HER MAJESTY THE QUEEN,
REASONS FOR JUDGMENT
 In 2002, 2003
and 2004, the Appellant was employed as a ship’s pilot by the Atlantic Pilotage
Authority (“APA”). He was scheduled to work every other week (“Scheduled
Weeks”) in the Halifax Harbour and was paid a flat salary. He also had the option of
accepting assignments for pilotage services during weeks he was not scheduled
to work (“Unscheduled Weeks”). For such services, he received a percentage of
the fees the APA charged to ships requiring pilotage.
 In the taxation
years under appeal, the Appellant worked during both Scheduled Weeks and
Unscheduled Weeks. During those years, he reported his salary from the
Scheduled Weeks as employment income; his earnings from assignments performed
during Unscheduled Weeks, he treated as business income on the basis that he
had performed such work for the APA as an independent contractor.
 The Minister of
National Revenue reassessed on the basis that the Appellant was at all times
working as an employee of the APA. The Minister included the Unscheduled Weeks’
earnings in the Appellant’s employment income and disallowed the business
expenses claimed in all years.
 In order to
understand the nature of the Appellant’s work, regard must be had to the
federal Pilotage Act, the Atlantic
Pilotage Tariff Regulations, 1996, and the
Collective Agreement between the pilots’ union, the Canadian Merchant
Service Guild (the “Guild”) and the APA.
 The Pilotage
Act provides for the establishment
and sets out the powers of port authorities across Canada. The
port authority for the Atlantic region is the APA and its powers include the
and discipline of pilots.
 The APA also has
the authority to designate by regulation
an area of the Atlantic coastal waters as a “Compulsory Pilotage Area” in which
ships are required to have a pilot on board, or as a “Non-Compulsory Pilotage
Area”, where they are not. In the present case, the Halifax Harbour is
designated as a Compulsory Pilotage Area. Sheet Harbour, where the Appellant most frequently accepted
assignments during Unscheduled Weeks is a Non-Compulsory Pilotage Area.
 Finally, the Pilotage
Act obliges the APA, with the approval of the Governor-in-Council, to
prescribe a formula for the calculation of tariffs to be paid to the APA for
various pilotage charges, including pilots’ expenses and the use of APA
equipment, such as pilot boats.
 As an employee
of the APA, the Appellant was required to be a member of the Guild. In each of
the years under appeal, the APA and the Guild were parties to a Collective
Agreement pursuant to which the APA recognized the Guild as the exclusive
bargaining agent of its pilots and was authorized to deduct membership and other
dues from the pilots’ monthly pay.
 The Collective
Agreement is a comprehensive document which addresses a wide range of matters
affecting a pilot’s work with the APA including leave, job security,
remuneration, pensions, duty rosters, dispute settlement and pilotage outside
of regular compulsory pilotage areas. Those of particular relevance to this
appeal are set out below:
(f) “Director” means the Director of Operations of the
[APA] or his representative;
“Pilot” means any person holding a licence as a pilot and
employed by the [APA] to perform the duties of same … .
Article 8.01 The Director shall have the direction of pilots …
and, in this regard, may make orders for the effective carrying out of the
provisions of this Agreement.
 One of the
Director’s duties is to draw up duty rosters for the pilots, in consultation with the pilots’ Area
Committee. Pursuant to Article 26.04, the normal practice is
for the Director to assign pilots for duty as their names appear on the roster;
under Article 26.03, a pilot on the duty roster is required to keep the
Director informed of his whereabouts. Article 27 sets out specific requirements
as to when, where and for how long a pilot may be assigned to work in
Compulsory Pilotage Areas.
 Returning to Article
8 of the Collective Agreement, that provision also sets out when a pilotage
assignment is considered to be completed and requires pilots to report the
completion of each assignment to the APA, whether working during Scheduled
Weeks or Unscheduled Weeks:
Article 8.04 A Pilot may terminate the pilotage assignment
undertaken as soon as the vessel is finally anchored or safely moored at its
intended destination or as near thereto as safety permits.
Article 8.04(a) As soon as possible after completing an assignment, a
pilot shall make every effort to notify the [APA’s] Dispatcher of his status.
Article 8.05 When a pilot is authorized to be absent from his
normal tour of duty for the provision of services in non-compulsory pilotage
areas, he shall report, on an acceptable form, to the [APA] upon his completion
of the assignment, indicating the period of time he was absent from the Duty
 Article 20.01
confers on the APA a general discretionary power over a pilot’s ability to
accept assignments in addition to his Scheduled Weeks:
Article 20.01 No pilot shall engage in any employment or
undertaking that will, in the opinion of the [Chief Executive Officer of the
interfere with his regular duties as a pilot.
 Of particular
importance to the present appeal is Article 28 which bears the heading
“Pilotage Outside of Regular Compulsory Pilotage Areas”:
(a) Pilots performing assignments outside their
regular compulsory pilotage area do so in their capacity as employees of the
(b) The parties agree to meet in consultation to
mutually establish a roster of volunteer pilots to perform such pilotage
(c) Pilots who agree to such assignments will
receive a fee equivalent to eighty-five (85%) of the total pilotage charges
excluding pilot boat charges, travel expenses and recall charges.
 Article 30 is
entitled “Remuneration” and sets out details of the pilots’ remuneration
including, in the attached Schedules, their annual salaries according to their
seniority and the Compulsory Pilotage Area to which each is assigned.
 Returning, then,
to the facts of the present case, because the Halifax Harbour is
designated as a Compulsory Pilotage Area, a ship in such waters is required by
federal law to have a pilot on board. In such circumstances, the ship’s owner
or, more typically, its agent requests pilotage services from the APA. The APA
then assigns that task to a pilot on the Halifax Harbour duty roster. Upon completing his assignment,
the pilot is required to complete a form supplied by the APA setting out, among other things,
the information required for the calculation of the tariff. The form must be
signed by the pilot and the ship’s master and be submitted to the APA. The APA
then invoices the ship's agent and is responsible for collecting any amounts
 During the years
under appeal, the Appellant accepted assignments during his Unscheduled Weeks
in Non-Compulsory Pilotage Areas, most frequently, in Sheet Harbour, Nova
Scotia. Although a ship in a
Non-Compulsory Pilotage Area is not legally required to have a pilot on board,
if it elects to do so, the pilotage services performed are no different in kind
from those provided by a pilot working in a Compulsory Pilotage Area.
Similarly, the procedures for obtaining a pilot to work in a Non-Compulsory
Pilotage Area are essentially the same as those in Compulsory Pilotage Areas.
The only real difference lay in the manner in which the Appellant was informed
of the assignment and the nature of his remuneration.
Non-Compulsory Pilotage Area work, the Appellant would typically be contacted
about the assignment directly by the ship's agent rather than through the APA.
This was not because a different procedure applied to Non-Compulsory Pilotage
Area work but because the Appellant was well known to those in the field and
enjoyed an excellent reputation as an experienced pilot. It was simply a matter
of convenience to communicate directly with the Appellant. The APA did not
object to this practice.
 As for his
remuneration, rather than a fixed salary, the Collective Agreement provided
that the Appellant was entitled to be paid a percentage of the pilotage charges
billed to the ship. As was the case for his work in the Halifax
Harbour, the APA was responsible for billing the ships for the Appellant’s
services in Non‑Compulsory Pilotage Areas but did not pay the Appellant
for such work until the fees had been recovered from the ship. The Appellant
could not recall ever having not been paid for his work mainly, he said,
because he and the APA dealt primarily with reputable ship's agents.
 As a pilot, the Appellant
was not obligated to work out of the business office of the APA. Upon receiving
an assignment, whether in the Halifax Harbour or a
Non‑Compulsory Pilotage Area, his practice was to go directly from his
home to the point of embarkation for the ship.
 During the
taxation years under appeal, the Appellant maintained a home office and claimed
business expenses in respect of it. In addition to the usual office furniture
and equipment, the office included professional journals and texts as well as charts
and maps used in pilotage. The APA did not require the Appellant to maintain a
home office and indeed, refused his request to provide him with a signed form
T-2200 that would have permitted him to deduct certain office expenses as an
 Whether the
Appellant was working during his Unscheduled Weeks as an employee or an
independent contractor must be considered in light of the four-fold test
established in Wiebe Door Services Ltd. v. The Minister of National Revenue and applied in 671122 Ontario Ltd. v. Sagaz
Industries Canada Inc.:
there is no universal test to determine whether a person is an employee or an
independent contractor, I agree with MacGuigan J.A. that a persuasive approach
to the issue is that taken by Cooke J. in Market Investigations, supra.
The central question is whether the person who has been engaged to perform the
services is performing them as a person in business on his own account. In
making this determination, the level of control the employer has over the
worker's activities will always be a factor. However, other factors to consider
include whether the worker provides his or her own equipment, whether the
worker hires his or her own helpers, the degree of financial risk taken by the
worker, the degree of responsibility for investment and management held by the
worker, and the worker's opportunity for profit in the performance of his or
bears repeating that the above factors constitute a non-exhaustive list, and
there is no set formula as to their application. The relative weight of each
will depend on the particular facts and circumstances of the case.
 The Court may
also take into account the degree to which the worker is integrated into the
payor’s business and intention of the parties.
 The Appellant’s
position is that he was working for the APA during his Unscheduled Weeks as an
independent contractor. The bases for this contention are dealt with separately
below under the relevant headings.
 Counsel for the
Appellant submitted that the factors of control and tools were of little
assistance in determining the question of whether the Appellant was an employee
or an independent contractor. By its very nature, he argued, the work of ship’s
pilot is inconsistent with the imposition of control by a supervising entity.
Similarly, the pilot’s chief “tool” is the expertise and experience he brings
to the job.
 While I agree
with counsel that the tools element of the test is not helpful in the analysis
of his status, the same cannot be said for the control factor. Although I
accept that no representative of the APA supervised the Appellant in the actual
performance of his pilotage duties, I am not persuaded that the APA did not
exercise or have the right to exercise control over the Appellant in his work as a pilot.
 A review of the
terms of the Pilotage Act and the Collective Agreement set out above
shows that the APA had both general and specific powers over the Appellant’s
capacity to work as a pilot and the manner in which he carried out his duties
as such. Because it was not necessary for someone acting as a pilot to be licensed
in a Non-Compulsory Pilotage Area, that aspect of the APA’s general authority is
not relevant to the present facts. However, because the Appellant was a
licenced pilot, it follows that he was, in principle, subject to the APA’s
disciplinary authority regardless of where he was working as a pilot.
 Turning, then, to
the Collective Agreement, Article 8.01 conferred on the APA a general power to
ensure that pilots complied with the provisions of the Collective Agreement
which, under Article 28, specifically included his work in Non‑Compulsory
Pilotage Areas. Another example of the APA’s control over the Appellant is found
in Article 20 under which the APA had the discretion to prohibit a pilot from
engaging in “any employment or undertaking” that interfered with his “regular
duties as a pilot”. These provisions are broad enough in scope to have fettered
the Appellant’s ability to accept assignments in a Non-Compulsory Pilotage Area
under Article 28. Further, the Appellant was required under the Collective
Agreement to report to the APA in respect of the completion of his work in a
Non-Compulsory Pilotage Area and was dependent upon the APA for the payment of
his fees for such work. Indeed, it was the APA that was charged by the Pilotage
Act with the duty of setting the tariffs. On balance, the evidence in
respect of control favours a finding of employee status.
Chance of Profit/Risk of Loss and the Intention of the Parties
 These three elements
were treated together in the submissions of counsel for the Appellant. Relying
on the analysis of former Chief Justice Bowman in Lang v. Minister of National
Revenue for the proposition that the integration factor is
“for all practical purposes dead”,
counsel argued that when weighed against the Appellant’s chance of profit, the
extent of the Appellant’s integration into the business of the APA had little
significance: the Appellant had an absolute right to decide whether to accept
work during his Unscheduled Weeks; the more he worked, the greater his income
became. He submitted that the intention of the parties ought to be given, if
not precedence, at least great weight in determining the Appellant’s status
when working in Non-Compulsory Pilotage Areas during Unscheduled Weeks. On this
latter point, counsel urged the Court to disregard what he characterized as the
“confusing” language of Article 28 in favour of the testimony of the Appellant
and the representative of the APA, Mr. MacArthur, to the effect that the
parties did not intend the Appellant’s work during Unscheduled Weeks to be part
of his employment with the APA.
 I must say I am
not at all persuaded by counsel’s submissions. First of all, I am unable to
follow the logic of counsel’s assertion that because the Appellant was free to
choose whether to accept work in Non-Compulsory Pilotage Areas, little weight
should be given to the extent to which he was integrated into the APA.
Furthermore, I do not share his confidence that the death knell has been
finally tolled for integration as a relevant consideration. While in many cases
this element of the test may be tricky to apply, in the present appeal, I have
no hesitation in concluding that the Appellant’s work in Non-Compulsory
Pilotage Areas arose from his employment in the business of the APA.
 The most
compelling evidence of this can be found in the Collective Agreement between
the APA and the Guild in which a pilot is, by definition, an “employee”. In
that document, the parties dealt with all aspects of a pilot’s employment,
including the circumstance of a pilot choosing to accept assignments in Non-Compulsory
Pilotage Areas. Article 28.01(a) expressly provides that such work is done by
pilots “in their capacity as employees of the [APA]”. Like counsel for the
Respondent, I am unable to find anything ambiguous in that language. The thrust
of the provision is to remove any uncertainty regarding a pilot’s status as an
employee while engaged in “voluntary” assignments in Non‑Compulsory
Pilotage Areas. This could be important, for example, in preserving a pilot’s
entitlement to such employee benefits as the “injury-on-duty” leave described in
Article 12. Under Article 28.01(b), the APA was obliged, as it is for
Compulsory Pilotage Area assignments under Article 26, to maintain and manage a
duty roster for pilots who agree to accept APA assignments in Non‑Compulsory
Pilotage Areas. Finally, Article 28.01(c) deals with the manner in which pilots
will be remunerated for their work “outside of Regular Compulsory Areas”.
 Given the
comprehensive nature of the Collective Agreement in general and Article 28 in
particular, there is no getting around the fact that the Appellant’s
opportunity to earn additional income during Unscheduled Weeks was firmly
rooted in his employment contract. He generated those earnings, not by
establishing a freelance pilotage service with individual ship's agents in unregulated
waters (which, according to the Appellant, some local fishermen did) but
rather, by simply availing himself of his rights under the employment agreement
with his employer.
 Turning then, to
the twin elements of chance of profit and risk of loss, there is no dispute
that the Appellant increased his earnings by accepting pilotage assignments
during his Unscheduled Weeks. While having the freedom to accept or refuse work
can be synonymous with having a chance of profit, in the present case, the source
of the Appellant’s right to choose lay in his employment contract; namely,
Article 28.01 of the Collective Agreement which describes work in
Non-Compulsory Pilotage Area as “voluntary”. The jurisprudence is also clear that
something more is required to satisfy the notion of profit than merely the
opportunity to take on extra work.
The profits must arise from the taxpayer’s efforts to generate income from a
business conducted on his own account; this necessarily implies a risk of loss.
On this point, the Appellant was candid in his testimony that there was little
risk of not being paid for his work in Non‑Compulsory Pilotage Areas;
indeed, it was the very reliability of such remuneration that made it so
attractive. In his final submissions on behalf of the Appellant, counsel
himself argued that:
… there was no
repercussion to [the Appellant] if he chose not to take on any more of this
work but he certainly had the incentive of knowing that it was very risk free.
That he was going to get paid if he got up at four in the morning to go to Sheet
Harbour in a snow storm that he was going to get his money.”
 And the “money”
he ultimately got was derived from activities more akin to voluntary overtime under
an employment contract than the operation of a business separate from that
of the APA. While the Appellant was not required to accept work during Unscheduled
Weeks, when he did, the APA was obliged to collect the applicable tariff
(which, it must be remembered, the APA had a statutory duty to set) from the
ship’s agent and was required by the Collective Agreement to pay the Appellant a
percentage thereof for his services. All the Appellant had to do was signal his
availability and the money would follow.
 In these
circumstances, I am satisfied that not only did the Collective Agreement have
the effect of fully integrating the Appellant’s performance of pilotage
services during Unscheduled Weeks into the business of the APA but it also
removed any element of profit or loss from such work.
 That leaves,
then, the matter of the intention of the parties. While both Mr. MacArthur
and the Appellant were entirely credible witnesses, their testimony regarding
the intention of the parties is not, in itself, determinative of the issue. The
question of intention must be considered in light of all the evidence, not the
least of which, in the present case, is the Collective Agreement. The facts of
this appeal are quite different from the more typical case where the parties’
testimony regarding their understanding of their working relationship may provide
the best evidence of their intention: for example, where there is no written
agreement, or where one exists but, for one reason or another, its terms do not
reflect the true nature of their relationship. Here, there was a written
agreement drafted by sophisticated parties who, presumably, had the benefit of
Collective Agreement is premised on the existence of an employer-employee
relationship between the APA and its pilots. It is clear on its face that it is
a contract of employment that addresses all aspects of their rights and
obligations in respect of the Appellant’s work, including that performed during
Unscheduled Weeks in Non-Compulsory Pilotage Areas. In these circumstances, I
am not persuaded that it would be appropriate to look beyond the parameters of
the Collective Agreement to determine the intention of the parties.
 Even if I am
wrong in this conclusion, the oral evidence of the Appellant and Mr. MacArthur
does nothing to supplant the clear wording of the Collective Agreement. That the
Appellant treated his earnings from work during Unscheduled Weeks as business
income and the APA did not object to that practice falls short of converting it
to a contract for services. Though they both testified that the APA had not
made any employment insurance or Canada Pension Plan deductions from his
earnings during Unscheduled Weeks, that was merely because the maximum amount
permitted had already been reached under the salaried portion of the Appellant’s
earnings. It was not the result of any agreement, either explicit or implicit, that
the Appellant was working as an independent contractor. Although counsel for
the Appellant contended that Article 28 was ambiguous, neither of the witnesses
challenged the validity of that provision or the Collective Agreement as a
whole. Indeed, their description of the practices normally followed by the
Appellant and the APA in respect of both Compulsory Pilotage Area and Non-Compulsory
Pilotage Area work mirrored their rights and obligations under the Collective
Agreement. Finally, it must be remembered that the Collective Agreement applied
not just to the Appellant but to all other employee pilots of the APA; thus,
intention must be considered in that more general context.
 All in all, the
Appellant has failed to meet the onus of showing that he was operating his own
business as an independent contractor when performing pilotage services in
Non-Compulsory Pilotage Areas during his Unscheduled Weeks. Accordingly, the
appeals of the 2002 and 2003 taxation years are dismissed.
 In respect of the
2004 taxation year, at the hearing of the appeal, counsel for the Respondent
advised the Court that in making his reassessment of that year, the Minister
had erroneously disallowed the business expenses claimed by the Appellant. As
shown by paragraph 6(m) of the Reply to the Notice of Appeal, the Minister had
assumed that the Appellant was operating another business in 2004 that was not in
connection with the APA; accordingly, counsel for the Respondent conceded that
the Minister ought to have allowed the expenses claimed by the Appellant for
that year. On that basis only, the appeal of the 2004 taxation year is allowed
and referred back to the Minister of National Revenue for reconsideration and
Signed at Victoria, British Columbia, this 20th day of January, 2010.
“G. A. Sheridan”