A Quebec government employee, who in the course of her employment must travel to visit patients, receives an allowance of $0.43 per kilometre in accordance with the Government of Québec's Treasury Board Directive for travel allowances.
After stating that in 2007-0228521I7, CRA had “already concluded that allowances paid in accordance with the Government of Quebec's Treasury Board Directive were reasonable and therefore non-taxable,” the Directorate stated:
Furthermore, a reasonable allowance covers all costs related to the use of a vehicle and must recompense all actual expenses incurred by the employee receiving it, such as depreciation, financing, insurance and fuel costs. In this case, if the allowance received by the taxpayer is not sufficient to cover the costs related to the use of the vehicle - with respect to travel in the course of employment - we are of the view that the allowance is not reasonable and that the taxpayer is entitled to the deductions provided for in paragraphs 8(1)(h), (h.1) and (j)…. [T]he limitations in paragraph 13(7)(g) and sections 67.2 and 67.3 will apply in computing the expenses incurred by the taxpayer.