Company cars aren't as common as they seem to be in Europe -- at least based on my perception of the number of AOers with company cars versus the number of people I know here with company cars.
While I don't have a company car, the answer is yes, if you have a car provided by your company, you'll pay taxes on it. Sorry it's not directly from the tax code
but this should give you the general idea.
"Do You Use Your Vehicle for Work?
"Employees that use their vehicle for employment purposes may qualify for a tax-free car allowance from their employer to cover the cost of travelling expenses. To qualify, the allowance must be reasonable and based upon
the actual kilometres driven for employment purposes. Alternatively, the employer may pay the employee a fixed monthly allowance for the business use of the car. However, this amount must be included in the employee’s
"If the per kilometre allowance is not sufficient to cover all of the travel costs, the employee is entitled to include the allowance in income and claim a deduction for the vehicle expenses. To determine whether it is to your advantage to record the income and claim the expenses, you will need to maintain accurate records of all expenditures and kilometres driven for work related purposes.
"If you were an employee and did not receive a tax-free per kilometre traveling reimbursement, you may be entitled to a GST rebate on the vehicle-related expenses claimed. In order to be entitled to the rebate, your
employer must be registered for the GST. The rebate is calculated as 7/107ths of eligible expenses unless you reside in the provinces of Newfoundland, New Brunswick or Nova Scotia. Within these harmonized tax provinces, the rebate is calculated using a 15/115 formula.
If you received a per-kilometre allowance that is not considered reasonable and you deduct additional expenses, you may only claim the rebate if the employer certifies that the allowance is not considered reasonable at the time of reimbursement. If your employer believes that the allowance is reasonable, you cannot claim the rebate. In this case, the employer will be entitled toclaim a refund of the GST component of the allowance paid.
"When employers provide a company car, employees are sometimes surprised to see a taxable benefit on their T4 for their personal use of the car.
In these instances, the taxable benefit is calculated at 2% of the cost of the vehicle multiplied by the number of months the vehicle was available for the employee’s use. This benefit can be reduced where the vehicle is used more than 90% for business purposes and the average monthly driving
in the year is less than 1,000 kilometres per month. Thus, if the company vehicle cost $20,000 and was available for use for the entire year, the taxable benefit to the employee would be deemed to be $4,800. It is worth noting that this standby charge applies regardless of how long the vehicle has been owned by the employer. For example, a 1995 vehicle that may be fully depreciated would still confer a taxable benefit of $4,800!
"If the company provides a leased vehicle, the taxable benefit is 2/3 of lease cost (including taxes) times the number of months available. In addition to these standby charges, the taxpayer is required to add an operating cost benefit to personal income calculated at 15 cents (16 cents in 2001) per kilometre driven for personal purposes."