CRA indicates that even where a vehicle available 24 hours a day to a fire chief is clearly marked as a firefighter car, the employer must still estimate whether there is a personal-use benefit

There is an exclusion from the “automobile” definition (and, thus, from the mechanical rules for imputing taxable employee benefits based on a standby charge and operating expenses) for clearly marked emergency response vehicles. After being asked about fire chiefs, who were on call 24 hours a day throughout the year with a clearly identified vehicle, equipped with all emergency equipment, to enable them to get to an emergency scene quickly, CRA stated that “an emergency response vehicle…is generally considered to be clearly identified if it is readily identifiable by the general public as a police or fire vehicle because of symbols or lettering on the exterior of the vehicle.”

CRA then noted that even if the vehicle comes within the emergency vehicle exclusion, the fire chief or other employee must still be T4’d for a taxable benefit based on the employer’s estimate of the fair market value of any benefit from personal use of the emergency vehicle (which with no guidance being provided on the intractable issue of making this estimate other than to acknowledge that the amount of such factual benefit “is generally less” than that computed under the standby etc. mechanical rules.)

Neal Armstrong. Summaries of 9 March 2017 External T.I. 2017-0689241E5 Tr under s. 6(2) and s. 248(1) - automobile.