Citation: 2008TCC321
Date: 20080617
Docket: 2008-51(IT)I
BETWEEN:
JULES LÉONARD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1]
This
is an appeal from a reassessment dated October 9, 2007, regarding the 2006
taxation year. After the Appellant’s objection, the value of the benefits
granted to him was reduced from $7,940 to $6,163, as indicated in the
reassessment.
[2]
The
issue is to determine whether the Minister of National Revenue (the
"Minister") correctly added the amount of $6,163 to the Appellant’s
income for the 2006 taxation year.
[3]
To
establish the reassessment for the 2006 taxation year, the Minister relied on
the following presumptions of fact:
[translation]
(a)
The Appellant is a
helicopter pilot;
(b)
During the taxation
year in question, the Appellant worked for the company Airborne Energy
Solutions Ltd;
(c)
The Appellant was
tied to Airborne Energy Solutions Ltd. by a permanent contract of employment;
(d)
The Appellant worked
in Alberta according to a schedule of 28 days of work followed by 14 days of
rest;
(e)
The Appellant kept
his residence in the municipality of Lévis in Quebec;
(f)
During his periods of
rest, the Appellant returned to Quebec;
(g)
The Appellant’s
employer paid for the air transportation costs in accordance with the
Appellant’s employment contract;
(h)
Following the
Appellant’s objection, the Minister issued a reassessment to reduce the benefit
by $1,777 to account for travel to Alberta when the Appellant was hired and for
his return to Quebec at the end of his employment contract;
(i)
The air travel fees
related to the Appellant’s rest days during his employment came to $6,163 for
the taxation year in question.
[4]
After
swearing in, the Appellant admitted subparagraphs 5(a) to (g) inclusively.
The case addresses the interpretation of certain facts.
[5]
The
Appellant stated he never received the $6,163 in cash or by cheque.
[6]
He
also stated that he performed his work at a "special work site"
within the meaning of the Act, and at various locations.
[7]
Lastly,
the Appellant claimed he had absolutely no cooperation from his employer, who
made false claims regarding the nature and conditions of his work in the TD-4
form, "Exemption Declaration – Employment at a Special Work Site".
[8]
The
Appellant explained that he piloted a helicopter to places affected by forest
fires, in general, for uninterrupted periods of 28 consecutive days, followed
by 14 days of leave.
[9]
During
his leave, he left Alberta to return home, to his residence in Lévis, in
Quebec.
[10]
At
the end of his 14-day leave, he returned to Alberta to work for another 28
consecutive days. He worked in various places for various periods, according to
his employer’s instructions.
[11]
The
work and the conditions for carrying out the work were set out in a very
detailed manner in a contract that came into force on March 21, 2006, for an
indeterminate period, and which was submitted as Exhibit I‑1.
[12]
In
his January 2, 2008, Notice of Appeal, the Appellant described the reasons for
his challenge at length (5 pages). As his testimony, the Appellant’s Notice of
Appeal made reference to the same sections, interpretation bulletins and forms
that the Minister used to explain the assessment under appeal, as shown in the
very detailed Notice of Appeal.
[13]
The
Appellant challenges the reassessment with an analysis that completely conceals
the fact that his residence was actually located in Lévis, in Québec.
[14]
However,
his Notice of Appeal specifically addresses this issue under the heading
"Principle place of residence", the content of which is entirely
accurate.
[15]
The
Appellant is not at all challenging the content of his contract of employment,
which is also very detailed as to the elements that must be taken into
consideration to evaluate the validity of the assessment under appeal.
[16]
The
Appellant would have liked for his employer to complete the TD-4 form not in
regard to the contract, as the employer should have, but in regard to his
understanding and interpretation that were non-compatible with the contract of
employment.
[17]
According
to the Appellant, the fact that he had to travel from one site to another meant
that it was a job carried out at a temporary location on a special work site.
[18]
In
other words, the Appellant wanted the same rights as a specialized worker who
travels often from his residence, which in fact, were granted to him
unequivocally.
[19]
What
he was not granted, essentially, was the benefit resulting from travel from his
main residence in Lévis to another province where he received instructions to
go to various locations, temporarily, to help fight forest fires.
[20]
In
his reasoning, the Appellant clearly refuses to account for the fact that the
travel between his residence and the province where he received instructions
was a personal expense and that the reimbursement of these fees by his employer
was a taxable benefit.
[21]
When
the Appellant was offered a job by the company Airborne Energy Solutions
Ltd., he had the option of remaining in Quebec and shuttling between Quebec and
Alberta or residing in Alberta, regardless of the place, during the period he
was not working, namely during his 14 days of rest. If he had made the second
choice, the Appellant would not have been subject to an assessment and his
travel from his Alberta residence to the various work sites would have been
paid by the employer without it being a benefit.
[22]
However,
he dismissed this choice and decided to return to his residence in Quebec
during his 14 days of leave. The costs related to the travel between Alberta
and Quebec are incontestably personal expenses.
[23]
The
fact that the Appellant never received a cheque, cash or a reimbursement has
absolutely nothing to do with the validity of the benefit. In this case, it
seems that the plane ticket was reserved and paid for directly by the employer,
which, in itself, is not enough to conclude that the amount paid by the
employer is not taxable.
[24]
The
Appellant focused on the statement, "Worksite was NOT temporary, this
was employees place of work" (Exhibit I-2); according to the
Appellant, this was a false statement and not at all based on reality, and this
led him to find that his employer clearly acted in bad faith.
[25]
However,
the statement in question is completely compatible with the content of his work
contract, which was not at all challenged; the Appellant admitted that the
contract conformed to the agreement.
[26]
As
an additional example, imagine a person whose residence is in Lévis and who
obtains regular work with an Ontarian company that carries out work all over
Ontario.
[27]
If
the Ontarian employer decides to pay the transportation costs for our guy from
Ontario to Lévis in Quebec every weekend, this is a taxable benefit and is such
even if the person pays nothing, since the employer pays for the train, bus,
plane or car rental.
[28]
In
this case, the appellant decided to keep his main residence in Lévis, in
Quebec, and to return there every 28 days. This is a personal choice, the
validity of which is not being questioned. However, this choice leads to consequences
he must accept. Had he chosen to rent an apartment somewhere in Alberta, his
employer would have paid for the travel costs related to the changes in work
site without it being considered a benefit, because it would be a work expense.
However, the travel between Alberta and Quebec were essentially personal in
nature. Moreover, the case has nothing to do with the expenses related to
travel from one fire to another; those are expenses that are not of a personal
nature.
[29]
Travel
fees for airline pilots—motels, taxis and meals—are included in the expenses
the employer assumes, but expenses related to the pilots’ travel to the airport
from their main residence are personal expenses. If the employer covers them,
it becomes a taxable benefit in the same way as a vehicle provided to an
employee.
[30]
For
all the above reasons, the evidence indicates that the reassessment is clearly
justified, and the appeal must be dismissed.
[31]
After
objecting to the reassessment, the Respondent reduced the taxable benefit by an
amount equal to a return trip, which is a normal, appropriate and legitimate
expense when a person leaves a province or region to work elsewhere because of
a contract of employment.
Signed at Ottawa, Canada, this 17th day of June 2008.
"Alain Tardif"
Translation
certified true
on this 30th day
of June 2008.
Elizabeth Tan,
Translator
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