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Vehicles & Work Driving

Tax Court of Canada rejects employee's appeal concerning deduction of car expenses from income tax

In Brochu v. The Queen, 2010 TCC 274, the Tax Court of Canada addressed the basis on which employees are allowed, under the Income Tax Act, to deduct their car expenses to the extent that they relate to the person's work.

Background

Under his collective agreement, Mr. Brochu, a heavy equipment operator, received:

  • a $20/week car allowance during the weeks in which he was stationed, beginning Monday and ending on Friday, at a remote "winter" logging camp; and
  • a $8/day car allowance during the weeks in which he drove daily to either
    the employer's "depot" (a garage/office), or to a marshalling point to catch a work shuttle to a "commuter" logging camp.

Mr. Brochu took the position that given he was given an unusually low car allowance by his employer, he should be able to deduct his actual car expenses from his income tax, to the extent that they exceeded the travel allowance.  The Canada Revenue Agency disagreed.

Court's Decision  read more »

Ban in BC on electronic devices while driving will be in effect as of January 1, 2010

Jurisdiction: - British Columbia - Ontario - Quebec

Following the lead of seven other provinces - including Ontario and Quebec - BC is introducing a ban on the use of electronic devices while driving effective January 1, 2010.

My former colleagues at Lawson Lundell LLP have prepared a bulletin that provides an overview of the rules and outlines the steps that employers should take in response to the ban. The bulletin can be read here.

"Staying on Track: Car Expenses and Benefits - A Tax Guide (2009)"

PricewaterhouseCoppers LLP has published "Staying on Track: Car Expenses and Benefits - A Tax Guide (2009)". It provides an excellent overview of the tax implications for Canadian employers "when they provide automobiles to employees to help them perform their employment duties, or instead give allowances or expense reimbursements".

Notice period reduced on basis employee might find new employment after trial but before end of notice period

Jurisdiction: - British Columbia
Sector: - Manufacturing

In the Jamieson v. Finning International Inc. 2009 BCSC 861 wrongful dismissal case, the 53 year old former employee had 20 years of service and had been the Millyard Systems Manager when his employment was terminated due to 'economic events". The company offered him a severance package based on a 12 month notice period, which he rejected.

The BC Supreme Court awarded him a notice period of 19 months, but reduced it by one month in consideration of the fact that the legal action had been pursued by way of a summary trial just 6.5 months after the employee had been dismissed and the employee might find new employment before the end of the 19 month notice period

Damages

The parties were in agreement that the employee's compensation over the notice period should be based, among other entitlements, on $84,000 in base salary and a $10,920 annual bonus.  read more »