It's Your Money
by Jim Park
It's time to blow the lid off of this meal-tax issue. If you're waiting around for the government to help, or for the carrier associations to lobby the government to change the rules, you're wasting your time and it's costing you money. It ain't gonna happen.
It's time to take this issue into your own hands and start making changes to the system from the bottom up. Get off your Canadian butts, folks, and do this for yourselves. You can make a difference, just like Don Wilkinson did.
But first, let's understand what we're dealing with here: the Canadian Customs and Revenue Agency (CCRA), formerly known as Revenue Canada, allows transport employees to deduct a portion (50%) of the cost of their away-from-home meals from their taxable income. That means it's not a meal allowance; your claim for meal expenses is deductible from your taxable income. If your taxable income is $40,000, and you claim $3000 in meal expenses, the result is that your taxable income drops to $37,000. In real dollars, what you're getting back from your meal expense claim is 50% of the difference in the amount of tax you would have paid if your taxable income hadn't dropped from forty grand to thirty-seven.
Big friggin' deal!
Finance Minister Paul Martin answers dozens of queries from truckers every month on this issue with exactly the same letter. I've seen a pile of them. He cranks them out by the dozen, complete with an electronic signature. His standard response suggests that he really doesn't understand the problem, and for all (?) the lobbying the associations have done on your behalf, he still doesn't get it.
He always comes back to some crap about fairness in the tax code and how unfair it would be to grant trucking a more generous deduction for "business meals" than any other sector. On that assertion, he's correct. If Martin was to grant carriers a more generous deduction than, say, computer firms, then he'd have a fight on his hands, but a truck driver's meals aren't "business meals." Martin is obviously operating under the assumption that the trucking industry somehow contributes to the cost of its drivers' meal expenses, which we all know isn't the case. Martin probably assumes that it's the carriers, not the drivers, who are looking for a more generous deduction.
If you want to see the 50% issue addressed, you've got to make your Member of Parliament understand that eating on the road, especially when you're a company driver, isn't a cost of doing business; it's a cost of living. If more MPs understood that their constituents were forced to dig deep into their own pockets to eat while on the job, I'd bet you'd find more than a few sympathetic ears on Parliament Hill.
The Treasury Board allows Canada's civil servants up to $61.50 per day as a paid allowance when they travel. That's a tax-free, cash-on-the-barrel allowance to cover the cost of survival while out on government business. And it's paid over and above their regular salaries. But don't confuse the issue here; it's not that the government is screwing you while looking after its own. It's that nobody is coming to your aid in covering those expenses while you're working, and you have no alternative to eating in restaurants.
If 100,000 drivers deducted $61.50 from their taxable income to cover meal expenses, the government would see a drop in potentially taxable income of $6,150,000 every day, so you can imagine why they're in no hurry to address the issue. But look at it like this and you'll have a strong incentive to start writing letters.
If you spend an average of $45.00 a day, including U.S. exchange, for 250 days away, it's costing you $11,250 a year to eat on the road. Subtract $11,250 from your after-tax income last year and tell me it isn't worth an hour's time to explain the problem. Postage is free, by the way, on all correspondence to MPs, and they're required to answer each and every letter. Forget Paul Martin. He doesn't get it, and he really doesn't matter. He's only one MP, and he's the one with the letter-writing machine. Write to your own MP and talk votes. With 40,000 highwaySTAR readers every month writing the same sort of letter, they'll soon be listening, I assure you.
Explain it the way I have here, and make it clear to your MP that your restaurant meals come directly out of your pocket and therefore should be at least 100% deductible, if not 100% deductible from your after-tax income. If you haven't got the stomach to confront your MP, then for God's sake, file a meal claim like Wilkinson did, and use the Treasury Board allowances.
The worst that could happen is that you'd be audited, and that's not so bad if you've been honest all along. The best thing that could happen is for 40,000 other drivers to do the same. That way, CCRA would soon be up to its backside in assessments and audits, far more than they could ever hope to handle. And remember, there's a judgment on the books now, saying it's okay to proceed with a "reasonable amount" as a meal claim. So what's reasonable? Please refer to Appendix C...
To contact your MP with your concerns, please visit this page for our sample letter.