Date: 20040329
Docket: A-307-03
Citation: 2004 FCA 125
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
PELLETIER J.A.
BETWEEN:
WAYNE DANIELS
Applicant
and
HER MAJESTY THE QUEEN
as represented by the ATTORNEY GENERAL OF CANADA
Respondent
Heard at Calgary, Alberta, on January 29, 2004.
Judgment delivered at Ottawa, Ontario, on March 29, 2004.
REASONS FOR JUDGMENT BY: DESJARDINS J.A.
CONCURRED IN BY: LÉTOURNEAU J.A.
PELLETIER J.A.
Date: 20040329
Docket: A-307-03
Citation: 2004 FCA 125
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
PELLETIER J.A.
BETWEEN:
WAYNE DANIELS
Applicant
and
HER MAJESTY THE QUEEN
as represented by the ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
DESJARDINS J.A.
[1] The applicant, who holds the office of councillor for Division One in the County of Newell, Alberta (the County), seeks judicial review of the decision of the Tax Court of Canada (Paris T.C.J., unreported decision) which upheld the reassessment of the Minister of National Revenue. The Minister included, in the applicant's taxable income for the year 1999, the portion of the allowance per kilometre received from the County for travel expenses incurred from his headquarters located in his home in Division One to Council meetings. The decision of the Minister was made pursuant to paragraph 6(1)(b) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act) which contemplates the inclusion of an "allowance for personal ... expenses" as "income from an office".
[2] The expenses engaged for travelling from the applicant's home to Council meetings were the only ones the Minister included in the taxpayer's income. The Minister excluded from income all allowances received by the applicant for expenses incurred while travelling for business functions related to the applicant's other duties as councillor.
[3] The applicant claims that the portion of the allowance he received from the County for travel expenses incurred from his home in Division One to Council meetings should be excluded from the calculation of his taxable income for the year 1999 because it was a "reasonable allowance ... for travelling in the performance of the duties of the office ...", as these words are found in subparagraph 6(1)(b)(vii.1) of the Act as being one of the exceptions to the provision of paragraph 6(1)(b) of the Act.
[4] The relevant portions of section 6 of the Act read as follows:
Amounts to be included as income from office or employment
6. (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
[...]
Personal or living expenses
(b) all amounts received by the taxpayer in the year as an allowance for personal or living expenses or as an allowance for any other purpose, except
[...]
(vii.1) reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment,
[...]
[Emphasis added]
[5] The applicant explained the following before the Tax Court of Canada (see transcript of evidence, Respondent's Record, at 43-44):
The reason that it's business travel is because the one very important aspect of the job is meeting the concerns of the citizens and to do that I have to be in Division 1 and to take it to council meetings. I am taking the business of the Country to the Council Chambers.
[...]
... so I am required by the residents of the County, the people who I represent to attend the meetings and, sure, they recognize that I am going to miss some meetings, but they require that I'm there, so I don't think that it's right to state that I am not required to go to the other ones, but I am required to go to council meetings.
[6] There is no merit, in my view, in the applicant's contention that the travelling allowance from his home to Council meetings are incurred in the performance of the duties of his office because his place of business is the whole of Division One, where his home is located, and that his travels to attend County meetings are from one place of business to the other place of business.
[7] It is well established that travel expenses incurred by a taxpayer in travelling to and from his home to his place of work are considered personal expenses. They are not travelling costs encountered in the course of the taxpayer's duties. Rather, they enable him to perform them (see Ricketts v. Colquhoun, [1926] A.C. 1, 95 L.J.K. 82; Hogg v. R., [2002] 4 F.C. 443, 2002 FCA 177, affirming [2001] 1 C.T.C. 2356; O'Neil v. R., 2000 CarswellNat 1788, 2000 D.T.C. 2409, [2001] 1 C.T.C. 2091; Luks v. Minister of National Revenue, 1958 CarswellNat 297, [1958] C.T.C. 345, [1959] Ex. C.R. 45, 58 D.T.C. 1194).
[8] If these costs are not travelling costs that can be deducted, the taxpayer, who receives from his employer or from another source an allowance for such costs, must include that amount in his income pursuant to paragraph 6(1)(b) of the Act.
[9] The case of Campbell v. R. (2003 DTC 420) (Campbell), relied on by the applicant, can be distinguished on the facts. In Campbell, admissions were made at the outset that the appellants held an office with the School Board, that their homes were their main base from which they performed their duties and were consequently a regular place of work, that the School Board Building was also a regular place of work, and that attending regularly scheduled meetings to the School Board Building were part of their regular duties. The Tax Court held that the appellants had two places of work and that the trips that gave rise to the claims for expenses were from one place of work to the other.
[10] There are no such admissions in the case at bar.
[11] The duty of the applicant is to represent his constituency at County meetings. He must therefore meet with his constituents in order to understand their concerns. He later attends Council meetings in order to bring the needs and requests of his constituents to the Council. On his return to Division One, he informs his constituents of the decisions of the Council. His duty of representation is essentially performed at County meetings. The gathering of information and the preparation for Council meetings is preliminary and distinct from the performance of the work itself. The expenses incurred are essentially from his home and his homework base to his place of work. They are not from one place of work to the other and are not incurred by the applicant in the performance of the duties of his office.
[12] The applicant relies also on the case of Hoedel v. R. (1986), 86 DTC 6535 (F.C.A.) where this Court held that a constable in the Canine Division of the Regina Police could deduct expenses incurred in transporting a police dog in his own vehicle from his home to his place of employment and to other locations. The constable had been provided with a police dog and kennel which he kept at home. While on duty, he was provided with a public vehicle adapted for transporting dogs. It was mandatory for him to take the dog along when he was off duty to socialize the dog. Non-compliance with this condition of employment would reflect negatively on his job performance evaluation. The expenses incurred by him when travelling and transporting the police dog were held to be duty-related and deductible under paragraph 8(1)(h) of the Income Tax Act, R.S.C. 1952, c. 148.
[13] None of the specificity of Hoedel can be found in the case at bar. I would therefore dismiss this application with costs.
"Alice Desjardins"
J.A.
"I agree
Gilles Létourneau J.A."
"I agree
J.D. Denis Pelletier J.A."