Cost of parking was consequence of taxpayer’s personal choices and not bound up in employment duties

Tax – Income tax – Employment income

Taxpayer was flight attendant employed by airline employer, which provided airport parking pass to him. Minister reassessed taxpayer under Income Tax Act to include $504 value of parking pass in income as employment benefit. Taxpayer’s appeal was dismissed. Taxpayer appealed. Appeal dismissed. Purpose of s. 6(1)(a) of Act was to include in employment income all forms of compensation received by employees, whether in money or in money’s worth, to ensure equitable tax treatment of those paid in cash and of those paid in kind. Reimbursement or subsidization of personal employee costs, including costs of commuting, were generally captured by s. 6(1)(a) of Act even if employer had business purpose in conferring these items of economic value on employees. It was irrelevant that taxpayer would not have accepted position without provision of this particular benefit and that he was required to work at location with paid parking and at hours that made it difficult to commute other than by car. Commuting costs originated in taxpayer’s personal decision as to where to live and he was not required to use vehicle in course of his duties. Contrary to Tax Court judge’s view, employer had business purpose in paying for employee parking and received value from doing so and it was irrelevant whether it would be more economical for employer to replace taxpayer with flight attendant who did not commute to work by car. Tax Court judge’s analysis on these points showed dangers of overemphasizing concept of “primary beneficiary” instead of focusing on whether employee received something of economic value. Fact that employer did not require its flight attendant employees to commute to work by car demonstrated that cost of parking at airport was consequence of taxpayer’s personal choices and not bound up in his employment duties. It was determinative that employer was content to preserve personal nature of employees’ commuting choices.

Smith v. Canada (2019), 2019 CarswellNat 2363, 2019 FCA 173, David Stratas J.A., Wyman W. Webb J.A., and J.B. Laskin J.A. (F.C.A.); affirmed (2017), 2017 CarswellNat 1520, 2017 CarswellNat 9099, 2017 TCC 62, 2017 CCI 62, Sylvain Ouimet J. (T.C.C. [Informal Procedure]).

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