Yvon Massy v. Minister of National Revenue, [1983] CTC 2500, 83 DTC 471

Roland St-Onge [TRANSLATION]:—The appeals of Mr Yvon Massy came before me on March 14, 1983 in the city of Montreal, province of Quebec.

The point at issue is whether the respondent was justified in adding to the appellant’s income amounts received from his employer, representing a $0.10-a-mile allowance for mileage not travelled in the course of his duties, in the taxation years 1978 and 1979.

The facts of these appeals are clearly stated in the reply to the notice of appeal of Mr Yvon Massy in paragraphs 5 and 6 of appeal No 82-319. These paragraphs read as follows:

5. In reassessing the appellant for his taxation year 1978 the Minister of National Revenue relied, inter alia, on the following facts:

(a) during the taxation years at issue, the appellant was a salaried employee of the Centre de Services Sociaux Laurentides-Lanaudière Inc, in the capacity of social worker;

(b) the Centre is a social agency, a part of the social affairs network of the province of Quebec with permanent offices in various localities in the region, at Joliette, Ste-Thérèse, St-Jêrome, Ste-Agathe and so on; the said Centre has various activities, such as youth protection, home care for the elderly, infirm, handicapped and so on;

(c) labour relations between the Centre and its salaried employees are governed by a collective agreement;

(d) during the taxation years at issue, the Centre asked the appellant to use his automobile, and in consideration thereof the Centre guaranteed the appellant an annual minimum mileage, and if this minimum mileage was not covered, he would be paid an additional amount for use of the automobile;

(e) to further clarify subparagraph (d), during the taxation year 1978 the relevant

paragraphs of the collective agreement in effect read as follows:

ARTICLE 24 — TRAVEL ALLOWANCES

24.01 When an employee at the request of the employer must carry out his duties away from the establishment, he shall be deemed to be at work throughout the time used in travelling.

In such a case, he shall be entitled to travel allowances to be paid as follows: Automobile expenses

When he uses his own automobile, the employee shall receive:

from 0 to 2,000 miles: $0.21 a mile

from 2,000 to 8,000 miles: $0.19 a mile

from 8,000 to 16,000 miles: $0.14 a mile

16,000 miles and over: $0.12 a mile

The sum of $0.02 shall be added to the stipulated allowances, for mileage travelled over gravel surfaces.

24.02 The allowances to be paid shall be calculated starting from the home base to which the employee is assigned; an employee may not have more than one home base.

The home base shall be determined by the employer according to the following criteria:

(1) the place where the employee usually performs his duties;

(2) the place where the employee regularly receives his instructions;

(3) the place where the employee reports on his activities.

Mileage in fact reimbursed shall be based on the distance necessarily and actually travelled by an employee in the course of his duties.

24.03 An employee required by the employer to use an automobile, who uses his own automobile for this purpose regularly during the year and travels less than 5,000 miles, shall be entitled to receive in addition to the compensation generally provided for an amount equal to $0.10 a mile for the mileage between that actually travelled and 5,000 miles, payable at the end of the year;

(g) during the taxation year at issue, the appellant received the sum of $312.60 in 1978 pursuant to clause 24.03 above alleged;

(h) during the taxation year at issue, the amounts received by the appellant as mileage actually travelled pursuant to clause 24.01 were not included in the appellant’s income, either by the latter or by the respondent;

(i) as the allowance received by the appellant and alleged in subparagraph (g) was not calculated based on the time actually spent by the appellant in travelling away from his usual home base, it was duly included in his income for the taxation year at issue.

6. The respondent further admitted that since the appellant had not included in his income the amounts alleged in either subparagraphs 5(g) or (h), he did not accordingly seek to deduct expenses;

At the hearing, the respondent established the allegations of his reply to the notice of appeal. He further established that the appellant had received some $0.38 a mile in 1978 and $0.55 a mile in 1979, which is greater than the reasonable amount of $0.22 a mile which should cover all expenses for a car during 1978 and 1979.

The employee’s contract of employment provided that the latter would receive from his employer compensation equal to $0.10 a mile for mileage between that actually travelled and 5,000 miles, payable at the end of the year. The respondent accordingly added to the appellant’s income the sums of money received for mileage not travelled. There is no section of the Income Tax Act, SC 1970-71-72, c 63, as amended, allowing an ordinary employee to make a deduction for the depreciation of his vehicle. In the appeal at bar, the appellant seeks to obtain indirectly what he cannot obtain directly, by arguing that this was not remuneration or a gratuity but compensation for his vehicle. Whatever name he gives to this amount, it is clearly a benefit received under a contract of employment.

section 5 of the Income Tax Act provides, and I quote:

Income from office or employment.

(1) Subject to this Part, a taxpayer’s income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuitities, received by him in the year.

I find it hard to see how the appellant does not fall under this section.

As the evidence showed, the appellant received a definite benefit, namely an amount greater than $0.22 a mile, that is $0.38 and $0.55 a mile for the years at issue.

I should also refer the appellant to the decision of the Supreme Court of Canada in Jack Cewe Ltd v Gary William Jorgenson, [1980] CTC 314; 80 DTC 6233, and I quote, at 315 [6234]:

Damages payable in respect of the breach of a contract of employment are certainly due only by virtue of this contract, I fail to see how they can be said not to be paid as a benefit under the contract.

I accordingly find it hard to understand how a sum of money allegedly paid for mileage not travelled is not a benefit “under the contract”.

For these reasons, the appeals are dismissed.

Appeals dismissed.