The Assistant Chairman:—This is the appeal of William Futoransky from an income tax assessment in respect of the appellant’s 1970 taxation year.
The appellant who is a resident of Edmonton was employed, in the year pertinent to this appeal, as foreman in charge of ten electricians at a power plant construction project at Sundance, Alberta by Hume & Rumble Ltd. In 1970 he was employed on the Sundance construction project for 8 months. During this time he had the opportunity of either living at a camp site provided by Calgary Power or travelling 69 miles daily to and from his residence in Edmonton to Sundance.
The appellant chose to travel daily to work, for which he was reimbursed at a rate of $14 a day and received in 1970 an amount of $3,318 for travelling expenses. The respondent included this amount in computing his income for 1970 and a notice of objection and a notice of appeal were filed by the appellant on the grounds that such a reimbursement for travelling expenses was not taxable.
Subsections 11(9) and 5(2) of the Income Tax Act establish specific circumstances and conditions under which travelling allowances are exempt from taxation. Subsection 11(9) states:
11. (9) Travelling expenses.—Where an officer or employee, in a taxation year,
(a) was ordinarily required to carry on the duties of his employment away from his employer’s place of business or in different places,
(b) under the contract of employment was required to pay the travelling expenses incurred by him in the performance of the duties of his office or employment, and
(c) was not in receipt of an allowance for travelling expenses that was, by virtue of subparagraph (v), (vi) or (vii) of paragraph (b) of subsection
(1) of section 5, not included in computing his income and did not claim any deduction for the year under subsection (5), (6) or (7),
there may be deducted, in computing his income from the office or employment for the year, notwithstanding paragraphs (a) and (h) of subsection (1) of section 12, amounts expended by him In the year for travelling in the course of his employment.
From the facts of this appeal the appellant for 8 months in 1970 was ordinarily required to carry on the duties of his employment at Sundance, Alberta, where his employer was engaged in the construction of a power plant at which the appellant reported daily for work, and from which he commuted daily to his place of residence. Notwithstanding the fact that the head office of Hume & Rumble Ltd was in some city other than Sundance, or that the company was engaged at other construction sites, the company’s place of business for which the appellant was employed and where he actually worked was at Sundance. So the appellant was not ordinarily required to carry on duties of his employment away from his employer’s place of business. Nor was he required by contract of employment to pay travelling ex- penses incurred by him. Moreover, the appellant, contrary to paragraph 11(9)(c), was in receipt of a $14 a day allowance for travelling expenses while he worked at Sundance.
Even though subsection 11(9) of the Income Tax Act is not the most applicable section dealing with the facts of this case, the appellant nonetheless does not, in my view, meet the requirements of that subsection and cannot therefore benefit from the tax deduction provided therein.
Subsection 5(2) of the Income Tax Act concerned specifically with construction workers is, in my opinion, the section which effectively deals with the issue in this appeal and establishes clear conditions under which a construction worker may deduct certain allowances from his income. Subsection 5(2) states:
5. (2) Construction workers.—Notwithstanding subsection (1), in computing the income of a taxpayer for a taxation year from an office or employment, where the taxpayer was, during the year, employed as a construction worker, there shall not be included
(a) the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses Incurred by him for, board and lodging, received by him
(i) In respect of, in the course of or by virtue of his employment as a construction worker at a construction site from which, by reason of distance from the place where he maintained a self-contained domestic establishment (hereinafter in this subsection referred to as his “ordinary place of residence”) in which he resided and actually supported a Spouse or a person dependent upon him for support and connected with him by blood relationship, marriage or adoption, he could not reasonably be expected to return daily to his ordinary place of residence, and
(li) In respect of a period while he was required by his duties to be away, for a period of not less than 36 hours, from his ordinary place of residence; or
(b) the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by him for, transportation between his ordinary place of residence and the construction site referred to in subparagraph (i) of paragraph (a), received by him
(i) In respect of, In the course of or by virtue of his employment described in subparagraph (i) of paragraph (a), and
(ii) in respect of a period described In subparagraph (ii) of paragraph (a), during which he received board and lodging, or a reasonable allowance In respect of expenses incurred by him for board and lodging, from his employer.
The appellant in commuting daily to and from his place of work cannot be said to have been away from his ordinary place of residence for not less than 36 hours. The deductibility of the transportation allowance provided for in subparagraphs 5(2)(b)(i) and (ii) is strictly limited to construction workers who are employed at a construction site which is so distant from the worker’s residence that he cannot reasonably be expected to return home daily as spelled out in subparagraphs 5(2)(a)(i) and (ii).
The appellant’s employment and the facts of this appeal do not meet requirements of subsection 5(2) of the Income. Tax Act and the appellant does not fall within the exception provided for in that subsection of the Act.
I conclude, therefore, that the respondent in computing the appellant’s income for 1970 properly included the amount of $3,318 received by the appellant in that year as an allowance for travelling expenses.
The appeal is dismissed.
Appeal dismissed.