Brian Edwards v. Minister of National Revenue, [1985] 2 CTC 2171

Goetz, TCJ [ORALLY]:—This is an appeal by the appellant with respect to his 1980 taxation year. In filing Form TL2, the appellant sought to claim the amount of $3,315 for meals and the amount of $1,200 for lodging, stating that his home terminal was Montrose yard, in Niagara Falls.

In his evidence, the appellant indicated that he had been employed as a trainman by Conrail, an American corporation with headquarters in Philadelphia, USA. He has lived in St Thomas, Ontario, since 1971 and built his home there. He considers St Thomas as his home terminal. He filed with the Court a copy of a letter signed by C R Spence, Divisional Superintendent at St Thomas which is the head point of Conrail in Canada. Mr Spence says that the appellant was employed in their train engine service on the Canada division and he had to work at either Niagara Falls (the Montrose yard), Welland or Leamington, in order to protect his seniority and that he did not work voluntarily at the above locations when he stood for work at St Thomas during the year 1980. In order to maintain his seniority and his job, he stated that he did not have the opportunity of standing for work at St Thomas because of others who had prior rights (as he called them) or more seniority than he. Consequently, though he was dispatched out of St Thomas, he spent most of the 1980 taxation year in the Montrose yard. He calculated his expenses for meals and lodging from his pay sheets which was, in my view, a reasonable way for him to do it. He certainly did not claim an excessive amount. The fact he does not have receipts in this case is not important. The main thing for me to consider is the application of certain sections allowing deductions for expenses.

The respondent is relying on subparagraph 8(1)(e)(ii), paragraphs (g), (h) and subsection 8(4) of the Income Tax Act, SC 1970-71-72, c 63, as amended. The really relevant paragraphs are 8(1)(e) and (g) which are similar to the section ruled on by Cattanach, J of the Federal Court Trial Division, in The Queen v Thomas E Little, [1974] CTC 678; 74 DTC 6534, and in that section he was dealing with what was then known as subsection 11(7) which reads the same as paragraph 8(1)(g) which reads as follows:

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:

(g) 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;

I do not think paragraph 8(1)(h), which is a general section on travelling expenses, has too much application in the instant case, but going back to the decision in Little (supra), the facts in that case, without going into them at this point, are very similar to the case before me. See also the decision in The Queen v Ervin E Diemert, [1976] CTC 301; 76 DTC 6187. That again is a decision of Cattanach, J, more or less on all fours with the appellant’s case. The headnote, as reported in the Dominion Tax Cases, is a concise summation of the case and reads as follows:

The appellant taxpayer, a locomotive engineer employed by the Canadian Pacific Railway, lived in Regina but, because he lacked seniority, was assigned to perform duties away from Regina. In the 1971 taxation year he was assigned to the yard in Assiniboia where he worked a five-day shift. He would travel to Assiniboia on Sunday night, stay in accommodation provided by his employer free of charge for the duration of the shift and return to Regina on Saturday morning. He used his own car. In computing his income he sought to deduct travelling expenses amounting to $829. The Minister disallowed the deduction contending that it did not constitute travelling expenses incurred in the course of his employment. The taxpayer appealed contending that the starting point of his work was in Regina and, therefore, his travelling expenses between Regina and Assiniboia were allowable deductions. The Tax Review Board allowed the taxpayer's appeal and the Minister appealed further.

Held: The appeal was allowed. The expenses were not incurred in the course of his employment. Travelling to his place of work must be contrasted with travelling in the course of his work. Travelling to and from Assiniboia on weekends was not done in the course of his employment and expenses incurred as a result were, therefore, not deductible.

The principle under which Cattanach, J makes this decision is that the appellant in that case did not come within subsection 11(7) of the Act (which is the same as paragraph 8(1)(g)) and that brings me to the point of having to determine what was the home terminal.

Subparagraph 8(1)(e)(ii) of the Act relates to expenses of certain railway employees employed away from ordinary residence or home terminal. Subparagraph (ii) reads as follows:

. .. away from the municipality and the metropolitan area, if there is one, where his home terminal was located, and at a location from which, by reason of distance from the place where he maintained a self-contained domestic establishment in which he resided and actually supported a spouse or a person dependent upon him for support and connected with him by blood relationship, marriage or adoption, he could not reasonably be expected to return daily to that place,

to the extent that he has not been reimbursed and is not entitled to be reimbursed in respect thereof. [Emphasis added.]

The appellant’s home (residence) was in St Thomas where he lived on weekends with his wife and child. That had been his home terminal until 1971 when Conrail cut back its service dramatically in Canada and this necessitated the appellant, in order to maintain his job and seniority, to bid for work at other yards. He was dispatched from St Thomas (the division headquarters of Conrail) to the Montrose yard in Niagara Falls for 11 months in 1980 where he had lodging and bought meals, some meals purchased across the border in the United States. That is not important. The question boils down to simply: Was his home terminal where he worked St Thomas or the Montrose yard in Niagara Falls?

In 1981 the appellant spent all his time at the Montrose yard. This is where he reported for work and he quite properly went home to be with his wife and child at St Thomas every weekend which was very normal for him to do. The appellant, through no fault of his own, was forced into the position to retain his job and seniority to really set up a second living place in Niagara Falls in 1980. He never reported to work in the year under question at St Thomas, except for a few times which would not be relevant. He reported to the Montrose yard in Niagara Falls throughout 1980 and 1981 and that then became his home terminal and he did not travel away from that home terminal other than on his own business for which he is not seeking to charge or deduct costs of travelling from and to St Thomas. He does not come within the four corners of the relevant sections of the Income Tax Act and I, therefore, must dismiss the appeal.

Appeal dismissed.