Principal Issues: Linespersons are on-call for five or six weeks per year and are required by the employer to take a company pick-up truck or a bucket truck home in order to respond to calls more expediently. The trucks are motor vehicles, not "automobiles" as defined under subsection 248(1) of the Act and are used to carry specialized equipment that are bulky in nature and used directly in the performance of the linespersons' employment duties, i.e., personal protection clothing, gear and equipment such as harnesses/cable-locating equipment etc.
1) Will a taxable benefit arise in the circumstances described?
2) What is an appropriate method to calculate the employment benefit for the personal use of the motor vehicles?
Position: 1)Yes. 2) The rate prescribed in s. 7305.1 of the Regulations.
Reasons: The rate in section 7305.1 of the Regulations reflects the economic benefit enjoyed by taxpayers that are prohibited from the personal use (other than driving between home and work) of motor vehicles that are specifically suited or designed to the employers' business or trade and are essential in a fundamental way for the performance of the employment duties. While this rate does not reflect the capital cost of owning a motor vehicle, it generally does reflect the operating cost. The rate, therefore, better reflects the benefit as a result of saving expenses that he or she would have otherwise had to incur for travel to and from work.t