Citation: 2009 TCC 441
Date: 20090909
Docket: 2009-658(IT)I
BETWEEN:
VICTOR G.E. KREUZ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the Appellant: The Appellant himself
Counsel for the
Respondent: Ian Theil
REASONS FOR JUDGMENT
McArthur J.
[1]
This appeal is from an
assessment by the Minister of National Revenue (the “Minister”) disallowing the
Appellant's claim for motor vehicle employment expenses of $5,372.00 in 2005. The
issue is whether the claimed employment expenses are permitted pursuant to
paragraphs 8(1)(h.1) and 8(1)(j) of the Income Tax Act
(the “Act”), or are they considered personal for travel back and forth between
the Appellant's home and place of employment.
[2]
The narrow issues are
contained in the Minister's submission as follows:
(a) The Appellant was
not required to carry on duties away from his place of employment which is the
school at which he teaches on a particular day, and that's with reference to paragraph
8(1)(h.1)(i) of the Act.
(b) Secondly, the Minister submits that the Appellant
was not ordinarily required to carry on the duties of employment in different
places within the meaning of paragraph 8(1)(h.1) and (j) of the Act
because he was employed for particular discrete substitute teaching assignments
and he did not ordinarily work in more than one school on the same day.
(c) Thirdly, the Minister submits that the Appellant
is not entitled to deduct the disallowed expenses under section 8 of the Act
so that their deductibility is prohibited by subsection 8(2).
(d) Finally, the Minister adds that the Appellant
did not submit the prescribed form T2200 from the employers for the 2005
taxation year and as such is not entitled to deduct the expenses by virtue of subsection
8(10).
[3]
The Appellant is a
resident of Peterborough, Ontario, and he reported income in 2005 of $29,000.00. He is
a 2003 university graduate and was employed as a substitute teacher of the Peterborough, Victoria, Northumberland and Clarington Catholic
School Board and Kawartha Pine Ridge District School Board during 2005. He
travelled to various schools throughout the district in that year and, as
stated, claimed $5,372.00 in car expenses.
[4]
The Appellant's
position includes that most employees work at one location on an ongoing basis.
These people cannot claim motor vehicle expenses when filing their returns because
"motor
vehicle expenses incurred travelling between one's home and place of
employment" is not allowed under the Act.
Also, such employees have many choices to reduce or
eliminate their reliance on a motor vehicle to get to work.
[5]
He added that he must
travel on short notice in all kinds of weather to one of over, I believe 40 or
50 schools. He continues that other employees qualify for motor vehicle expense
claims under the same sections.
[6]
His goal is to become a
permanent teacher but in 2005, he was a replacement only, and when called on to
do so, he travelled as much as 50, 60 or more kilometres from his Peterborough home to teach. He is qualified to teach both in the
primary and high school areas. He rarely refused a board request, sometimes
teaching in five different schools in a single week. He had his own car which
was absolutely necessary to travel from school to school on short notice. He
impressed me as a person of integrity and stability.
Legislation
[7]
Paragraph 8(1)(h.1)
of the Act provides
8(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
(a) …
(h.1) where the taxpayer,
in the year,
(i) was ordinarily
required to carry on the duties of the office or employment away from the
employer’s place of business or in different places, and
(ii) was required
under the contract of employment to pay motor vehicle expenses incurred in the
performance of the duties of the office or employment,
amounts expended by the taxpayer in
the year in respect of motor vehicle expenses incurred for travelling in the
course of the office or employment, except where the taxpayer
(iii) …
The exceptions do not apply in the present situation.
Analysis
[8]
In a nutshell, the
statutory conditions the Appellant has to meet are:
(a) firstly, subsection
8(10) requires that he file a prescribed form " and in this instance he was
provided one from the Catholic Board but was unable to get one from the Public
Board;
(b) secondly, for paragraph
8(1)(h.1)(i), I find the Appellant meets this criteria. His employer,
the school boards, were in Peterborough which I have no difficulty finding is the
employer's place of business;
(c) thirdly, for paragraph
8(1)(h.1)(ii), he also meets this criteria. To travel to various
schools, be they 10 kilometres or 60 kilometres from his home on short notice,
he required a car. He had to maintain his car at his own expense whether or not
it was so stated in his contract of employment which included A2‑03 of
the collective agreement. Who else was going to pay his travelling expenses? and
(d) lastly, the
appellant could be made aware the day before that he was teaching some 50
kilometres away. Being new and wishing to please his employer with his long‑term
goals in sight, he felt obligated to go, good weather or bad. To make a living
he had to accept all requests. His car was a required tool of his trade. Other
modes of transportation were either not available or practical.
[9]
In O'Neil v. The
Queen,
Justice Rip found that a City of Ottawa security coordinator whose work
entailed visits outside of City Hall did not fulfil the conditions in paragraph
8(1)(h.1). His decision is distinguishable from the present appeal
because in O'Neil, the appellant sought to deduct his travel expenses
from home to City Hall. He was reimbursed for his trips to numerous locations,
but not between his residence and City Hall.
[10]
Presently, the Appellant
does not seek to deduct trips, if any, to the school board offices, but only
from home to school board-owned property. His employers' place of business
included or was the two boards' Peterborough offices and not the individual schoolrooms
that the Appellant attended from day‑to‑day. It is no stretch of
reasoning to conclude that there was an implied contract between the Appellant
and his employer that he had to travel to various schools by car, at his own
expense, and obviously he received no travel allowance.
[11]
The Catholic School
Board provided him with the required prescribed form T2200, which is filed as
Exhibit A‑1, which sets out questions and replies by the employer
constituting the conditions of employment:
(a) Did this employee's contract require the
employee to pay his or her own expenses while carrying out the duties of
employment?
Answer: Yes.
Did you normally require this employee to work away from your place
of business or different places?
Answer: Yes.
This is important in identifying the place of business
of the employer not being the schools, and it is just common sense.
(b) Did this employee receive a motor vehicle
allowance?
Answer: No.
6 Did you require this employee to pay other
expenses for which the employee did not receive any allowance or repayment?
Answer: No.
Did this employee's contract require the employee to pay his or her
own expenses?"
Answer: Yes.
[12]
I believe common sense
should prevail. The Minister submits that the Appellant, if at all, should be
reimbursed for driving only one way, that is to the school and not home. I do not
think this argument deserves any comment. The more difficult question is
whether the car travel amounts were "expended … for travelling in the
course of employment".
[13]
In Menard v. The
Queen,
the Appellant was a longshoreman who reported to different quays as directed at
the Port of Montreal. The Federal Court of Appeal found the quays were different places as
used in paragraph 8(1)(h.1), but he was not contractually obligated to
use his vehicle. This differs from the Appellant’s situation who, I find as a
fact, had no other practical way of travelling to his various schools. It was
inherent that he use his own vehicle.
[14]
In Chrapko v. Canada,
the taxpayer was a pari‑mutuel teller employed at all relevant times by
the Ontario Jockey Club. The travelling expenses were incurred when the
taxpayer travelled from his residence in Niagara Falls to one of the three tracks. The Court in Chrapko
restricted allowable expenses to expenses incurred by the taxpayer in
travelling to a place of work away from the places at which he normally worked,
which is similar to this case, but those places in Chrapko included
Woodbine and Greenwood at which he worked 75% of his time. The
Court found the deductible travel expenses for the taxpayer were those incurred
while working at Fort Erie, notwithstanding that he chose to reside in Niagara
Falls which is closer to Fort
Erie. Chrapko supports
the Appellant’s position.
[15]
The Appellant presented
a number of cases, including Rousseau v. The Queen.
Rousseau was a plumber who claimed a deduction for the use of his motor
vehicle for travel from home to home job sites. The following is an excerpt
from Rousseau:
As presently, the T2200 signed by the employee's representative
indicates that Mr. Rousseau had to travel in his employment and did not
receive travel allowance.
which applies to the present appeal as well. In Rousseau,
Justice Paris went on to state that in Rozen v. Canada,
the Federal Court indicated:
If an employee is obliged to travel to do his work and his employer
is not prepared to pay the exact total cost of transportation, he must come
within the requirements of paragraph 8(1)(h.1)(ii).
Justice Paris concluded that the Mr. Rousseau
complied with the Act.
[16]
Finally, I refer to the
third condition of paragraph 8(1)(h.1) which states that the expenses
deducted must be incurred by the taxpayer for travel in the performance of his
duties. In Chrapko, the Court implicitly accepted that a taxpayer's
travel between home and place of work could be considered travel for employment
purposes if the taxpayer was ordinarily required to carry on the duties of his
employment at different places. This same reasoning was applied in Her
Majesty the Queen v. Merten,
and in Royer v. Canada.
.
[17]
Now, referring to the
second condition, I have already referred to the fact that it was inherent
under the circumstances that the Appellant was obligated to cover his vehicle
expenses under his employment contract. The following reasons from Justice
Sheridan in Hudson v. Canada,
also applies to the present case:
… The taxpayer was required to have his motor vehicle
available at the office. The only way the requirement could be satisfied was to
drive there each day. If he left it permanently parked at the office, as
counsel for the respondent gamely suggested, he would have been completely
deprived of the personal use of his own vehicle, a quite unreasonable
expectation to impose on an employee. I accept his evidence that except for the
requirement that he have his vehicle at work he would have relied on cheaper
alternate transportation.
I have no difficulty concluding the Appellant was
working while driving to the schools. The trips were not pleasure runs, but
definitely part of his work requirement to get himself to various places. The Appellant
was performing a valuable service to his employers, and it was an obligation on
his part travelling in all weather conditions to fill in for a teacher who was
not able to do so.
[18]
I refer to part of the Appellant's
opening remarks, with approval:
As a supply teacher I work in different places. The two school
boards I work for encompass large areas, roughly 160 kilometres from boundary
to boundary. I live in Peterborough, approximately in the middle of the board's boundaries. To work
five days a week to satisfy my employer, I usually travel out of Peterborough and often have 150 kilometre
round trip commutes. I could not do my job without a car. I do not have a
realistic choice. I ask the court to take note of the discussion of choice in Mitchell
v. Canada.
... in such cases there is no element of choice on the part of the
appellants. They simply had to travel in order to satisfy their respective
duties of employment or suffer the consequences.
And that applies equally to the Appellant and, I might
add, is common sense.
Conclusion
[19]
In conclusion, I find
the Appellant did not meet the requirement in subsection 8(10) with
respect to the Public School Board, and he is prohibited from deducting his
travel expenses while travelling for the Public School Board locations.
However, the appeal is allowed for the travel submitted while employed with the
Catholic Board in 2005. I accept the Appellant's evidence as to the distance
travelled and expenses incurred. I do not have the specifics and trust that the
amounts given by the Appellant to the Respondent which were not contested will
suffice that need. The Minister did not dispute the amounts in the Reply to the
Notice of Appeal.
Signed at Ottawa, Canada, this 9th day of September 2009.
"C.H. McArthur"
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