William Charboneau v. Her Majesty the Queen (Informal Procedure), [1995] 2 CTC 2017

Christie A.C.J.T.C.C.:-This appeal is governed by the informal procedure prescribed by section 18 and following sections of the Tax Court of Canada Act.

The notice of appeal reads:

Please accept this letter as my notice of appeal to the Minister’s variation of my notice of reassessment for my 1990 taxation year. The Minister’s notice was dated April 18, 1994.

I wish to pursue the informal procedure for the hearing of this appeal.

Facts

-I filed my 1990 personal tax return claiming a deduction of $1,733.60 pursuant to paragraph 8(1 )(g) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act"). The amount of the deduction was computed in accordance with the simplified method set out in Revenue Canada’s Information Circular 73-21R7, "Away-from-home expenses".

—All required supporting documentation was filed with my personal tax return, and trip logs detailing the areas travelled were made available to Revenue Canada during the course of my appeal.

—The prerequisites for a deduction pursuant to paragraph 8(1 )(g) of the Act appear to me to be as follows:

1. I must be an employee of a person whose principal business is the transport of passengers and or goods,

2. My duties of employment must require me to regularly travel away from the municipality where my employer’s establishment is located and away from the metropolitan area where my employer’s establishment is located on vehicles used by my employer to transport goods and or passengers, and

3. I must be required to make disbursements for meals while so away from the municipality and or metropolitan area referred to in 2 above.

-During the year in question, I was an employee of GO Transit, driving a bus between Brampton (the home terminal), Georgetown, Hamilton and downtown Toronto. Furthermore, the terms of my employment are such that I could not reasonably be expected to have my meals at my home terminal and the cost of my meals are not reimbursed by my employer.

-Revenue Canada has denied my deduction on the basis that I did not travel away from the municipality and metropolitan region where my employer’s home base was located.

Reasons

-I am of the opinion that I met all of the prerequisite conditions set out in paragraph 8(1 )(g) of the Act and should be entitled to the deduction which I claimed in my 1990 tax return.

—With respect to the issue of travelling away from the municipality\metropolitan region where my employer’s home base was located, I wish to point out the following:

1. In IC 73-21R7, Revenue Canada defines a municipality to be "a city, town or district". It is clear that my travel required me to be away from the city of Brampton wherein my home base was located.

2. In IC 73-21R7, Revenue Canada defines a metropolitan area to be "the surrounding populated area integrated with a municipality (a major urban centre and its environs)". The term integrated is defined in the Webster’s Dictionary as "brought together or incorporated into a whole". Clearly, Brampton, Georgetown, Hamilton and Toronto cannot be viewed as forming the part of a whole city or town. Each is a distinct geographic area distinguished by separate local governments, separate transit systems and each is separated by clearly delineated geographic boundaries.

—It is my opinion that I have met all of the conditions set out in paragraph 8(1 )(g) of the Act and that I am entitled to the deduction claimed on my 1990 personal income tax return. I therefore ask the Court to instruct the Minister to reassess my return to permit the deduction claimed pursuant to paragraph 8(1 )(g).

Paragraphs I to 8 inclusive of the reply to the notice of appeal read:

1. He admits the facts stated in the first sentence of the first paragraph under the heading Facts in the appellant’s notice of appeal.

2. With respect to the fourth paragraph of the notice of appeal, he admits that the appellant was an employee of GO Transit during the year in question.

3. He denies any other allegations of fact contained in the notice of appeal. 4. In computing income for the 1990 taxation year, the appellant deducted the amount of $1,733.60 as other employment expenses (the cost of meals purchased in travelling from Brampton to Toronto).

5. In assessing the appellant for the 1990 taxation year, by notice of assessment mailed on July 17, 1991, the Minister of National Revenue (the ’’Minister”) initially assessed the appellant’s return of income for the year as filed.

6. In reassessing the appellant for the 1990 taxation year, by notice of reassessment mailed on April 29, 1992, the Minister disallowed the deduction of transport employee’s expenses.

7. In so reassessing the appellant, the Minister made the following assumptions of fact:

(a) the appellant was, at all material times, employed as bus driver by GO Transit (the "employer”);

(b) the employer’s place of business was located in Brampton, Ontario, where the appellant reported for work and where all trips started and finished;

(c) destinations such as York Mills, Georgetown, Union Station, Port Credit and Milton are all within the municipality and the metropolitan area where the employer’s establishment is located;

(d) the appellant’s duties of employment did not involve regular travel away from the municipality or away from the metropolitan area where the employer’s establishment to which he reported for work was located;

(e) while away from the employer’s establishment to which he reported for work, he was not required regularly to make disbursements for lodging in the course of his duties of employment in the 1990 taxation year.

B. Issues to be decided

8. The issue is whether the appellant is entitled to deduct transport employee’s expenses pursuant to paragraph 8(1 )(g) of the Income Tax Act.

Paragraph 8(1 )(g) of the Income Tax Act provides:

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:

(g) where the taxpayer was an employee of a person whose principal business was passenger, goods, or passenger and goods transport and the duties of the employment required him, regularly,

(i) to travel, away from the municipality where the employer’s establishment to which he reported for work was located and away from the metropolitan area, if there is one, where it was located, on vehicles used by the employer to transport the goods or passengers, and

(ii) while so away from such municipality and metropolitan area, to make disbursements for meals and lodging,

amounts so disbursed by him in the year to the extent that he has not been reimbursed and is not entitled to be reimbursed in respect thereof;

It must be borne in mind that in cases of this kind the onus is on the appellant to show that the reassessment is in error. This can be established on a balance of probability. Where the onus lies has been settled by numerous authorities binding on this Court. It is sufficient to refer to two judgments of the Supreme Court of Canada in this regard: Anderson Logging Co. v. The King, [1925] S.C.R. 45, [1925] 2 D.L.R. 143, and Johnston v. M.N.R., [1948] S.C.R. 486, [1948] C.T.C. 195, 3 D.T.C. 1182.

In addition to Brampton, where he reported to work, Georgetown, Hamilton and downtown Toronto are referred to in the notice of appeal. At the hearing the appellant also referred to Guelph and Barrie. The deduction he claims relates to meals only.

This appeal turns on whether the appellant has established that his duties of employment required him, regularly, to travel away from Brampton and away from the metropolitan area where it is located and while so away to make disbursements for meals and lodging. Paragraph 8(1 )(g) has been considered by this Court and its predecessor the Tax Review Board on a number of occasions. In this regard I make special reference to Derrien v. M.N.R., [1980] C.T.C. 2848, 80 D.T.C. 1751 (T.R.B.). Board member M. J. Bonner (now a judge of this Court) said at page 2850 (D.T.C. 1753):

When paragraph 8(1 )(g) refers to travelling away from a municipality and its metropolitan area it contemplates journeys of such substantial distance and duration as to require disbursements for both meals and lodging. It does not encompass all cases in which a taxpayer goes from a place inside the metropolitan area to a place just outside it.

In this case the appellant’s claim was limited to disbursements for meals alone. It is unnecessary to decide whether the appellant’s trips took him beyond the boundary of the metropolitan area in which Sea Island is located. The trips could not be said to involve travel away from that metropolitan area within the meaning of paragraph 8(1 )(g). The appeal is therefore dismissed.

In Kraushar v. M.N.R., [1986] 1 C.T.C. 2257, 86 D.T.C. 1210 (T.C.C.), the appellant was employed as a truck driver by two different employers located in Edmonton, where he resided. The appellant’s duties included hauling loads from outside the municipal boundaries of Edmonton to a destination also outside of Edmonton. He was able, however, to return to his residence after his work each day. He sought to deduct the cost of meals. Bonner J.T.C.C. said at page 2258 (D.T.C. 1211):

The appellant’s trips did not take him either any great distance from Edmonton or close to any other major urban centre nor did they bring him within any region having an identity separate and distinct from Edmonton. While the appellant’s duties prevented him from returning home for lunch, they did not prevent him from returning to his Edmonton home each evening. In such circumstances it cannot, in my view, be said that the duties of the appellant’s employment required him, while away from Edmonton and its metropolitan area, to make disbursements for meals and lodgng.

The appeal will therefore be dismissed.

In Foster v. M.N.R., [1983] C.T.C. 2673, 83 D.T.C. 620 (T.C.C.), Rip J.T.C.C. after citing Derrien, supra), with approval at page 2676 (D.T.C. 622) went on to deal with the phrase "metropolitan area" in paragraph 8(1 )(g). Maple Ridge and Langley are two different municipalities in British Columbia. They are not part of Vancouver or the larger area known as the Greater Vancouver Regional District. He said at page 2677 (D.T.C. 623) :

Vancouver is the principal city of British Columbia, both from an economic and population point of view. From a review of the evidence, including a map of the area in question, showing integrated roadways between the City of Vancouver and Maple Ridge and Langley, settlements of population around the City of Vancouver, I find that Maple Ridge and Langley pertain to Vancouver.

The City of Vancouver and the municipalities of Maple Ridge and Langley are all in the same metropolitan area and therefore the appellant in performing his duties on the ferry in 1979 was not away from the Vancouver metropolitan area.

The appeal is therefore dismissed.

In the light of the authorities cited, this appeal cannot succeed and judgment shall issue dismissing it.

Appeal dismissed.