Date: 20020619
Docket:
2001-3619-IT-I,
2001-3621-IT-I,
2001-3622-IT-I,
2002-88-IT-I,
BETWEEN:
DARLENE
CRAWFORD,
GARY
FORSYTH,
DEBBIE
RENKO,
JOHN
STEWART,
Appellants,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasonsfor
Judgment
BOWIE J.
[1]
Each of these four Appellants appeals from
reassessments of income tax for the 1997, 1998 and 1999 taxation
years. By consent of all parties, their appeals were heard
together on common evidence under the informal procedure of the
Court at Victoria, B.C. I am told that they are typical of a
large number of cases that are pending in the Court. In each case
the Minister of National Revenue (the Minister) has disallowed
the Appellants' claims to be entitled to deduct the amounts
paid by them for meals while at work, pursuant to paragraph
8(1)(g) of the Income Tax Act (the Act).
That provision 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:
...
(g)
where the taxpayer
was an employee of a person whose principal business was
passenger, goods, or passenger and goods transport and the duties
of the employment required the taxpayer, regularly,
(i)
to travel, away from the municipality where the employer's
establishment to which the taxpayer reported for work was located
and away from the metropolitan area, if there is one, where it
was located, on vehicles used by the employer to transport the
goods or passengers, and
(ii)
while so away from that municipality and metropolitan area, to
make disbursements for meals and lodging,
amounts so
disbursed by the taxpayer in the year to the extent that the
taxpayer has not been reimbursed and is not entitled to be
reimbursed in respect thereof;
[2]
The Minister's position is that none of
the Appellants is entitled to any deduction under that provision,
because the duties of their employment did not require them to
make disbursements for "meals and lodging", but only
for meals. Counsel for the Respondent says that the word
"and" in this context is conjunctive. Counsel for the
Appellants says that it is disjunctive; disbursements for either
meals or lodgings may be deducted.
[3]
All the Appellants worked, at the material
times, on the ferries operated by British Columbia Ferry
Corporation (B.C. Ferries). Darlene Crawford is a cafeteria
supervisor, Deborah Renko is a catering attendant, and Gary
Forsyth is a Chief Engineer. They all are employed on the route
between Schwartz Bay on Vancouver Island and Tsawassen on the
mainland. All of them work shifts of at least eight and sometimes
as much as ten hours. The morning shift begins at 6:45 a.m., or a
little earlier in the case of Mr. Forsyth. It ends at about
2:45 or 3:00 p.m., and the afternoon shift begins then and ends
at 11:00 p.m., or later if the ferry is running behind schedule.
The ferries operating on that route make two round trips during
each shift. The vessels on this run all have cafeterias at which
the employees of B.C. Ferries may purchase food at a discount of
50% from the price charged to passengers. Ms. Renko and
Ms. Crawford both have breaks during their shifts. One break
is a half hour long and they also have breaks of fifteen minutes
every two hours. They both testified that they usually eat two
meals on each day shift. Mr. Forsyth eats his meals when the
ferry is docked between crossings, rather than leave his post
while it is underway. He said that typically he eats several
small meals on a shift, for which he pays between $4.00 and $7.50
on average.
[4]
John Stewart works as a deck hand on a ferry
that sails between Campbell River on Vancouver Island and
Quadra Island. The crossing takes only about 10 minutes each way,
and there are generally 17 round trip crossings made during a
nine-hour shift. The morning shift starts at 6:00 a.m. and ends
at 3:00 p.m.; the afternoon shift begins at 3:00 p.m. and
ends at 11:00 p.m., or midnight on weekends. Mr. Stewart
testified that he cannot leave the vessel to obtain a meal during
a shift, and so he takes food from home, which his wife has
purchased at the grocery store, and cooks it on board. The
crew's quarters are equipped with a refrigerator, stove,
oven and microwave oven. I understand from his evidence that he
is in the habit of cooking quite substantial meals during his
shifts. He said that usually he eats two meals during a day shift
and one during an afternoon shift.
[5]
Not surprisingly, none of the Appellants kept
all the receipts for the meals they had bought during the years
under appeal so that they could compute the exact amount of their
expenditures and then claim a deduction of 50% of that amount. Darlene Crawford did keep some
receipts after the time that the Minister started to challenge
the right of the Appellants, and many of their co-workers, to
claim meal deductions. Their claims were computed using what was
referred to in the evidence as the administrative method. This is
simply the application of a policy published by the Minister
whereby claims under paragraph 8(1)(g) may be made on the
basis of a flat rate of $11.00 per meal as an alternative to
keeping every receipt for every meal taken during the year.
Counsel for the Respondent did cross-examine on the quantum of
the deductions claimed, but the real raison
d'être for these appeals is the interpretation of
the circumstances in which the deduction may be taken, not the
amounts claimed. As I understood their evidence, all of the
Appellants before me intended to claim an amount calculated on
the basis of $11.00 for each meal they ate while on duty, divided
by two as required by section 67.1 of the Act, and, except
in the case of Mr. Stewart, divided by two again to reflect the
discount afforded them by their employer. Mr. Stewart could not
buy his meals from B.C. Ferries, and so he got no discount.
However, I doubt very much that the ingredients he used cost an
average of $11.00 per meal. In view of the conclusion that I have
reached with respect to the central issue in the case, it is not
necessary to quantify the cost of the meals eaten by the
Appellants while at work. Had I to do so, I would find on the
evidence that the Appellants, Crawford, Forsyth and Renko spent,
on average, $10 per shift worked, and so would be entitled to a
deduction of $5.00 per shift when reduced by 50%. I would find
that Mr. Stewart spent half of that amount, and so his
entitlement would be $2.50 per shift. For the reasons that
follow, however, I find that they are not entitled to any
deductions and that their appeals should be dismissed.
[6]
Certain important matters are not in
dispute. Tsawassen is in the Vancouver metropolitan area, and
Schwartz Bay is in the Victoria metropolitan area. Similarly,
Quadra Island and Campbell River, although not far apart, are in
different municipalities. Thus, all the Appellants leave the
boundaries of the municipality in which they report for work
during the course of their working day. Indeed, they do so more
than once. It is also not disputed that they all end their work
day where they began it, and are able to return home to their
residence each night. Nor is it disputed that the principal
business of B.C. Ferries is the transportation of
passengers, goods, or both of these. The only point of
contention, therefore, is the Appellants' claim that the
word "and" must be read disjunctively where it
appears in the expression "... disbursements for meals
and lodging, ..." in subparagraph 8(1)(g)(ii)
of the Act.
[7]
In saying this, I have not overlooked Mr.
Rachert's argument that the Minister is estopped from
denying that a taxpayer may claim a deduction for meals even
though he/she does not incur an expense for lodging. This is said
to be based upon a letter written by an official of Revenue
Canada, as it was then called, to a union representative. This
argument has no merit. First, the Appellants did not plead an
estoppel, although it has always been the rule that an estoppel
must be pleaded if it is to be raised at trial. In any event, the
supposed estoppel is as to a matter of law, not fact. It was
established long ago that no estoppel will lie as to that which
is a matter of interpretation of a statute: see M.N.R. v.
Inland Industries.
[8]
Much time was taken up at the hearing by Mr.
Rachert's cross-examination of the former employee of
Revenue Canada as to the letter that he had written, and by his
cross-examination of the assessor in an attempt to show that he
had acted with bias, or at least without giving the Appellants,
and others who were reassessed as well, a full opportunity to be
heard on the issue. All of this missed the point. I do not sit in
review of the manner in which the assessor did his job. Although
in the present case it appears to me that he acted perfectly
reasonably and correctly, from a procedural point of view, that
is of no moment here. My jurisdiction is to find the facts, so
far as they are in dispute, from the evidence before me, and then
to apply the law as written by Parliament to those facts,
interpreting the words of the Act if they are
ambiguous.
[9]
There is no ambiguity in the present case. The
same question came before Judge Bonner when he was a Member of
the Tax Review Board, in Derrien v. M.N.R. on facts indistinguishable from
those before me now. He said at page 1753:
In my view the
solution becomes apparent when paragraph 8(1)(g) is
read as a whole within its statutory context. The approach of the
Income Tax Act to deductions from salary or wages in the
process of computing income from office or employment is
generally restrictive. In this regard reference should be made to
subsection 8(2) of the Act. The exceptions in subsection
8(1) are not to be regarded as having been inserted capriciously.
The exception made for transport employees by paragraph
8(1)(g) recognizes that the nature of the work often
involves substantial trips away from the area where such
employees live and report for work. Such trips impose a burden of
expense for meals and lodging not borne by the ordinary worker
who can sleep and eat, at least most of the time, at home. The
"while so away" qualification and the use of the word
"and" in the phrase "disbursements for meals and
lodging" tend to support this conclusion. The cost to the
ordinary worker of food and shelter is a personal expense. The
cost to a transport worker of meals and lodging necessitated by
travel in the course of his duties is much more directly related
to the income earning process.
When paragraph
8(1)(g) is read as a whole within its context it will be
seen that some of the dictionary definitions of
"travel", such as "to go from one place to
another", are inappropriate. When paragraph 8(1)(g)
refers to travelling away from a municipality and its
metropolitan area it contemplates journeys of such substantial
distance and duration as to require disbursements for both meals
and lodging. It does not encompass all cases in which a taxpayer
goes from a place inside the metropolitan area to a place just
outside it.
[10]
A very large number of cases have considered
claims made for deductions under paragraph 8(1)(g), or its
predecessor subsection 11(7), both before and since
Derrien, but the correctness of that decision has never
been doubted. In many of those cases the point in issue here was
not raised at all; frequently the only issue has been the amount
to be allowed. Where the point has been in issue, however, the
Court has consistently applied Derrien.
[11]
There is little that I can usefully add to
what was said by Judge Bonner, except perhaps to point out that
his decision is consistent with the most recent pronouncements of
the Supreme Court of Canada regarding the interpretation of
statutes. The word "and" in its plain meaning is
clearly conjunctive. In cases of ambiguity it has been
interpreted otherwise, in order to achieve the object of the
legislation. In Bell ExpressVu Limited Partnership v.
R., the Supreme Court has yet again
cautioned that there is no justification to depart from the plain
meaning of statutory language and apply any of the many canons of
construction unless it is first shown that the language chosen by
Parliament, considered in its context within the statute as a
whole, is ambiguous. There is no ambiguity in the present case,
and the statute must be applied as it was written.
[12]
Mr. Rachert argued for the Appellants that to
give paragraph 8(1)(g) its plain meaning would work
hardship in a case where a truck driver, for example, took trips
of several days, but incurred no expense for lodging because he
was able to sleep in the cab of a tractor unit. No such
hypothetical case is before me, and I do not propose to speculate
upon it. For the present cases the legislative intent is clear.
The deduction for meals is not intended to be available to
workers who return to their homes each night as a matter of
course. It is perhaps redundant to point out that if it were
otherwise, these Appellants would be placed in a preferential
position in relation to the many people who are employed in jobs
where they do not leave the municipality in which they begin
their work each day, but who for myriad reasons cannot return
home for lunch.
[13]
Counsel for the Respondent put before me some
evidence as to the legislative intent behind paragraph
8(1)(g). Since there is no ambiguity, however, I shall not
make reference to it.
[14]
The appeals are dismissed.
Signed at Ottawa, Canada, this 19th day of
June, 2002.
"E.A. Bowie"
J.T.C.C.
COURT FILE
NO.:
2001-3619(IT)I, 2001-3621(IT)I,
2001-3622(IT)I and
2002-88(IT)I
STYLE OF
CAUSE:
Darlene Crawford, Gary Forsyth,
Debbie Renko and John Stewart
and
Her Majesty the Queen
PLACE OF
HEARING:
Victoria, British Columbia
DATE OF
HEARING:
April 23, 2002
REASONS FOR JUDGMENT
BY: The Honourable Judge E.A.
Bowie
DATE OF
JUDGMENT:
June 19, 2002
APPEARANCES:
Counsel for the Appellant: J. Andre
Rachert
Counsel for the
Respondent:
Lisa Macdonell
COUNSEL OF RECORD:
For the
Appellant:
Name:
J. Andre Rachert
Firm:
Blair Dwyer & Company
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-3619(IT)I,
2001-3621(IT)I,
2001-3622(IT)I,
2002-88(IT)I,
BETWEEN:
DARLENE CRAWFORD,
GARY FORSYTH,
DEBBIE RENKO,
JOHN STEWART,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on April 23, 2002, at Victoria,
British Columbia, by
the Honourable Judge E.A. Bowie
Appearances
Counsel for the
Appellants: J. Andre
Rachert
Counsel for the Respondent: Lisa
Macdonell
JUDGMENT
The appeals from assessments of tax made under the Income Tax
Act for the 1997, 1998 and 1999 taxation years are
dismissed.
Signed at Ottawa, Canada,
this 19th day of June, 2002.
J.T.C.C.
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