SUMMERLAND, B.C. - A national class action lawsuit by truckers against Canada Customs and Revenue Agency (CCRA) over meal allowances is proving successful for most participants, but it seems to depend largely on where they reside, says Tom Johnsto...
JUGGLING ACT: Truckers involved in the lawsuit may get their full $70 per day meal allowance back at tax time, but it could be taken back by CCRA.
SUMMERLAND, B.C. – A national class action lawsuit by truckers against Canada Customs and Revenue Agency (CCRA) over meal allowances is proving successful for most participants, but it seems to depend largely on where they reside, says Tom Johnston, the lawyer representing truckers.
By late this spring, 1,400 out of 1,900 participants have successfully claimed the civil servant rate of $70 per day. But their success depends on where they come from, according to Johnston, who has noticed a disturbing trend.
“We have graphed the success rate based on provinces and the success rate definitely drops off as you go east or west of (central) Canada,” said Johnston.
“The vast majority of the (successful) truckers have been out of Ontario. The majority have gotten it and the minority tends to be Albertans, British Columbians and Atlantic Canadians.”
That has triggered some alarm bells, since truckers are supposed to be treated equally – regardless of where they live and work.
“Once you get categorized in a certain class, you should be treated the same.
“Not one person getting $16.50, while another guy gets $33 while some others get $70.
“That doesn’t make any sense. One would think that once you’re in a particular class, which is ‘travel for a living,’ you would get the rate, whatever that rate is,” Johnston said. “It sets up a discrimination argument. Obviously they’re picking and choosing what ones they want to (receive the civil servant rate) and that’s exactly what they shouldn’t be doing.”
Those who have been refused the civil servant rate are pursuing it further.
Johnston said he was hoping that everyone on board would have received the full amount for the 2002 tax year by now, so they could begin working on previous years’ returns.
But is receiving the $70 claimed really a victory? Not necessarily, according to CCRA spokesperson, Dawna Labonte.
She cautioned that while drivers may receive the $70 they filed for in the first place, they could be asked to repay it with interest at any time within four years once their claim is re-assessed.
Labonte said CCRA often pays the initial amount claimed to expedite the tax filing process. The claim is later re-assessed which is where truckers who received $70 per day could find themselves in trouble.
“The re-assessment is when we look into the details of the claim,” explained Labonte.
“If you claimed an amount that’s not eligible then we will ask for that back and you will have to pay interest. That could be a significant amount.”
Even so, Johnston continues to advise the class’s members to claim the $70 civil servant rate.
When the lawsuit was launched in the spring of 2002, he told Truck News that truckers who have been driving for 10 years or more could receive between $20,000 and $40,000 in compensation when all is said and done. That may prove to be a long process, but the class action lawsuit is forging ahead, he said.
“What we are attempting to do is deal with the management level of CCRA to get it straightened out,” Johnston said of the inconsistencies involving refunds. “Some offices continue to fall back on the position that each case is an individual case, which doesn’t make any sense. They aren’t individual cases, they’re all travelling, they’re all eating meals and they all should be entitled to the meal allowance.”
Those who are taking part in the lawsuit will also try to claim the full amount for the 2003 tax year before pulling out their records from years gone by. Johnston is hopeful there will be as much, if not more, success in ’03 as there was for the ’02 tax year.
“We may be able to get some of the 2002 and 2003 issues resolved through administrative procedures – that’s what we’re looking at doing now,” Johnston said. “We’d prefer not to and the Justice Department would prefer not to have this issue before the courts because it’s one that we essentially agreed to, that they should be treated in a certain manner. But these tax returns are handled at individual offices and they seem to have different approaches.”
The class action lawsuit is no longer open to new participants, but many industry observers are keeping a close eye on the developments, which are posted at the law firm’s Web site: www.summerlandlawoffice.com/classaction.html.
“We wanted to have an identifiable class, so we could see if all 1,900 had received it or not,” Johnston said by way of explaining why class action participants are no longer being accepted. Because the class has remained the same size all along, he said it’s been easy to determine that 400 members are “still getting shafted.”
He added that if the court allows the class action suit to recruit new members down the road, it is possible it could be expanded. If that happens, the information will be posted on the law firm’s Web site.
Some of the participants have expressed concern at how slowly the lawsuit is moving. Johnston addressed these complaints with a posting on his Web site.
“We are still receiving documents from various sources with respect to the acceptance by CCRA of the civil servant rate. We have also been keeping the case moving along, connecting with our clients, doing research, and figuring out how the federal government has been able to spin its way through the dry complexities of the Income Tax Act, as well as figuring out how the Charter applies to all of this. Obviously, this case will have a profound effect on many Canadians and in fact will indirectly affect all Canadians if, we are successful,” Johnston wrote.
“Having said that, we are keenly aware that some of you are dissatisfied with the progress we have made to date in this case. Rest assured that we are relentlessly pursuing victory. We have outstanding staff who are all diligently working for you.”
He added: “Since we have undertaken this monumental task, the number of detours and road blocks have been anything but predictable.” One obstacle that has posed difficulties for some members is that there’s been some unexpected resistance among the accountants handling truckers’ claims – possibly because they are aware claiming $70 could cause repercussions down the road.
“We’ve run into a situation with the accounting profession where they’re beholding to CCRA,” explained Johnston. “They don’t want to lose e-mail filing privileges and so on, so they’ve been refusing to do these returns for some of their trucker clients. We’ve built up an inventory of accountants and tax preparers that know how to do it, but we don’t want to have people changing their accountants over this issue.”
On another note, many of the truckers participating in the lawsuit have received a mysterious letter requesting personal tax information, which is not from CCRA or Johnston’s law firm.
He warned participants not to send the requested information, or money, to the letter’s author. Instead, report the suspicious letter to the police or CCRA.
“This proposed meal allowance class action has been more successful than we anticipated,” said Johnston. “We have been putting our full energies into ensuring that all our 1,900 members receive the full meal allowance at $70 a day without receipts.”
Johnston advises members to continue filing amended returns with CCRA requesting the full amount of $70 per day.
But CCRA officials insist any $70 payouts can be retracted during the re-assessment stage.