The taxpayers were police union representatives. Although they continued to receive their regular remuneration from the police force, they could spend up to a specified number of hours on union duties (e.g., 1000 hours per year). They received funds from the police union for various expenses including transportation and meal expenses, and in some instances child care, internet and computer expenses and allowances for attending union meetings. These amounts were often paid in a fixed amount without receipts being required.
Lamarre J. affirmed the Minister's position that amounts received were taxable, generally as taxable allowances. Respecting amounts received from the union to compensate for home office expenses, he stated (at para. 37):
[T]hese expenses constitute personal expenses that the appellants would have incurred even if they did not have union duties. An employer's payment of an employee's regular or current expenses constitutes a taxable benefit. In reimbursing the appellants this way, under the pretext that they use their computers to carry out union tasks, the Police Union was giving the appellants a form of remuneration.