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Citation: 2003TCC580
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Date: 20030814
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Docket: 2002-2163(IT)I
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BETWEEN:
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WILLIAM ALLEN JENNER,
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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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REASONS FOR JUDGMENT
Bowman, A.C.J.
[1] This appeal is from an assessment
for the appellant's 2000 taxation year.
[2] Mr. Jenner is an electrician. His
home in that year (and still is) is in Sturgeon Falls,
Ontario.
[3] In 2000 he was employed by four
employers at five work sites in Ontario as follows:
Ontario Electric at the Y.M.C.A. Project
in Sudbury, Ontario
(February 28, 2000 to July 20, 2000)
Smith & Long at 100 University Avenue,
Toronto, Ontario
(July 24, 2000 to September 1, 2000)
Smith & Long at 939 Eglinton Avenue East,
Toronto, Ontario
(September 4, 2000 to September 15, 2000)
Brothers & Wright at Linen & Things Project
Mississauga, Ontario
(October 10, 2000 to October 13, 2000)
Graywood Electric at the Cara Food-Airport
Infield Project, Toronto, Ontario
(October 16, 2000 to December 31, 2000)
[4] In filing his return of income for
2000 Mr. Jenner deducted $9,783.75 as employment expenses. This
figure is made up as follows:
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Legal and accounting fees
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$ 90.95
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Allowable motor vehicle expenses
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6,072.80
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Food, beverages and lodging
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$4,200.00 @ 50%
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2,100.00
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Supplies - stationery
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1,520.00
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$ 9,783.75
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[5] In his notice of appeal
Mr. Jenner increased his claim to $13,788.23 but at trial he
abandoned the additional amounts.
[6] The respondent does not dispute
that the amounts claimed in the return of income were in fact
spent. What is disputed is the deductibility.
[7] Mr. Jenner's argument was
skilfully and articulately presented by him, and I can do no
better than reproduce a portion of his written argument as
follows:
Under the provisions regarding "Special Work Sites"
there is no requirement to work away from the employer's
place of business. Rather, it is based upon the taxpayers
principal place of residence to which, by reason of distance, the
taxpayer could not reasonably be expected to have returned daily
from the special work site.
Regarding my employment with Ontario Electric in Sudbury,
Ontario, while this employment did meet all the conditions in
order for the special work site rules to apply, I did in fact
commute on a daily basis. However, I do not believe this to be a
bar from deducting certain transportation costs for the following
reasons:
• Generally, when individuals find
employment in regions distant from their residence, those
individuals must inevitably make choices. They can choose to move
closer to the new place of employment and deduct certain moving
expenses allowed by the Income Tax Act or decide to commute daily
between their residence and their new place of employment.
However, these expenses, would reflect personal preferences and
are non-deductable.
• However, when an individual accepts
employment distant from their principle place of residence, in
circumstances where they cannot reasonably be expected to move
(e.g. Employment is of a temporary nature), a distinction must be
made between truly "work related" expenses and those
that reflect lifestyle decisions of the taxpayer.
It is my assertion that there is a clear interaction between
Section 6 and Section 8 of the Income Tax Act and that
where an allowance for expenses is excluded from income under
Section 6, it is only reasonable that in lieu of such an
allowance that the taxpayer be allowed to deduct from his/her
income a reasonable amount in respect to expenses incurred.
[8] Essentially the argument is based
on an analogy between section 6 and section 8 of the Income
Tax Act. Section 6 deals with the inclusion of employment
income. Subsection 6(6) excludes from income certain allowances
paid to a taxpayer by the employer for expenses incurred special
work sites or at remote locations. Subsection 6(6) reads:
(6) Employment at special work site or remote
location. Notwithstanding subsection (1), in computing the
income of a taxpayer for a taxation year from an office or
employment, there shall not be included any amount received or
enjoyed by the taxpayer in respect of, in the course or by virtue
of the office or employment that is the value of, or an allowance
(not in excess of a reasonable amount) in respect of expenses the
taxpayer has incurred for,
(a) the taxpayer's board and
lodging for a period at
(i) a special work site,
being a location at which the duties performed by the taxpayer
were of a temporary nature, if the taxpayer maintained at another
location a self-contained domestic establishment as the
taxpayer's principal place of residence.
(A) that was, throughout the period, available for the
taxpayer's occupancy and not rented by the taxpayer to any
other person, and
(B) to which, by reason of distance, the taxpayer could
not reasonably be expected to have returned daily from the
special work site, or
(ii) a location at which, by virtue of its remoteness
from any established community, the taxpayer could not reasonably
be expected to establish and maintain a self-contained
domestic establishment,
if the period during which the taxpayer was required by the
taxpayer's duties to be away from the taxpayer's
principal place of residence, or to be at the special work site
or location, was not less than 36 hours; or
(b) transportation between
(i) the principal place of residence and
the special work site referred to in subparagraph
(a)(i),
or
(ii) the location referred to in
subparagraph (a)(ii) and a location in Canada or a
location in the country in which the taxpayer is employed,
in respect of a period described in paragraph (a)
during which the taxpayer received board and lodging, or a
reasonable allowance in respect of board and lodging, from the
taxpayer's employer.
[9] That is not what we are dealing
with here. Mr. Jenner is seeking a deduction, not an
exclusion from income of amounts received.
[10] Section 8 deals with deductions.
Paragraphs 8(1)(h) and 8(1)(h)(i) read:
(h) Travel expenses - where the taxpayer, in the
year,
(i) was ordinarily required to carry on the duties of the
office or employment away from the employer's place of
business or in different places, and
(ii) was required under the contract of employment to pay the
travel expenses incurred by the taxpayer in the performance of
the duties of the office or employment,
amounts expended by the taxpayer in the year (other than motor
vehicle expenses) for travelling in the course of the office or
employment, except where the taxpayer
(iii) received an allowance for travel expenses that was,
because of subparagraph 6(1)(b)(v), (vi) or (vii), not
included in computing the taxpayer's income for the year,
or
(iv) claims a deduction for the year under paragraph
(e), (f) or (g);
(h.1) Motor vehicle travel expenses - where the
taxpayer, in the year,
(i) was ordinarily required to carry on the duties of the
office or employment away from the employer's place of
business or in different places, and
(ii) was required under the contract of employment to pay
motor vehicle expenses incurred in the performance of the duties
of the office or employment,
amounts expended by the taxpayer in the year in respect of
motor vehicle expenses incurred for travelling in the course of
the office or employment, except where the taxpayer
(iii) received an allowance for motor vehicle expenses that
was, because of paragraph 6(1)(b), not included in
computing the taxpayer's income for the year, or
(iv) claims a deduction for the year under paragraph
(f);
Subsection 8(2) prohibits the deduction of amounts in
computing employment income except those specifically
allowed:
(2) General limitation. Except as
permitted by this section, no deductions shall be made in
computing a taxpayer's income for a taxation year from an
office or employment.
[11] Mr. Jenner seeks to import into
section 8 deductions that are analogous to the allowances
that are specifically excluded by subsection 6(6). While such
arguments by analogy may be philosophically attractive they do
not fit within the accepted rules of statutory interpretation
employed in construing the Income Tax Act. The taxation of
employment income as well as the deduction of amounts spent in
earning that income is spelt out in the Income Tax Act
with great specificity. The cost of travel from
Mr. Jenner's home in Sturgeon Falls to the various
places where he was employed by the different employers as well
as his living expenses when he was working at those work sites is
simply not covered by section 8 of the Income Tax Act,
even though in a broad sense one might say the expenses were
related to his employment. Mr. Jenner is to be commended for
coming to Court and putting forward his argument as clearly as he
did but unfortunately I cannot help him.
[12] The appeal is dismissed.
Signed at Victoria, British Columbia, this 14th day of August
2003.
A.C.J.
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