Effective control was control that could be freely exercised

Tax court of Canada | Public Law | Social programs | Employment insurance

B Inc. was held by L, M and G Inc. with L holding 25.7 percent of votes and M holding 24.8 percent of votes. G Inc. was held in equal portions by L and M. Minister of National Revenue decided that jobs of M and L were insurable jobs under Employment Insurance Act. B Inc. appealed. Appeal allowed. For job to be excluded under terms of s. 5(2)(b) of Act, employee must control more than 40 percent of employer’s voting shares. Effective control was control that could be freely exercised and not impeded by circumstances independent of person having control. Federal Court of Appeal had found that for purposes of s. 5(2)(b), administrative control of company was not relevant but rather that it was control of its voting shares that was important. Jobs of L and M for B Inc. during period were not insurable employment within meaning of Act because s. 5(2)(b) was applicable. Applying Act in manner put forward by Crown would give results that were absurd and contrary to purpose of Act.

Équipements Boifor Inc. c. M.N.R. (2018), 2018 CarswellNat 1209, 2018 CarswellNat 1210, 2018 TCC 53, 2018 CCI 53, Dominique Lafleur J. (T.C.C. [Employment Insurance]).

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