Good news for those who don't fly to work: Moving costs deductible: Distances needn't be measured in a straight line

National Post


This coming week, while the rest of the country celebrates Canada Day, Quebecers
will be preoccupied with the annual July 1 Moving Day, known locally as La fete
de demenagement.

This year it is estimated that nearly 900,000 tenants will be moving on July

What's so special about July 1? The date can be traced back to 1973 when the
Civil Code of Quebec was amended to stipulate that unless a landlord and tenant
specifically agree otherwise, every 12-month lease must run from July 1 to June

As a result, some Montreal movers have been doubling their normal rates for
July 1 moves -- assuming you can even find a mover.

The good news is that at least for some, your moving expenses may be tax

Under the tax rules, you can deduct your moving expenses if you move from one
place to another to start a new job or begin a new business, provided your new
residence is at least 40 kilometres closer to the new work or business location
than the old residence.

But how is the 40-kilometre distance measured? This was the issue facing the
Federal Court of Appeal a decade ago in a seminal case dealing with moving

Dianne Giannakopoulos was a researcher with the University of Alberta when
she accepted a new position that required her to work at a different location.
In order to be closer to her new workplace, she moved from Stony Plain, Alta. to

Ms. Giannakopoulos measured the distance on her car odometer to be 44
kilometres closer to the new location than her prior residence and consequently,
deducted her moving expenses on her tax return.

The Canada Revenue Agency disallowed her deduction on the basis that, when
measured in a straight line, her new residence was actually only 36 kilometres
closer to her workplace than her prior one.

The Court was asked to determine how the distance between two geographic
points should be measured, since no method of measurement is specifically
sanctioned in the Income Tax Act.

In other words, should the distance be measured "as the crow flies," (i.e.,
in a straight line) as the CRA argued, or by the normal route taken by the
travelling public, as Ms. Giannakopoulos maintained.

In making its decision, the Court examined the purpose behind the moving
expense deduction, which was to allow an employee, who may have to move in order
to remain within a practical commuting distance of a new job, to be able to
deduct the relocation cost as a legitimate, work-related expense.

The Court concluded that it only makes sense to measure the distance Ms.
Giannakopoulos moved using real routes of travel. As the judge remarked, "the
straight line method bears no relation to how an employee travels to work. It is
illogical to apply this technique to a provision which exists to recognize work
related relocation expenses. It leads to absurd results."

The Court found in favour of Ms. Giannakopoulos and her moving expenses were
allowed. This decision reversed a string of earlier tax cases and is good news
for any taxpayers who are moving, especially those of us who don't regularly fly
to work.

GRAPHIC: Black & White Photo: Marie-France Coallier, The Gazette; Piano movers
(left) Rob Prasad (left) and Tomas Rebelo from Move'n Tune in Montreal. You can
deduct moving costs if your new residence is at least 40 kilometres closer to
work than before. A court has ruled it only makes sense to measure the distance
using real routes of travel, not a straight line.