It’s tax time and you’re getting ready to file, but you’re starting to get that sick feeling, the one way down in the pit of your stomach, the one that tells you something is on its way back up.
Make no mistake – what’s making you queasy is a year’s worth of lunches, the ones you thought were deductible.
That’s right, if you’re a short haul driver, someone who goes home at night, or even if you’re on long haul most of the time, but occasionally deduct a lunch on a short haul, you could be out of luck.
In other words, before you read the rest of this you should get ready to swallow twice, and hard.
Because that windfall you were planning on getting back when you deduct your lunches may not be coming after all.
It’s all thanks to a tax case decided and upheld on appeal in B.C. last year, where the judge ruled that B.C. ferry workers, who, like truckers, qualify as transport workers under the Canadian Income Tax Act, couldn’t deduct their lunches.
Granted, ferry workers are not truck drivers,and they do not share the work conditions of truck drivers. So common sense would lead one to conclude that the judge in this case merely looked at the particular situation (maybe the ferry had a fridge on board that would allow the workers to brown bag easily) and simply said “No, you guys aren’t in the same situation as those guys (truck drivers and rail employees) and you can’t have the same privileges.”
And to be fair, the judge did stipulate, when the defense brought up the whole what-would-you-say-to-a-truck-driver argument, that the case of truck drivers was “hypothetical,” and didn’t necessarily have a bearing on the ferry workers’ case.
But that’s small comfort to truck drivers in light of the ruling that was finally made.
The tax court judge’s ruling in this case,was based on the conjunctive “and” in the language of the Income Tax Act itself, namely the “and” that appears in “Claims or Meals AND Lodging Expenses of Transport Employees.”
Apparently, the “and” was critical in the tax court’s ruling. AND it’s what makes the tax court’s ruling so darned scary for truck drivers.
Here’s why: Thanks to the conjunctive “and” ruling, the ferry workers couldn’t deduct their lunches because they weren’t required to stay away from home overnight. And since ferry workers, like truck drivers, are transport workers, it could mean the same for truck drivers who don’t stay away overnight either. (This does not include O/Os who file as businesses.)
Point is, it was decided in court, so it’s a premise, like it or not.
This despite the fact that literature (Circular 73-21R8 ) explaining transport worker meal deductions and published by Revenue Canada last fall (and after the ruling and appeal in the ferry worker case) states: “Where a shorter journey (of a truck driver) is scheduled for 10 hours or less, the CCRA would expect the transport employee to eat breakfast and dinner meals at home, as is the case with most other employees. Accordingly, only one meal per day, namely lunch, will be permitted (as a deduction) in these circumstances.”
The panic of truck drivers who have been or who were planning on claiming deductions for their lunches at the end of the month is understandable.
Should they claim and risk having to pay it all back? Or should they not claim and sacrifice a sizable chunk of change to their peace of mind?