27 July 1998 External T.I. 9807745 - LANGLEY, ABBOTSFORD, NISKU AND YALE AS PART OF METRO

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: whether Langley, Abbotsford and Yale form part of metro area of Vancouver and whether Nisku is part of the metro area of Edmonton for purpose of transport employee deduction

Position: Langley & Abbotsford are part of metro Vancouver
Nisku is part of metro Edmonton
Although Yale is not part of metro Vancouver, no deduction under 8(1)(g) for regular runs between Yale and Vancouver

Reasons: finding of fact for whether metro includes a certain municipality -for regularly scheduled trips between Yale and Vancouver, which would normally involve a regular 8 hour day, the deduction under 8(1)(g), while not limited by 8(4) is only available if the employee must routinely pay for meals and lodging because of the distance travelled. Short trips outside of a muncipality or metropolitan area only qualify when the employee normally goes longer distances

XXXXXXXXXX 980774
A. Humenuk

July 27, 1998

Dear Sir:

Re: Meaning of Metropolitan Area for the Purpose of Transport Employee Expenses

This is in reply to your letter of January 24, 1998, in which you ask whether the municipalities of Langley, Abbotsford and Yale, British Columbia and the municipality of Nisku, Alberta each form part of a larger metropolitan area for the purpose of paragraph 8(1)(g) of the Income Tax Act (the "Act"). We apologize for the delay in our response.

It is your understanding that a transport employee who reports to work at a home terminal located in one of these municipalities is entitled to deduct the cost of one meal per day in computing his or her income from employment provided that the municipality does not form part of a larger metropolitan area.

An employee who works for an employer whose principal business is the transportation of goods, passengers, or goods and passengers, may be entitled to a deduction for meals and lodging under paragraph 8(1)(g) of the Act. The criteria to be met are described in the enclosed Information Circular 73-21R7, Away-from-Home Expenses. When the conditions in paragraph 8(1)(g) of the Act apply, the amount which is deductible is limited to 50% of the cost of meals actually purchased by the employee to the extent that the employee has not been reimbursed for such costs and is not entitled to a reimbursement of such costs.

The issue of whether Langley is part of the metropolitan area of Vancouver was considered in the case of James v. M.N.R. (83 DTC 620) in which the taxpayer routinely travelled between the municipality of Maple Ridge and the municipality of Langley. The Court found that both Maple Ridge and Langley were part of the metropolitan area of Vancouver. For the same reasons as set out in that decision, it is our view that Abbotsford can also be considered part of the metropolitan area of Vancouver.

Nisku, Alberta is located just outside of Edmonton. The metropolitan area of Edmonton was considered in the case of Kraushar v. M.N.R. (86 DTC 1210). Although the municipality of Nisku was not mentioned in that case, the finding that travel to Calmar and Stoney Plain did not constitute travel away from the metropolitan area of Edmonton suggests that Nisku can also be considered part of the metropolitan area of Edmonton.

Yale is situated on the Trans Canada highway north of Hope, British Columbia. Although Yale is not considered part of the metropolitan area of Vancouver, it is a question of fact as to whether a transport employee who travels away from Hope to other places would be eligible for a deduction under paragraph 8(1)(g) of the Act. In the case of Charboneau v. the Queen (1995 (1) CTC 2017), the Court found that a deduction under paragraph 8(1)(g) of the Act was not available because the taxpayer was not required to make disbursements for both meals and lodging while travelling away from the metropolitan area where he regularly reported for work. The taxpayer was a bus driver who routinely travelled between the municipalities of Brampton, Georgetown and Hamilton, all of which are located in Ontario. Although Hamilton does not form part of the same metropolitan area as Brampton, the court found that journeys away from the metropolitan area in which Brampton is located were not of such a distance as to require the employee to pay for meals and lodging while away from that metropolitan area, and for that reason the appeal was dismissed.

If you require assistance in determining whether expenses are deductible by a specific taxpayer, we suggest that all relevant facts and documentation be submitted to the appropriate tax services office for their views.

We trust that these comments have clarified our position with respect to paragraph 8(1)(g) of the Act.

Yours truly,

J.F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
Enclosure