Mario Bouchard v. Minister of National Revenue, [1980] CTC 2885, 80 DTC 1785

The Chairman [TRANSLATION]:—This appeal was brought by Mr Mario Bouchard against an assessment for the 1977 taxation year. In the notice of objection and the notice of appeal two parties were disputed:

1. An amount of $1,500 which the appellant omitted to include in his income and the respondent considers to be taxable allowances;

2. An amount of $450 claimed as financing expenses which the respondent disallowed.

At the hearing, the appellant withdrew his appeal as regards the $450 claimed for financing expenses and the appeal on this point is thus dismissed.

The Board must therefore decide whether the amount of $1,500 received by the appellant from the Université de Sherbrooke in 1977 is allowable.

Facts

The appellant, who lives in Quebec City, was employed full-time by the Government of Quebec. During the 1977 taxation year, he also worked as a professor at the Université de Sherbrooke. For his services he received a total payment of $6,720 including a $1,500 allowance for travel and living expenses.

It was clearly established during cross-examination that:

1. The appellant was an employee of the Université de Sherbrooke and an employee of the Quebec Government.

2. There was no relation between the appellant’s work at the Université de Sherbrooke and his duties as a Quebec Government employee. The ap- pellant was employed by and rendered separate services to two different employers.

3. The appellant was not required to perform his professorial duties at any location other than the campus of the Université de Sherbrooke and was thus not required to travel in discharging his obligations toward the Université de Sherbrooke. His work for the Quebec Government in no way required him to teach at the Université de Sherbrooke. Even if the Quebec Government did not object to the appellant’s teaching at that institution, he was not required by his employment with the Government to travel to Sherbrooke. His employment at the Université de Sherbrooke and his travel between Quebec and Sherbrooke resulted from decision taken by the appellant himself, for personal reasons.

The facts and amount of this appeal are admitted, and the issue is only the interpretation to be given to paragraph 6(1 )(b) of the Income Tax Act, SC 1970-71-72, c 63, as amended.

The appellant, a lawyer who represented himself, based his argument on the application of general interpretation principles in concluding that the allowances in the amount of $1,500 met the requirements for an exception laid down in subparagraph (vii) of paragraph 6(1 )(b) of the said Act.

Subsection 6(1) reads as follows:

Amounts to be included as income from office or employment.

(1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable:

The parts of paragraph 6(1)(b) of the Act which are relevant to the appeal are (b) and (b)(vii):

(b) Personal or living expenses.—all amounts received by him in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except

(vii) allowances (not in excess of reasonable amounts) for travelling expenses received by an employee (other than an employee employed in connection with the selling of property or negotiating of contracts for his employer) from his employer if they were computed by reference to time actually spent by the employee travelling away from

The appellant submitted that the amount of $1,500 received as travel expenses (mileage and rest expenses) was reasonable and that he had to travel outside the municipality where the employer’s establishment was situated. He pointed out that he had two jobs, one with the Quebec Government, where he worked 32 /? hours per week and one at the Université de Sherbrooke, where he worked part time. He noted that his residence was in Quebec City and the respondent’s assessment prevented him from deducting his travelling expenses incurred to earn income. He alleged that the tax laws should make provision for the exceptional difficulties encountered by the appellant because of the distance between Quebec City and Sherbrooke which he had to cover in performing his duties at the Université de Sherbrooke, to which the Quebec Government was favourable.

The appellant adduced the following texts and case law:

Maxwell on Interpretation of Statutes (12th ed) pp 278 to 282.

43, 86, 96, 105 to 116, 140 to 143, 199 to 212, 256 to 258.

Driedger, The Construction of Legislation pp 5-6, 9 to 53 (especially 21 to 26 and 44 to 48), 64 to 67, 74-5, 79-80, 148 to 153.

J C Landeryou v MNR, 35 Tax ABC 174; 64 DTC 281;

H Cohen v MNR, [1967] Tax ABC 492; 67 DTC 351;

[1946] AC 119; [1892] AC 150;

(1846), 9 QB 328; [1965] AC 182, 222;

[1965] 2 QB 39;

[1968] AC 553; (1919), AC 956;

[1952] 1 DLR (2d) 620, 630;

[1972] 5 WWR 513;

(1944), 3 WWR 637;

(1972), 5 WWR 513;

(1968), 65 WWR 565;

[1973] 5 WWR 289;

[1934] SCR 523;

[1973] SCR 189, 194;

(1971), 2 NSR (2d) 361;

(1970), 3 NBR (2d) 278.

The appellant concluded that the Minister had erred in interpreting subparagraph 6(1 )(b)(vii) of the Act and that his refusal to allow the deduction of the travel allowances is incorrectly based in law.

Counsel for the respondent submitted that the appellant had the onus of proving that the Minister’s assessment was incorrect, and since an exemption was at issue, subparagraph 6(1 )(b)(vii) of the Act should be interpreted restrictively. In support of these two principles of tax law, the respondent cited Johnston v MNR, [1948] CTC 195; 3 DTC 1182, and W A Sheaffer Pen Company of Canada Limited v MNR, [1953] Ex CR 251; [1953] CTC 345; 53 DTC 1223.

The respondent rightly stated that the principles of the interpretation of laws only apply when a section of the Act is ambiguous. In the present case, subparagraph 6(1 )(b)(vii) of the Act involves no ambiguity, in my opinion, even tough the appellant sees a certain lack of fairness in its application.

The respondent admitted that the travelling expenses were reasonable and could have been calculated independently from the classes given by the appellant or the number of hours he spent on this, but the respondent emphasized that the expenses could not have been calculated from the time spent by the appellant away from the campus of the university, to travel to any other location. Because of this, appellant does not meet the requirement of subparagraph 6(1)(b)(vii) of the Act (cf The Queen v Eric L Lavers, [1978] CTC 341; 78 DTC 6230. Moreover, since the appellant was not required by his obligations to the Quebec Government to travel to Sherbrooke, the respondent concludes that the travel between Quebec City and Sherbrooke was voluntary and does not come under the exception laid down in subparagraph 6(1)(b)(vii) of the Act, and the amount of $1,500 thus constitutes personal expenses which are not deductible. (Cf John Charles Landeryou v MNR, [1964] Tax ABC 174; 64 DTC 281; Michael D Pawliuk v MNR, [1971] Tax ABC; 71 DTC 559, and MNR v Wilfrid Pelletier, [1963] CTC 64; 63 DTC 1059.

Conclusion

Subparagraph 6(1)(b)(vii) in no way requires the principles of interpretation of laws to be applied so that the legislator’s intention can be clearly understood. Furthermore, the cases cited by the respondent are all applicable a fortiori to the facts of the appeal before us.

In this affair I see no greater lack of fairness resulting from a restrictive interpretation of subparagraph 6(1)(b)(vii) than there would be in considering that the expenses generally incurred by a taxpayer to travel to the establishment where he works are personal in nature.

The evidence shows that the appellant was not a businessman but an employee of the Quebec Government and the Université de Sherbrooke. In my opinion, there is no justification for considering the expenses as anything other than personal expenses for travel from Quebec City to Sherbrooke voluntarily incurred by the appellant, just like the expenses he incurred in going from his residence in Quebec City to the Parliament Buildings, where he also worked.

The appellant cited Blackman et al v MNR, [1967] Tax ABC 480; 67 DTC 347, and referred the Board to pp 487 and 351 of this decision:

the intention of the legislator in enacting the provisions of the Act with respect to deductibility of travelling expenses was to give the same treatment as to wages, Salaries and remuneration to all employees of a designated trade or industry. For instance if an employee was required to travel in the performance of the duties of his employment and he could not deduct his travelling expenses under the provisions of the sections of the Act dealing with travelling expenses, then he would be underpaid vis-a-vis the other employees whose function is to accomplish stationary work. Similarly, if an employee, in the discharge of his duties, is called to sojourn or live for many months in places other than the municipality where his employer has his establishment and if he has the right to deduct the living expenses he is receiving to make up for personal expenditures he may incur on account of the fact that he was called to stay away from the locality where he habitually resides, then he will be overpaid vis-à-vus the other employees who, in order to carry out their duties, do not need to travel or sojourn away from their ordinary place of residence.

I fail to see how this citation can have any bearing on the appellant’s case. It emphasizes that the legislator was referring to the travelling expenses of one or more employees called upon to travel for their work. The fact which is of primary importance in this appeal is that neither of the appellant’s employers required him to travel in performing his duties as an employee.

I must conclude that the facts of this appeal do not meet the requirements for exemption laid down in subparagraph 6(1)(b)(vii) of the Act and that the amount of $1,500 paid to the appellant in 1977 by the Université de Sherbrooke constitutes a reimbursement for personal expenses and is taxable.

The appeal is thus dismissed.

Appeal dismissed.