Workers held insurable employment notwithstanding non-arm’s length relationship

Income Tax – Employment income

Minister of National Revenue determined that company's workers held insurable employment under Employment Insurance Act (EI Act) and that one worker held insurable employment under Canada Pension Plan (CPP). Company appealed on ground workers were self-employed. EI appeal dismissed and CPP appeal allowed in part. In determining whether there was “insurable employment” within meaning of EI Act or CPP, it must be determined whether there was “contract of service” within s. 5(1) of EI Act or “contract of employment” in accordance with s. 2085 of Civil Code of Quebec (CCQ). Parties’ intention was to have established “business or service contract” as provided for in s. 2098 of CCQ. Company distinguished between employees and self-employed workers. Workers would be called when needed, would be paid by piece, and could work for competitor. Objectively, relationship between company and workers was that of employee and employer. Limited number of tools, lack of possibility of profit or loss, integration of workers, and subordinate relationship all favoured finding of employment relationship. Workers held insurable employment under s. 5(1) of EI Act, including worker AR, notwithstanding his non-arm’s length relationship. Worker SAG was in employment relationship under CPP from 2013 to 2014, rather than period of 2013 to 2016 as alleged by Minister. SAG was hired under agreement in BC and worked in BC from 2011 to 2014, pursuant to ss. 4(4) and 6(1) of CPP.

Ray-Mont Logistiques Montréal Inc. c. M.R.N. (2019), 2019 CarswellNat 3115, 2019 CarswellNat 3255, 2019 TCC 144, 2019 CCI 144, Guy R. Smith J. (T.C.C. [Employment Insurance]).

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