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Citation:2005TCC282
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Date: 20050421
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Docket: 2004-4319(IT)I
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BETWEEN:
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DANIEL SEGUIN,
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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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REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant, Daniel Seguin, is
appealing reassessments of his 2002 and 2003 taxation years made
by the Minister of National Revenue disallowing
Mr. Seguin's claim for employment expenses in respect of
travel and accommodation costs. Mr. Seguin and his bookkeeper,
Muriel Maguire, testified at the hearing and both were
straight-forward in the presentation of their evidence and
entirely credible.
[2] Mr. Seguin is employed as an
electrical apprentice by Hydro One Networks Inc. This position
requires him to travel to various worksites and to spend time
away from home. Pursuant to the collective agreement with his
employer, Mr. Seguin was entitled to and received allowances for
room and board for the five working days of the week, as well as
an allowance for travel expenses for one round trip between his
home and the worksite. He was also entitled to include as part of
his working day, the time required to make his initial trip to
the worksite and the final trip home. None of this is in issue.
The disputed claims are in respect of expenses incurred by
Mr. Seguin for weekend accommodation and additional trips
between worksites and Mr. Seguin's residence. Mr. Seguin
was typically required to be away from home for more than a week
at a time: on such occasions, if he chose to remain at the
worksite, he was responsible for paying his own accommodation and
living expenses; if, on the other hand, he decided to return home
for the weekend, he had to pay his own travel costs. In such
circumstances, he was not entitled to travel "on company
time"; thus, for example, rather than driving Monday morning
to the worksite as he was permitted to do on the initial trip to
that location, Mr. Seguin would have to travel on Sunday, his day
off, to be available to continue his work on site the following
Monday morning.
[3] The issue is whether such
expenditures are allowable deductions under paragraphs
8(1)(h) and (h.1) of the Income Tax Act; if
so, then Mr. Seguin is also entitled to capital cost allowance
deductions[1].
8.(1) Deductions allowed.
(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:
...
(h) Travel expenses - 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 the travel expenses incurred by
the taxpayer in the performance of the duties of the office or
employment,
amounts expended by the taxpayer in the year (other than motor
vehicle expenses) for travelling in the course of the office or
employment, except where the taxpayer
(iii) received an
allowance for travel expenses that was, because of subparagraph
6(1)(b)(v), (vi) or (vii), not
included in computing the taxpayer's income for the year,
or
(vi) claims a deduction
for the year under paragraph (e), (f) or
(g).
(h.1) Motor vehicle travel
expenses - 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 (f).
[4] These provisions have been
carefully considered on more than one occasion by the Federal
Court of Appeal. In Daniels v.
Canada(Attorney-General)[2] , Desjardins, J.A. stated
at page 379:
[7] It is well
established that travel expenses incurred by a taxpayer in
travelling to and from his home to his place of work are
considered personal expenses. They are not travelling costs
encountered in the course of the taxpayer's duties. Rather,
they enable him to perform them.
[5] The key phrase in the legislation
regarding the deductibility of such expenses is that they must
have been incurred "in the course of the office or
employment"; if not, they are by definition, personal. In
Hogg v. Canada[3], referred to in the Daniels
decision, Nadon, J.A. explained the meaning of this phrase:
[13] Thus, in my view, a plain
reading of both the French and English texts of paragraph
8(1)(h.1) of the Act makes it clear that the words
"motor vehicle expenses incurred for travelling in the
course of the office ..." necessarily require that
these expenses be incurred by the taxpayer while performing the
duties of his office.
[6] In Mr. Seguin's case, the
accommodation and travel costs he incurred were for weekend stays
at the worksite or to go home to spend his time off there.
Expressed in terms of Hogg, it cannot reasonably be said
that Mr. Seguin was performing the duties of his employment when
he incurred such costs. While the possibility existed that he
might have to be on call, Mr. Seguin was clear in his evidence
that at all times relevant to these appeals, he was off duty -
either enjoying the weekend at home, or away from home but
not working at the worksite location. Accordingly, the
Minister was correct in disallowing the deductions claimed and
these appeals must be dismissed. In view of this decision, it is
not necessary to consider the additional materials filed by Mr.
Seguin in respect of a possible claim for capital cost
allowance.
Signed at Ottawa, Canada, this 21st day of April, 2005.
Sheridan, J.
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