Citation: 2009 TCC 111
Date: 20090219
Docket: 2008-2748(IT)I
BETWEEN:
LINDSAY GELINAS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Miller J.
[1]
This is a unique
situation regarding the application of the moving expense deduction set out in
subsection 62(1) of the Income Tax Act. Ms. Gelinas, the Appellant,
seeks to deduct $18,823.44 of moving expenses for a move she made in 2006,
resulting in moving more than 40 kilometres closer to her place of employment
at the Lakeridge Health Corporation in Oshawa,
Ontario. She lived over 65 kilometres away from the Oshawa hospital at her former residence in Woodville, Ontario, and after her move to Whitby, she was only a few
kilometres away from the hospital in Oshawa, where she
worked both before and after the move.
[2]
The words of the
legislation are to be carefully scrutinized to determine if Ms. Gelinas’ moving
expenses qualify. Subsection 62(1) of the Act reads as follows:
62(1) There
may be deducted in computing a taxpayer’s income for a taxation year amounts
paid by the taxpayer as or on account of moving expenses incurred in respect of
an eligible relocation, to the extent that
(a) they were not paid
on the taxpayer’s behalf in respect of, in the course of or because of, the
taxpayer’s office or employment;
(b) they were not
deductible because of this section in computing the taxpayer’s income for the
preceding taxation year;
(c) the total of those
amounts does not exceed
(i)
in any case described in
subparagraph (a)(i) of the definition "eligible relocation" in
subsection 248(1), the taxpayer’s income for the year from the taxpayer’s
employment at a new work location or from carrying on the business at the new
work location, as the case may be, and
(ii) in any case described in
subparagraph (a)(ii) of the definition "eligible relocation"
in subsection 248(1), the total of amounts included in computing the
taxpayer’s income for the year because of paragraphs 56(1)(n) and (o);
and
(d) all reimbursements
and allowances received by the taxpayer in respect of those expenses are
included in computing the taxpayer’s income.
[3]
The definition of
eligible relocation in section 248 of the Act reads as follows:
"eligible relocation" means a relocation
of a taxpayer where
(a) the relocation occurs to enable
the taxpayer
(i) to carry on a business or
to be employed at a location in Canada (in section 62 and this subsection referred to as
“the new work location”), or
(ii) to be a student in
full-time attendance enrolled in a program at a post-secondary level at a
location of a university, college or other educational institution (in section
62 and in this subsection referred to as “the new work location”),
(b) both the residence
at which the taxpayer ordinarily resided before the relocation (in section 62
and this subsection referred to as “the old residence”) and the residence at which
the taxpayer ordinarily resided after the relocation (in section 62 and this
subsection referred to as “the new residence”) are in Canada, and
(c) the distance
between the old residence and the new work location is not less than 40
kilometres greater than the distance between the new residence and the new work
location
except that, in applying subsections 6(19) to (23)
and section 62 in respect of a relocation of a taxpayer who is absent from but
resident in Canada, this definition shall be read without reference to
the words “in Canada” in subparagraph (a)(i), and without
reference to paragraph (b);
[4]
What must Ms. Gelinas
prove to have her move qualify as an eligible relocation? She must establish
the following:
(i) The move was to
enable her to be employed at the Oshawa hospital, a location in Canada.
(ii) Both the old and new residences
are in Canada. This is not in dispute.
(iii) The distance
between the old residence and the Oshawa hospital is at
least 40 kilometres greater than the distance between the new residence and the
Oshawa hospital. This is also not in dispute.
[5]
The only question,
therefore, is whether Ms. Gelinas’ move was to enable her to be employed at the
Oshawa hospital. The Crown argues that because she was
already employed at the Oshawa hospital, albeit part-time, she did not
move to a new work location – she was already employed there; in effect,
the move was not necessary for her employment. The Crown relies on Chief
Justice Christie’s comments in the case of Bracken v. The Minister of
National Revenue
to the effect that there must be four elements to obtain the moving expense
deduction: an old work location, a new work location, an old residence and a
new residence.
[6]
Before commenting on
this interpretation of the moving expense deduction requirements, it is
necessary to consider the circumstances of Ms. Gelinas’ move. Up to January
2006, Ms. Gelinas worked part-time at the Lakeridge Health Corporation in Oshawa. She indicated she averaged two shifts a week on the
7th floor of the hospital in General Surgery-Urology. At that
time, she lived in Woodville, Ontario, approximately 65 kilometres from the
hospital in Oshawa. She sought full-time employment and
therefore applied for positions in Lindsay and Peterborough, both locations closer to her home. She also applied for a full‑time position
that had come up at Lakeridge Health Corporation in Oshawa (Lakeridge Health
also had health centres in Bowmanville, Whitby
and Port Perry). The position in Oshawa was with a different department,
orthopaedics. Other nurses also applied for that position. Ms. Gelinas was
interviewed by Lakeridge and was offered the full-time position at the Oshawa hospital. Given the different nature of her
responsibilities, she had to undergo training to work in orthopaedics. Now, as
a full-time employee, with a 40-hour work week, she moved to a different
pay scale with additional benefits.
[7]
Ms. Gelinas, having
accepted the new full-time position at Lakeridge, decided that a 130-kilometre
daily commute was simply too much, especially in winter road conditions. She
decided to sell her residence, listing it in the spring. The property
eventually sold in October and she moved in late November to a new residence in
Whitby, only a few kilometres from the Lakeridge Health
Centre in Oshawa. She incurred moving expenses of $18,823.44.
[8]
From these undisputed
circumstances, I draw certain conclusions. First, Ms. Gelinas’ move
was work-related. She moved her residence because her new job required five
round trips of 130 kilometres each, as opposed to the twice a week trips she
could manage as a part-time employee. Second, her new position was at a work
location in Canada. Third, while the new position was in the
same health centre as her part-time position, it was in a different department
on a different floor: it was a different job.
[9]
Based on these facts, I
would have no hesitation in concluding that Ms. Gelinas’ move qualifies as
an eligible relocation as that expression is statutorily defined, as her
relocation did, I find, enable her to be employed at a location in Canada. She moved so that she could go to work in Oshawa on a full-time basis. This is a work-related expense
which I find fits squarely within the wording and spirit of the moving expense
deduction provision.
[10]
The difficulty comes
when I am presented by the Respondent with case law that suggests to qualify as
an eligible relocation requires a new work location, an old work location, a
new residence and an old residence. This is derived from former Chief Justice
Christie’s comments in Bracken:
My reading of subsection 62(1) is that it contemplates the existence
of four separate elements: old work location, new work location, old residence
and new residence, and the comparison of two distances, i.e. the distance from
the old residence to the new work location with the distance from the new
residence to the new work location the former of which must exceed the latter
by 40 or more kilometres in order for the moving expenses to be deductible. …
[11]
Cases subsequent to Bracken
have disagreed on the correctness of this interpretation (See, for example, Templeton
v. Canada
for a decision contrary to Bracken, and Grill v. Canada and Jaggers
v. Canada
which agree with the approach set forth in Bracken).
[12]
I have concerns with
any rigid interpretation requiring both an old and a new work location.
Firstly, “new work location” is simply a term defining the words preceding it.
Why should it be elevated to introduce a whole new concept that is not
contained in the operative words. The words preceding it are “to enable the
taxpayer to be employed at a location in Canada”.
Those are the critical words, not “new work location”. There is no
reference in the operative words to a new location or new employment, though
the context is a move of residence by the taxpayer due to fulfilling employment
requirements. This certainly suggests something had to have changed in the
taxpayer’s work to result in the taxpayer’s move. And, indeed, with respect to
Ms. Gelinas, there was something new – a new job.
[13]
The term “new work
location” used to describe the concept of enabling a taxpayer to be
employed at a location in Canada should not, I respectfully suggest,
restrict that very concept. As Chief Justice Rip indicated in Dalisay
v. Canada:
17 The phrase “the new work location” is not to be
interpreted with any rigidity. The words “to carry on a business or to be
employed at a location in Canada” have a very broad meaning. The words allow for flexibility in
interpretation depending on the facts. …
[14]
“New work location” is
simply a term defining the actual requirement, and nothing more.
[15]
By interpreting the
term “new work location” as not introducing a requirement for an old work
location, I am not injecting into the definition of eligible relocation words
that are simply not there. I note that former Chief Justice Christie
in Bracken, while identifying an old work location as a requirement,
actually goes on in applying the eligible relocation definition to rely on only
three elements, the location called the new work location, an old residence and
a new residence. This suggests to me that this case does not set any rigid rules
to be slavishly followed. I believe the appropriate approach generally in
determining deductions, such as moving expenses, is the more flexible approach
suggested by Chief Justice Rip. It is unnecessary to get hung up on “new work
location” as demanding an old work location. What is necessary is to ask if the
taxpayer moved to enable the taxpayer to be employed at a location in Canada. Ms. Gelinas meets that requirement.
[16]
This conclusion is not
intended to open doors for taxpayers who have no change in their work to
claim moving expenses if they move 40 kilometres closer to work. In such
situations, there is clearly no change in work that such a taxpayer could
rely on to successfully claim the move was to enable such a taxpayer to be
employed at the location. Ms. Gelinas’ circumstances are entirely different.
Her new job required unacceptable travel: she had to move. What she could
handle part-time, she could not handle full-time.
[17]
If I follow Chief
Justice Christie’s approach such that there must indeed be an old work location
and a new work location, then I ask where is the Government supposed to draw
the line? Clearly, the Government argues in this case that moving from the 7th
floor to the 6th floor is not from an old work location to a new
work location. Chief Justice Rip made the following interesting observation in Dalisay:
19 The words “work location” and the phrase “the new work
location” are elastic, depending on the context in which they are applied.
When one “zooms in” on a map to find the location of a street address, one may
first be directed to a province, then to a city, then to a district, then to a
street, and finally to the address. Similarly, a person who works in Edmonton may inform a person of her work
location depending where the person making the inquiry is from. If the person
is from outside the country, she may describe her work location to be in Canada
or Alberta. To someone in New
Brunswick, she may tell them her work location is in Alberta or Edmonton; to
someone in Alberta, she may describe her work location to be in Edmonton or in
some area of Edmonton; but to an Edmontonian she may inform that person that
her work location in a specific area of the city or volunteer the specific
building or site. In all cases the person is describing her “work location”. …
[18]
Take this theory a
little further. If one nurse asks another nurse working at the Oshawa hospital where she works, she will no doubt respond –
on the 7th floor in Urology. Unlike the specific 40 kilometre
requirement for a move from an old residence to a new residence, there is no
guidance in the legislation for any measurable move of work location. This
suggests two conclusions: first, as I have already concluded, an old work
location is not strictly a necessary requirement; second, a change of job
requiring a move as little as from one floor to another could just as readily
be considered a move from an old work location to a new work
location. Again, I reiterate, what is key is that the move of residence was
necessitated by a change in work circumstances, not necessarily a move of any
set distance from one work location to another.
[19]
Finally, if I must put
more reliance on “new work location” than I believe is warranted by the
legislation, then these words should be read with sufficient elasticity so that
“new” defines “work”, as opposed to “location”. I could then read that term as
a location of new work. Read in that light, Ms. Gelinas would clearly qualify
as she certainly had new work (full-time orthopaedics versus part‑time
surgery-urology). And that new work was, as required by the legislation, at a
location in Canada.
[20]
As I indicated at the
outset, this is a unique situation. At first blush, it may seem
counterintuitive that an employee who goes from a job on the 7th
floor to a job on the 6th floor could qualify for a moving expense.
But when it is clear the move was to enable her to be employed in a new
full-time position, all elements of the requirements for moving expense are
technically met and also are within the Government policy of assisting
taxpayers with work-related moves. The appeal is allowed and referred back to
the Minister for reconsideration and reassessment on the basis that Ms. Gelinas
is entitled to the full amount of the moving expenses claimed.
Signed at Ottawa, Canada, this 19th day of February 2009.
“Campbell J. Miller”
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