John E Shoveller v. Minister of National Revenue, [1984] CTC 2207, 84 DTC 1195

Rip, TC J:—This is an appeal from an assessment for 1979 whereby the appellant was assessed for additional tax by reason of adding to his declared taxable income the amount of $500, $470.80 of which was incurred by him in purchasing certain clothing required in the performance of his duties as a plainclothes police officer and which was reimbursed to him by the Niagara Regional Police Force, his employer. [1]

The appellant has been a police officer for 25 years and at time of trial was a superintendent of police with the Niagara Police Force. During the first seven years as a police officer the appellant was employed as a uniformed officer; in 1966 he commenced working as a plainclothes officer.

In 1979 the appellant was employed in the criminal investigation branch in the Welland Division of the Force where he held a rank of staff sergeant. His responsibilities included the investigation of the commission of any criminal offence, responding to crimes in progress, testifying in Court and related matters. Not much time was spent by the appellant in the Division office.

The terms of employment of the Force’s police officers for 1979 were covered by a collective agreement between the Niagara Regional Board of Commissioners of Police, the appellant’s employer, and the Niagara Regional Police Association, acting for the members of the Niagara Regional Police Force, as well as the Police Act, RSO 1970, c 351, as amended, and the regulations made from time to time by the Lieutenant Governor-in-Council.

The relevant provision of the collective agreement reads as follows:

17.01 Each member covered by this Agreement who is required to provide and wear ordinary clothing as part of his regular duties, shall be reimbursed by the Board for expenses incurred in the purchase of such clothing, upon presentation of the necessary receipts. Such reimbursement shall be in an amount not to exceed five hundred dollars ($500.00) per annum.

The dress code of the Police Force was strict in that an officer on duty had to wear what the appellant described as conservative clothing. If an officer was not dressed properly he would receive a reprimand from his senior officer.

On January 6, 1979, the appellant incurred the following expenses in purchasing clothing which his employer required him to provide and wear as part of his regular duties:

On or about January 12, 1979, the appellant submitted a receipt for the clothing and requested reimbursement of the expenses to his superior officer who examined the receipts and found them “to pertain to clothing which is to be supplied” and recommended payment to his superior. The appellant was reimbursed for the full amount of $470.80. [2]

The appellant purchased other clothing during 1979 for use in the performance of his duties, but he was only entitled to a reimbursement of $500 per year, and not all clothing was accepted for reimbursement by the employer; not eligible for reimbursement were articles such as winter footwear and winter jackets, the cost of which was absorbed by the Police officer.

The appellant testified the suits he purchased for his work were not suits he would have otherwise acquired and he would not wear these suits on social occasions. The clothing he purchased, in particular, the suits, had to be conservative and durable, usually manufactured from a combination of polyester and wool. The suits were purchased “off the rack” and were loose fitting to accomodate the equipment worn with the suit, yet stylish so as to conceal the fact the appellant was a police officer. The equipment carried by the appellant included a radio (kept in a coat pocket), handcuffs (attached to the belt), billy stick and memo book (kept in coat pocket), firearm (on holster on belt under the jacket) and sometimes a flashlight.

The only time the appellant would wear the suit while off duty was going to and from work and if he had personal business to attend while going to and from work.

The shirts purchased were also “conservative” as were the ties which were colour coordinated with the suit. The belt had to be strong enough to accomodate the handcuffs hanging from it. On infrequent occasions the appellant would wear the shirts or ties while off duty.

The appellant testified he would not have purchased the clothing if he thought he would not be reimbursed for its cost; he looked upon these clothes as working clothes in the same way a brother uniformed officer looked upon his uniform which was supplied to him by his employer. He testified that a plainclothes officer and uniformed officer of equal rank received equal pay, and in cross- examination stated if he would not have been reimbursed he would have requested transfer to a uniform position.

The appellant would use the clothing he purchased until it was no longer serviceable for the performance of his duties. Once he could not use the clothing in his work he discarded it rather than return it to the Force since “if I had no use for the clothing, they (ie the Police Force) would have no use for it”.

The appellant was of the view that he received no benefit when he was reimbursed for the clothing he was required to wear in the performance of his duties and if he did receive a benefit, the value of the benefit was less than $470.80.

The respondent stated the amount of the reimbursement was a benefit received and enjoyed by the appellant and by virtue of paragraph 6(l)(a) of the Income Tax Act is to be included in his income for the year.

“Benefit” is defined in the Shorter Oxford English Dictionary, inter alia, as “advantage, profit, good” as well as a “pecuniary profit”.

The word “benefit” in the French version of paragraph 6(1 )(a) is “avantage”. Le Petit Robert defines “avantage” as “profit” and “bien, bénéfice, intérêt, profit . . . avantage pécuniaire. Gain, rémunération, rétribution”.

In my view the appellant has not received any benefit, in the ordinary meaning of the word, as a result of being reimbursed for expenses. He had absolutely no use for the two suits totalling $390 except in the performance of his duties, and the personal use he made of the other articles was so infrequent that it is impossible to determine the value of any benefit he could have derived from wearing them. The appellant received no economic advantage because of the reimbursement. To suggest — as did the respondent — that the benefit to the appellant was the saving in money he did not have to expend on other clothing, or the saving of wear and tear on his other clothing, in performing his duties does not deserve comment. Similarly I am not impressed by the argument that because of the reimbursement the appellant was put in funds to spend as he wished on personal goods. I do not see any difference between an employee being reimbursed by his employer for costs of travel and lodging undertaken at the demand of his employer and being reimbursed for clothing his employer requires him to wear in the performance of his duties. In both cases the employee is compelled during the course of his duties to pay moneys out of his own pocket and is reimbursed in whole or in part by his employer. I fail to see where the employee has received or enjoyed a benefit. He is simply being restored to the economic situation he was in before his employer ordered him to incur the expenses.

In respect of the difference between the $500 reflected in the appellant’s T-4 form and the $470.80 he was reimbursed, the appellant’s evidence was that he did not receive any amount in excess of $470.80 from his employer and the $500 indicated on the T-4 form was an error and I so find.

The appeal is therefore allowed.

Appeal allowed.