Lucien Duperron v. Minister of National Revenue, [1984] CTC 2463, 84 DTC 1406

Brulé, TCJ:—This is an appeal to determine whether or not the appellant, Mr Lucien Duperron, must include in his income for 1980, the sum of $13,250 received by him by virtue of his employment in accordance with paragraph 6(1)(b) of the Income Tax Act or if pursuant to subsection 6(6) of the Income Tax Act he is not to include such sum in his income.

Facts

In 1980, Mr Duperron took a job with Houle Electric Limited at a shopping mall in Fort St-John some 82 kilometres from his home in Dawson Creek, B.C. At the time of employment in addition to other remuneration a living-out allowance was agreed upon and the appellant completed a “Declaration of Exemption — Employment at Special Work Site’’ form known as form TD4. He duly filed his income tax return for the year 1980. On January 7, 1982, Houle Electric Limited issued for 1980 a T4-T4A to the appellant in the amount of $13,250. This led to a notice of reassessment dated March 25, 1982, by which the Minister of National Revenue reassessed the appellant’s 1980 taxation year so as to add the amount of $13,250 to the appellant’s income for 1980. The appellant objected to the said reassessment on May 4, 1982, and the Minister of National Revenue by notice of confirmation dated July 22, 1982, confirmed the said reassessment.

Taxpayer's position

The appellant stated that he should be entitled to the exemption allowed by subsection 6(6) of the Income Tax Act because if he had stayed on the site the payments would have been exempt, but he chose to travel the 82 kilometres each way to his home in Dawson Creek. This travel alone he alleged took a considerable amount of the expense allowance for his automobile. In support of this argument Mr Duperron stated that on negotiating the employment he was told that he would have the exemption, and as set out above he completed a form TD4. The appellant relies on this and also the explanation offered in Interpretation Bulletin IT-91R2. Mr Duperron claimed that if the payment of $13,250 by Houle Electric Limited were not to be exempted he would not have accepted the employment some 82 kilometres away from his place of residence as such would not have been profitable.

Minister's position

The respondent’s position is that the $13,250 in question was taxable income and that during the time of his employment with Houle Electric Limited the appellant did not incur any expenses for board and lodging at the company’s work site and that he returned home each day and lived at home during the course of his employment, facts that were not disputed. No funds were expended at the work site for the purposes intended by subsection 6(6) of the Income Tax Act and therefore they are properly taxable in computing the appellant’s income in accordance with the provisions of paragraph 6(l)(b) of the Act.

Analysis

It was quite clear that Mr Duperron at the time of his employment by Houle Electric Limited believed he was to receive a non-taxable living allowance in addition to normal remuneration. His belief was undoubtedly strengthened by his completing form TD4. There is provision in form TD4 for the employee to complete certain particulars and to attest to these by completing an “Employee’s Certification’’. The employer must also complete a certification. Provided the form is properly completed and other conditions are met the relevant benefit or allowance may be excluded from the employee’s income. In the present case the employee Mr Duperron completed and signed his certification, but nothing else on the form was entered or signed. Houle Electric Limited never provided a certification.

Apart from form TD4 subparagraph 6(6)(a)(i) of the Income Tax Act requires that an employee must work at a special work site where the duties the employee performed were of a temporary nature, and by reason of distance, the employee cannot reasonably be expected to return daily to the place where he maintained a self-contained domestic establishment in which he resided and actually supported a spouse or person dependent for support and connected by blood relationship, marriage or adoption; and subparagraph 6(6)(a)(ii) requires that the employee must work at a location at which by virtue of its remoteness from an established community, he could not reasonably be expected to maintain a self- contained domestic establishment. It was never disputed by Mr Duperron that he could not return home daily, and in fact he always did so. He also always maintained a self-contained domestic establishment during the period involved.

Appeal dismissed

I find therefore that the appellant does not come within the exemption provisions of subsection 6(6) of the Income Tax Act and that the amount paid to him by Houle Electric Limited in the year 1980 is to be included in his income for that year pursuant to paragraph 6(l)(b) of the Income Tax Act.

The appeal is therefore dismissed.

Appeal dismissed.