Citation: 2007TCC474
Date: 20070815
Docket: 2007-355(IT)I
BETWEEN:
C. RAYMOND PERSAUD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1] The issue in this appeal relates to a claim for moving
expenses by the Appellant in 2005. The claim relates to travel from Quispamsis,
New Brunswick to Fort McMurray, Alberta
and then from Fort McMurray to Quispamsis in the same year. In
particular the issue related to the claim for moving expenses is whether the
Appellant ordinarily resided in Fort McMurray in 2005.
[2] The Appellant is a journeyman electrician. He was
unemployed in 2005. The union posted a job opening for a position for a
journeyman electrician in Fort McMurray. The Appellant did not have a lot of time
to respond but chose to apply for the position in Fort McMurray.
[3] The Appellant incurred $1,099.34 in expenses in
travelling on May 9, 2005 to work in Fort McMurray.
The Appellant worked at the position in Fort McMurray until some time in August. The Appellant indicated
that he took most of his personal items with him including his casual clothes,
work clothes, winter jacket, tools, cell phone, clock radio, CD and tape
player. He originally went to Fort McMurray with a view to possibly relocating there
permanently. Prior to moving to New Brunswick in 1989 the Appellant and his
family had lived in Saskatchewan for 22 years. Therefore the Appellant was
familiar with relocating from one part of the country to another. As well the
Appellant’s son was stationed in Cold
Lake, Alberta and his
daughter lived in Calgary, Alberta.
[4] The Appellant’s wife did not relocate with him but
stayed in Quispamsis in their home. The Appellant did not return to Quispamsis
until September of 2005 when he returned to accept another job. He had discovered
that the job in Fort McMurray was not going to (and did not) last as
long as he had originally thought that it would.
[5] The Appellant did not have receipts for the expenses
incurred in relocating from Fort McMurray to Quispamsis in September 2005 but
did agree that the amount incurred should be the same as was incurred in
relocating from Quispamsis to Fort
McMurray. The amount that he
had claimed on his tax return was $5,229. However the total amount that the
Appellant now agrees should have been claimed is two times $1,099.34 or
$2,198.68.
[6] The total amount that the Appellant earned in Fort McMurray exceeded the expenses submitted of $1,099.34 in
relation to the relocation to Fort McMurray and the total amount that the
Appellant earned from his job in New
Brunswick upon his return
also exceeded the amount now claimed in relation to the relocation to Quispamsis.
[7] The issue in this case is whether the Appellant
ordinarily resided in Fort McMurray for the time that he was there.
[8] The Supreme Court of Canada
in Thomson v. M.N.R., 1945 CarswellNat 23, [1946] C.T.C. 51, dealt
with the definition of “ordinarily resident”. Justice Rand of the Supreme Court
of Canada made the following comments:
47 The gradation of degrees of
time, object, intention, continuity and other relevant circumstances, shows, I
think, that in common parlance "residing" is not a term of invariable
elements, all of which must be satisfied in each instance. It is quite
impossible to give it a precise and inclusive definition. It is highly
flexible, and its many shades of meaning vary not only in the contexts of
different matters, but also in different aspects of the same matter. In one
case it is satisfied by certain elements, in another by others, some common,
some new.
48 The expression "ordinarily
resident" carries a restricted signification, and although the first
impression seems to be that of preponderance in time, the decisions on the
English Act reject that view. It is held to mean residence in the course of the
customary mode of life of the person concerned, and it is contrasted with
special or occasional or casual residence. The general mode of life is,
therefore, relevant to a question of its application.
[9] In the same decision
Justice Estey of the Supreme Court of Canada made the following comments:
71 A reference to the dictionary and
judicial comments upon the meaning of these terms indicates that one is
"ordinarily resident" in the place where in the settled routine of
his life he regularly, normally or customarily lives. One "sojourns"
at a place where he unusually, casually or intermittently visits or stays. In
the former the element of permanence; in the latter that of the temporary
predominates. The difference cannot be stated in precise and definite terms,
but each case must be determined after all of the relevant factors are taken
into consideration, but the foregoing indicates in a general way the essential
differences. It is not the length of the visit or stay that determines the
question. Even in this statute under section 9(b) the time of 183 days
does not determine whether the party sojourns or not but merely determines
whether the tax shall be payable or not by one who sojourns.
[10] It is clear that the
expression “ordinarily resident” is imprecise and is not entirely based on the
length of a visit or stay.
[11] In Cavalier v. R.,
2001 CarswellNat 2374, [2002] 1 C.T.C. 2001, Justice Bowie made the
following comments on the Thomson case:
One thing is clear from Thomson, however;
the meaning of the expression ordinarily resident is far from certain.
[12] and further at
paragraph 22:
22. I conclude from these cases that in order
to be “ordinarily resident” a taxpayer need not have formed the intention to
remain permanently, or for any particular length of time, at the new place of
residence. Nor need he move all his household effects, or be accompanied by the
members of his immediate family.
[13] Therefore the fact that the Appellant’s spouse
remained in Quispamsis and that his furniture and other belongings remained in
Quispamsis is not determinative of the issue.
[14] In Calvano v. R., 2004 CarswellNat 730, 2004
TCC 227, Justice C. Miller made the following comments:
23
...
Whether a residence is intended to be temporary or permanent does not determine
whether the residence constitutes "ordinarily resident." Simply
because someone chooses to live somewhere temporarily, it does not
automatically follow that they cannot be ordinarily resident there. Put in
positive terms, one can be ordinarily resident on a temporary basis. The
concept of "ordinarily resident" has more to do with the settled,
ordinary routine of life than the permanence of the arrangement.
24 I agree with
Justice Bowie's conclusion in the case of Cavalier v.R. where he stated
at paragraph 22:
I conclude from these cases that in
order to be "ordinarily resident" a taxpayer need not have formed the
intention to remain permanently, or for any particular length of time, at the
new place of residence. ...
Having said that, the length of stay in
Coquitlam is one of a number of factors to consider in determining whether
Mr. Calvano was ordinarily resident in Coquitlam.
[15] As noted by Justice C. Miller the length of stay at a
particular location is a factor that should be taken into account in
determining whether a person is ordinarily resident in that location. There
are, however, situations where time would not be relevant. For example if an
individual were to sell his or her house in one location and, together with all
the persons residing at that house, move with their possessions to a new
location to start work at a new job, then the time spent at the new location
would not be a factor as the individual clearly would have ceased to reside in
the former location as he or she would have severed their residential ties with
that location.
[16] However, in cases where the individual has not severed
his or her residential ties with a particular location, then the time spent in
the new location is a factor that should be taken into account in determining
whether or not that individual is ordinarily resident in the new location as
the longer the person is in the new location the more likely it is that his or
her settled, ordinary routine of life is in the new location. In MacDonald
v. Her Majesty the Queen, 2007TCC250, the individual travelled to Alberta twice. On the first trip he was unable to find any
work and on the second trip he only worked for six weeks. In this particular
case the Appellant stayed significantly longer in Fort McMurray than did Mr. MacDonald. As well in this
particular case the Appellant also opened a bank account at the Credit Union in
Fort McMurray and Mr. MacDonald did not open a bank
account in Fort McMurray.
[17] The Appellant did not obtain an Alberta driver’s
licence nor did he apply for provincial health coverage in the province of Alberta. How significant is the failure to obtain an Alberta driver’s licence
or to apply for provincial health coverage in Alberta
in determining whether the Appellant ordinarily resides in Alberta?
[18] The Motor Vehicle Administration Act,
R.S.A. 2000, c. M-23, of the province of Alberta provides in part as follows:
5(1) No person shall drive a motor vehicle on a highway unless that
person is the holder of an operator’s licence.
...
(3) If a person is the holder of a valid licence or permit issued to
that person in a jurisdiction outside Alberta authorizing that person to
operate a motor vehicle of the type or class being operated by that person,
then that person is exempt from subsection (1) if that person does not
remain in Alberta for more than 3 months.
(4) Subsection (1) does not apply to a person, not being resident in Canada, who
(a) holds an international driver's licence issued outside Canada, and
(b) does not remain in Alberta for more than 12 consecutive months.
(5) Subsection (1) does not apply to a student as defined in the regulations if the student is authorized by the laws of that person's place of residence to operate a motor vehicle of the type or class being operated by that person.
(6) A person who contravenes
(a) subsection (1) is guilty of an offence and liable to
the penalty provided for under section 101(1) ...
(7) In a prosecution for a contravention
of subsection (1), the onus is on the accused to show that the accused holds a
subsisting operator's licence.
...
10(1) Except as otherwise provided in
this Act, a person who is guilty of an offence under this Act or the
regulations for which a penalty is not otherwise provided is liable to a fine
of not more than $500 and in default of payment to imprisonment for a term not
exceeding 6 months or to imprisonment for a term not exceeding 6 months without
the option of a fine.
[19] An operator’s licence is defined in subsection 1(n) of
the Motor Vehicle Administration Act as
“operator’s licence” means a licence to operate a motor vehicle
issued pursuant to this Act.
[20] It should be noted that in order to operate a motor
vehicle on a highway in the province of Alberta, subject to subsections 3, 4
and 5, a person must hold a licence issued by the province of Alberta. The
exception, which allows individuals who are residents of Canada and who are not
students to drive in the province of Alberta with a licence issued by
another province, applies so long as the person does not remain in Alberta for more than three months. It is not based on the
person becoming a resident of Alberta. In this particular case as well it should
be noted that the Appellant did not bring his motor vehicle with him and he
indicated that he simply did not need a driver’s licence because he was not
driving in the province of Alberta. Failing to obtain an Alberta driver’s licence would
not make him a resident of New
Brunswick but could result in
him having committed an offence under the Motor Vehicle Administration Act of
the province of Alberta if the Appellant would have driven in Alberta
with a New Brunswick licence after he had been there for more
three months.
[21] Subsection 3(1) of the Alberta Health Care
Insurance Act, R.S.A. 2000, c. A‑20 provides as follows:
The Minister shall, in accordance with this Act and the regulations,
administer and operate on a non-profit basis a plan to provide benefits for
basic health services to all residents of Alberta.
[22] A “resident” or “resident of Alberta”
is defined in subsection 1(x) as follows:
“resident” or “resident of Alberta” means a person lawfully entitled
to be or to remain in Canada, who makes the person’s home and is ordinarily
present in Alberta and any other person deemed by the regulations to be a
resident, but does not include a tourist, transient or visitor to Alberta.
It should be noted that the language in this section
is slightly different from the Income Tax Act in that it applies to a
person who makes the person’s home and is ordinarily “present” in Alberta.
[23] It would also include a person who is deemed by the regulations
to be a resident.
[24] The Appellant in this case felt that he was still
covered by the province of New Brunswick. The Medical Services Payment Act,
R.S.N.B. 1973, c. M‑7 of the province of New Brunswick provides that the provincial authority shall
establish a medical services plan.
[25] Subsection 3(4) of the General Regulation -
Medical Services Payment Act, N.B. Reg. 84-20 provides in part as
follows:
3(2) Except as otherwise provided in
the Act and this Regulation, a beneficiary is eligible to have payment made on
his or her behalf or to receive an amount computed in accordance with this
Regulation for entitled services received
(a) within the Province,
(b) outside the Province, or
(c) while temporarily absent from the
Province
by that person or any
dependents.
…
3(4) For the purposes of this section, a person is “temporarily
absent from the Province” where that person is absent from New Brunswick
(a) for the purpose of a vacation, visit or business
engagement but not where the period of absence exceeds 182 days in a twelve
month period, or
(b) for the express purpose of furthering an education in a
province or country where that person is not eligible to receive reimbursement
or have payment made on his or her behalf for or with respect to entitled
services under the medical services plan, if any, of that province or country
and who is not gainfully employed outside the Province except during vacation
periods but not where the period of absence exceeds twelve consecutive months.
…
3(7) A beneficiary who leaves the Province ceases to be
a beneficiary for purposes of coverage by the Medicare Branch,
(a) in the case of an individual who in the opinion of the
Director has ceased to be a resident of the Province and has established a residence
elsewhere in Canada upon the first day of the third month following the month
of arrival at the new residence,
(b) in the case of any other beneficiary who in the opinion
of the Director leaves the Province to establish residence elsewhere in Canada,
subject to section 3, twelve months after the date of departure, and,
(c) in the case of an individual who in the opinion of the
Director has ceased to be a resident of the Province and has established
residence elsewhere than in Canada upon the date that person left Canada.
[26] It should be noted that paragraph 3(4)(a) of the General
Regulation - Medical Services Payment Act does provide for coverage
while a person is temporarily absent from the province and the concept of
temporary absence does include absence for a “business engagement”. Whether a
business engagement will include temporary employment at a location in another
province is a matter for the courts of the Province of New Brunswick to determine. It should also be noted that a person
ceases to be a beneficiary under subsection 3(7) if, in the opinion of the
Director, that person has ceased to be resident in New Brunswick. There was no evidence in this case whether the Director had formed
this opinion in relation to the Appellant.
[27] In any event, the issue would still be whether the
failure to apply for provincial health care coverage in the new location would
change the issue of whether the settled, ordinary routine of life of the
Appellant was in Alberta or New Brunswick. It would appear that a person can still have a
settled, ordinary routine of life without having changed their provincial
medical coverage. Simply applying for health coverage with the province of
Alberta would not make the Appellant resident in Alberta but if he ceased to be
resident in New Brunswick in the opinion of the Director under the Medicare
program in New Brunswick, he would have ceased to have been covered by New
Brunswick’s Medicare plan as provided in subsection 3(7) of the Regulation -
Medical Services Payment Act of the province of New Brunswick referred
to above. Whether the Appellant would have been covered by the Medicare plan
for the province of New
Brunswick is a matter that
the appropriate authorities with that plan would have had to determine if the Appellant
would have required medical treatment while in the Province of Alberta.
[28] The representative for the Appellant also raised the
issue of the entitlement of students to claim moving expenses. The definition
of “eligible relocation” applies not only to individuals who relocate for work
but also to students who relocate to attend, on a full time basis, a
university, college or other educational institution. Subsection 62(2) of
the Income Tax Act modifies the definition of eligible relocation in relation
to students but it only modifies paragraph (b) of the definition of eligible
relocation and does not change paragraph (c). In other words, students are only
eligible to claim moving expenses if they ordinarily reside at their new
accommodations while attending the educational institution. The change that is
made to the definition of eligible relocation for students is to change the
word “both” in paragraph (b) to “either or both”. As a result the definition of
“the new residence” remains the same i.e. it is the residence at which the
taxpayer ordinarily resided after the relocation and the distance requirements
are still the same in paragraph (c). As a result, for students, the question will
still be whether they ordinarily reside at the new residence.
[29] Therefore parliament must have intended that students
who leave home to attend university on a full‑time basis would be
considered to be ordinarily resident at the university (or other location) even
though the accommodation at which they reside would only be temporary and they
would be returning home at the completion of the term or year. Since the
definition of “the new residence” is the same for workers and students (i.e.
the place at which such person ordinarily resides), Parliament must have intended
that either workers or students could be ordinarily resident at temporary
accommodations. This is also consistent with the finding of Justice Bowie in Cavalier
where the taxpayer lived in a residence at the College.
[30] In this case the Appellant resided in the
accommodations provided by his employer in Fort McMurray for more than three months. The accommodations were
described as being similar to a university residence. He worked in Fort McMurray, he opened a bank account in Fort McMurray and for the
time that he was there the settled, ordinary routine of his life was in Fort McMurray. He would also visit his children who were living in Cold Lake, Alberta and Calgary, Alberta. A four month period was sufficient for Justice Bowie to find that the
taxpayer in Cavalier had moved to Fort McMurray and I find that in this
case the Appellant was ordinarily resident in Fort McMurray and hence is entitled to claim the moving expenses
related to his relocation from Quispamsis to Fort McMurray and from Fort McMurray to Quispamsis.
[31] If the Appellant did not ordinarily reside in
Fort McMurray for the time that he was there then the finding would have
to be that he ordinarily resided in Quispamsis during this time but it seems to
me that it is difficult to say that the settled, ordinary routine of the
Appellant’s life was in Quispamsis for the period from May to September when he
was not in Quispamsis at all during this time. In this situation, this is
simply too long a period of absence to be considered to still be ordinarily
resident in Quispamsis during this time.
[32] The Respondent had also noted that the amount that was
claimed in the tax return was significantly in excess of the amount established
during the hearing as expenses that were incurred. However this is also similar
to the Cavalier case where Justice Bowie noted that the claims related
to the taxpayer in that case were also “considerably inflated”. As in Cavalier
this does not affect the right of the Appellant to claim moving expenses but
only affects the amount that may actually be claimed.
[33] Therefore the appeal is allowed in part and the
Appellant is entitled to claim moving expenses of $2,198.68 in computing his
income for the 2005 taxation year.
Signed at Toronto, Ontario, this 15th day of August 2007.
“Wyman W. Webb”
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