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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".