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Citation: 2003TCC61
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Date: 20030224
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Docket: 2002-1525(IT)I
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BETWEEN:
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VICTOR E. CORMIER,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Angers, J.T.C.C.
[1] The appellant has appealed from the Notices of Assessment concerning the 1999 and 2000 taxation years, in which the Minister of National Revenue ("the Minister") disallowed the deductions in the amount of $3,160.43 for the 1999 taxation year and in the amount of $1,797.17 for the 2000 taxation year claimed by the appellant as expenses related to the use of an all-terrain vehicle, a snowmobile and a trailer in performing the duties of his employment.
[2] In confirming the reassessments concerning the taxation years at issue, the Minister relied on the following assumptions of fact, the truth of which the appellant admitted or denied, as follows:
[TRANSLATION]
(a) during the 1999 and 2000 taxation years ("the taxation years at issue"), the appellant was employed as a forestry technician by CJB Forestry Plus Ltd. ("CJB Forestry"); (admitted)
(b) the appellant's duties were to check reforestation sites in the bush and to mark them for replanting or thinning; the appellant entered into a computer the data on the condition of the stands and the roads and their exact location; (admitted)
(c) according to the prescribed Forms T2200 duly completed by CJB Forestry for each of the taxation years at issue and produced by the appellant:
(i) in performing the duties of his employment, the appellant was obliged to incur expenses;
(ii) the appellant was required to work in various locations;
(iii) the appellant's work periods were from May to November 1999 and from June to November 2000;
(iv) the appellant received a fixed allowance;
(v) the appellant was not required to remain outdoors for more than 12 hours; and
(vi) the appellant was required to use part of his home for work and to purchase supplies used directly in performing the duties of his employment, without being reimbursed; (admitted)
(d) the deductions claimed by the appellant as expenses related to the use of an all-terrain vehicle, a snowmobile and a trailer are as follows:
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1999
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All-Terrain Vehicle
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Snowmobile
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Trailer
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Fuel
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$312.00
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$0.00
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$0.00
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Maintenance
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$212.30
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$0.00
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$979.81
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Insurance premium
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$0.00
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$0.00
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$72.00
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Vehicle registration
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$16.00
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$23.00
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$23.00
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Depreciation
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$220.50
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$102.90
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$1,275.00
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Total
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$760.80
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$125.90
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$2,349.81
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Percentage used for work purposes
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90%
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100%
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100%
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$684.72
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$125.90
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$2,349.81
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Total deduction claimed
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$3,160.43
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2000
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All-Terrain Vehicle
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Snowmobile
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Trailer
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Fuel
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$276.00
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$0.00
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$0.00
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Maintenance
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$338.27
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$0.00
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$31.48
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Insurance premium
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$0.00
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$0.00
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$72.00
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Vehicle registration
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$16.00
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$0.00
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$23.00
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Depreciation
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$154.35
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$72.03
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$892.50
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Total
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$784.62
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$72.03
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$1,018.98
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Percentage used for work purposes
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90%
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100%
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100%
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$706.16
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$72.03
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$1,018.98
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Total deduction claimed
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$1,797.17
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(admitted)
(e) the appellant did not work during the winter and did not use his snowmobile during the taxation years at issue; (admitted)
(f) the snowmobile is not a motor vehicle that is designed or adapted to carry individuals on highways and streets; (admitted)
(g) the snowmobile is a capital asset, and the expenses related to its purchase and use are personal or living expenses; (denied)
(h) the appellant chose to spend the night in his trailer two or three times per week rather than to return home; (admitted)
(i) the distance between the appellant's home and his work did not prevent him from returning home; (denied)
(j) the expenses related to the purchase and use of the trailer are personal or living expenses; (denied)
(k) the appellant chose to use his all-terrain vehicle instead of his truck in certain locations; (admitted)
(l) the appellant did not need to use the all-terrain vehicle to perform the duties of his employment; (denied)
(m) the expenses related to the appellant's use of an all-terrain vehicle, a snowmobile and a trailer are not deductible employment expenses. (denied)
As well, the Minister now relies on the following conclusions or assumptions of fact:
(a) the all-terrain vehicle is not a motor vehicle that is designed or adapted to carry individuals on highways and streets; (admitted)
(b) the all-terrain vehicle is a capital asset, and the expenses related to its purchase and use are personal or living expenses. (denied)
[3] The appellant is required to drive in the bush as part of his work as a forestry technician, which consists of taking inventories and gathering data that he then processes using his computer, submits to the provincial Department of Natural Resources and forwards to his employer. As a result, he is occasionally required to travel as much as an hour and a half from his home.
[4] However, the appellant receives an allowance from his employer for those expenses. In 1999, he received $5,200; in 2000, he received $2,645.
[5] In order to facilitate his work, the appellant transports an all-terrain vehicle with him in his truck. He uses the all-terrain vehicle in order to get around more easily in locations where access is difficult, thereby saving time. He adduced in evidence a series of photos highlighting certain difficulties encountered while driving in the bush. The appellant explained that he is paid on the basis of his performance, not at an hourly rate; as a result, in order to make his work cost-effective, he is required to find ways of saving time and boosting his performance. He purchased his all-terrain vehicle in 1986 for $3,000 for recreational purposes. He began using it for work purposes in 1994.
[6] The appellant uses the trailer to spend the night in the bush when he is required to travel long distances from his home. He would spend the night in the trailer two or three times per week, usually parking it near the location where he was working. On other occasions, he parked it near the trailers of other workers. He stated that 100 per cent of his use of the trailer was for work purposes.
[7] The appellant acknowledged that he did not use the snowmobile during the two taxation years at issue. However, he did use it previously for work purposes and intends to keep it in case it is needed.
[8] According to the appellant, these three vehicles were indispensable in doing his work effectively and quickly, and he used them solely in order to earn his living. He acknowledged that he received travel allowances but stated that the amounts received were insufficient. The appellant adduced two letters he sent to the tax review office (Exhibits A-2 and A-3), explaining his use of the three vehicles concerned, and a letter from his employer stating that he needed these vehicles in order to do his work.
[9] The respondent called as a witness Catherine Elizabeth Chopin, an Appeals Officer with the Canada Customs and Revenue Agency. Her investigation showed that the appellant's employer did not require him to have a trailer in the bush in order to facilitate his work. According to the employer, the longest distance the appellant was required to travel was 124 kilometres and he himself completed a return trip every day. Nor did the employer require that the appellant spend the night in the bush; the appellant himself had asked to travel to the most distant locations. The work period during which it was necessary to travel to the most distant locations was from one week to two and a half weeks each season. The other employees who did the same work returned home every evening. According to the employer, if the appellant had been required to spend the night in the bush, his expenses would have been reimbursed.
[10] Ms Chopin's investigation also showed that the employer did not require its employees to have or to use an all-terrain vehicle. The hiring of an employee did not depend on ownership of an all-terrain vehicle, but employees were free to use one.
[11] The appellant's income tax return for the 2000 taxation year includes a Form T2200 duly completed by the employer. This form confirms the conditions of the appellant's employment and the fact that he received an allowance to cover his travel costs. This information is reiterated in paragraph (c) of the Reply to the Notice of Appeal, the truth of which the appellant admitted.
[12] Although there appear to be some contradictions in the evidence concerning the appellant's conditions of employment, it is clear to me that the use in the bush of an all-terrain vehicle, a snowmobile and a trailer is not a prerequisite for obtaining employment and the appellant's employment was not jeopardized if he did not own these vehicles. Rather, here we have a situation in which the appellant chose to do his work using these vehicles in order to make his work easier and save time and effort. He was not required under his contract of employment to own these vehicles or to pay the expenses related to them. His employment involved travel; his employer reimbursed the expenses related to that travel, and therefore necessary in performing the duties of his employment, in the form of a travel allowance.
[13] Paragraph 8(1)(h) of the Income Tax Act ("the Act") allows the deduction of travel expenses (other than motor vehicle expenses) that a taxpayer is required under the contract of employment to pay during the year. In this case, I find that the appellant was not required under his contract of employment to incur the expenses he claimed and that he incurred them by choice.
[14] Now, can the appellant deduct the expenses incurred for the all-terrain vehicle and the snowmobile under paragraph 8(1)(j) of the Act? Subsection 248(1) sets out the following definition of the term "motor vehicle":
"motor vehicle" means an automotive vehicle designed or adapted to be used on highways and streets but does not include
(a) a trolley bus, or
(b) a vehicle designed or adapted to be operated exclusively on rails;
[15] In New Brunswick, where this case was heard, the All Terrain Vehicle Act (Revised Statutes of New Brunswick, chapter A-7.11) defines an all-terrain vehicle as a "motor vehicle designed or adapted for off-road use" and a motorized snow vehicle as a "self-propelled vehicle designed to be driven exclusively on snow or ice". It is clear that these two vehicles were not designed to be driven on highways and streets and are therefore not included in the definition of "motor vehicle" set out in the Act.
[16] The expenses related to the use of an all-terrain vehicle, a snowmobile and a trailer in the amounts of $3,160.43 and $1,797.17 $ for the 1999 and 2000 taxation years respectively are not deductible. The appeals are dismissed and the Minister's decision is confirmed.
Signed at Edmundston, New Brunswick, this 24th day of February 2003.
J.T.C.C.
Translation certified true
on this 14th day of April 2004.
Sophie Debbané, Revisor
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