O’dell v. Kragh, [1999] 2 CTC 289

Zarzeczny J.:

The applicant, Nola Gay O’Dell, applies to vary an existing child support order granted by Scheibel J. on June 30, 1992 in favour of her three children Keshia Marie Kragh (8); Kymberlie Lynn Kragh (8); and Kale Jordan Kragh (7).

It is accepted that since the existing child support order predates the implementation of the Federal Child Support Guidelines (SOR/97-175 as am.) this variation application is in order and that it is appropriate to consider and issue a new child support order in accordance with the guidelines.

The one issue argued upon the hearing of the application is the determination of the respondent’s income.

Wayne Kragh is a long distance trucker, hauling primarily into the United States. A letter from his employer confirms that he is away on average 21 days per month. The financial information filed indicates a gross monthly income of $3,457.18 for a gross annual income of $41,486.16.

Mr. Kragh is responsible for paying his own meal costs while on the road. These he estimates to be approximately $10.00 U.S. per meal with an average of three meals per day. His position on the child support application is that his annual income for guideline purposes is to be adjusted by deducting the cost of his meals as incurred, including a conversion of those costs to take into account the presently disfavourable exchange rate between the Canadian and American dollar. In making this argument the applicant relies upon and encourages application of s. 16 of the guidelines incorporating, as it does, Schedule III. Section 16 provides:

16. Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total Income” in the T1 General form issued by Revenue Canada and is adjusted in accordance with Schedule III.

Schedule III to s. 16 provides for certain adjustments to income based upon adjustments or deductions allowed under certain provisions of the Income Tax Act. In the case of Miller v. McClement (1997), 160 Sask. R. 232 (Sask. Q.B.), Dawson J. concluded that in determining the income of a trucker for guideline purposes it is appropriate to deduct the amount allowed by the Income Tax Act for meal expenses. The respondent’s argument upon this application is that the principles recognized by Dawson J. in the Miller case ought to be further extended to take into account the actual expenses incurred or at least, to adjust upwards the deductible allowance based upon the U.S./Canadian dollar exchange rates. Revenue Canada places a ceiling upon the maximum allowable deductions on account of this expense to 50 percent of $11.00 Canadian per meal unless receipts for the amount actually expended can be provided (which has not been the practice of the respondent in past years).

I am unable to accept the arguments of the respondent that in determining his income for guideline purposes I can deduct any amount greater than the expense allowed as a deduction to income under the Income Tax Act and the approach to that deduction which the respondent has taken in past years. I adopt the reasoning and approach taken by Dawson J. in the Miller case as appropriate to the circumstances of this case.

The information filed confirms that the respondent’s total income in the past and projected for 1998 is as follows:

Based upon the current financial statement filed it appears that $3,457.18 per month is being earned which will lead to a gross 1999 income projected at $41,486.00.

The income tax-allowable expense claim for meals in these past years including that projected for 1998 is as follows:

Since only 50 percent of the meal expenses are deductible pursuant to the limitations of the Income Tax Act, the resultant projected 1998 allowable tax deduction is estimated at $4,158.00 and I so find.

In the result, I find that the respondent’s income for guideline purposes is as follows:

The guideline amount payable for three children is $676.00. An order may accordingly issue with the usual provisions based upon this determination of income and the resultant guideline amount payable.

The applicant shall have her costs of this application which I fix at $350.00 plus disbursements.

Application allowed.