Tax Court of Canada

Employment Insurance

Services of worker integral to employer’s core function

Appeals by employer from assessments under Income Tax Act (Can.). Employer was small non-profit charitable organization. Ruling was made that worker was employed in pensionable employment within meaning of s. 6(1)(a) of Canada Pension Plan (“CPP”) and Employment Insurable (“EI”) within meaning of s. 5(1)(a) of Employment Insurance Act (Can.). CRA confirmed determination. CPP and EI assessments were made in 2007 and 2009 for years 2006 and 2007 and income tax source deductions assessment was issued in 2009 for 2007 taxation year. Employer terminated worker’s service in August 2008. Appeals dismissed. During period at issue, worker was employee and not independent contractor working on his own account. Minister did not err in determining that worker was providing services pursuant to contract of service, and thus, held insurable and pensionable employment. Stated intention of each party and control factor were not conclusive. Worker genuinely had no chance of profit or risk of loss. This factor favoured existence of employer-employee relationship. Non-profit organizations could not seek to abuse workers by claiming that lack of funds to pay benefits, and worker’s acceptance of that, was basis to avoid categorizing workers as employees. Employer received funding from government organizations and funding agreements stipulated that employer was responsible for any and all deductions required to be made from employee’s income and for any payments to employees. Business was clearly employers and it was employer, not worker, who ultimately was responsible and accountable to donors with regard to how funds were spent by him. Services of worker were integral to employer’s core function rather than being merely ancillary to its operations. Integration test favoured employee status.

M.A.P. (Mentorship, Aftercare, Presence) v. M.N.R.

(Mar. 2, 2012, T.C.C., Lamarre J., File No. 2010-1560(EI); 2010-1562(CPP); 2010-3719(CPP); 2010-3720(EI); 2010-3404(IT)I) 213 A.C.W.S. (3d) 794 (23 pp.).

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