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Measuring Distance for Moving Expense Purposes

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Measuring Distance for Moving Expense Purposes

Hauser v The Queen, 2014 TCC 328

At issue was how to measure the distance between two locations (old home and work) for purposes of the moving expense deduction (ITA, s 62) so as to determine whether a move was an “eligible relocation” (ITA, s 248(1)) or not.


The Crown argued that the distance should be measured using a commute along the major urban route, being the shortest normal route.

The Taxpayer argued that the distance should be measured according to the most efficient route in a particular tax year – in this case a freeway route that goes around the city and bypasses detours and delays on the urban route caused by construction and light rail transit.


To qualify for a work-related moving expense deduction – section 62 of the ITA – the move must be an “eligible relocation” as defined in subsection 248(1) of the ITA.  An eligible relocation requires that the distance between the old residence and the work location be not less than 40 Km greater that the distance between the new residence and the work location.  In other words, the taxpayer must move to be more than 40 Km closer to work.

The principles applicable were set out in Giannakopoulos v MNR, 95 DTC 5477 (FCA), at paragraphs 7-9:

  • The usual starting point is that the taxpayer travels “to work using ordinary routes of public travel, i.e. roads, highways, railways”;
  • The distance should be measured “using real routes of travel” so as to get “a realistic measurement of traveling distance”;
  • The straight-line method is not appropriate because it does not relate to how an employee travels to work;
  • The normal route is not the subjective route that the worker normally takes to get to work, but rather refers to the shortest normal route of the travelling public;
  • Consideration of the normal route can include routes under construction, so long as construction projects do not last an inordinate amount of time (not that the delay caused by the project adds inordinately to the commute);

The deduction for moving expenses is meant to recognize that although the commute to work is a personal expense, the move to be within a reasonable distance of work is a legitimate employment expense.  To be eligible the move is expected to provide long-term benefits (a number of years), and not short term ones (for example avoiding a short term construction project).

In this case, the court was not convinced that the delays and detours lasted sufficiently long to make the urban route not an appropriate route for section 62 purposes.

– Sas Ansari

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Moving Expense of Employees – CRA Officer v CRA

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Moving Expenses of Employees – What is Deductible for Income Tax Purposes?

Sirivar v The Queen, 2014 TCC 24

At issue was whether paragraph 62(3)(c) which limited deductions for costs of meals and lodging to 15 days worth works to limit the deduction of lodging expenses that are properly moving expenses.

The TCC held that the 15 day limit only applies to room and board and is intended to extend deduction to expenses not properly “moving expenses” and not to limit proper moving expense deductions.


A CRA officer moved from Ottawa to Toronto to take up a new position with the CRA.  He spent one week in a hotel, and then rented a room in a private home, postponing his purchase of a home in Toronto because for 20 weeks after the  move he was required to work on large cases back in Ottawa (but was reimbursed only for 8 weeks).  There was also uncertainty which CRA office he would report to in Toronto.  He made claims for the room rental in Toronto, 9 trips to Ottawa, Ottawa home ownership expenses while that home was vacant, other travel expenses, and storage and moving expenses.

The CRA denied the all or part of the amounts claimed.


The Court began by reviewing Sections 62 of the Income Tax Act, and the definition of “eligible relocation” in subsection 248(1) of the ITA.

The court then referred to the decision in Storrow v. The Queen, [1979] 1 F.C. 595, dealing with the interpretation of 62(3), where it was said that moving expenses are “the ordinary out-of-pocket expenses incurred by a taxpayer in the course of physically changing his residence” and does NOT include (except as expressly included in subsection 62(3)) increased cost of a new residence over the old one, cost of installing household items from the old home in the new one, cost of refitting household items in the old residences, or outlays costs associated with the acquisition of the new residence.  “Only outlays incurred to effect the physical transfer of the taxpayer, his household, and their belongings to the new residence are deductible”.

The court then referred to the FCA decision in A.G. of Canada v. Séguin, 97 DTC 5457, moving expenses don’t include “accessory damages that are unrelated to the actual move to and resettlement in the new residence”, such as interest expenses on loans not pertaining to the physical move of the taxpayer.

Lodging expense deduction are limited to a period of 15 days by paragraph 62(3)(c) – refers to cost of meals and lodging for temporary accommodations – and is meant to capture things not otherwise considered to be “moving expenses”.  The TCC distinguished Christian v. The Queen, 2010 TCC 458, and said that there is no intention by parliament to restrict lodging expenses property part of moving expenses, but only to allow deduction of “room and board”.  Where the conditions of employment prolong the completion of an eligible relocation – in this case, because a permanent home could not be found until the exact workplace was identified by the employer – the taxpayer is not to be penalized for accommodating the needs of his employer.

The TCC allowed the expenses for lodging for the hotel and the room in a private residence but did not allow the other deductions.

Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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