A simple question lies behind Patrick de Kruyff’s Tax Court of Canada victory last month over the Canada Revenue Agency (CRA): Who on earth would suggest taking Toronto’s Don Valley Parkway at rush hour?
An auditor in Vancouver, that’s who.
The Toronto-based financial advisor reluctantly uses the words “smoking gun” when describing the key discovery that helped him win a five-year battle to get the CRA to accept his application to deduct relocation expenses after he moved to live closer to work in 2020.
The basic rule for the deduction is that the move has to cut at least 40 kilometres off the daily commute.
But for some reason Google Maps kept giving the CRA a much shorter route than it did de Kryuff, despite the fact they both punched in the same coordinates at the same time of day Monday to Friday — the heart of rush hour, 4:45 p.m.
And then de Kruyff found the flaw that led to a precedent-setting ruling that could pave the way for tax relief for other urban commuters: the CRA’s employee was in B.C. — getting Google Maps’s suggestions to navigate Toronto traffic at 4:45 p.m. Pacific time.
That’s 7:45 p.m. Eastern.
“Judicial notice and the empirical common sense of any motorist in the city of Toronto divines that traffic conditions on the Don Valley Parkway/404 are dramatically different between 4:45pm and 7:45pm of an average weekday,” Tax Court of Canada Judge Randall Bocock wrote.
“A reasonable person would follow and adhere to the route suggested by Google Maps which [de Kruyff] has done. Frankly, so has the CRA, just incorrectly because of the time zone faux pas.”
‘A mile in Toronto is very different’
Bocock’s ruling highlights the evolution of a provision of Canada’s Income Tax Act which the courts have forced to adapt to the tangled growth of the country’s cities and the experience of commuters painfully aware the shortest way from point A to point B is not always the quickest.
Beyond the specifics of de Kruyff’s claim, the case is also significant because the judge recognized the use of Google Maps to calculate “the shortest normal route” to meet the 40-kilometre threshold for a relocation expenses claim — the hard-fought language of the legislation.
“It felt like a win not only for me, but for people in general,” de Kruyff told CBC News.
“A mile in Toronto is very different from a mile in other jurisdictions, so maybe it’s time to not look at it from distance but from a timing standpoint. Because in B.C., if you live in Prince Rupert, a 40-kilometre commute might be 20 minutes, whereas in Toronto that could be an hour plus.”
De Kruyff made the move from Newmarket to Mississauga in January 2020. He works nine to five at a job in downtown Toronto, and as Bocock points out “like many other office workers in the GTA, battles traffic travelling each day to the office. Flex time does not apply.”
“I remember talking to my physician, getting an annual checkup. He said ‘Geez, what’s going on?'” the 48-year-old recalls.
“I said, it’s the commute. He said you’ve got to change it, because if anything’s going to shorten your life, it’s going to be that.”
According to the decision, de Kruyff spent almost $130,000 on the move — a figure he says has raised eyebrows. But he says homeowners may be unaware relocation tax claims can include expenses like estate agent commissions and land transfer fees.
Regardless, the CRA rejected his initial claim, insisting the travel distance between his new and his old commute only weighed in at 32.8 kilometres, not the 47.4 kilometres Google Maps was telling him.
‘As the crow flies’
Courts have been considering battles over income tax relocation expense claims for decades.
In 1995, the Federal Court of Appeal weighed in on the question of whether the eligible distance should be measured “in a straight line, i.e. ‘as the crow flies,’ or by following a normal route of travel?”
In that case, a research interviewer moved from Stony Plain to Edmonton to be closer to the University of Alberta. But while her odometer said her new residence was 44 kilometres closer, the CRA said the distance — drawn with a ruler — was only 36 kilometres.
“Usually, a taxpayer travels to work using ordinary routes of public travel, i.e., roads, highways, railways,” the appeal court found.
“In determining whether the taxpayer has really moved 40 kilometres closer to work it only makes sense to measure the distance he has moved using real routes of travel. The straight line method bears no relation to how an employee travels to work.”
The CRA took that advice to heart — and absurd lengths — in 2007 when the agency rejected another Toronto man’s relocation claim because it was technically possible to fall under the 40-kilometre limit with a route involving 18 left turns and 19 right turns on 40 roads.
Tax Court Judge Donald Bowman was not kind.
“The 38-turn slalom suggested by the Crown is neither realistic, nor normal, nor reasonable, nor commonsensical. In some ways it is even more nonsensical than the straight line approach,” the judge wrote.
“The straight line approach would at least make sense to a crow. The 40 road zigzag approach makes sense to no one.”
‘It was a great day’
Like the taxpayers in both those previous cases, de Kruyff took the CRA’s lawyers on by himself.
He says he cross-examined the Vancouver-based auditor who would have had him travel the Don Valley Parkway at the height of rush hour, and she noted the CRA’s rules for calculating distance don’t make any allowance for time of day.
De Kruyff says he raised that point in his closing arguments.
“I think the question we have to look at is based on today’s technology, being Google Maps and things in real time, does that then move the idea of the most commonly used, shortest route to the idea of the most commonly used, shortest route at a specific time,” he said.
Bocock ultimately agreed.
“Ignoring the changing dynamic, which is the use of this ubiquitous software, renders the law obsolete, unreflective and frankly inaccurate,” he wrote.
“This more likely ‘traps’ the Court and the law in a time now past to which paper-based lawyers and judges nostalgically cling but from which the broader public has enthusiastically sprung by presently tapping smartphones in their hands and commanding the GPS in their cars.”
De Kruyff got word of the win by email on a weekday around 4 p.m. ET.
“It was a great day,” he says.
He called his wife and daughter. Then he got in his car and drove home.
