Beaubier T.C.J.:
This appeal pursuant to the Informal Procedure was heard at Edmonton, Alberta on July 15, 1998. The Appellant was the only witness. The Appellant resides in St. Albert, Alberta and is a personal trainer.
In 1992 the Appellant played football as a member of the Edmonton Eskimos Football Club in the Canadian Football League. He was paid a salary of $91,300 and an “away game meal allowance” of $1,100 which was recorded by his employer on form T-2200 in paragraph 7. He reported both these amounts as income from employment and deducted employment expenses of $4,960. They were disallowed. He appealed.
Paragraphs 6 to 9, inclusive, of the Reply to the Notice of Appeal read:
6 In reassessing the Appellant for the 1992 taxation year, the Minister of National Revenue (the “Minister”) reduced the claim for employment expenses by $4,735.00, from $4,960.00 to $225.00, as follows:
| Item | Claimed | Allowed | Disallowed |
| Entertainment for Clients | $ 596.00 | nil | $ 596.00 |
| Meals | 2,184.00 | nil | 2,184.00 |
| Parking | 225.00 | 225.00 | nil |
| Gloves, Cleats, Miscellaneous | $1,955.00 | nil | 1,955.00 |
| Football Gear | |
| Total | $4,960.00 | $225.00 | $4,735.00 |
7 In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) at all material times to the period under appeal, the Appellant was employed as a football player by the Edmonton Eskimo Football Club (hereinafter referred to as the “Employer”);
(b) the Appellant was required to travel for 11 road games during the 1992 taxation year;
(c) in respect of the away games referred to in paragraph 7(b) supra, the Appellant was away for no more that 33 days in the 1992 taxation year;
(d) during the 1992 taxation year, the Appellant was in receipt of a travel allowance in respect of away game meals from the Employer in the amount of $1,100.00;
(e) the allowance referred to in paragraph 7(d) supra was a reasonable allowance for travel expenses within the meaning of subparagraph 6(b)(viii) of the Income Tax Act (the “Act”);
(f) the Appellant included the allowance referred to in paragraph 7(d) supra into income in completing his return for the 1992 taxation year;
(g) expenses claimed for meals in the amount of $2,184.00 were not reasonable in the circumstances;
(h) gloves, cleats and miscellaneous football gear claimed in the amount of $1,955.00 were not supplies that were consumed directly in the performance of the duties of office or employment;
(i) during the 1992 taxation year the Appellant:
| 1. | was not employed in connection with the selling of |
| property or negotiating of contracts for the Em |
| ployer; and |
| ii. | was not remunerated in whole or in part by com |
| missions or other similar amounts fixed by refer |
| ence to the volume of sales made or the contracts |
| negotiated; |
| (j) | expenses claimed in the amount of $4,735.00 that were dis |
| allowed were not proven to have been incurred. |
B. Issue to be Decided
8. The issue to be decided is whether the Appellant is entitled to a deduction for employment expenses in the 1992 taxation year in excess of the amount allowed by the Minister.
C. Statutory Provisions, Grounds Relied on and Relief Sought
9. He relies on, inter alia, sections 3, 5, 67 and 67.1, subsection 8(2) and paragraphs 6(1 )(b), 8(1 )(f), 8(1 )(h), 8(1)(h.1), 8(l)(i) of the Act as amended for the 1992 taxation year.
Paragraphs 7 to 10 of the 1992 Form T-2200 signed by the Appellant’s employer and filed with his 1992 income tax return read:
7 a) Did this employee receive an allowance or a repayment of expenses paid to
Yes / No earn income?
b) If yes, indicate the
| (1) | amount received as a fixed allowance, such as a flat monthly allowance, |
| for | |
| * motor vehicle expenses | $ |
| * travel expenses | $ |
| * other (specify) | $1,100 away game meal |
| allowance |
8 Please indicate how much of the expenses and the amount entered in 7b above you included on this employee’s T4 slip
The $1,100 in 7.b) was not included on T4 slip
9.a) Was this employee required to pay for other expenses for which the / Yes
No employee did not receive any allowance or repayment?
b) If yes, indicate the type(s) of expenses Misc. Football Equipment
Airport Parking etc.
10 a) Was this employee required under a contract of employment to
• rent an office away from your place of business or use a portion of his [3 Yes / No or her home?
¢ pay for a substitute or assistant? Q Yes / No
¢ pay for supplies that were used directly in the employee’s work?/ Yes No
b) Did you repay or will you repay this employee for any E] Yes / No of the expenses in 10a above?
If yes, indicate which expenses the repayment is for, whether the repayment is shown in 7b above, and to what extent.
The Appellant was a player in the C.F.L. for 12 years. His job essentially was to catch the football and score touchdowns. As part of his duties he spoke to groups on behalf of and as a representative of the Edmonton Eskimos. By heading in paragraph 6 of the Reply, the expenses claimed represent the following in 1992:
1. Entertainment for Clients - $596.00
One example of this occurred when the Appellant spoke to the Edmonton Young Offenders on the instructions of the Eskimos. During the talk he invited those in attendance to an Eskimos football game. He had expected the Club to pay since he was sent by the Club. The Club required him to pay at first for the full price of 60 tickets; then, on negotiation, for one-half the price. He paid the half and deducted it. In addition, when he scored a touchdown, he threw the ball into the stands. The C.F.L. charged him $75.00 per ball, which it said was one-half its cost per ball. He deducted it.
2. Meals - $2,184.00
The Eskimos paid him $1,100.00 on account of meals for 11 games away from home. The team arrives the day before the game, works out, plays on game day and leaves the next day. The fixed allowance is $100 per “away game meal allowance”. This works out to about $33.00 per day for a working young, male, professional athlete. Moreover, the team stayed at hotels such as a Westin, where meals are expensive.
3. Parking $225.00
Is not in dispute.
4. Gloves, Cleats, Miscellaneous Football Gear $1,955.00
Mr. Ellis adopted gloves late in his career and he commented on how much they assisted him in catching the ball. Similarly, shoes, cleats, sweatbands and sweatclothes and thermal underwear were not supplied by the Eskimos once training camp was over and the Appellant was hired by the Club. Mr. Ellis had to buy these himself. They were part of his equipment for what is a violent, physical profession.
The Court accepts Mr. Ellis’ description of professional football as entertainment. The Edmonton Eskimo Football Club and the C.F.L. put on public performances to interest and amuse paying customers and spectators. Mr. Ellis was a performer in these public performances in 1992.
Exhibit A-l, a contract between Mr. Ellis and the Edmonton Eskimo Football Club was filed by agreement with the Respondent as representing his contract of hiring for the year in question. The following clauses, or portions of clauses, are pertinent:
3 For the Player’s services as a skilled football player during the term of this contract, and for his agreement not to play football, or engage in activities relating to football, for any other person, firm, Club or corporation during the term of this contract and for the option hereinafter set forth giving the Club the right to renew this contract and for the other undertakings of the Player herein the Club promises to pay the Player the sum of $... CDN to be payable as follows: 100% of the said sum to be divided into as many equal instalments as there are regular scheduled games and paid to the Player within 48 hours of each said game whenever the said schedule permits it to be practicable. It is understood between the parties hereto that payment to the Player by the Club for League Playoff games will be made as hereinafter provided.
5 The Club agrees to pay the proper and necessary travelling and reasonable board and lodging expenses whenever the Player is travelling in the services of the Club for games in other than the Club’s home city, but when not so travelling, the Player shall pay his own expenses.
8 The Player agrees that should he at any time or times, or in any manner, fail to comply with the covenants or agreements on his part herein contained, the Club shall have the right for so long as he continues to fail to so comply, to suspend or discipline him or at the Club’s option, to terminate the contract. Further, should the Player at any time be intemperate, immoral, indifferent or conduct himself in such manner, whether on or off the field as in the opinion of the Club, endangers or prejudices the interests of the Club, or fails to attain first class physical condition or fails to maintain...
10 ...It is agreed by both parties that the Club’s Head Coach shall be the sole judge as to the competency and satisfaction of the Player and his services.
29 The Player agrees to make such appearances at public or private gatherings or on radio or television programs in the interest of the promotion of football as the Club may request from time to time.
The Appellant was an employee who was in the control of the Club’s Head Coach.
The disputed claims are dealt with as follows:
Meals $2,184.00
Since the Appellant’s receipts were lost in a flood, the actual amounts are not disputed. He was paid $1,100.00 for 33 days of meals pursuant to paragraph 5 of his contract which describes the sum as “reasonable board”. He included this in his reported income. Paragraph 8(1)(h) of the Income Tax Act for the year 1992 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) 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 the travel expenses incurred by the taxpayer in the performance of the duties of the office or employment,
amounts expended by the taxpayer in the year (other than motor vehicle expenses) for travelling in the course of the office or employment, except where the taxpayer
(iii) received an allowance for travel expenses that was, because of subparagraph 6(1)(b)(v), (vi) or (vii), not included in computing the taxpayer’s income for the year, or
(iv) claims a deduction for the year under paragraph (e), (f) or (g);
When the Appellant complained that the $100 per game away sum (or its then equivalent) was not sufficient, his C.F.L. employer told him to keep his receipts and deduct the appropriate amount. Thus, he established that the “reasonable board” paid by the teams was not reasonable to him. He thereupon reported the $1,100 as income. His proposition that $100 for three days is not reasonable is supported by subsection 67.1(3) of the Income Tax Act which reads:
67 1(3) For the purposes of this section, where a fee paid or payable for a conference, convention, seminar or similar event entitles the participant to food, beverages or entertainment (other than incidental beverages and refreshments made available during the course of meetings or receptions at the event) and a reasonable part of the fee, determined on the basis of the cost of providing the food, beverages and entertainment, is not identified in the account for the fee as compensation for the food, beverages and entertainment, $50 or such other amount as may be prescribed shall be deemed to. be the actual amount paid or payable in respect of food, beverages and entertainment for each day of the event on which food, beverages or entertainment is provided and, for the purposes of this Act, the fee for the event shall be deemed to be the actual amount of the fee minus the amount deemed by this subsection to be the actual amount paid or payable for the food, beverages and entertainment.
The Court accepts as a fact that the Appellant’s figure of $2,184 is reasonable for meals for a practising athlete who ate meals in these hotels in 1992 in the course of carrying out his profession. He was required to be away from his Edmonton playing field in other cities for these meals in the course of his work. He was required to pay for these meals. The $100 per game allowance was not reasonable for what averaged a total of about three days per away game. Both the Respondent and the Court believe that his receipts were destroyed in a flood. The amount of $2,184 claimed is reasonable for the Appellant’s meals in these circumstances. However, for 1992, the Appellant is subject to the 80% rule described in subsection 67.1 of the Income Tax Act. Therefore, the appeal of the reassessment respecting the deduction for meals is allowed on the following amount:
$2,184 x 80/100 + $1,743.20
Gloves, Cleats, Miscellaneous Football Gear $1,955
For the Appellant to be able to succeed in this claim he must establish that these were “supplies that were consumed” in the performance of his duties of employment pursuant to subparagraph 8( 1 )(0(iii) of the Income Tax Act. It is clear that he was required by his contract of employment to supply and pay for them as is evidenced by the quotations taken from form T-2200. The meaning of supplies in a context similar to this was reviewed by Bell, J.T.C.C. in Cuddie v. R., [1998] 3 C.T.C. 2232 (T.C.C.). He quoted Thurlow, J. in Luks v. Minister of National Revenue (1958), 58 D.T.C. 1194 (Can. Ex. Ct.) at page 1198, where Thurlow, J. said:
“Supplies” is a term the connotation of which may vary rather widely, according to the context in which it is used. In s. 1 l(10)(c) it is used in a context which is concerned with things which are consumed in the performance of the duties of employment. Many things may be consumed in the sense that they may be worn out or used up in the performance of duties of employment. The employer’s plant or machinery may be worn out. The employee’s clothing may be worn out. His tools may be worn out. And materials that go into the work, by whomsoever they may be provided, may be used up. “Supplies” is a word of narrower meaning than “things”, and in this context does not embrace all things that may be consumed in performing the duties of employment, either in the sense of being worn out or used up. The line which separates what is included in it from what is not included may be difficult to define precisely but in general, I think its natural meaning in this context is limited to materials that are used up in the performance of the duties of the employment. It obviously includes such items as gasoline for a blow torch but, in my opinion, it does not include the blow torch itself. The latter, as well as tools in general, falls within the category of equipment.
Bell, J.T.C.C. concluded with these words:
The submissions made by the Appellant Cuddie were logical, and in the circumstances described by him, well based. I have no doubt, from my appraisal of him, about his sincerity and about his credibility. However, the statutory test that must be met is strict. The legislature, in using the words “supplies that were consumed” posed a firm requirement for deduction. The New Shorter Oxford English Dictionary defines “consume” as,
That has been consumed.
and defines consumed, inter alia, as
Destroyed by or like fire or (formerly) disease; cause to vanish (away), as by evaporation. ... Use, so as to destroy; take up and exhaust; use up. ... Eat up, drink down; devour.
The expenses incurred by the Appellants simply did not result in supplies being consumed. Accordingly, the appeals are dismissed.
For the same reasons, this claim of the Appellant is not allowed.
Entertainment for Clients $596.00
The Appellant’s only sources of income in 1992 were money from the Eskimos and the family allowance. Had he received any business income from advertisements or similar sources, costs like the tickets for the Young Offenders or the balls that he threw into the stands might be deductible respecting those sources, since they might have contributed towards his personal popularity for sponsorship purposes. The fact that the Eskimos agreed to pay one-half the price of the tickets and the C.F.L. agreed to pay one-half the price of the balls indicates that both of these sets of expenditures were made in the performance of the Appellant’s duties of employment. These facts also indicate that his contract of employment required the Appellant to pay his half.
But, in this case, both the tickets and balls must be “consumed” for the Appellant to deduct them from his employment income. However, the Appellant transferred them to others. The tickets were given to Young Offenders to use. The balls were thrown to fans in the stands. The Appellant did not “consume” them himself. For this reason, these claims are not allowed.
Accordingly, this appeal is referred to the Minister of National Revenue for reconsideration and reassessment to allow the Appellant’s claim for 1992 in respect of meals in the amount of $1,743.20.
Appeal allowed in part.
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