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

By John Deverell
Toronto Star, July 25, 1998

BERNARD WEIL/TORONTO STAR

SAVOURY WIN: Wayne Scott, a former courier, won his 16-year battle with Revenue Canada to make some food and drink tax-deductible.

Bike and foot courier Wayne Scott beat 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 some food is business fuel, and that extra fuel is a tax-deductible business expense.

Mr. Justice Joe McDonald issued a ruling this week overturning the Tax Court of Canada and a Revenue Canada tradition that holds 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 a court,'' Scott said yesterday, basking in praise from other couriers at the Standby Cafe on Temperance St.

Scott, 48, was a bike courier from 1981 and, after a severe accident in 1990, switched to good shoes and a Metropass to deliver on foot. He left 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 beyond the norm to get through a strenuous day and shouldn't have to pay income tax on the outlay.

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

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

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

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

``Only where there is a corresponding business deduction for fuel in the form of gasoline for the same type of business will a deduction for the 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 consume large amounts of food.

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

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

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

Paul Mallette, who argued for the federal justice department, said it is too soon to know whether the decision will be appealed to the Supreme Court of Canada.

Scott precipitated the court proceedings in 1994 when he began declaring taxable income but refusing to pay Revenue Canada unless it granted his request 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 called to offer her services for free.

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

Top couriers make $650 to $700 a week, while many others toil for $250 to $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 returns based on the latest ruling.

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

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

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