The downs, ups, downs, and ups of the TL2 Simplified Method

I was doing some research on the history and comparisons of the TL2 and Non-Taxable Benefits (NTB) in preparation for a short video on the 38-year study. While doing a step-by-step breakdown, I reviewed the Aug 24th 2000 court case of Don Wilkinson vs CRA. This court case was the one I quoted in my first book “Making Your Miles Count: taxes, taxes, taxes”. The conflict was that Don claimed $40 per day rather than the $33 allowed at the time. The debate between the judge and the CRA representative was a conflict between the “reasonableness” of the $40 per day asked for versus the allowable $33. The evidence Don Wilkinson provided was that the CRA gave $48.00 per day to their auditors when in travel status. The now infamous quote by His Honor (condensed):

“…why is it reasonable for civil servants to be paid $48 a day for meals while somebody who has to go down to the States on work business and buy their meal is limited to the amount of $33 (Canadian currency) … quite frankly, it just boggles the mind that $33 would be considered to be sufficient… I just do not see $33 per day as being nearly what I would call reasonable in the circumstances… I am going to allow the appeal, as you may have gathered from my comments.”

Mr. Bouvier (CRA Rep): “Yes. Well, I think enough is said.”

The conflict was/is the TL2 regulatory publication of $33 per day (today the amount is $69 per day). The judge had an issue with the $33 as not adequate in comparison to the civil servants’ $48. In the end, he allowed Don Wilkinson to claim $40. This means the “regulatory publication” is subject to “reasonableness” (according to the judge).

However, that being compared and said, there are some details about the issues that I’ve never really gone over in any of my articles but will do so now (also in my video). Comparing $33 per day to $48 per day is inaccurate. The $48 is a non-taxable benefit (after-tax money) and the $33 is the amount that is entered into the income tax form as a gross figure. The formulas assigned in the income tax system convert the $33 DOWN into its after-tax figure (called non-refundable tax credit). The true comparison is actually $48.00 and $5.38… YEP! That’s right! An 892% difference (not even the lowest in the 38-year review).

There is yet another issue regarding the court case numbers. Don Wilkinson’s use of $48 is not the actual amount. It’s not the figure civil servants were using at the time of the court case. Depending on its date of reference it was: 1995 $47.55, 1996 $49.20, 1997 $49.75, 1998 $50.85, 1999 $53.70. The reason I used five years as the reference is that 1995 represented the last year civil servants were given under $48 and 1999 was the latest possible audit year in dispute. The case most probably referenced 1998 since the filing deadline would have been April 1999, then went under audit, appeal, and finally, a court date assigned. The audit and appeal process itself usually takes 6+ months so it’s highly unlikely it referred to 1999 (CRA rarely proceeds that fast). So, comparing equal dates, in 1998 auditors were getting $50.85 per day, not $48. All this additional evidence proves that the court case was filled with even more “aberrations” than the judge acknowledged.

In studying the reaction of CRA to the case (or at least what I believe is their reaction) it seems as though they were “aggressive” in providing the US exchange on top of the regulatory publication. In other words, CRA took one thing the judge said (driver drives in the US and must purchase US meals), then only applied THAT issue to their allowances. The aberration was… basically… ignored. You can tell because they never increased their $33 per day until 3 years later… when a class action suit became public (another issue).

In my video “38 years of Truckers Taxation” I show the ups and ups of NTB versus the downs, ups, downs, and ups of the TL2 simplified method.

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About the Author:
Robert D. Scheper is a leading Accountant and Consultant exclusively serving the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His second book “Choosing a Trucking company” is the most in-depth analysis of the independent operator industry today. He has a Master’s degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars.

You can find him at or 1-877-987-9787.

About Robert Scheper

Robert D Scheper operates an accounting and consulting firm in Steinbach, Manitoba. He has a Masters Degree in Business Administration and is the author of the Book “Making Your Miles Count: taxes, taxes, taxes” (now available on CD). You can find him at and or at 1-877-987-9787. You can e-mail him at: