CRA finds that where the employee alternates between a close and distant regular place of work, travel expenses even to the distant location are personal

An employee, working alternating weeks at an employer establishment located in the city where the employee resides and at a second establishment located in a city approximately 300 km from the first establishment, is paid a reasonable per-kilometre travel allowance by the employer, regarding the commute to the more distant location. Is this excluded from income inclusion under s. 6(1)(b) by virtue of the exclusion in s. 6(1)(b)(vii.1) “for traveling in the performance of the duties of the … employment”? CRA stated:

[I]f the employer determines that [the two establishments] are "regular places of employment" of the employee, the travel expenses incurred by the employee to travel between the individual's residence and these locations are personal expenses of the employee. Amounts paid to the employee for such travel must therefore be included in computing the employee's income … [and] the employee cannot deduct personal travel expenses in computing income from an office or employment.

“Longstanding position” or not, it could be argued that this represents a mechanical application of statements made in the Federal Court of Appeal (e.g. Hogg, at para. 12) without regard to the underlying rationale, which is that if the employee incurs significant commuting expenses, that is a result of a personal decision to live at a distance rather than close to the employer’s establishment (see e.g., Cumming – “There may no doubt be [other] cases where a further element of personal preference for a more distant location has an appreciable effect on the amount of the expense involved” - or the House of Lords decision cited both by CRA and in Hogg: “They are incurred … because … living … away from Portsmouth, he must travel to that place before he can begin to perform his duties … and, having concluded those duties, desires to return home”), and that in a situation like this, the expense instead results from the employer’s business decision to have a second, more distant, work location.

Neal Armstrong. Summary of 17 August 2020 External T.I. 2016-0643631E5 F under s. 6(1)(b)(vii.1).