Former educator had fought tax agency in court over unorthodox but entirely legal deduction
A former teacher has sent a message to the Canadian government in a most unusual way: by moving from Whitby, Ontario to Ottawa in a canoe in order to deduct expenses from his income tax bill.
It was a meaningful victory for the recently retired 55-year-old educator, who’d lost a court battle against the CRA over its apparently inconsistent application of tax law.
As reported by CTV News, John Konecny moved from Ottawa to Toronto for his wife’s job in 1989, assuming the arrangement would be temporary. “We thought we were going back to Ottawa, so I kept doing summer school to keep my name in the place,” he told the news outlet.
But over more than twenty years, he continually moved between the two cities as he worked full-time in Toronto and part-time during the summer in Ottawa. Every year within that period, Konecny was able to deduct his moving expenses, including meals and costs of travel — something he’d been doing even as a student in 1984 — because of a quirk in Canadian tax law.
Under government tax rules, individuals can deduct their moving expenses from their tax bill if they relocate at least 40 kilometres closer to work. The rules do not specify a particular mode of transportation for the move, nor do they indicate how long someone should stay in a location to be considered a resident.
The law hasn’t changed since then. But in 2011, the CRA decided to block Konecny from claiming $1,400 in moving expenses. According to him, the agency said his moves to Ottawa in the summer were just a working vacation and could not be considered a full move.
“I was offended that the government would let me do something for 25 years … and suddenly [tell] me, 'No you can’t do this,'” he told CTV News. He took the CRA to court over the denied deduction; he eventually lost the legal battle, ending up on the hook for $3,000 in court fees.
The presiding judge told Konecny that to claim the expenses when he moved, he had to update his driver’s licence and bank information as proof of his new residency. He acted on that advice — and went even further.
“In court he asked, ‘Could you move in a day?’ He said ‘Could you move on a bike?' And then he said, 'Could you move in a canoe?'” Konecny said. “The law is for travel, it doesn’t state what type of vehicle. It doesn’t define how you travel.”
To make his point, Konecny set off in a canoe packed with essentials — including food, clothing, and bags of ice for his diabetic insulin — for his 2018 move to Ottawa. He spent five nights sleeping in provincial parks, and had to build fires to keep warm. After the journey, he filed a reported $838.30 in moving expenses, including costs of entrance to the parks, meals, bags of ice, and firewood.
The full amount was approved last week in a letter he received from the CRA.
Critics may say Konecny stretched the law through his actions, but tax experts agree that he was fully within the limits.
Speaking to the National Post on the case, David J. Rotfleisch, a managing partner and owner of Toronto law firm, Rotfleisch & Samulovitch, said that the use of “the most typical Canadian mode of transportation” was legitimate.
Dale Barrett, a managing partner at Barrett Tax Law, also approved Kenocny’s “ingenious” use of the canoe, adding that he doesn’t think it will spur any change in the wording of the Income Tax Act.
“You can’t define everything. The Income Tax Act is wordy as it is, but you’ve got to have some general principles,” he told the Post. “You can’t legislate every single word.”