An August 25, 2025 Tax Court of Canada case considered whether a taxpayer’s relocation expenses in 2020 qualified as deductible moving expenses. The dispute focused on whether the distance between the old residence and the new work location was at least 40 kilometres greater than the distance between the new residence and the new work location.
CRA calculated the difference as only 32.8 km using an “eastern route” proposed by Google Maps. The taxpayer, also using Google Maps, submitted route data showing an average difference of 47.4 km using a “western route.”
Taxpayer wins
The Court noted that, based on various other court cases, the measure and test should be evaluated based on the shortest normal route. The Court noted that technology like Google Maps is widely accepted and used, representing an updated method and the new norm to identify the shortest normal route. This was supported by the fact that both the taxpayer and CRA used Google Maps to determine the appropriate route.
The Court then examined the parameters that CRA and the taxpayer used to obtain their respective Google Map results. It noted that the CRA agent, located in a different time zone than the taxpayer, had generated route estimates based on traffic at approximately 7:45 pm, rather than the taxpayer’s actual commuting time of 4:45 pm. The taxpayer demonstrated that in four out of five weekdays, at 4:45 pm, Google Maps suggested the route resulting in a 47.4 km difference. The Court noted that the updated utilization of computer algorithms, when properly deployed, renders consistent sets of data to determine whether a move is an eligible relocation or not.
The Court agreed with the taxpayer, concluding that the average daily travel distance saved by the move exceeded 40 kilometres, and therefore, the relocation qualified.
Disclaimer: The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.