Teskey
J.T.C.C.:-This
appeal
was
heard
under
the
informal
procedure.
The
appellant
appeals
his
assessment
of
income
tax
for
1991
wherein
the
Minister
of
National
Revenue
(the
"Minister")
disallowed
him
from
deducting
against
wages
automobile
expenses.
Facts
The
appellant
admits
the
facts
the
Minister
assumed
when
making
his
assessment,
as
reproduced
in
subparagraphs
(a),
(b),
(c),
(f)
and
(g)
of
paragraph
6
of
the
reply
to
the
notice
of
appeal.
The
appellant
did
not
agree
that
the
compensation
he
received
from
the
province
of
Ontario,
calculated
at
$0.29
a
kilometre
for
the
first
4,000
kilometres
and
$0.24
a
kilometre
after
that
was
an
"allowance".
I
have
no
hesitation
in
finding
that
the
payments
paid
to
the
appellant
for
use
of
his
own
vehicle
on
business,
were
a
non-
taxable
allowance.
Therefore,
the
only
remaining
issue
is
whether
the
allowance
paid
by
the
province
of
Ontario
was
a
reasonable
allowance
based
on
kilometres
driven
by
the
appellant
in
the
performance
of
his
duties.
In
1991,
the
appellant
was
driving
a
1987
Dodge
mini
van
which
he
had
purchased
in
1988.
During
the
years
1988,
1989
and
1990,
the
allowance
he
received
for
the
kilometres
driven
in
the
performance
of
his
employment
duties
covered
his
costs
of
driving
this
same
Dodge
mini
van.
The
respondent
at
trial
admitted
that
the
appellant’s
total
cost
of
operating
the
vehicle
in
1991
was
$3,946.53.
I
accept
that
the
appellant
claimed
and
received
payment
for
travelling
8,031
kilometres
in
1991.
The
actual
kilometres
the
vehicle
was
driven
in
1991,1
find
was
9,000
kilometres.
The
appellant
submitted
only
8,324
kilometres
as
the
total
kilometres
the
vehicle
was
used
in
the
1991
year.
This
was
an
error.
Appellant's
position
The
appellant
submits
that
I
should
only
consider
the
year
1991
and
only
take
into
consideration
this
appeal
and
no
one
else,
and
that
since
the
amount
received
from
the
province
of
Ontario
in
1991,
leaves
a
large
shortfall
on
the
pro
rated
portion
of
the
expenses
(business
and
pleasure),
that
I
should
determine
that
the
allowance
was
unreasonably
low
and
consequently
allow
his
appeal.
Respondent's
position
The
respondent
submits
that
without
evidence
as
to
how
the
employer
calculated
the
mileage
allowance
and
without
having
the
average
cost
of
operating
a
reasonable
motor
vehicle
owned
by
a
provincial
civil
servant,
the
appellant
has
failed
to
demonstrate
the
allowance
was
unreasonable.
To
determine
this
I
should
also
know
if
the
employer
intended
the
allowance
to
completely
reimburse
its
average
employee
or
not.
The
respondent
also
argued
that
if
I
determine
that
I
should
take
this
particular
taxpayer
into
consideration,
that
he
has
still
failed
to
demonstrate
the
allowance
was
unreasonable
as
I
would
have
to
look
at
each
year
this
particular
vehicle
was
used
for
his
employer’s
business,
and
the
costs
thereof.
This
is
argued
in
view
of
the
fact
this
same
vehicle
was
used
partially
in
each
of
the
three
previous
years
and
the
appellant
stated
that
the
allowance
more
than
covered
his
costs
in
those
years.
The
respondent
submitted
that
the
same
mileage
reimbursement
cannot
be
reasonable
for
three
years
and
not
the
fourth
year.
Analysis
Both
parties
agreed
that
the
only
issue
to
be
decided
was
whether
the
allowance
paid
would
reasonably
cover
the
costs
of
operating
a
motor
vehicle,
as
a
term
of
the
appellant’s
employment,
was
that
he
was
required
to
provide
a
motor
vehicle
and
use
of
the
same
in
his
business
for
the
province
of
Ontario
away
from
his
regular
place
of
business.
I
believe
that
the
Associate
Chief
Judge
Jerome
of
the
Federal
Court-Trial
Division
in
Mina
et
al.
v.
R.,
[1988]
1
C.T.C.
380,
88
D.T.C.
6245,
is
authority
from
the
principle
that:
"If
the
mileage
allowance
turns
out
to
be
woefully
inadequate,
as
alleged,
it
would
be
manifestly
unjust
to
limit
these
taxpayers,
who
were
required
to
use
their
cars,
from
deducting
the
balance
of
their
reasonable
expenses".
It
appears
to
me
that
the
test
whether
the
allowance
is
woefully
inadequate
to
cover
reasonable
expenses
of
owning
and
maintaining
a
motor
vehicle
is
an
objective
test.
I
believe
that
to
make
such
a
determination,
I
not
only
must
have
evidence
as
to
how
the
allowance
was
calculated
by
the
employer,
but
the
intent
of
the
employer
when
setting
the
allowance.
I
must
also
have
the
complete
history
of
the
vehicle
such
as
the
expenses
over
the
years
an
allowance
was
received.
Just
looking
at
the
one
year,
in
light
of
the
evidence
before
me
is
not
sufficient.
An
allowance
cannot
be
reasonable
for
three
years
and
unreasonable
the
fourth
year.
Obviously
an
appellant
has
to
demonstrate
that
his
vehicle’s
expenses
are
reasonable
for
an
employee
in
his
employment.
An
employee
earning
an
annual
wage
of
$40,000
with
an
investment
income
of
several
hundred
thousand
dollars
a
year
may
choose
to
own
and
drive
a
$100,000
car.
Obviously
a
normal
reasonable
mileage
allowance
would
never
cover
the
depreciation
of
an
automobile
this
expensive.
Even
though
the
expense
and
depreciation
for
that
car
would
be
reasonable,
it
would
not
be
reasonable
for
the
employer
or
the
taxpayers
of
Canada
to
subsidize
this
hypothetical
employee.
There
is
simply
not
enough
evidence
before
me
to
determine
that
the
compensation
paid
by
the
province
of
Ontario
to
the
appellant
would
not
reasonably
compensate
the
latter
over
the
life
of
this
vehicle
for
reasonable
expenses
thereof.
For
the
reasons
given
above,
the
appeal
is
dismissed.
Appeal
dismissed.
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