 28-day period.
[6]
The tickets that were
purchased by the Appellant were paper tickets and therefore would not be an
electronic payment card. While an electronic device would read his ticket and
validate it for each trip that he took, an “eligible electronic payment card”
for the purposes of the Act, is an electronic (not a paper) payment card
that is used by the individual. The Appellant used a paper ticket to access the
GO train and therefore he did not use an electronic payment card.
[7]
Each week he would have
to buy another ticket that was valid for ten rides for the following week. The
Appellant would use the tickets for at least 32 one-way trips during an
uninterrupted period of at least 31 days as he would use the tickets for two
one-way trips per day – one from his home to work and one from his work to
home. While counsel for the Respondent argued that the trip from home to work
in the morning and from work to home in the evening would only be a single one-way
trip, this argument is without merit. In the morning the place of origin was
the Appellant’s home and the termination of the trip would be downtown, where
he was working. This is a one-way trip. In the evening he would take another
one-way trip from downtown Toronto to Whitby, Ontario. This would be on average
40 one-way trips every month. While the Appellant did use public transit for at
least 32 one-way trips during an uninterrupted period not exceeding 31 days
several times in 2009, because the paper ticket was not an electronic payment
card, the amount that he spent to purchase the tickets cannot qualify as the
cost of an “eligible electronic payment card”.
[8]
Since the tickets were
only valid for ten rides, they did not allow the Appellant to use the GO Transit
system an unlimited number of times and therefore would not be an “eligible
public transit pass”. The Appellant acknowledged that he could have purchased a
monthly pass but he indicated that he found it easier to finance the weekly
cost of the tickets than the cost of a monthly pass.
[9]
Unfortunately for the
Appellant, by buying each week tickets that were valid for ten rides the
amounts that the Appellant spent on theses tickets in 2009 do not qualify for
the public transit tax credit and his appeal is dismissed, without costs.
Signed at Ottawa, Canada, this 25th day of July,
2012.
“Wyman W. Webb”
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