Yes, there is a tax-free lunch ...

By John Deverell
Toronto Star, July 25, 1998

SAVOURY WIN: WayneScott, a former courier, won his 16-year battle with Revenue Canada tomake some food and drink tax-deductible.

Bike and foot courier Wayne Scottbeat the taxman.

It took 16 years, but Scott, a fixture on the Toronto courier scene,finally won his point in the Federal Court of Appeal: For a courier somefood is business fuel, and that extra fuel is a tax-deductible businessexpense.

Mr. Justice Joe McDonald issued a ruling this weekoverturning the Tax Court of Canada and a Revenue Canada tradition thatholds all personally consumed food and drink to be personal expenses.

``I knew all along I was right, but it feels good to hear it from acourt,'' Scott said yesterday, basking in praise from other couriers atthe Standby Cafe on Temperance St.

Scott, 48, was a bike courier from 1981 and, after a severe accidentin 1990, switched to good shoes and a Metropass to deliver on foot. Heleft the business last year.

He has been telling Revenue Canada for years that working couriers,who are treated as independent contractors, need food and drink well beyondthe norm to get through a strenuous day and shouldn't have to pay incometax on the outlay.

"We all require foodand water to live. (A courier, as an independent contractor) can only deductthe extra food and water he must consume above and beyond the average person'sintake in order to perform his job.

"This is similar to the automobilecourier who is only entitled to deduct that portion of the fuel used fora business purpose."

- Mr. Justice Joe McDonald
Federal Court of Appeal

He has also argued that bike and foot couriers do much good by avoidingthe use of gasoline.

``Couriers shun technology to save the environment,'' said Scott. ``Weput our bodies where our mouth is. I hope this decision brings us a littlecloser to the mainstream of society.''

McDonald said his ruling will not open the floodgates for all and sundryto claim tax deductions for food and beverage expenditures.

``The analogy between fuel for an automobile and fuel for the humanbody provides an appropriate line for the courts to draw,'' he wrote.

``Only where there is a corresponding business deduction for fuel inthe form of gasoline for the same type of business will a deduction forthe extra food and water a human needs to consume as its fuel be allowed.''

By that standard, a rickshaw driver, who competes with taxi drivers,gets a deduction, but a construction worker does not, although he may consumelarge amounts of food.

McDonald sent the case back to Tax Court to decide how much the deductionshould be.

Scott, who would graze all day, suggested $8 for extra food and $3 forextra drink, but the judge raised a cautionary flag.

``I have doubts as to whether Perrier is necessary in lieu of tap wateror commercially bottled water,'' he wrote.

Paul Mallette, who argued for the federal justice department, said itis too soon to know whether the decision will be appealed to the SupremeCourt of Canada.

Scott precipitated the court proceedings in 1994 when he began declaringtaxable income but refusing to pay Revenue Canada unless it granted hisrequest for a favourable ruling on expense deductibility.

Daina Groskaufmanis of Torkin, Manes Cohen & Arbus represented Scott.She read about his loss in Tax Court, thought he should appeal and calledto offer her services for free.


``The firm knew there was a good argument, but nobody actually thoughtwe'd change the 19th-century case law and set precedent,'' she said. ``Logicand the law don't always go together.''

Top couriers make $650 to $700 a week, while many others toil for $250to $450. Many don't bother declaring their small incomes to Revenue Canada``but maybe now they will,'' said Groskaufmanis.

Courier Stephen Peringer, 22, said he will resubmit his income tax returnsbased on the latest ruling.

``We won, and I eat a lot more than the average person because of thiswork,'' he said.

Deb Puricelli, 24, said the decision was ``a very good thing, becausewe're fuel-efficient. We should be encouraged.''

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