Tax Court of Canada

Unemployment Insurance

Minister determined that employment was not insurable

Worker worked as bricklayer and in other roles for construction company which he had incorporated and was 40 per cent shareholder. Company was incorporated to allow worker to collect employment insurance. Minister of National Revenue determined that worker’s employment was not insurable because employment relationship was not at arm’s length. Worker appealed. Appeal dismissed. Construction company was incorporated to give impression that worker was employed by independent third party. Payer was purportedly controlled by worker’s father and worker’s spouse, and employment relationship was deemed not to be at arm’s length by s. 251(1)(a) of Income Tax Act (Can.). Evidence adduced at court did not lead to conclusion that worker and person acting at arm’s length would have entered into substantially similar contract of employment Spouse’s only duty was to maintain books and records and spouse did not take on extra duties that worker claimed. Worker’s testimony was self-serving. Worker decided when he would work, his own rate of pay, quotes issued by payer construction company, contracts which company would accept, days and hours he would work, and casual laborers who would be hired. Worker decided direction of payer construction company’s business.

Stuckless v. Minister of National Revenue (Sep. 8, 2016, T.C.C. [Employment Insurance], Valerie A. Miller J., 2016-1392(EI)) 270 A.C.W.S. (3d) 222.

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