Date: 19991008
Docket: 1999-1637-IT-I
BETWEEN:
V. PAUL McLAREN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
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For the Appellant: the Appellant himself
Agent for the Respondent: Michael Taylor (Student-at-law)
___________________________________________________________________
Reasons for Judgment
(Delivered orally from the Bench at Edmonton, Alberta, on August 23, 1999)
Bowie J.T.C.C.
[1] The facts of this case are not seriously in dispute, although there is some difference between the parties in the way that they are expressed. The material facts, however, are that the Appellant, Mr. McLaren, was living and working in Port Alberni up to December 1995. Some time before December 15, 1995 he had decided that he would leave Port Alberni, and that he was going to look for work in some other part of Canada. He had also decided that there was a significant possibility that the mill in Port Alberni, which is essentially a one-industry town, might close, with the effect of depressing real estate prices. He therefore advertised his house for sale, and sold it on December 15, 1995. At that time Mr. McLaren’s wife and children moved to another residence, rented, in Port Alberni, and at some undetermined date they moved to yet another rented residence in Port Alberni.
[2] Mr. McLaren’s position is that he did not move with them to those two subsequent residences, so that neither of them became his ordinary place of residence. What he did do was to leave Port Alberni and live at various times with his mother and with various friends in Victoria, Kamloops and Edmonton, all the while searching for employment. He occasionally returned for a weekend to Port Alberni to spend some time with his family. He had briefly a job on a trial basis in Kamloops about the end of 1994 or the beginning of 1995, and he worked there for three months, but did not become permanently employed there. However, he continued his search for employment, and in early 1997 he was in touch with a company called Aero Paint Canada Inc., for which he subsequently went to work, beginning that employment about April 1997, first on a trial basis and then subsequently on a permanent basis. After his employment with Aero Paint in Edmonton had become permanent, he moved his family from Port Alberni to Edmonton on or about August 14, 1997.
[3] In filing his income tax return for the 1997 taxation year he claimed an amount for moving expenses pursuant to subsection 62(1) of the Income Tax Act, and the expenses that he claimed included a total amount of $6,658.96 consisting of the real estate commissions, legal fees and mortgage penalty, all incurred in order to sell his house in Port Alberni in December 1995. This amount was not allowed by the Minister of National Revenue in assessing his return for the 1997 taxation year, and the question before me today is whether or not it should have been.
[4] The operative words of section 62(1) of the Act are:
Where a taxpayer has, at any time, commenced
(a) ... to be employed at a location in Canada ...
(b) ...
and by reason thereof has moved from the residence in Canada at which, before the move, he ordinarily resided...to a residence in Canada at which, after the move, he ordinarily resided...there may be deducted amounts paid by him as or on account of moving expenses ...
The subsection also contains a condition as to the distance of the move and particulars with respect to the computation of the expenses, neither of which is an issue here.
[5] It is clear, both from the English version of the Act and from the French version of the Act, that on its ordinary grammatical construction the taxpayer must commence to be employed at the new location in Canada, and, as a result of that commencement of employment, incur the expenses, in order for them to be deductible under the subsection. In other words, what subsection 62(1) permits is a deduction for the costs of moving to specific employment after that employment has been located and begun, as opposed to the costs of moving from one’s former residence in order to go and look for work at some other location.
[6] As I understood Mr. McLaren’s position, it was that he did not become ordinarily resident in either the second or third place that his family lived in Port Alberni, and therefore at the time of his move to Edmonton his ordinary place of residence remained the first house, the house which he sold in Port Alberni. In my view the facts and the words of the Act are simply not open to that construction. It is quite clear that whatever his ordinary place of residence may have been, it was not, after December 15 when the house that he owned in Port Alberni sold, that particular house.
[7] It is argued for the Respondent that his ordinary place of residence was where his wife and children resided from time to time in Port Alberni. Certainly that was, according to his evidence, his mailing address. One might, I suppose, take the view that if he stayed for a protracted length of time with his mother or with friends, whether it be in Victoria, Kamloops or elsewhere, that that became his ordinary place of residence, but it is certain that after December 15, 1995, his ordinary place of residence was no longer the house that he had sold.
[8] Unfortunately the wording of subsection 62(1) simply does not admit of a construction that would permit the deduction where the taxpayer has incurred the expense before finding the new employment.
[9] I am therefore bound to dismiss the appeal.
Signed at Ottawa, Canada, this 8th day of October, 1999.
"E.A. Bowie"
J.T.C.C.