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Citation: 2006TCC552
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Date: 20061106
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Docket: 2005-1208(IT)I
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BETWEEN:
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SYLVAIN ROUSSEAU,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
(Delivered
orally from the bench on May 5, 2006, at Ottawa, Canada)
Paris J.,
F.C.C.
[1] This is a reassessment for the Appellant’s
2001 and 2002 taxation years. The Minister denied Mr. Rousseau the deduction
set out in paragraph 8(1)(h.1) of the Income Tax Act for motor
vehicle costs claimed for each of those years.
[2] Mr. Rousseau is a plumber and was employed
by S & R Mechanical (S & R) for all of 2001 and in 2002 until the
beginning of May. From May 2002 until the end of 2002, he was an employee
at Modern Niagara inc.
[3] For each year, Mr. Rousseau claimed a
deduction for the use of a motor vehicle for travel between his residence and
the job sites where he worked for these employers.
[4] He also said he travelled certain days
between different job sites and that he used his vehicle to run work-related
errands.
[5] The issue is whether
the Appellant is eligible for the deductions shown.
[6] Paragraph 8(1)(h.1) of the Act reads
as follows:
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:
. . .
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) received an allowance for
motor vehicle expenses that was, because of paragraph 6(1)(b), not
included in computing the taxpayer's income for the year, or
(iv) claims a deduction for the
year under paragraph 8(1)(f);
[7] The conditions that the taxpayer must meet
to be entitled to this deduction are the following:
1. he must be ordinarily
required to perform the duties of his employment away from his employer’s place
of business or at different places;
2. he must be
required, under his contract of employment, to pay for these travel costs or
the costs relating to his vehicle;
3. he must have
incurred the travel costs deducted in the performance of his duties.
[8] Concerning the first
condition, the evidence reveals that the Appellant never went to the
headquarters of S & R or
of Modern Niagara. He went directly from his home to the different job sites
and from there he went directly home.
[9] Therefore, concerning the first condition,
for Mr. Rousseau to be entitled to the deduction in question, the job sites
where he worked would have to not be places of business of his employers or
Mr. Rousseau would have to be required to perform the duties of his
employment at different places.
[10] According to the testimony of Serge Robert,
president of S & R, the Appellant worked at three different job sites for S
& R in 2001 and 2002.
[11] S & R had no site office at the first
site, at 219 Laurier Street (an office building), but did at the other two, St.
Joseph Printing and the Kanata Golf Club.
[12] In the site office at the printing house,
there was office equipment, including a telephone and a fax machine.
[13] Mr. Robert indicated that there was a desk,
a table and possibly a telephone and a fax machine in the site office located
in the basement of the golf club.
[14] It seems to me that the two site offices –
at the printing house and at the golf club – were places of business of S &
R.
[15] I would differentiate
them from places described in Champaigne
v. Canada, 2006TCC74, by
the fact that, in this case, the premises were used as temporary offices for S
& R and not only as rest areas and lunch rooms for the employees.
[16] In the case of Modern Niagara, Mr. Rousseau
testified that he had worked on four sites in 2002.
[17] However, a representative of Modern Niagara
filed with the Court an excerpt from the company’s records indicating that Mr.
Rousseau had only worked at the Ottawa airport that year.
[18] Although she admitted that it was possible that Mr. Rousseau had
worked at other sites, I got the impression that this possibility was minimal.
[19] Moreover, Mr. Rousseau, in
cross-examination, was unable to say with certainty whether he had worked at
sites other than the airport in his work with Modern Niagara that year.
[20] In light of all the evidence, I am not
convinced that Mr. Rousseau worked at sites other than the airport in his
work for Modern Niagara. The evidence also reveals that Modern Niagara had a
site office at the airport where it had office telecommunications equipment. In
my opinion, this would be a place of business of Modern Niagara within the
meaning of paragraph 8(1)(h.1) of the Act. For these reasons, the
Appellant did not meet the first condition for the deduction of costs incurred
for his travel between his residence and his employment for Modern Niagara, and
these costs are not deductible.
[21] It remains to be determined, for the period
when he worked for S & R, whether Mr. Rousseau was ordinarily required to
perform the duties of his employment at different places in 2001 and 2002.
[22] For 2001, as I have already indicated, Mr.
Rousseau worked at three sites for S & R. Although Mr. Rousseau said that
there may have been others, this fact was never demonstrated by adequate
evidence.
[23] Yet Mr. Rousseau said that he changed sites for
S & R based on instructions that he received from his employer every day.
This leads me to believe that S & R had more than one site at a time and
that the Appellant could find himself at different sites during the same week.
[24] As a result, he would have been required to
work at different places. He therefore meets the first condition of paragraph
8(1)(h.1) of the Act for 2001 and part of 2002 as an employee of S &
R.
[25] Let us now look at
the second condition.
[26] The Respondent claims that Mr. Rousseau was
not obliged to cover his vehicle costs under his employment contract.
[27] However, the T-2200 signed by each
employer’s representative indicates that Mr. Rousseau had to travel in the
course of his employment and that he did not receive a travel allowance.
[28] In Rozen v. Canada, [1985] F.C.J.
No. 1002, 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 and total cost of transportation,
then he must come within the requirements of subparagraph 8(1)(h)(ii).
[29] I therefore conclude
that the Appellant complied with the second condition during the two years in
question.
[30] Finally, I refer to the third condition of
paragraph 8(1)(h.1), which states that the expenses deducted must have
been incurred by the taxpayer for travel in the performance of the taxpayer’s
duties.
[31] In Canada v. Chrapko, [1984] F.C.J.
No. 934, the Federal Court of Appeal implicitly accepted that a taxpayer’s
travel between home and a place of work could be considered travel for
employment purposes if the taxpayer was ordinarily required to carry on the
duties of his or her employment at different places.
[32] This same reasoning was applied in Her
Majesty the Queen v. J.U. Merten, 90 DTC 6600, by the Federal Court
and in Royer v. Canada [1999] T.C.J. No. 111, by the Tax Court of
Canada.
[33] In this case, given that I have already
decided that Mr. Rousseau had to travel to different places for S & R, his
travel to go to the job site and return home constitute travel in the
performance of his duties.
[34] Therefore, the costs
incurred for this travel are deductible.
[35] Since Mr. Rousseau worked for all of 2001
for S & R, he is allowed to deduct the entire amount claimed for that year.
[36] For 2002, a third of the amount, or $3,603,
will be deductible, representing the four out of 12 months that the Appellant
worked for S & R.
[37] For these reasons, the appeal is allowed in
part, with costs.
Signed at Ottawa, Canada, this 6th day of November 2006.
on this 30th day of April 2007.
Gibson Boyd, Translator
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