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FEDERAL INCOME TAX - Employee benefits - Parking

Wednesday, July 10, 2019 @ 8:03 AM  


Lexis Advance® Quicklaw®
Appeal by the taxpayer from a decision confirming a reassessment to include the value of a parking pass provided by the appellant’s employer as an employee benefit in the appellant’s income. The appellant was a flight attendant. He argued that the parking pass primarily benefitted his employer due to the remote location and unusual hours of the appellant’s employment, and his employer’s stated belief that providing a parking pass to flight attendants enhanced their reliability and flexibility.

HELD: Appeal dismissed. Parking, like all costs of commuting to work, was ordinarily a personal expense. It remained personal even if an employee must, as a practical matter, pay for parking because of the location of his or her work or the impracticability of using public transit. In the circumstances of this case, the appellant’s parking costs remained personal, despite the employer’s business purpose in paying for them. The appellant therefore received a benefit within the meaning of paragraph 6(1)(a) of the Income Tax Act. His employer’s business purpose did not support the inference that the appellant received no economic value from the provision of the parking pass or the conclusion that the value he received was merely incidental. The employer did not require its flight attendants to commute to work by car but was content to preserve the personal nature of employees’ commuting choices. This fact demonstrated that the cost of parking at the airport was a consequence of the appellant’s personal choices and not bound up in his employment duties or in the nature of his work as a flight attendant.

Smith v. Canada, [2019] F.C.J. No. 671, Federal Court of Appeal, D.W. Stratas, W.W. Webb and J.B. Laskin JJ.A., June 10, 2019. Digest No. TLD-July82019009