Nick Veskoukis v. Her Majesty the Queen (Informal Procedure), [1995] 1 CTC 2107

McArthur J.T.C.C.:-This appeal was heard in Toronto, Ontario, on August 12, 1994, under the informal procedure of this Court concerning the appellant’s 1991 taxation year.

The issue is whether the appellant can deduct from his employment income the amount of $3,648 being 80 per cent of the amount expended for meals as other employment expenses under paragraph 8(1 )(g) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act").

The appellant gave evidence on his own behalf with the assistance of his agent Mr. Kassam.

For the most part, the facts are not in dispute. The appellant is a truck driver. In 1991 he drove a "roll off" truck for Browning- Ferris Industries Ltd. in the Toronto District from the Company’s base in Concord. He commenced work at 3:30 — 3:45 a.m. and was through at a approximately 2:00 — 3:00 p.m. During the 1991 taxation year, he expended the $3,648 for breakfast and lunch during working hours. He travelled, for the most part, from Concord to Oshawa and Newmarket two or three times daily. His truck carried metal waste containers which he loaded with waste disposal product which he delivered to disposal sites in the Toronto area depending on the nature of the waste. He described this waste as clean separated "goods" that included paper products, wood, concrete and metal. Approximately ten per cent of his waste was mixed refuse. The remaining containers held only separated clean goods or waste material.

The appellant included in his evidence a letter from his employer under a letter head BFI RECYCLING SYSTEMS:

This letter is to confirm that waste goods picked up by BFI trucks is transported to transfer facilities where the waste goods are separated into recyclable materials and solid waste. The recyclable materials are subsequently processed into various finished goods.

The remaining solid waste is then shipped to landfill sites for dumping. Current difficult economic conditions have reduced the amount of separation of recyclables from solid waste done at the source of pick-up.

Included with the appellant’s notice of appeal was a company profile that included the following paragraph:

Browning-Ferris Industries Ltd. (B.F.I. Waste Systems Ltd.) is one of the largest publicly - held companies whose subsidiaries and affiliates collect, process for recycling, transport and dispose of a wide range of commercial, industrial, medical and residential solid wastes.

Positions

The appellant’s position was that he qualified for and income tax deduction for the cost of his meals on the road under paragraph 8(1 )(g) of the Act having acknowledged that he did not qualify under other paragraphs of section 8.

The position of the respondent was that the appellant’s employer’s principal business was not passenger, goods or passenger and goods transport pursuant to paragraph 8(1 )(g) of the Act.

Thelncome Tax Act

The relevant sections of the Act include the following;

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:

8(1 )(g) Transport employee's expenses - 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 him regularly,

(i) to travel, away from the municipality where the employer’s establishment to which he 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 such municipality and metropolitan area, to make disbursements for meals and lodging,

amounts so disbursed by him in the year to the extent that he has not been reimbursed and is not entitled to be reimbursed in respect thereof;

8(2) 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.

Analysis

The appellant is not permitted any deductions from his employment income unless as permitted by section 8 — excepted are those general deductions such as RRSP contributions and the like.

The appellant submitted the qualified for deductions contained in paragraph 8(1)(g).

A different treatment is accorded deductions from employment income than that from business or property. The appellant although on commission, was an employee during the 1991 taxation year. His income was from employment within the meaning of subsection 8(1). The focus must be: Was the appellant an employee "of a person whose principal business was passenger, goods or passenger and goods transport..."?

Counsel for the respondent referred to the case of Pepper v. M.N.R.,

[1984] C.T.C. 2694, 84 D.T.C. 1613. In that case the taxpayer was an employee of a company whose principal business was the distribution and supplying of electricity and gas. The taxpayer deducted certain meal expenses. The Court found that the employer was not in the business of "goods...transport".

Christie C.J.T.C.C. (as he then was) stated at page 2695 (D.T.C. 1614):

...in accordance with the established rule of interpretation of statutes, the meaning of the words "principal business was... goods transport" in paragraph 8(1 )(g) of the Act must be gathered from their entire context. When so regarded, I do not believe that the principal business of the British Columbia Hydro and Power Authority can be said to be the transportation of goods within the meaning of the paragraph. In my opinion, what the paragraph contemplates is corporations and individuals whose principal business is what is generally regarded as transportation companies or enterprises such as commercial trucking, railroading, shipping and airlines. I consider the presence of the words "on vehicles used by the employer to transport the goods" in paragraph 8(1 )(g) as conclusive of what I have said.

Following this reasoning, I do not find that the employers principal business is what is generally regarded as a transportation company or commercial trucking company.

For these reasons the appeal is dismissed.

Appeal dismissed.