Citation: 2013TCC221
Date: 20130709
Docket: 2012-390(IT)I
BETWEEN:
PATRICK J. BARRY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
The issues in this
appeal are:
(a)
whether the Appellant
is entitled to deduct his motor vehicle expenses of $6,707.53 and $7,592.06 in
the 2008 and 2009 taxation years respectively;
(b)
whether he is entitled
to deduct cell phone expenses in the amount of $410 and $440 in the 2008 and
2009 taxation years respectively; and
(c)
whether he is entitled
to an “Employee and Partner GST/HST” rebate of $564.21 and $696.94 under
section 253 of the Excise Tax Act for the 2008 and 2009 taxation years
respectively.
[2]
In 2008 and 2009, the
Appellant had two jobs. He had a permanent position as a schoolteacher and he
also had a temporary position as a group home counsellor with the Eastern
Residential Support Board Inc. (“ERSB”) in St. John’s, Newfoundland. The issues
raised in this appeal concern the Appellant’s employment as a temporary
employee with the ERSB.
[3]
In this appeal, the
Minister of National Revenue (the “Minister”) relied on paragraph 8(1)(h.1) of
the Income Tax Act (“ITA”) to disallow the Appellant’s
claim for motor vehicle expenses. He found that the Appellant’s contract of
employment with ERSB did not require him to pay motor vehicle expenses incurred
in the performance of his duties of employment. The Minister also found that
the Appellant’s contract of employment did not require him to have a cell
phone.
[4]
The witnesses at the
hearing were the Appellant and Allan English, the manager of finance and
administration with the ERSB.
[5]
The ERSB operates
fourteen group homes throughout the St. John’s metropolitan area. The Appellant
started to work as a group home counsellor with the ERSB in 2000; and, in 2008
and 2009, he was “on call” to any of seven of the group homes. According to the
Appellant, he was “on call” at anytime that he was not employed in his full
time position as a schoolteacher. He explained that he could be called to
report to work on very short notice. He needed his personal vehicle to get him
to work on time as it was not practical to take a bus.
[6]
As part of his duties
with the ERSB, the Appellant took residents of the group homes shopping, to
medical appointments and to recreational activities. He used his personal motor
vehicle to transport the residents; and, in 2008 and 2009, the ERSB provided
him with positive T2200 forms which allowed him to deduct his motor vehicle
expenses in accordance with paragraph 8(1)(h.1) of the ITA.
[7]
According to Mr.
English, it was not a condition of employment that the Appellant have a motor
vehicle. In 2008 and 2009, the ERSB gave the Appellant the option of using a
taxi, public transportation, or his personal vehicle to take residents to their
various activities. Mr. English testified that if an employee used his personal
vehicle, he had to have the appropriate insurance. When an employee used his
personal vehicle to transport residents, it had been the practice of the ERSB
to either reimburse the employee for the kilometres he travelled in the course
of his employment or to provide the employee with a positive T2200 form,
whichever the employee found to be more advantageous.
[8]
Mr. English explained
the circumstances which led to the ERSB issuing T2200 forms to its employees.
It was his understanding that officials of ERSB had consulted with representatives
of the Canada Revenue Agency (“CRA”) in 2003 and 2004 with respect to the use
of the T2200 form. As a result of these consultations, ERSB understood that if
employees were allowed to use their vehicles to perform the duties of their
employment and the employees paid their own expenses, then the employer could
issue T2200 forms to its employees.
[9]
Mr. English opined that
it was mutually beneficial for both the employees and ERSB that its employees
use their personal vehicles. It was more economical for ERSB and it assured
more mobility for the residents of the group homes.
[10]
When he learned, in
2010, that several employees of ERSB had been audited to disallow their claim
for motor expenses, Mr. English contacted an auditor with the CRA. After
discussions with the auditor and then advice from the lawyer for ERSB, Mr.
English caused ERSB to cease issuing positive T2200 forms to those employees
who were not required under their contract of employment to pay motor vehicle
expenses incurred in the performance of their duties of employment.
[11]
For those employees of
ERSB whose motor vehicle expenses were disallowed by the CRA, the ERSB has
since offered to reimburse them for the use of their vehicles in 2008, 2009 and
2010. However, the Appellant has chosen to continue with this appeal rather
than make a claim for reimbursement from his employer.
[12]
The Appellant agreed
that his contract of employment does not expressly require him to pay the motor
vehicle expenses which he incurred. However, it is his position that it is an
implicit term of his contract that he had to use his personal vehicle in the
performance of his duties and therefore that he had to pay the motor vehicle
expenses. He has argued that the ERSB wanted the residents to have access to
the community and he was better able to provide this access when he used his
own vehicle. He stated that it was not convenient or practical to use public
transportation or a taxi.
[13]
It was also the
Appellant’s position that he should be entitled to deduct the travel expenses
he incurred to travel from his home to the group homes in which he worked. He
stated that his vehicle was a tool he had to use in his employment. It did not
remain parked by the group home during his shift. Rather, it was necessary to
use his vehicle to give the residents access to the community.
[14]
The Appellant stated
that he did not own a cell phone until he obtained his position with ERSB. It
was essential to own a cell phone because of his “on call” status. He could
receive a call to go to work with very little notice. He stated that if he
refused or missed a call to go to work on three consecutive occasions, he would
lose his seniority with the ERSB.
Analysis
[15]
Paragraph 8(1)(h.1)
of the ITA reads:
8(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.1) 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);
[16]
According to paragraph
8(1)(h.1), a taxpayer must meet the following conditions to be entitled
to deduct his motor vehicle expenses:
(1)
He must have been
ordinarily required to carry on his duties away from his employer’s place of
business or in different places; and,
(2)
He must be required
under his contract of employment to pay his motor vehicle expenses; and,
(3)
The motor vehicle
expenses must have been incurred in the performance of his duties of
employment.
[17]
The expression
“different places” does not exclude a place of business and can apply to a
situation where the employer does not have just one place of business: Royer
v R, [2000] 1 CTC 2688 (TCC); Ménard v R, 2004 TCC 516 at paragraph
35. In the circumstances of this appeal, I find that ERSB had its head office
at 95 Bonaventure Avenue in St. John’s and it had a place of business at each
of the fourteen group homes.
[18]
It was the Appellant’s
evidence that he could be called to work at any of seven different group homes
in 2008 and 2009. He was not assigned to a specific group home. In addition, he
was required as part of his duties to take the residents out of the group homes
and into the community. I find that the Appellant was ordinarily carrying on
his duties at “different places” and the first condition has been met.
[19]
However, it is clear
from the evidence that the Appellant has not met the second condition in
paragraph 8(1)(h.1). I have concluded from the evidence that his
contract of employment did not expressly or implicitly require that he pay for
motor vehicle expenses.
[20]
It was Mr. English’s
evidence that it was not a condition of the Appellant’s employment that he
provide his own vehicle to use in his employment. He stated that many employees
refuse to use their personal vehicle to transport the residents and instead,
they use taxis or public transportation. Mr. English testified that the terms
of the Appellant’s employment with the ERSB were contained in the Collective
Agreement between Her Majesty the Queen in Right of Newfoundland and Group
Homes and the Newfoundland Association of Public Employees (“Collective Agreement”).
Mr. English was not aware of any other agreement between the Appellant and
ERSB.
[21]
I note that article 30
of the Collective Agreement confirms that the Appellant was not required to use
his personal vehicle in the course of carrying out his duties and therefore was
not required to pay motor vehicle expenses. It reads:
(b)(i) When, in the
course of his/her duty, an employee is required to travel on the Employer’s
business, transportation shall be provided by the Employer or with the approval
of the Employer he/she may be permitted to use his/her own vehicle and be
reimbursed as follows…
[22]
The Appellant relied on
the decision in Rozen v Canada, [1986] 1 CTC 50 (FCTD) to argue that his
employer expected him to use his vehicle in the performance of his duties and
he was responsible for the costs of operating his own vehicle. This he argued
was an implied term of his contract. However, Rozen is distinguishable
from the present appeal. In Rozen, there was no written contract between
the taxpayer and his employer as in the present appeal. Also, in Rozen,
unlike the present appeal, the taxpayer was required to use his vehicle in the
performance of his duties.
[23]
To support his position
that he should be able to deduct the travel expenses incurred in travelling
from his home to the group home, the Appellant relied on Chrapko v MNR,
[1988] 2 CTC 342 (FCA) and Evans v The Queen, 99 DTC 168 (TCC). In Chrapko,
the taxpayer was allowed to deduct the travel expenses from home to a place
of work away from the places where he “usually” worked. In the present appeal,
the seven group homes where the Appellant worked were his usual places of work.
In Evans, the taxpayer was allowed to deduct the travel expenses
incurred in commuting to and from work to home on the basis that she was
transporting work-related materials in the trunk of her car. In this appeal,
the travel expenses incurred in commuting to and from work were not incurred by
the Appellant in the performance of his duties.
[24]
It may have been more
convenient for the Appellant to use his personal vehicle to take the group home
residents to their activities rather than use a taxi or public transportation.
However, this does not mean that he was required under his contract of
employment to pay his motor vehicle expenses. I have concluded that the
Appellant has not shown that he is entitled to deduct his motor vehicle
expenses. My decision on this issue also decides the issue with respect to the
Appellant’s entitlement to a rebate under the Excise Tax Act.
[25]
There was no evidence that
the Appellant was required by his employer to own a cell phone. It was
convenient for him to have a cell phone but in my view, the cost of owning the
cell phone was a personal expense.
[26]
The appeal is
dismissed.
Signed at
Ottawa, Canada, this 9th day of July 2013.
“V.A. Miller”
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