Words and Phrases - "in the course of the … employment"

The taxpayer, an industrial engineer successfully running the operations of his Canadian employer (“Savage Canada”), was asked by it to temporarily assist a US affiliate (“Savage USA”) in its struggling operations over what proved to be a 19-month period. This entailed him travelling to their office in Westfield, Massachusetts (an eight-hour drive away) to serve for two to three weeks every month as its Senior Director of Manufacturing. He was required to bear his related lodging, food and other travel expenses, as set out in the addendum to his employment contract with Savage Canada. When not working in Massachusetts, he continued his regular duties with Savage Canada, in Lakefield, Ontario. The employment contract for taking on these additional duties (for which he received additional salary) was signed only with Savage Canada, and Savage Canada paid the entirety of his remuneration.

Before concluding that the taxpayer satisfied the requirements of s. 8(1)(h), so that the travel, meal and accommodation expenses were deductible from the taxpayer’s employment income, MacPhee J made the finding (at para. 25) that the taxpayer “only had one employer, and that employer was Savage Canada” given that “Savage Canada paid the Appellant’s salary at all times” and he “also had an employment contract with Savage Canada setting out the entirety of his duties.” Furthermore, the following s. 8(1)(h) requirements were met:

• He “ordinarily” i.e., (normally or commonly) carried out his duties of employment in Massachusetts.
• He was required to do so by the addendum to his employment contract.
• His assignment to Savage USA, the Westfield, Massachusetts was away from his employer’s place of business.

That then left the issue as to whether his claimed expenses were expended by him “for travelling in the course of the … employment.” MacPhee J stated (at paras. 35-38):

[One] line of cases accepts that travel from an employee’s home to various work sites is in the performance of a service for an employer. …

The second line of cases finds that travel from an employee’s home to a work site is inherently personal, unless it can be shown that some duties are being performed by the employee during these travels (such as transporting supplies for an employer). …

[N]either party provide[d] submissions on whether the Appellant was providing a service to his employer during his monthly travels from his home to Westfield, Massachusetts.

Given the lack of submissions on this issue, I will accept that the Appellant was providing a service to his employer in his eight-hour drive, and thus travelling in the course of his employment. The Appellant’s employment contract required him to travel to Savage USA. Thus in his travels, the Appellant was fulfilling an employment obligation. I therefore find that the Appellant has met this requirement of paragraph 8(1)(h) … .