RINFRET,
C.J.C.:—The
appellant
was,
in
1941,
a
Member
of
the
Legislature
of
the
Province
of
Alberta
representing
the
constituency
of
Calgary.
He
included
his
allowance
of
$2,000.00
(as
a
Member
of
the
Legislature)
as
part
of
his
income;
but
he
deducted
certain
expenses,
which
deduction
was
disallowed
by
the
Minister
of
National
Revenue.
These
expenses
as
set
out
in
the
agreed
facts
consisted
of
:
(a)
The
bill
of
the
McDonald
Hotel
in
Edmonton
|
being
the
place
at
which
the
Provincial
Legisla
|
|
|
ture
sits
and
in
respect
to
which
the
appellant
|
|
|
paid
for
a
room
at
a
monthly
rate
of
$80.00
per
|
|
|
month,
making
a
total
of
-
|
$144.35
|
|
(b)
Expenses
for
berths
and
other
conveyances
to
and
|
|
|
from
Calgary
to
Edmonton
for
14
single
trips
|
|
|
which
the
appellant
took
over
each
week
end
so
as
|
|
|
to
be
in
Calgary
on
Saturdays
and
Sundays
in
|
|
|
order
to
be
available
to
confer
with
his
constitu
|
|
|
ents-
who
might
wish
to
see
him
about
various
|
|
|
matters,
making
a
total
of
|
43.40
|
|
As
to
the
above
it
is
to
be
noted
that
the
actual
|
|
|
railroad
fare,
apart
from
berths,
was
provided
by
|
|
|
a
pass
issued
to
the
appellant
and
in
respect
to
|
|
|
which
he
has
made
no
claim.
|
|
|
(ce)
Additional
expenses
for
meals
and
other
inci
|
|
|
dentals
while
away
from
Calgary
and
in
Edmon
|
|
|
ton
over
and
above
the
cost
of
the
same
to
the
|
|
|
appellant
while
he
is
at
home,
which
the
appel
|
|
|
lant
has
calculated
at
$2.00
per
day
for
38
days,
|
|
|
making
a
total
of
|
16.00
|
|
$263.75
|
|
Less
an
item
which
had
been
reimbursed
from
|
|
|
the
Provincial
Government
as
against
these
|
|
|
expenses
|
-
|
27.40
|
|
$236.35
|
His
appeal
‘to
the
Exchequer
Court
was
dismissed
and
the
question
is
whether
there
was
error
in
the
judgment
of
that
Court
in
not
holding
that:
(1)
The
said
expenses
were
wholly,
exclusively
and
necessarily
expended
for
earning
the
income
as
stipulated
in
Section
6(1)(a)
of
the
Income
War
Tax
Act;
or,
(2)
The
said
expenses
consisted
of
travelling
expenses
(including
the
entire
amount
expended
for
meals
and
lodging)
while
away
from
home
in
the
vursuit
of
a
business;
and
therefore
should
be
deducted
from
income
as
provided
by
Section
5(1)
(f)
of
the
Act.
Taxable
income
is
defined
in
Section
3(1)
of
the
Act
and
is
said
to
include
the
‘‘salaries,
indemnities
or
other
remuneration
of
.
.
.
.
members
of
Provincial
Legislative
Councils
and
Assemblies.
‘
‘
The
sole
problem
therefore
is
whether
the
expenses
above
mentioned
are
such
as
the
appellant
is
entitled
to
deduct
under
the
provisions
of
the
Income
War
Tax
Act.
We
do
not
think
the
words
used
in
subsection
5(1)
(/)
are
apt
to
include
the
expenses
now
in
question.
The
provisions
of
that
subsection
are
as
follows:
(1)
(f)
"Travelling
expenses,
including
the
entire
amount
expended
for
meals
and
lodging
while
away
from
home
in
the
pursuit
of
a
trade
or
business.
‘
‘
The
occupation
of
Members
of
Provincial
Legislative
Councils
and
Assemblies
is
neither
a
trade
nor
a
business.
The
travelling
expenses
there
mentioned
are
in
the
nature,
for
example,
of
expenses
of
commercial
travellers.
Bahamas
General
Trust
Company
et
al
v.
Provincial
Treasurer
of
Alberta
[1940-41]
C.T.C.
478;
[1942]
1
W.W.R.
46
at
p.
53.
Ricketts
v.
Colquhoun
[1925]
1
K.B.
725
at
731,
approved
in
the
judgment
of
Lord
Blanesburgh
in
the
House
of
Lords
in
the
same
case:
[1926]
A.C.
8.
In
our
view,
this
is
sufficient
to
eliminate
subsection
(/)
of
paragraph
(1)
of
Section
(5)
of
the
Act
as
supporting
the
appellant’s
contention.
Alternately
the
appellant
claims
the
benefit
of
the
provisions
of
Section
6(1)
(a)
of
the
Act
which
is
as
follows:
"In
computing
the
amount
of
the
profits
or
gains
to
be
assessed,
a
deduction
shall
not
be
allowed
in
respect
of
(a)
disbursements
or
expenses
not
wholly,
exclusively
and
necessarily
laid
out
or
expended
for
the
purpose
of
earning
the
income.”
This
clause
was
considered
in
the
case
of
Minister
of
National
Revenue
v.
Dominion
Natural
Gas
Co.
Ltd.
[1940-41]
C.T.C.
155
where
the
then
Chief
Justice
of
this
Court,
at.
page
158
said:
"‘In
order
to
fall
within
the
category
‘disbursements
or
expenses
wholly,
exclusively
and
necessarily
laid
out
or
expended
for
the
purpose
of
earning
the
income,’
expenses
must
be
working
expenses
;
that
is
to
say,
expenses
incurred
in
the
process
of
earning
the
income.”
In
that
judgment,
the
Court
followed
the
decision
in
Lothian
Chemical
Co.
Ltd.
v.
Rogers,
(1926)
11
T.C.
508;
Robert
Addie
&
Sons
Ltd.
v.
Inland
Revenue
Commissioners
[1924]
S.C.
231
at
235.
In
the
Addie
case
it
was
held
that
in
order
to
be
allowed,
such
expenditure
must
be
laid
out
as
part
of
the
process
of
profit
earning.
Reference
may
be
also
made
to
the
case
of
Montreal
Coke
and
Manufacturing
Company
v.
Minister
of
National
Revenue
(P.C.)
[1944]
C.T.C.
94
where
it
was
held
that
expenditure
to
be
deductible
must
be
directly
related
to
the
earning
of
income
from
the
trade
or
business
conducted.
It
can
not
be
said
here
that
the
expenses
of
the
appellant
had
been
incurred
in
the
process
of
earning
the
income
and
more
particularly
such
expenses
can
not
be
considered
as
having
been
incurred
‘‘wholly,
exclusively
and
necessarily’’
for
that
purpose.
Moreover,
Section
6
of
the
Act,
subsection
(f)
excludes
‘‘personal
and
living
expenses’’
from
the
deduction
which
may
be
allowed
‘‘in
computing
the
amount
of
the
profits
or
gains
to
be
assessed.”
For
those
reasons,
the
appeal
is
dismissed
with
costs.
KERWIN,
Hupson
and
Estey
JJ.
concur
with
RINFRET
C.J.C.
Rand,
J.:—The
Appellant
is
a
member
of
the
Provincial
Legislature
of
Alberta,
representing
the
constituency
of
Calgary.
The
Assembly
sits
in
Edmonton,
some
200
miles
from
that
city.
He
receives
from
the
Province
an
allowance
of
$2,000.00
under
The
Legislative
Assembly
Act,
R.S.A.
1942,
ce.
4,
sections
54
and
57
of
which
are
as
follows:
“54.
(1)
In
respect
of
each
session
of
the
Legislature
which
is
first
held
in
any
year,
there
shall
be
allowed
and
payable
to
each
member
of
the
Legislative
Assembly
attending
such
session
an
allowance
of
$2,000.00
and
no
more;”
“57.
There
shall
be
allowed
to
each
member
five
cents
for
each
mile
of
the
distance
between
the
nearest
railway
station
to
the
place
of
residence
of
the
member
and
the
place
at
which
the
session
is
held,
reckoning
the
distance
going
and
coming,
according
to
the
shortest
railway
route
together
with
his
actual
travelling
expenses
between
his
place
of
residence
and
the
railway
station
when
the
distance
is
greater
than
five
miles.
‘
’
In
making
his
return
of
income
to
the
Respondent,
he
deducted
from
the
sessional
allowance
the
expenses
of
(a)
lodging
in
a
hotel
at
Edmonton
in
the
sum
of
$144.35;
(b)
expenses
for
berths
and
incidental
transportation
between
Calgary
and
Edmonton
exclusive
of
regular
fares
incurred
in
seven
round
trips
taken
at
week
ends
to
enable
the
Appellant
to
be
in
his
constituency
to
confer
with
constituents
on
various
matters
in
the
sum
of
$43.40:
(c)
additional
expenses
for
meals
and
other
incidentals
while
in
Edmonton
over
and
above
their
cost
to
the
Appellant
at
home
figured
at
$2.00
a
day
for
38
days,
making
a
total
of
$76.00:
less
the
sum
of
$27.40
representing
the
mileage
allowance
for
one
trip
to
Edmonton
and
return
under
section
97.
The
deductions
were
disallowed
by
the
Respondent;
an
appeal
to
the
Exchequer
Court
was
dismissed,
and
the
case
is
now
brought
to
this
Court.
The
Income
War
Tax
Act
defines
“income”
as-follows:
“3.
(1)
For
the
purposes
of
this
Act,
‘income’
means
the
annual
net
profit
or
gain
or
gratuity
.
.
.;
and
shall
include
the
interest,
dividends
or
profits
.
.
.
and
also
the
annual
profit
or
gain
from
any
other
source
including
(d)
The
salaries,
indemnities
or
other
remunerations
of
.
(1)
members
of
the
Senate
and
House
of
Commons
of
Canada
and
officers
thereof
;
(2)
members
of
Provincial
Legislative
Councils
and
Assemblies.
‘
‘
Exemptions
and
deductions
are
covered
by
section
5
as
follows
:
“5.
(1)
'Income’
as
hereinbefore
defined
shall
for
the
purposes
of
this
Act
be
subject
to
the
following
exemptions
and
deductions:
(f)
Travelling
expenses,
including
the.
entire
amount
expended
for
meals
and
lodging,
while
away
from
home
in
the
pursuit
of
a
trade
or
business;”
$.
(1)
In
computing
the
amount
of
the
profits
or
gains
to
be
assessed,
a
deduction
shall
not
be
allowed
in
respect
of
—
(a)
Disbursements
or
expenses
not
wholly,
exclu-
sively
and
necessarily
laid
out
or
expended
for
the
purpose
of
earning
the
income:
(f)
Personal
and
living
expenses
;
’
‘
The
question
is
whether
the
items
deducted
are
travelling
expenses
‘‘in
the
pursuit
of
a
trade
or
business;’’
or
“disbursements
or
expenses
wholly,
exclusively
and
necessarily
laid
out
or
expended
for
the
purpose
of
earning
the
income’’;
and
in
my
opinion
they
are
neither.
Whether
or
not
attending
a
session
of
a
Legislative
Assembly
can
be
deemed
business'
‘
which
I
think
extremely
doubtful,
certainly
making
the
extra
trips
and
lodging
in
a
hotel
in
Edmonton
cannot
be
looked
upon
as
‘‘in
the
pursuit”
of
it.
That
expression
had
been
judicially
interpreted
to
mean
‘‘in
the
process
of
earning”
the
income:
Minister
of
National
Revenue
v.
Dominion
Natural
Gas
Co.
(Can.
S.C.)
[1940-41]
C.T.C.
155.
The
sessional
allowance
is
specifically
for
attendance
by
members
at
the
legislative
proceedings:
it
has
no
relation
to
any
time
or
place
or
activity
outside
of
that.
The
“pursuit”
of
a
business
contemplates
only
the
time
and
place
which
embrace
the
range
of
those
activities
for
which
the
allowance
is
made:
the
‘‘process
of
earning’’
consists
of
engaging
in
those
activities.
To
treat
the
travelling
expenses
here
as
within
that
range
would
enable
employees
generally
who
must,
in
a
practical
sense,
take
a
streetcar
or
bus
or
train
to
reach
their
work
to
claim
these
daily
expenses
as
deductions.
Employees
are
paid
for
what
they
do
while
‘‘at
work’’;
and
the
legislators
receive
the
allowance
for
their
participation
in
the
sessional
deliberations:
up
to
those
boundaries,
each
class
is
on
its
own
expense.
For
the
same
reason
it
cannot
seriously
be
urged
that
the
expenses
are
‘‘wholly,
exclusively
and
necessarily”
laid
out
for
the
purpose
of
earning
the
allowance:
they
are
for
acts
or
requirements
preparatory
to
entrance
upon
the
remunerated
field.
The
appeal
should,
therefore,
be
dismissed
with
costs.
Appeal
dismissed.
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