Date: 20001109
Docket: 2000-2005(IT)I
BETWEEN:
BRUCE GILLESPIE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Victoria, British Columbia on
October 17, 2000. The Appellant was the only witness. He has
appealed the disallowance of moving expenses which he claimed
with respect to his 1998 taxation year. In addition, at the
hearing, he referred to a further claim of $2,572.29 which he
incurred in 1998 maintaining his house in Victoria while he lived
in Courtenay, British Columbia and awaited the sale of his house
in Victoria.
[2] Paragraphs 9 to 12 inclusive of
the Reply to the Notice of Appeal read:
9. The
Minister of National Revenue (the "Minister") initially
assessed the Appellant for the 1998 taxation year by Notice dated
May 6, 1999 and disallowed the Moving Expense.
10. In so assessing the
Appellant, the Minister relied on the following assumptions of
fact:
a) the
Appellant worked for Highway Constructors Ltd. (the
"Company") from June 22 1998 to October 5, 1998;
b) the Company
was responsible for contracts awarded for the construction of
Inland Highway on Vancouver Island;
c) in December
1998, the Appellant moved from Victoria to Comox, British
Columbia;
d) the
Appellant's new residence in Comox was within 100 km of the
job site that he had worked at during his employment with the
Company from June 22, 1998 to October 5, 1998 (the "Work
Location"); and
e) the
Appellant was not employed at the time of the move.
B. ISSUES TO
BE DECIDED
11. The issue is whether
the Appellant is entitled to a deduction of the Moving Expense
for the 1998 taxation year.
C. STATUTORY
PROVISIONS RELIED ON
12. He relies on section
62 and subsection 248(1) of the Act as amended.
[3] Assumptions 10(a) and (b) are
correct.
[4] The Appellant was requested to
take this job by Highway Constructors Ltd. on June 16, 1998. He
is and was a skilled hydraulic drill operator who is accustomed
to drilling and operating equipment in association with
explosives. The project was the new Island Highway then under
construction on Vancouver Island. The Appellant moved immediately
from Victoria to Courtenay and rented premises where he lived
within 25 km of his job site and put his house in Victoria up for
sale. He had work and pay at the job site until he was laid off
on October 5, 1998. He was rehired on the same job by the
same contractor in May, 1999. He stayed at Courtenay in the
interval and after his Victoria house sold in December, 1998 he
purchased a home in Courtenay where he still lives and is
employed.
[5] Subsection 62(1) of the Income
Tax Act ("Act") reads in part:
62.(1) Where a taxpayer has, at any time,
commenced
(a) to carry on a
business or to be employed at a location in Canada (in this
subsection referred to as "the new work location"),
...
and by reason thereof has moved from the residence in Canada
at which, before the move, the taxpayer ordinarily resided (in
this section referred to as "the old residence") to a
residence in Canada at which, after the move, the taxpayer
ordinarily resided (in this section referred to as "the new
residence"), so that the distance between the old residence
and the new work location is not less than 40 kilometres greater
than the distance between the new residence and the new work
location, in computing the taxpayer's income for the taxation
year in which the taxpayer moved from the old residence to the
new residence or for the immediately following taxation year,
there may be deducted amounts paid by the taxpayer as or on
account of moving expenses incurred in the course of moving from
the old residence to the new residence, to the extent that
...
[6] Moving expenses are deductible to
assist people such as the taxpayer to find gainful employment. In
fact the Appellant did move to gainful employment in June, 1998,
became employed, and earned wages in that employment. But he was
only able to sell his house in December. Thereupon his accountant
completed his claim for moving expenses on the basis that the
move occurred at the date of sale, December 17, 1998, when the
Appellant was laid off. That form was completed incorrectly and
the Court so finds.
[7] It is in the light of these
findings that subsection 62(1), as quoted, must be examined. In
Corporation Notre Dame de Bon-Secours v. Communaute Urbaine de
Quebec and City of Quebec, 95 DTC 5017, Gonthier, J. stated
at the end of Section A of his analysis:
The rules formulated in the preceding pages, some of which
were relied on recently in Symes v. Canada [1993] 4 S.C.R.
695, may be summarized as follows:
-
The interpretation of tax legislation should follow the ordinary
rules of interpretation;
-
A legislative provision should be given a strict or liberal
interpretation depending on the purpose underlying it, and that
purpose must be identified in light of the context of the
statute, its objective and the legislative intent; this is the
teleological approach;
-
The teleological approach will favour the taxpayer or the tax
department depending solely on the legislative provision in
question, and not on the existence of predetermined
presumptions;
-
Substance should be given precedence over form to the extent that
this is consistent with the wording and objective of the
statute;
-
Only a reasonable doubt, not resolved by the ordinary rules of
interpretation, will be settled by recourse to the residual
presumption in favour of the taxpayer.
[8] Referring to subsection 62(1),
- the taxpayer
commenced to be employed at Courtenay, B.C. on June 22,
1998;
- for that reason he
moved to Courtenay from Victoria on June 22, 1998;
- before June 22 he
ordinarily resided at his house in Victoria;
- after June 22 he
ordinarily resided in Courtenay;
- his new work
location was 22 km from his workplace, rather than 212 km as was
the case from his house in Victoria.
[9] For these reasons, the appeal is
allowed. The Court also finds that his submission of additional
expenses of $2,572.29; if properly backed up with appropriate
records and reasons, appear to be claimable respecting the
move.
[10] The Appellant had to come to Victoria
from Courtenay to prosecute his appeal. He is awarded $200 on
account of out of pocket expenses incurred in proceeding with the
appeal.
Signed at Ottawa, Canada this 9th day of November,
2000.
J.T.C.C.
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