The recent decision of Hauser v. R. 2014 TCC 328 is an illustration of the principles to be applied when determining whether moving expenses are deductible. The taxpayer moved in order to have a shorter commute to her new job. The only issue was whether her new home is at least 40 kilometers closer to her new work location such that the move would be an “eligible relocation” as defined in subsection 248(1) of the Income Tax Act.
The Minister argued that the distance should be measured by a major urban road. If that is the appropriate method of measurement, the new home is only 25 kilometers closer to the new work location.
The taxpayer argued that the preferred route of travel is a freeway around the city to bypass detours and delays caused by the construction on the urban road. Using the freeway distances, the new home is 45 kilometer closer to the new work location.
Referring to Giannakopoulos v. MNR, 95 DTC 5477 (FCA), the Court said the relevant principle to be applied is that the distance must be determined by the shortest route that one might travel to work, as long as it is a normal route used by the traveling public.
The urban route is a shorter route than the freeway, but was it a normal route used by the traveling public while it was under construction? The Court said it is appropriate to determine the distance using a route under construction as long as the construction does not last an inordinate amount of time. The construction project started to cause delays in 2010 and was expected to be completed by November 2012. The taxpayer moved around August 2012. Although some evidence showed that the construction lasted longer than expected, the Court found the duration of the construction was not so long as to disqualify the urban road from being the basis of the calculation. Accordingly, the Court dismissed the appeal.