The taxpayer was a boilermaker who regularly travelled from his home in Kelowna to jobs in various out-ot-town locations. The collective agreement governing his employment was altered in 2014 so as to create administrative ease by obviating the need for receipts and standardizing the reimbursement regime; the new allowance was calculated using Burnaby City Hall as a common starting place for all workers regardless of their actual starting location, with no additional payment except for a few limited specific exceptions such as ferries, taxis and airfare and project-specific agreements.
Wong J noted (at para. 17) that following 1994 amendments to s. 6(1)(b)(vii) and (vii.1) “an allowance for travel or motor vehicle expenses must be wholly reasonable in order to be excluded from employment income”, and conversely “where such an allowance is considered unreasonable and must therefore be included in income, travel or motor vehicle expenses may be deductible from income by virtue of paragraphs 8(1)(h) and (h.1)” (para. 18). Here, regarding s. 6(1)(b)(vii) “its wording requires that the employee be travelling away from the employer’s establishment … [whereas h]ere, Burnaby City Hall has no connection to the employer’s establishment so the allowance received by Mr. Nicoll is either unreasonable or falls outside the parameters set out by the provision” (para. 20). If the allowance was instead considered under s. 6(1)(b)(vii.1), the allowance would be deemed unreasonable by virtue of s. 6(1)(b)(x), as Burnaby City Hall was “an arbitrary starting point” so that “the allowance was not based solely on the number of kilometres driven for an employment purpose” (para. 21).
Although actual expenses of travel potentially could be deducted under s. 8(1)(h) or (h.1), the “streamlined reimbursement system under the collective agreement did not lend itself to [the required] recordkeeping” (para. 25) i.e., there was insufficient evidence for deductions thereunder.