This is an employee benefits case dealing with meal allowances and travel allowances to remote locations.
Justice Campbell considered ITA s. 6(6)(b)(i), which allows travel allowances covering “the principal place of residence and the special work site referred to in subparagraph (a)(i)” (the worksite being too far away to go home at night.)
Under a collective bargaining agreement, the employer had to pay the employees using a formula based on distance travelled between the worksite and the City Hall, probably to avoid accounting issues over figuring out how to calculate exact mileage from the employee’s principal residence.
Justice Campbell decided that because the allowances were not based on travel from the principal place of residence but from City Hall, they didn’t qualify. So here we have a saving rule that seems intended to address the otherwise personal benefit of travelling from one’s home to a place of work being used in a negative way, to impair access to the exemption, rather than to broaden it.
It seems we should be able to go beyond the narrow wording in 6(6)(b) to recognize that the “principal residence” wording was intended to broaden not narrow the rule. Diane Campbell did not believe she could make that reading, even though she recognized the likely purpose for the union contract clause was to facilitate employer accounting.
This is an Informal Procedure appeal; so it’s technically not binding. But since it fits CRA policy and is a judicial decision, one would likely have to go through a bit of a battle to have another judge come to a different view.
This taxpayer was a self-represented, so that might have had some impact. Here’s what the explanatory notes to a 1971 change to the rule said:
1971 TR: … Among those who will benefit are lumber and mining workers, oil well drillers, exploration crews, employees at isolated bases and those who work at remote construction sites but do not qualify as “construction workers”.
Here are the facts of this case:
[2] The Employer provides essential maintenance and turnaround services to large industrial facilities generally in northern locations, including the pulp and paper industry, together with the mining and smelting, oil and gas, power generation and chemical sectors …
Didn’t this taxpayer fit that intention?
Should the employer’s method of calculating the allowance determine eligibility to it? S. 6(6)(b)(i) focuses on the purpose of the allowance, not the method for its calculation:
“… there shall not be included any amount received … in respect of, … an allowance … in respect of expenses the taxpayer has incurred for, … (b) transportation between (i) the principal place of residence and the special work site”.
The words “in respect of” are well recognized to be very broad in scope. And there’s nothing in that subsection that focuses on calculation or the method of calculation, except that the amount be reasonable. The union contract dealt with the method of calculating the allowance. It didn’t focus on defining the purpose of the travel allowance, which evidently would be for travel from home to the special work site. Certainly, the employer and union would not have expected that employees would have to travel to City Hall before going onward to the special work site.