CRA issued a directive stating that meal allowances of over $17 per meal would be considered unreasonable, and on that basis the taxpayer's employer treated his $20 meal allowances as a taxable benefit.
In allowing the taxpayer's appeal, Tardif J. found that:
- the $17 threshold was arbitrary and unsubstantiated, and therefore there was no basis to conclude that $20 was unreasonable; and
- whether an employer treats a benefit as a taxable benefit is ultimately irrelevant to its proper tax treatment, "particularly if it is the product of a superficial and arbitrary analysis" (para. 7).