Benefit qua shareholder

2.3 Unless the particular facts establish otherwise, there is a general presumption that an employee-shareholder receives a benefit or an allowance in their capacity as a shareholder when the individual can significantly influence business policy. This presumption may not apply if:

• the benefit or allowance is available to all employees of the corporation; or
• all of the employees are shareholders or individuals related to a shareholder, and the benefit or allowance is comparable (in nature and amount) to benefits and allowances generally offered to non-shareholder employees of similar-sized businesses, who perform similar services and have similar responsibilities.

Relations

2.12 …[B]enefits that an employer provides to an individual who does not deal at arm’s length with an employee, such as the employee’s spouse, child, or sibling, are generally included in the employee’s income.

Measurement of benefit

2.14 …Lowe...confirmed that generally, the value of a benefit will be included in an employee’s income under paragraph 6(1)(a) where the employee or an individual not dealing at arm’s length with the employee:

• receives an economic advantage measurable in monetary terms; and
• is the primary beneficiary of the benefit.

Travel

2.20 Travel between an employee’s home, including a home office, and a regular place of employment…is generally personal travel. … However, if transportation between an employee’s home and a regular place of employment is provided by an employer for security reasons, or if public and private vehicles are not allowed or practical, then such travel is not considered personal. Where an employer requires an employee to proceed directly from home to a point of call (for example, a client’s office), return home from a point of call, or travel between two regular places of employment, such travel is employment travel. …

2.21 … An employee may have more than one regular place of employment if the employee regularly performs their employment duties at more than one work location.

2.22 ....

Example 3 – Travel from home office

...The employee regularly works from home, but attends bi-weekly meetings at the head office. The head office is a regular place of employment for the employee. As noted..., travel between an employee’s home (including a home office) and a regular place of employment is personal travel.

Incidental v. primary benefit

2.23 ... McGoldrick...held..., “[w]here something is provided to an employee primarily for the benefit of the employer, it will not be a taxable benefit if any personal enjoyment is merely incidental to the business purpose ….”

2.24 ...[T]he following...may suggest...the employer is the primary beneficiary...:

• Does the employer have a business purpose for providing the benefit?
• Is the benefit required for the employee to perform the employment duties more effectively?
• Is the benefit required to fulfill a condition of employment?
• Does the employer have a moral or contractual obligation to provide the benefit....[then providing example of providing home security system for prosecutor at risk]

2.25 Where an employer requires an employee to take a trip for employment-related reasons, the employer is the primary beneficiary of the trip. ... However, where an employee receives a trip as an employment incentive or award, the employee is the primary beneficiary... . If the employee is required to perform employment duties during that trip, any benefit included in the employee’s income may be reduced for any actual employment-related activity.

Valuation of benefit

2.26 ...Spence...determined that the value of a benefit...is the fair market value of the benefit.

Third-party benefits

2.28 When an employee receives a discount on merchandise because of their employment [including from a third party]...the value of the benefit is equal to the fair market value of the merchandise purchased, less the amount paid by the employee. However, no amount is included in the employee’s income if the discount is also available to the general public or to specific public groups.

Example 9 – Supplier award

An employee is awarded a Caribbean cruise by her employer’s third-party supplier. ... Although there is no employer-employee relationship between the employee and the supplier, she received the trip because of her employment.

Benefits received in personal capacity

2.29 [A] benefit or an amount is generally received in the person’s capacity as an individual if it is...provided for humanitarian or philanthropic reasons [providing example of disaster relief].

Specific policies on benefits and allowances

2.68 [P]olicies can be found at Benefits and allowances, or in Guide T4130, and include:

• cellular phone and internet services;
• commissions on sales;
• employer-provided motor vehicles required to be taken home at night;
• gifts, awards, and social events;
• loyalty and other points programs;
• moving expenses and relocation benefits;
• overtime meals or allowances;
• parking;
• premiums under provincial hospitalization and medical care insurance plans;
• professional membership fees;
• recreational facilities and club dues;
• rent-free and low-rent housing;
• scholarships, bursaries, tuition, and training;
• subsidized meals;
• tickets;
• transit passes; and
• uniforms and special clothing.

eligible housing loss

2.39 An eligible housing loss is defined in subsection 6(22) as a housing loss in respect of an eligible relocation of an employee or an individual who does not deal at arm’s length with the employee. An employee can designate only one residence for purposes of the eligible housing loss. An eligible relocation in respect of an individual is a relocation that occurs to enable the individual to be employed at a new work location, where the new residence is located at least40 kilometres closer to the new work location than the old residence. When an employer compensates an employee for an eligible housing loss, the first $15,000 of the compensation is not included in the employee’s income. However, one-half of the compensation that exceeds $15,000 is deemed by subsection 6(20) to be a benefit received from employment and included in the employee’s income under paragraph 6(1)(a). For examples of how to calculate an eligible housing loss benefit, go to Examples - housing loss.

Inclusion of substance abuse/exclusion of legal and financial counselling

2.47 ...Generally, the term counselling services refers to guidance and assistance provided by a trained person on a professional basis. This includes counselling services for tobacco, drug, or alcohol abuse, or for stress management.

2.48 The value of employer-paid legal and financial counselling services for an employee is generally not excluded...subparagraph 6(1)(a)(iv).

Example 12 – Personal trainer

An employer pays for the cost of a personal trainer for an employee. ...Some of these services qualify as counselling for the employee’s mental and physical health. Unless the value of any benefit received from such counselling services can be separated from the value of any benefits received from the other non-counselling services, subparagraph 6(1)(a)(iv) would not apply. ...

Education for family members

2.49 Subparagraph 6(1)(a)(vi) provides that any benefit an employee’s family member receives or enjoys under an educational program offered by an arm’s length employer is not included in the employee’s income. The benefit must not be a substitute for salary, wages, or other remuneration. This generally applies to free or reduced tuition provided to an employee’s family member to attend an elementary, secondary, or post-secondary school (private or public). The benefit is included in the family member’s income under subparagraph 56(1)(n)(i). The scholarship exemption in subsection 56(3) may exclude some or all of the benefit from the family member’s income.

Part-time employment

2.50 Subsection 81(3.1) excludes from a part-time employee’s income reasonable allowances for, or reimbursements of, travel expenses incurred in getting to and from their part-time employment. The exclusion applies if:

• the employee and the employer were dealing at arm's length
• throughout the period that the expenses were incurred, the employee had other employment, was carrying on a business, or was a part-time teacher or professor working for a designated educational institution in Canada; and
• the part-time employment was performed at a location not less than 80 kilometres from:
  • both the employee's home and the place of the other employment or business; or
  • the employee’s home if the employee was a part-time teacher or professor.

2.51 A part-time employee is generally someone who, for a day, week, month, or year, is employed for irregular hours of duty or for specific intermittent periods (or both), and whose services are not required for the normal work day, week, month, or year.

Meaning of allowance

2.56 An allowance or an advance is any periodic or lump-sum payment that an employee receives without having to account for its use. An allowance or advance is:

• usually an arbitrary amount that is predetermined without using the actual cost;
• usually for a specific purpose; and
• used as the employee chooses, since the employee does not provide receipts.

Reasonable travel allowance

2.63 ...In general, expenses normally incurred while travelling from one place to another, including food, accommodation, and incidentals, are considered travel expenses.

2.64 ...[A]n allowance that approximates the reasonable out-of-pocket expenses the employee will incur while travelling for work is generally considered reasonable.