An amount is paid by an employer to compensate a lessor for the total loss of an employer-leased automobile (which was self-insured for collision damages by the employer). CRA stated:
[A] payment made by an employer to a lessor to compensate for damages (including the total loss of a leased automobile) … would not be included in the standby charge calculation in subsection 6(2) … . That is, a payment made for this purpose (i.e., an amount normally covered by insurance) would not be an amount payable by the employer to a lessor for the purpose of leasing the automobile. The items described in paragraph 13 of IT-63R5 (including a terminal charge) are generally reflective of the extra use of a leased automobile over what was contemplated in a lease, and not the loss or damages of an automobile, due to an accident.
This position represented a reversal of 2011-0399691I7.