Wes D. Andrews v. Minister of National Revenue, [1987] 2 CTC 2046, 87 DTC 410

Taylor, T.C.J.:—This is an appeal against an income tax assessment, for the year 1983, heard in Calgary, Alberta, on April 27, 1987, in which the Minister of National Revenue had disallowed “employment expenses incurred from additional travel and lodging expenses". At the notice of objection stage, the appellant had asserted as follows:

Attached is a copy of a letter dated December 17, 1984, from T. Besplug of Revenue Canada Taxation. This letter disputes my claim of $4240.00 for employment expenses incurred from additional travel and lodging expenses, over and above my daily employment allowance of $20.00/day. (This allowance is always tax exempt and has never been disputed.) My employer had previously paid $40.00/day under similar conditions. The $20.00/day was unreasonably low. Also I transported other employees from the Calgary office to and from the special work site.

I had been called from another location to Fox Creek, Alberta and could have been called to other locations at anytime.

1. The Construction Site was not the Employer's Place of Business.

2. Travelling to and from Calgary to the Special Work Site, (near Fox Creek, Alberta), is not personal use.

3. I was employed on a relatively permanent basis.

The claim which had been made was:

Used own vehicle for transportation to remote location.

7 round trips from home to Fox Creek, Alberta.

1200 km @ 25^/km x	7=	$2100.00
64 round trips from Fox Creek to job site.
110 km @ 25¢/km x 64		$1760.00
Meals and room while away from home for 64 days.		$1920.00
Total:		$5780.00
Less subsistence paid by employer		$1540.00
Total:		$4240.00

It is evident from the above, that at that time the appellant was seeking relief for all his expenses under the general framework of the “special work site" provisions of the Act — subsection 6(6). In assessing, and in confirming the assessment, the Minister had continued to exclude from income the amount received from his employer — $1,540 (above) and provided the following explanation:

The allowance for board, lodging, transportation at a special work site received by the taxpayer from Canyon Engineering and Construction Ltd. has been properly excluded in computing his income in accordance with the provisions of subsection 6(6) of the Act; that the expenditures for board, lodging, transportation at this special work site amounting to $4,240.00 claimed as deductions from income do not come within any of the deductions permitted by section 8 of the Act; the taxpayer was not ordinarily required to carry on the duties of his employment away from his employer's place of business and accordingly is not entitled to a deduction from income within the provisions of paragraph 8(1)(h) of the Act.

In the notice of appeal, Mr. Andrews chose to address the question of “special work site” (subsection 6(6)) as follows:

I am appealing your Notification of September 6/85. I am disputing your claim on different grounds than before. In a previous case: Forestell v. M.N.R.,* [1] the appeal was allowed in respect of meals, rent, and transportation because his employment was always of a temporary nature and on Special Work Sites. (7 projects over 2 years and far from the employee's place of residence.) Forestell’s appeal was allowed and he was awarded expenses which were also in excess of his allowance.

At the hearing however, Mr. Andrews concentrated his efforts on the provisions of paragraph 8(1)(h) of the Act, in particular that he was required to carry on the duties of his employment "in different places", as noted in that section. According to his testimony, Mr. Andrews was assigned to various locations in Alberta, by his employer Canyon, only one of which was the 64- day period in Fox Creek, under dispute in this appeal. In argument, Mr. Andrews recognized that the Forestell judgment (supra) had been appealed to the Federal Court, and while that Court had upheld the decision favorable to the taxpayer, there had been some variation in the reasons provided.

Counsel for the Minister, in the reply to notice of appeal (supra) agreed that Fox Creek, not Calgary had been Canyon's "place of business", and therefore the appellant was not entitled to deductions under paragraph 8(1)(h), but rather only entitled to exclude from income the subsistence allowance of $1,540 received because the "job site” near Fox Creek was at the minimum in a "remote" area, possibly a “special work site” (subsection 6(6) of the Act). Finally, I would note that Form T2200 giving details of Mr. Andrews' "employment condition and employment expenses", had been completed by the appellant's employer, Canyon, and was available to the Court. It showed Canyon's business address as 220 7220 Fisher St. S.E., Calgary, Alberta.

Analysis

First, I see no merit in Mr. Andrews "in different places" argument — we are only talking about one place — Fox Creek. In Richard A. Ronchka v. M.N.R., [1979] C.T.C. 3071 at 3074; 79 D.T.C. 854 at 856, when referring to the judgment of the Federal Court of Appeal in Thomas Healy v. The Queen, [1979] C.T.C. 44; 79 D.T.C. 5060, it was noted:

. . . As I read it, the "employer's place of business” would have been Toronto when he was in Toronto, and Fort Erie when he was in Fort Erie, although this aspect of paragraph 8(1)(h) was apparently not relevant to the judgments given.

After reviewing Healy (supra) that perspective of the judgment still remains valid in my view — Healy's employer clearly had a "place of business” (a racetrack) in each of these locations. However, I find that situation quite different from the employment of Mr. Andrews. The only evidence available to the Court (the 72200 (supra) and the testimony of Mr. Andrews) indicates that the "Head Office” of Canyon was in Calgary, Alberta, and remained there throughout the period of his employment with Canyon — a period considerably longer than the 64 days at issue in this appeal, when he was working at Fox Creek. The argument of the Minister in this matter is that Fox Creek became the “place of business” of Canyon — perhaps a second "place of business", because Canyon had successfully bid on a contract and been awarded a job to do at Fox Creek. In proposing this argument, counsel for the Minister relied upon the decision in Lome Nelson v. M.N.R., [1981] C.T.C. 2181 at 2184; 81 D.T.C. 190 at 192:

. . . the "employer's place of business" as used in subparagraph 8(1)(h)(i) of the Act, does not necessarily refer to the employer's head office or any of its administrative offices but refers specifically to that establishment of the employer for which the taxpayer was hired, to which he was assigned and at which he ordinarily reports for work. In other words, the "employer's place of business" should in my opinion be interpreted in relation to the taxpayer.

I completely agree with that comment, in the context of Nelson (supra) wherein the location of the “place of business” was determined with reference to the relationship it had to the supervision and functioning of the taxpayer — that was clearly Aylmer, Ontario. Mr. Nelson in that appeal put forward only the ”. . . rather vague statement that he believed he was being offered a senior managerial position at the company's head office in Toronto, there is no evidence which supports that allegation.” (page 194). In the instant case, Mr. Andrews lived in Calgary, was employed by the Canyon office in Calgary, and, as well as I can understand it, assigned by the principals of Canyon to work in certain specific job sites (one of which was very near Fox Creek) in the performance of his duties. Whereas Mr. Nelson in Nelson (supra) had no viable employment relationship to Toronto, Mr. Andrews in this matter had a direct and continuing link to Calgary. I am prepared to accept the assertion of Mr. Andrews that Calgary was the “place of business" of Canyon, his employer, and not Fox Creek. The bottom line of the assertion of counsel for the respondent — that the "job site" at Fox Creek became the (or "a") "place of business" for Canyon, simply because Canyon as a general contractor was doing construction work on a job there does not impress me. I cannot feature [sic] that each time a business (even a professional business) accepts a contract somewhere away from the regular "place of business”, or sends an employee to carry out a commitment there, that new location becomes the "place of business" for purposes of the section of the Income Tax Act at issue here. While that may shed some general light on the problem at hand, it does little to advance Mr. Andrews' main cause — the deduction he seeks (see above). There is no evidence whatever, that after assignment by the Calgary office of Canyon to Fox Creek, that Mr. Andrews in his travels between Calgary and Fox Creek was doing so “in the course of his employment" (paragraph 8(1)(h) of the Act). That was simply between his permanent home and his temporary home at Fox Creek, or perhaps even directly to the job site. It might have been proposed by Mr. Andrews that one return trip from Calgary to Fox Creek would be sustained under paragraph 8(1)(h) of the Act, but he did not so propose, and I shall not deal with that possibility. Therefore, (as far as any deduction under paragraph 8(1)(h) of the Act is concerned) — the expense claimed must be immediately reduced by $2,100 (see above). Mr. Andrews' net claim for travel then becomes $1,760 — for 64 days to the job site (see above). That again is not viable — it was obviously Mr. Andrews' responsibility to deliver himself to the "job site", and it cannot be said that in travelling from his temporary residence in Fox Creek to the "job site” he was doing so "in the performance of his duties" (paragraph 8(1 )(h) ), any more than he would have been, had he remained living in Calgary, and in some manner attempted to commute daily to the "job site" from Calgary. The immediately preceding observation, leaves aside the fact that the allowance he did receive ($1,540) might disqualify him from any deduction at all under paragraph 8(1)(h) because of its possible relationship to paragraph 6(1)(a) of the Act.

Having said that, it seems to me that Mr. Andrews' claim comes down to the fact that he received some $1,540 as an allowance for something, and he says it cost him some $1,920 to accomplish it. While that amount of $1,920 does not appear very high, there is no basis for considering that the allowance he received was not “reasonable”. In fact the Court has no information on what it did cost him to live in Fox Creek over and above what it might have cost him to be living at his residence in Calgary. But that is the purpose of subsection 6(6) of the Income Tax Act — to provide relief from the inclusion of a form of “subsidy”, or “differential payment" resulting from certain employment assignments which render it virtually impossible to remain living at home. In this case the amount received was $1,540, and the Minister was perfectly correct in excluding it from income (see Forestell, (supra)). The Minister was equally correct in limiting Mr. Andrews' relief to the amount of $1,540.

The appeal is dismissed.

Appeal dismissed.