Blanchard v. Canada
T-2373-86
Jerome A.C.J.
22/10/92
15 pp.
Appeal from reassessment -- In 1978 plaintiff and wife purchasing home through housing program offered by employer -- Long-term agreement for sale pursuant to which made monthly payments, but would not acquire legal title until entire purchase price paid -- Would not have accepted employment in remote and isolated mining town without such program -- Housing provided not improvement over what plaintiff previously occupied -- In 1984 employer seeking to withdraw from housing program -- Instituting program whereby in return for release from liability to "buy-back" property, paid employee sum representing real estate commission employee might now have to pay on any sale of property, and transferred ownership of land to employee -- Decision to enter new program at employee's option -- Regular remuneration for services not affected -- Minister including payment of $7,240 to plaintiff in income pursuant to Income Tax Act, s. 6(1)(a), (b), (3) -- S. 6(1)(a) providing value of benefits of any kind received in course of employment shall be included in income -- S. 6(1)(b) including in income amounts received as allowance for personal or living expenses or as allowance for any other purpose -- S. 6(3) deeming payments from employer to employee as consideration for accepting employment to be remuneration for payee's services -- Appeal allowed -- Payment not taxable pursuant to s. 6(1)(a) -- Reference to cases discussing purpose of s. 6(1)(a), meaning of "benefit" -- Payment made as result of contracts extraneous to plaintiff's employment relating to ownership of land, not prerequisites of plaintiff's employment, and not affecting or changing employment -- Program not upgrading plaintiff or making him more valuable employee or creating opportunity for promotion -- Payment not allowance for purpose of s. 6(1)(b) -- Payment in satisfaction of obligation to indemnify or reimburse someone or to defray actual expenses not allowance: R. v. Pascoe, [1976] 1 F.C. 372 (C.A.) -- Concept of allowance not applicable to payment herein -- Payment in satisfaction of contractual obligation on employer and not intended for employee's personal gain or to underwrite personal extravagances -- Designed to reimburse them for loss of rights under contract -- Nothing suggesting payment made as remuneration for services under contract of employment pursuant to s. 6(3)(d) -- Contract of employment separate from housing transaction and plaintiff separately and fully remunerated for services -- 1978 Agreement and contract of employment separate and unrelated documents -- Payment not made pursuant to 1978 Agreement, but pursuant to 1984 Agreement, executed to release employer from original housing agreement -- Rendering of services in accordance with terms of contract of employment not part of business transaction resulting in payment -- Income Tax Act, S.C. 1970-71-72, c. 63, ss. 5, 6 (as am. by S.C. 1980-81-82-83, c. 140, s. 1).