Eligible Relocation

See Also

Ellaway v. The Queen, 2019 TCC 118

no moving expense deduction was available for a move to Canada

The taxpayer was an Australian resident who moved from Australia to Canada in February 2016 to take up employment as a doctor, and became a Canadian resident at that time. Owen J confirmed the denial of her claim under s. 62 for $59,188 in moving expenses given that she was an Australian resident before the move, stating (at para 11):

Paragraphs (b) and (c) of the definition of “eligible relocation” in subsection 248(1) … together require in clear and unambiguous terms that before the move the Appellant ordinarily resided at a residence in Canada and that after the move the Appellant ordinarily resided at a residence in Canada. An exception to the “in Canada” requirement in paragraph (c) is provided only if at the time of the move the Appellant was “absent from but resident in Canada”. …

He also rejected the taxpayer’s submission that IT-178R3 was misleading respecting the “within Canada” requirement, noting (at para. 14) that it clearly was only addressing the situation where “an individual changes residences in Canada” – and, in any event, “information bulletins do not create estoppels” (para. 15).

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. IT Bulletins do not create estoppels 134

Zhao v. The Queen, 2015 DTC 1128 [at 809], 2015 TCC 124 (Informal Procedure)

"new work location" requires a change in work location

The taxpayer underwent a "lateral transfer" within the same department, from an hourly CAM programmer to a salaried CAD/CAM developer. He reported to the same person and the terms of his existing employment agreement continued into the new position. Because of his expanded responsibilities, he moved more than 40 kilometers closer to work, incurring $31,188 in moving expenses.

Masse DJ upheld the disallowance of the taxpayer's moving expenses. Although acknowledging the contrary finding in Wunderlich, Masse DJ concluded (at para. 15):

I am of the view that Parliament has intentionally chosen to use the word "new" in the expression "new work location" ... . The expression "the new work location" appears several times in both subs. 62(1) and subs. 248(1) of the Act. Each word in an enactment must be given meaning. It cannot be concluded that the word "new" as used in these provisions of the Act are merely surplusage.

Dueck v. The Queen, 2014 DTC 1183 [at 3687], 2014 TCC 187 (Informal Procedure)

move was for personal reasons

Hogan J found that the taxpayer's move to a smaller home was for personal reasons, and that he was unable to establish that he moved in order to continue working, as there were no changes in employment conditions.

Konecny v. The Queen, 2014 DTC 1125 [at 3317], 2014 TCC 114 (Informal Procedure)

summer job between full-time teaching work was not part of an "eligible relocation"

The taxpayer, a teacher for the Toronto District Schoolboard, spent a summer in Ottawa working for their schoolboard. Bocock J found that his associated travel expenses were not deductible as an "eligible relocation," given that his customary mode of life had not changed - his family, house, and TDSB job were waiting for him back in Toronto at the end of the summer.

Langelier v. The Queen, 2013 DTC 1256 [at 1435], 2013 TCC 322 (Informal Procedure)

no new responsibilities at current job

Favreau J found that the taxpayer's move in 2010, 70 kilometers closer to the place she worked since 1996, was not an eligible relocation because her place of employment could not reasonably be considered a "new work location." The case was distinguishable from Wunderlich because there was no compelling evidence that she had taken on new responsibilities (especially in that there was no change in her salary).

Evangélist v. The Queen, 2013 DTC 1095 [at 515], 2013 TCC 62 (Informal Procedure)

no requirement to deduct expenses in the year they are incurred

Lamarre J found that there was nothing in s. 62(1) that required that moving expenses be incurred in the year they are deducted rather than a prior year. Therefore, the taxpayer's expenses for moving his belongings to a friend's house in 2010 gave rise to a deduction in 2012 when he finally found employment.

Wunderlich v. The Queen, 2012 DTC 1040 [at 2676], 2011 TCC 539 (Informal Procedure)

"new work location" does not require a change in work location

The taxpayer lived in Toronto. He worked in Burlington beginning in 2004, was promoted to management in 2007, and moved to Oakville in 2008, 50 kilometers closer to his workplace than his Toronto home. Webb J found that the taxpayer's moving expenses were deductible as an eligible relocation, notwithstanding that the relocation occurred approximately four years after his employment commenced.

The term "new work location" originated when the Act required that the taxpayer cease to be employed at an old work location in order to deduct relocation expenses. Because that requirement was repealed, it is no longer reasonable to construe the phrase "new work location" as imposing a timeliness requirement in the definition of "eligible relocation" (paras. 10-11). Webb J stated (at para. 8):

It should also be noted that the same label "new work location" was also placed on the educational institution if the taxpayer was a student. This emphasizes the point that "new work location" is simply the name or the label that was placed on the particular location. The words used as part of this label (in particular new and work) should not be used to define the expression "new work location".

The taxpayer's relocation occurred "to enable" him to be employed at his workplace, because his promotion came with added responsibilities that made his previous commute unmanageable.

Words and Phrases
Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions word used in defined term did not inform its meaning 155

Dierckens v. The Queen, 2011 DTC 1136 [at 742], 2011 TCC 169 (Informal Procedure)

annual seasonal hiring

The taxpayer, a schoolbus driver, was laid off for July and August of each year and rehired in September. One year, she moved from her home 47 kilometers from her place of work to a home one kilometer from her workplace. Webb J. rejected the Minister's argument that the taxpayer's deduction should be denied because the move was not to a "new work location." In the definition of "eligible relocation," the term "new work location" is defined in clause (a)(i) as the location in Canada in which the relocation enables the taxpayer to work. The word "new" serves only to distinguish the "new work location" from the previous one. It does not impose an additional requirement that the work location be "new" in the sense of being recent, or "new" in the sense of being a place the taxpayer has never worked before.

Myles v. The Queen, 2010 DTC 1067 [at 2860], 2010 TCC 60 (Informal Procedure)

short-term emergency tenancy

The taxpayer moved from his house in Abbotsford B.C. to an apartment in Victoria in 2006 for health reasons, and from there to a Victoria house in 2007. In finding that the taxpayer did not "ordinarily reside" in the apartment, and hence that the move from the apartment was part of an eligible relocation from Abbotsford, Sheridan J. referred to the Thomson decision, and stated at para. 18:

Nothing about the way Mr. and Mrs. Myles conducted themselves while at the Victoria Flat was consistent with what had been their "settled routine" prior to the move to Victoria. They went from a spacious dwelling, full of furniture and effects, large enough to accommodate family, neighbours and pets to what was essentially a hotel room cum storage unit. ... So focussed were they on this goal [of finding an affordable permanent home close to work] that they invested no time in establishing themselves in either the Victoria Flat or the neighborhood, in general.

Lund v. The Queen, 2010 DTC 1177 [at 3404], 2010 TCC 252 (Informal Procedure)

distance based on shortest normal route

The route proposed by the Crown between the taxpayer's old residence and his new work location, which involved traveling on a busy six-lane highway, would not have satisfied the 40-kilometre test, whereas a route advanced by the taxpayer, which he claimed would have taken less time during the morning rush hour than the route proposed by the Crown, would have satisfied the 40-kilometre test. Given that the relevant test is not based on the route which takes the least amount of time but, rather, is based on the shortest normal route (with the route being proposed by the Crown being one that was frequently used by commuters), the taxpayer did not satisfy the "eligible relocation" 40-kilometre test.

Sears v. The Queen, 2009 DTC 1370, 2009 TCC 344 (Informal Procedure)

The taxpayer was found not to have moved the residence at which he ordinarily resided from St. John, New Brunswick (where his family continued to stay at his home) to Alberta (where, with the exception of a "work holiday" in New Brunswick, he worked for the next few years) given (para. 24) that a taxpayer does not have "a settled ordinary routine of life in [a] new location" where "the taxpayer does not sever social and economic ties with the old location and leave behind all the other aspects of a normal and customary mode of life".

Nagy v. The Queen, 2007 DTC 1208, 2007 TCC 394 (Informal Procedure)

route for measurment purposes must be realistic and reasonable

Bowman C.J. rejected the submission of the Crown (at para. 11) that distance for purposes of the 40 kilometre test should be determined by "a mechanical measurement of all possible routes" with "the shortest chosen, regardless of whether any reasonable person would follow such a route" and found for the taxpayer on the basis of a route that was realistic and reasonable.

Calvano v. The Queen, 2004 DTC 2471, 2004 TCC 227

When the taxpayer received a new position in Vancouver, he and his family moved from their Brampton home to an apartment there and then, 19 months later, purchased a house in Port Moody. In finding that the taxpayer no longer was ordinarily resident in Brampton at the time of the purchase of the Port Moody house, Miller J. noted that the family had severed significant attachments in Ontario, had moved all their belongings to the apartment, had moved drivers licences and health care coverages to British Columbia, made only occasional trips to Ontario during the 19 month period, established a new social life in British Columbia and had rented out the Brampton property. As the taxpayer thus had ceased at the end of the 19 month period to be ordinarily resident in Brampton, the deduction was not available for expenses of selling the Brampton home and purchasing the Port Moody home.

Jaschinski v. The Queen, 2002 DTC 2183 (TCC) (Informal Procedure)

In March 1998 the taxpayer, following a promotion, moved from Calgary to a purchased home in Mississauga, and in December 1999 moved from the home in Mississauga to a home in Campbellville, which was further from his place work than the Mississauga home. In finding that the taxpayer was entitled to deduct the costs of the move from Mississauga to Campbellville (including the commission paid on the sale of his Mississauga home) in addition to those incurred on the move from Calgary to Mississauga, McArthur T.C.J. accepted the taxpayer's position that he never regarded the Mississauga home as his ordinary residence and only went there as a temporary place to live.

Bayette v. The Queen, 89 DTC 701, [1989] T.C.J. No. 1001, [1990] 1 CTC 2001

In considering whether there is a time limit on an "eligible relocation," Taylor J. stated:

I was satisfied from the evidence and testimony that there were good reasons for which the taxpayer delayed his move from Winnipeg to Beausejour - illness, lack of housing in Beausejour, inactive real estate selling market in Winnipeg, etc. - but that is probably irrelevant. In my opinion, the taxpayer and he alone is left to determine the timing of the move, and the costs associated with the move, and no time limit is expressed by the wording of the Act. While clearly five years is an unusually long period of time between change of work locale and the move, that cannot be put in issue - the respondent has no basis upon which to conclude... that there is some time frame that is "reasonable" and another that is unreasonable.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 62 47

Administrative Policy

S1-F3-C4 - Moving Expenses

4 conditions

4.3 An eligible relocation of an employee and a self-employed individual is a move in respect of which all of the following conditions are met:

a) it occurs to allow the individual to carry on a business or to be employed at a location that is, except if the individual is absent from but resident in Canada, in Canada (referred to as the new work location);

b) before the move the individual ordinarily resided at a residence (referred to as the old residence) and after the move the individual ordinarily resided at a residence (referred to as the new residence);

c) except if the individual is absent from but resident in Canada, both the old residence and the new residence are in Canada; and

d) the move allows the individual to be at least 40 kilometres closer to the new work location. The Federal Court of Appeal established in Giannakopoulos v M.N.R., [1995] 3 FCR 294, 95 DTC 5477, that the 40 kilometre distance is measured using the shortest normal route available to the travelling public.

Required connection between move and employment/business/education

4.7 To satisfy the condition described in ¶4.3(a) or ¶4.4 (a), there must be a connection between the individual’s move and one of the following activities:

  • carrying on a business or being employed at a location in Canada or
  • attending an educational institution.

Whether such a connection exists in a given situation can only be determined by examining the circumstances surrounding the move.

4.8 The required connection does not exist when an individual moves solely for personal reasons.

4.9 For an employee or self-employed individual, the connection can exist, for example, in the following situations:

  • an employee moves due to a transfer to another establishment of the employer; or
  • a self-employed individual moves for business reasons, such as needing to be closer to a possible market or resources needed for the business (for example natural resources, raw materials, or specialized equipment).

Generally, the connection can exist even if there is a delay between the move and the time the business or employment activity at the new work location is undertaken.

4.10 For a student, the connection may exist and an eligible relocation may occur even if a student moves to attend an educational institution as well as to be employed.

"Ordinarily resided"

4.11 ... The notion of ordinarily resided must be given the meaning assigned ... in Thomson v Minister of National Revenue, [1946] S.C.R. 209, 2 DTC 812.

4.12 For details regarding individuals who are absent from but resident in Canada for the purposes of the Act, see Income Tax Folio S5-F1-C1, in particular ¶1.10 - 1.21 ... .

Reduction of daily commute considered personal

4.31 ...

Example 1

An individual lives in dwelling A in Halifax with his family for five years and then moves his family and all of his belongings to dwelling B in Brampton in order to be employed in downtown Toronto. After a few months, he sells dwelling B and moves his family and his belongings to dwelling C in Toronto for personal reasons (because he is tired of the daily commute). ...

The individual’s move from dwelling B to dwelling C is not for the purpose of carrying on a business or to be employed. ...

A few months' stay at intermediate residence, not ordinarily residing

Example 2

An individual who ordinarily resides in dwelling A in Saskatoon moves to Regina in order to be employed. He moves to dwelling B for a few months until he takes possession of dwelling C, also in Regina. In this situation, the facts indicate that the individual did not ordinarily reside at dwelling B before ordinarily residing at dwelling C.

The CRA considers that only one move took place, from dwelling A to dwelling C, and that it occurred in two stages. Dwelling A is considered the old residence, and dwelling C the new residence. Given that this move appears to be an eligible relocation, the expenses incurred in respect of the individual’s move from dwelling A to dwelling C may be eligible as moving expenses. None of the expenses relating to the purchase or the sale of dwelling B are eligible.

15 December 2014 Internal T.I. 2012-0445361I7 F - Remboursement de frais de déménagement

expenses re selling a Canadian home after a 2nd relocation abroad are non-deductible if no ordinary residence at 1st location abroad

CRA stated that “the reimbursement by an employer of an employee’s moving expenses, does not constitute a taxable benefit…where those expenditures would also qualify, were it not for the reimbursement, as eligible moving expenses under section 62.” CRA further indicated that the terms "ordinarily reside" (in s. 62) and "ordinarily resident" (in s. 250(3)) have the same meaning and that “the notion of ‘ordinarily reside’ relates more to everyday life than to the permanent nature of the situation, CRA then went on to indicate that the question of whether the reimbursement of expenses of selling a residence at Location 1 in Canada, which had continued to be held by an employee after his relocation to a job abroad at Location 2, could be treated as a taxable benefit if such residence was sold at the time the employee was relocated again to another location and position abroad at Location 3, turned on whether he should be considered to ordinarily reside at Location 2, stating:

If it is established, on the facts, that the employee ordinarily resided at each of Location 1, Location 2 and Location 3, moving from Location 1 to Location 2, and then from Location 2 to Location 3, could each be considered as an "eligible relocation" if all other conditions are met.

Expenses related to the sale of the residence at Location 1 at the time of the move from Location 2 to Location 3 would not be deductible in computing the taxpayer's income because the residence at Location 1 would no longer be considered to be the old residence during the eligible relocation from Location 2 to Location 3. …

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) reimbursement of moving expenses not a taxable benefit if such moving expenses otherwise deductible under s. 62 which, in the case of multiple moves, can turn on whether there is ordinary residence at each location 436
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) criteria for determining “ordinarily resides” under s. 62 (coterminous with “ordinarily resident” under s. 250(3)) 381

11 August 2014 External T.I. 2014-0525511E5 - Moving expenses

new responsibilities not assumed

The taxpayer accepted a permanent position for the same job which he previously had been filling as a casual employee, and relocated 40 kilometers closer to the employer's work place. CRA stated:

Although the Act uses the term "new work location" to designate a place in Canada where the taxpayer has relocated, the courts have generally taken the view that such a place does not necessarily have to be "new". Sometimes, a taxpayer may carry out an eligible relocation without changing his or her employer or work location. This may be the case where the taxpayer relocates to assume new responsibilities related to his or her employment, which the taxpayer would have been unable to assume if it were not for the relocation. …

[Here] … it appears that the move did not occur to enable the taxpayer to be employed at a new work location for purposes of the moving expense deduction.

3 March 2014 External T.I. 2014-0518791E5 F - Réinstallation admissible

40-kilometre test is met if it is met going home from work but not to work

Due to one-way streets, the distance between the old residence and the new work location is less than 40 kilometers greater than the distance between the new residence and the new work location for the trip to work but not for the return journey. In finding that the 40-kilometere test was satisfied, CRA stated:

[T]he distance a taxpayer travels must reflect normal public roads, i.e., streets, highways and, where applicable, one-way roads.

…[Since] the straight-line method … [has] given way to the shortest normal route method, it is realistic to expect that the distance between two points may be different where it is measured in one direction or the other. Consequently … the requirement of paragraph (d) … is met as soon as the result of one of the calculations described above is at least 40 kilometres.

12 November 2013 External T.I. 2012-0471621E5 F - Moving expenses - eligible relocation

a multiple move may consist of one or more eligible relocations, and if there is one eligible relocation from Residence 1 to 3, the intermediate moving costs can be deductible

In 2013, the taxpayer and spouse moved from Residence A to furnished accommodation (Residence B) in order for the taxpayer’s spouse to attend a full-time program at a university in Canada. In 2014, in order for the spouse to take up a new job, they will move from Residence B to Residence C. In the meantime, they wish transport their furniture to Residence C for storage there.

What is the deductibility of expenses incurred in 2013 of moving between Residence A and Residence B taking into account a temporary stop at Residence C, and of transporting furniture between Residences A and Residence and storing it there - as well as of mtravel expenses that will be incurred in 2014 between Residence B and Residence C?

After noting that “the expression ‘ordinarily resided’ must be interpreted in accordance with its ordinary meaning and does not refer to a special or occasional residence,” and listing nine indicia of ordinarily residing at a place, CRA stated:

[I]n the case of multiple moves, each move must be considered separately to determine if it constitutes an "eligible relocation"… .

For example, consider a taxpayer living in Canada who moves from Residence 1 to Residence 2 to take up new employment. The taxpayer remains in Residence 2 for a few months before moving again to Residence 3. …

If it is established on the facts that the taxpayer ordinarily occupied Residences 1, 2, and 3, the move from Residence 1 to Residence 2 is considered a relocation, and that from Residence 2 to Residence 3 as a second relocation. Consequently, it will be necessary to determine whether each of these two relocations is an "eligible relocation"… .

If ... the taxpayer did not ordinarily reside at Residence 2 before ordinarily residing at Residence 3, we will consider that a single relocation from Residence 1 to Residence 3 occurred, and that relocation took place in two stages. If this relocation is an eligible relocation, the eligible relocation expenses of the move from Residence 1 to Residence 3 would be deductible in computing the taxpayer's income, provided that all of the conditions in sections 62 and 67 are satisfied. Since only one eligible relocation took place, the expenses related to the move from Residence 1 to Residence 2 and those related to the move from Residence 2 to Residence 3 would also be deductible in computing the taxpayer's income provided that all the conditions in sections 62 and 67 are satisfied.

Words and Phrases
ordinarily reside
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 62 - Subsection 62(3) - Paragraph 62(3)(a) costs of moving pets by air could qualify 84
Tax Topics - Income Tax Act - Section 62 - Subsection 62(3) - Paragraph 62(3)(b) moving furniture to ultimate residence could qualify if not ordinarily residing at intermediate residence 269
Tax Topics - Income Tax Act - Section 62 - Subsection 62(3) reasonable gas expenses but not car tune-up costs can qualify 81

5 November 2012 External T.I. 2012-0458801E5 F - Frais de déménagement

move can relate to an existing workplace if there is a causal link

Must a taxpayer must have a "new work location" in order for a relocation of the taxpayer to qualify as an "eligible relocation"? CRA responded:

A taxpayer does not necessarily need to have a new workplace for the relocation to qualify as an "eligible relocation"… . There must, however, be a causal link between the taxpayer's relocation and its being effected in order (among other things) to allow the taxpayer to be employed at a location in Canada.

2 November 2012 External T.I. 2012-0440241E5 - moving expenses - expanded territory

As a result of an expansion in the sales territory to be serviced by a sales manager, the individual decides to relocate to a more central residence to make travelling to the territories he or she supports more accessible with less time travelling from work to home. The move results in the new residence being well over 40 kilometres closer to the majority of the individual's sales territories than the old residence. In finding that this qualified as an eligible relocation, CRA stated:

...the expansion of the sales territory results in a new work location for purposes of the moving expense deduction. In our view, there is a sufficient nexus between the move and the commencement of employment at the new work location to conclude that the relocation occurred to enable the individual to carry on employment and as such should qualify as an eligible relocation.

28 February 2012 External T.I. 2011-0423201E5 F - Frais de déménagement

move following shift from part-time to full-time at same employer did not qualify

The correspondent held part-time jobs with three different employers for 10 years and then secured a full-time job with one of those employers, which resulted in a sale of the existing home and the acquisition of a new home in order to be closer to the place of full-time work. Were such moving expenses deductible? CRA responded:

[Y]ou have not changed your place of residence to obtain employment because you already had part-time employment with the same employer prior to your move. Consequently ... your moving expenses cannot be deducted from your income under section 62.