A City provides the foremen of the Public Works Department with vans for travel during working hours but with the vehicles left at their disposal of the foremen at all times other than during vacations since they are sometimes called upon to carry out tasks related to their employment outside of normal working hours. Although travel of a personal nature is generally prohibited, a portion of the kilometres driven by foremen is for personal use. The employer pays for all expenses related to the operation of the vehicles, such as gas, maintenance and insurance, whether the vehicles are used for job-related or personal purposes.
CRA indicated that as the vans were at their disposal in part for personal use, a taxable benefit must be included in the foremen's income for each taxation year in which the van is available to them. A reduction in this benefit may be made if the employer requires the employee to use the vehicle in the performance of the duties of the office or employment and the total distance travelled by the van was primarily in the performance of the duties of the employee's office or employment.
In addition, to the extent that the operating expenses associated with the personal use of the vehicles are borne by the City they would be a taxable benefit under s. 6(1)(k).