Date: 20001115
Docket: 1999-4448-EI
BETWEEN:
9033-9979 QUÉBEC INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
ROBERT VIGNEAULT,
Intervenor.
Reasonsfor
Judgment
Archambault, J.T.C.C.
[1]
The corporation 9033-9979 Québec Inc. (Location) is
appealing from a decision by the Minister of National Revenue
(Minister) under the Employment Insurance Act
(Act). In his decision, the Minister concluded that Robert
Vigneault did not hold insurable employment within the meaning of
the Act from May 4, 1998, to January 20, 1999 (relevant
period). Robert Vigneault is an intervenor in
Location's appeal. The Minister's position is that Mr.
Vigneault's employment is excluded from insurable employment
because of the non-arm's-length relationship
between him and Location. According to the Minister, a similar
contract of employment would not have been entered into if they
had been dealing with each other at arm's length.
Facts
[2]
In making his decision, the Minister relied on the following
assumptions of fact as set out in paragraph 5 of the Amended
Reply to the Notice of Appeal:
[TRANSLATION]
(a)
The appellant, 9033-9979 Inc., operates a car rental business
under the firm name Location d'Autos M.C.R.;
(b)
since February 28, 1998, Mario Poirier, Robert Vigneault (the
worker) and Mr. Vigneault's daughter,
Céline Vigneault, have each owned one third of the
appellant's voting shares;
(c)
during the period at issue, the appellant owned between 13 and 15
rental vehicles;
(d)
the business was open seven days a week;
(e)
summer was the busiest season;
(f)
the worker's duties mainly involved cleaning, refuelling and
parking the vehicles; he occasionally replaced Mario Poirier
at the rental counter at the airport;
(g)
he worked five days a week for an average of eight hours a
day;
(h)
he cleaned between two and six vehicles a day;
(i)
he was paid $450 a week;
(j)
the worker provided services to the appellant without pay in
January 1998 and for four weeks in April 1998;
(k)
he also continued to provide services to the appellant until
January 20, 1999, even though rental contracts had decreased
considerably since November; the period during which he worked
does not coincide with the business's busy period.
[3]
Mr. Poirier (Location's president) and counsel for Mr.
Vigneault both admitted all the above facts except those stated
in subparagraphs (f), (h), (j) and (k).
[4]
The only witnesses for Location and Mr. Vigneault were Mr.
Poirier, Mr. Vigneault and Mr. Vigneault's daughter,
Céline Vigneault. Denis Tremblay, an insurability
officer, was the only person who testified for the respondent.
Though present at the hearing, the appeals officer who
recommended the decision to the Director of Appeals did not
testify.
[5]
The evidence adduced by the witnesses for Location and Mr.
Vigneault does not contradict the facts set out in subparagraphs
(f) and (h) of paragraph 5 of the Amended Reply to the Notice of
Appeal. Their testimony and the documents filed at the hearing
prove the following additional facts.
[6]
Mr. Poirier started up Location in May 1996. The company operated
a car rental business primarily at the
Îles-de-la-Madeleine airport.
Mr. Poirier was the company's sole shareholder until
February 1998, when he sold two thirds of his shares to Mr.
Vigneault and Céline Vigneault. Until that time, he was
also Location's only employee. Before starting his own
business, Mr. Poirier had run the Budget car rental agency on the
Îles-de-la-Madeleine for about 10 years.
That agency had as many as 50 rental cars and three employees.
The employees were paid perhaps $400 for 40 hours of work. For a
while, they were hired only for the period from May to November.
Mr. Poirier left Budget when it stopped operating on the
Îles-de-la-Madeleine.
[7]
At first, Location received financial assistance from the
Department of Human Resources Development. Mr. Poirier was able
to continue receiving his employment insurance benefits for 12
months under the Self-Employment Assistance Program (SEA
Program), even though he worked about 50 hours a week for
Location. Location paid him a salary of $100 a week from July to
November 1996. No other salary seems to have been paid to him for
1996. For 1997, a lump sum salary amount of $6,000 was paid on
December 31, 1997.
[8]
Mr. Vigneault (who, at the date of the hearing, had more than 20
years of experience in the car rental business) managed the
Tilden agency on the Îles-de-la-Madeleine
for at least about 15 years. He was paid entirely on a commission
basis. He was the one responsible for hiring the staff needed to
run the agency. For about 10 years, his daughter worked for him
as a counter clerk while he mainly looked after the maintenance
of the cars. The wages of his daughter and the other employees he
hired were deducted from his commission income. The Tilden agency
on the Îles-de-la-Madeleine was transferred to another
resident of the islands, and Mr. Vigneault and his daughter lost
their jobs around the end of 1997.
[9]
Since the Budget agency and the Tilden agency each had its rental
counter at the Îles-de-la-Madeleine
airport, Mr. Poirier and Mr. Vigneault knew each other very well.
According to Ms. Vigneault, it was Mr. Poirier who, in February
1998, offered her and her father a chance to join him in
Location. They each paid $7,000 to purchase one third of
Location's shares from Mr. Poirier.
[10] Mr.
Poirier decided at that time to increase the number of cars owned
by Location from nine to fifteen, and Mr. Vigneault became
involved in negotiating the purchase of the cars. Mr. Vigneault
and Ms. Vigneault, like Mr. Poirier, had to provide security for
the loan granted by a credit union to finance the purchase of the
six new cars. The amount of the security was limited to
$22,440.
[11] The three
shareholders also had to invest an additional $9,066 to finance
Location's working capital. Mr. Poirier and Ms. Vigneault
borrowed $10,000 from the
Îles-de-la-Madeleine Community Futures
Development Corporation. Only Ms. Vigneault and Mr. Poirier met
the age requirement to be eligible for the loan, on which no
interest had to be paid or principal repaid for two years.
[12] Mr.
Poirier testified that he did not feel like a minority
shareholder when decisions were made by Location's board of
directors. The decisions were generally made unanimously.
However, Mr. and Ms. Vigneault did not always agree, as shown by
a resolution of the board of directors dated March 28, 2000. At
the directors' meeting held that day, it had to be decided
whether Location was going to bid to renew its lease at the
Îles-de-la-Madeleine airport for five years.
Robert Vigneault's view was that they had to put in a
bid. Mr. Poirier and Ms. Vigneault disagreed with him,
and their opinion prevailed.
[13] Although
Mr. Vigneault became a shareholder in Location in
February 1998, he did not begin his employment there until
May 4, 1998. The insurability officer, Mr. Tremblay, said he was
told that Mr. Vigneault did some work for Location before the
relevant period. However, Mr. Tremblay did not ask for any
details in that regard, being content to confine his questions to
the relevant period. Mr. Vigneault did not work without pay
before May 1998 (this was confirmed by Mr. Poirier and the
Vigneaults). Mr. Vigneault did not do any work at Location's
counter or any car cleaning or maintenance before May 1998.
He was merely involved in purchasing the six cars, negotiating
the purchase of Mr. Poirier's shares in Location and
taking the necessary steps to obtain financing to purchase the
cars. It should also be noted that Mr. Poirier did not receive
any remuneration for the period from January to April 1998.
[14] Starting
in May 1998, Mr. Poirier's work involved serving customers at
the counter and keeping the books, while Mr. Vigneault focused on
car maintenance. Mr. Vigneault cleaned the cars inside and out,
made sure they were in good condition, did minor repairs and went
to the garage if more substantial work was necessary.
[15] Mr.
Vigneault testified that it is difficult to quantify the hours he
spent cleaning the cars, since they could vary from season to
season. During the company's busiest period, he could clean
between five and eight cars a day. Outside that period, there
were more short-term rentals (one or two days), which, he said,
meant less cleaning. During the busy season, if someone with
children leased a car for a week, much more sand was generally
found in the car when it came back, which consequently required
more cleaning time.
[16] Mr.
Vigneault also had to replace Mr. Poirier at the counter when he
was away. Location's business hours could extend from 6:00 in
the morning until midnight. Mr. Vigneault was therefore regularly
there early in the morning—between 6:00 a.m. and 8:00
a.m.—and in the evening. He also sometimes had to go and
pick up customers or take them a car. Around 15 percent of
Location's customers did not come to the airport.
[17] In May
1998, Location did not have enough work to be able to hire
Ms. Vigneault. However, the goal of each of the three
shareholders was for Location to be able to create a
full-time job for each of them throughout the year.
Unfortunately, that goal was never achieved. In the fall of 1998,
the shareholders realized that Location was still operating at a
loss and that it was not even possible to maintain two
full-time jobs. At the end of January 1999,
Mr. Vigneault had to be laid off.[1] Mr. Poirier kept his job because
he was the only one who could do Location's bookkeeping. Mr.
Poirier therefore took over Mr. Vigneault's work but had to
cut back the business's hours so that he would be limited to
working 40 hours a week.
[18] Location
rehired Mr. Vigneault on June 6, 1999, and he worked 40 hours a
week until November 27, 1999. He was unemployed again from
November 27, 1999, to June 11, 2000, when he was rehired by
Location. At the time the appeal was heard, he was still working
for Location.
[19] It should
be noted that Mr. Poirier kept his job with Location through all
of 1999 and, in 2000, up to the time the appeal was heard.
However, he reduced his working hours from January 2 to June 10,
2000: he worked on a part-time basis according to
Location's needs, putting in between five and fifteen hours a
week. Like Mr. Vigneault, Mr. Poirier began working 40 hours a
week again the week commencing on June 11, 2000.
[20]
Céline Vigneault worked for Location only from June 20[2] to
November 27, 1999. For her work, she was paid the same
salary as Mr. Poirier and her father. She was hired to take
steps to increase Location's turnover. She submitted
proposals to insurance brokers and targeted a new clientele; in
addition, she helped Mr. Poirier at the counter. Unfortunately
for Location, Ms. Vigneault's efforts were unsuccessful, and
she was not rehired.
[21] Location
paid Mr. Vigneault and Ms. Vigneault $450 because they had a
great deal of experience. Mr. Poirier is not related to the
Vigneaults. At the hearing, when Mr. Poirier was asked why
Location kept Mr. Vigneault on as an employee after the busy
season in the summer of 1998, he answered that Location's
goal was to create permanent employment for Mr. Vigneault
and himself. According to Ms. Vigneault's testimony, one
reason Mr. Vigneault was kept on was that the cars had to be
prepared for the winter. She pointed out that the cars were not
all available at the same time, since they were rented out.
[22] According
to Mr. Tremblay, Mr. Poirier told him that, if Location had had
to hire a third party to replace Mr. Vigneault, it would not have
offered the same terms and conditions of employment. However, Mr.
Tremblay said that he did not ask Mr. Poirier to specify under
what terms and conditions such an employee would have been
hired.
[23] From the
time it was established, Location did nothing but incur losses in
operating its business. The evidence adduced at the hearing
reveals the following figures:
|
|
March 31, 1997[3]
|
February 28, 1998[4]
|
February 28, 1999
|
February 28, 2000
|
|
Receipts
|
n/a
|
$56,506
|
$130,118
|
$124,178
|
|
Before-tax losses
|
n/a
|
($7,077)
|
($22,997)
|
($23,149)
|
|
After-tax losses
|
($12,927)
|
($4,626)
|
($16,717)
|
($23,149)
|
|
Salaries paid
|
$2,100
|
$6,000[5]
|
$39,100[6]
|
$46,317[7]
|
[24] This
table shows that Location had financial problems even though the
salary it paid Mr. Poirier before the Vigneaults became
shareholders was very low. The company incurred after-tax
operating losses of $12,927 in 1997 and before-tax losses
of $7,077 in 1998.
[25] According
to Mr. Poirier and the Vigneaults, one reason for the poor
results was the arrival of a new competitor. Like Tilden, that
competitor had a fleet of about 25 cars but, unlike Tilden and
Location, it did not have a counter at the airport. Rather, its
place of business was very close to the airport. According to Mr.
Poirier and Mr. Vigneault, the fact that the competitor did
not have to pay rent to Transport Canada created unfair
competition.
[26] Some of
Location's accounting records provide monthly data on its
income and the number of rental contracts from May 1998 to
January 1999. Those data are shown in the following table, which
also indicates, in percentage terms, the decrease in monthly
income and in the monthly number of rental contracts from
October 1998 to January 1999 as compared to the average
income for the best two months of the year, namely July and
August 1998. The average monthly income for those two months was
$20,048, and the average number of rental contracts was 89.
|
|
May
|
June
|
July
|
August
|
Sept.
|
October
|
November
|
Dec.
|
Jan.
|
|
rental income
|
5,422
|
13,863
|
18,962
|
21,134
|
13,406
|
10,327
|
6,588
|
4,830
|
8,856
|
|
no. rentals
|
49
|
101
|
87
|
90
|
84
|
88
|
54
|
41
|
42
|
|
decrease: rental income
|
|
|
20,048
|
|
(48%)
|
(67%)
|
(76%)
|
(56%)
|
|
decrease: no. rentals
|
|
|
89
|
|
(1%)
|
(39%)
|
(54%)
|
(53%)
|
[27] This
table shows that there was a significant decrease in rental
income for the period from October to January in comparison with
the busiest period. As for the number of rental contracts, the
decrease occurred from November to January. Thus, in December and
January, the number of rental contracts was less than half the
number there had been during the busier July-August period,
while rental income dropped by 56 percent, 67 percent
and even 76 percent during the last three months.
Analysis
[28] Mr.
Vigneault and his daughter formed a related group that controlled
Location.[8] As a
result, Mr. Vigneault and Location were related persons and are
deemed not to have dealt with each other at arm's length.[9] Under
paragraph 5(2)(i) of the Act, a person's
employment is excluded from "insurable employment" if
the person and his or her employer are not dealing with each
other at arm's length. That paragraph reads as follows:
|
5(2) Insurable employment does not include
. . .
|
(i) employment if the employer and employee are not
dealing with each other at arm's length.
[29] Even
though Mr. Vigneault's employment is excluded employment
because of his non-arm's-length relationship with
Location, it is within the Minister's discretion to treat Mr.
Vigneault and Location as if they had dealt with each other at
arm's length if he is satisfied that they would have entered
into a substantially similar contract of employment if they had
been dealing with each other at arm's length. Only the
Minister may exercise that discretion, as provided in
subsection 5(3) of the Act:
(3) For the purposes of paragraph (2)(i),
(a) the question of whether persons are not dealing
with each other at arm's length shall be determined in
accordance with the Income Tax Act; and
(b) if the employer is, within the meaning of that Act,
related to the employee, they are deemed to deal with each other
at arm's length if the Minister of National Revenue is
satisfied that, having regard to all the circumstances of
the employment, including the remuneration paid, the terms and
conditions, the duration and the nature and importance of the
work performed, it is reasonable to conclude that they
would have entered into a substantially similar contract of
employment if they had been dealing with each other at arm's
length.
[Emphasis added.]
[30] However,
this Court has a duty to ensure that the Minister's decision
resulted from the proper exercise of his discretion. The Federal
Court of Appeal has had on a number of occasions,
inter alia in Attorney General of Canada v. Jencan
Ltd., [1998] 1 F.C. 187, [1997] F.C.J. 876, the opportunity
to state the Tax Court of Canada's role. In Jencan,
Isaac C.J. wrote the following in paragraph 31:
The decision of this Court in Tignish, supra,
requires that the Tax Court undertake a two-stage
inquiry when hearing an appeal from a determination by
the Minister under subparagraph 3(2)(c)(ii). At the
first stage, the Tax Court must confine the analysis to a
determination of the legality of the Minister's
decision. If, and only if, the Tax Court finds that one
of the grounds for interference are established can it then
consider the merits of the Minister's decision.
[Emphasis added.]
[31] Further
on, in paragraph 37 of the decision, the same judge sets out the
specific reasons that justify the Tax Court of Canada's
interference:
The Tax Court is justified in interfering with the
Minister's determination under subparagraph
3(2)(c)(ii)—by proceeding to review the merits of
the Minister's determination—where it is established
that the Minister: (i) acted in bad faith or for an improper
purpose or motive; (ii) failed to take into account all of the
relevant circumstances, as expressly required by paragraph
3(2)(c)(ii); or (iii) took into account an irrelevant
factor.
[32] Even if
some of the facts on which the Minister may have relied in
exercising his discretion turn out to be unfounded and even if
certain facts were not brought to the Minister's attention,
that does not necessarily mean that the Minister exercised his
discretion improperly and that this Court may therefore decide
itself whether the parties would have entered into a
substantially similar contract of employment if they had been
dealing with each other at arm's length. It must first be
determined whether the Minister's decision can still be
justified in light of the evidence adduced in this Court. This is
what we learn from the Federal Court of Appeal's decision in
Jencan. Isaac C.J. wrote as follows in paragraph 50:
The Deputy Tax Court Judge, however, erred in law in
concluding that, because some of the assumptions of fact relied
upon by the Minister had been disproved at trial, he was
automatically entitled to review the merits of the determination
made by the Minister. Having found that certain assumptions
relied upon by the Minister were disproved at trial, the
Deputy Tax Court Judge should have then asked whether the
remaining facts which were proved at trial were sufficient in law
to support the Minister's determination that the
parties would not have entered into a substantially similar
contract of service if they had been at arm's length.
If there is sufficient material to support the
Minister's determination, the Deputy Tax Court Judge is not
at liberty to overrule the Minister merely because one or
more of the Minister's assumptions were disproved at trial
and the judge would have come to a different conclusion on the
balance of probabilities.
[Emphasis added.]
[33] Paragraph
41 of the same decision also specifies on whom it falls to
challenge the assumptions of fact on which the Minister relied in
making his decision:
Although the claimant, who is the party
appealing the Minister's determination, has the burden
of proving its case, this Court has held unequivocally
that the claimant is entitled to bring new evidence at the Tax
Court hearing to challenge the assumptions of fact
relied upon by the Minister.
[Emphasis added and footnotes omitted.]
[34]
Unfortunately, the appeals officer who reviewed the files of
Location and Mr. Vigneault and who made a recommendation to the
Minister for the purposes of paragraph 5(3)(b) of the Act
did not testify, nor was that officer's report filed.
Consequently, we do not know precisely which facts the Minister
took into account in exercising his discretion. We must therefore
rely on the facts set out in paragraph 5 of the Amended Reply to
the Notice of Appeal and make assumptions about the
Minister's assessment thereof.
[35] Given
that the burden is on Location and Mr. Vigneault to prove that
the Minister exercised his discretion improperly, it is rather
surprising that they did not call the appeals officer as a
witness. I have trouble understanding how employment insurance
claimants can come before this Court without summoning and
calling as a witness the appeals officer who played an important
role in the Minister's exercise of his discretion. It seems
to me that doing so would make it easier to prove the errors, if
any, made in exercising that discretion.
[36] Here, it
seems to me that two of the facts that may have accounted for the
Minister's decision are set out in subparagraphs (j) and (k)
of paragraph 5 of the Amended Reply to the Notice of Appeal. As
well, subparagraph (h) could imply that there was not enough work
to keep Mr. Vigneault busy for 40 hours a week.
[37] The
evidence shows that the facts set out in subparagraph (j) are
unfounded. The Minister assumed that Mr. Vigneault had provided
services to Location without pay for four weeks in April 1998.
The evidence shows the contrary. He did not actually start
working until May 4, 1998.
[38] Counsel
for Mr. Vigneault argued, rightly in my view, that a distinction
must be drawn between the work done by a person as a company
shareholder and the work done by the same person as an employee
of the company. The activities associated with the negotiations
for the purchase of Location's shares and with the provision
of security for the benefit of Location by its shareholders
cannot be considered normal activities of an employee.
[39] The
activity that could be considered characteristic of an employee
is that relating to Location's purchase of six cars. However,
it is inconceivable here that that unpaid activity could have
kept Mr. Vigneault busy enough to make it an important factor to
take into account in assessing the terms and conditions of his
employment.
[40] The main
fact that might justify the Minister's decision is that
Mr. Vigneault's employment continued during the period
when Location was not busy. Subparagraph 5(k) of the Amended
Reply to the Notice of Appeal states that the number of rental
contracts had fallen considerably since November. This implies
that, if Mr. Vigneault had not been related to Location but had
been an outsider, his employment would have been terminated
because of a lack of work, especially given the company's
financial situation.
[41] Counsel
for the intervenor argued that there are new facts that were not
taken into account by the Minister in exercising his discretion.
One such fact is the importance attached by the shareholders to
the creation of permanent, full-time jobs. As well, the
Minister allegedly failed to take account of the fact that the
business was a new one just starting up. However, counsel for the
intervenor can scarcely argue that the Minister was not aware of
those facts as she did not call as a witness the appeals officer,
who could have enlightened us in that regard. On the other hand,
the facts relating to that point are not set out in the Reply to
the Notice of Appeal and it might be assumed that if they are not
stated there, the Minister did not take them into account.
[42] In my
view, even if all the new facts are considered and the mistaken
facts taken into account by the Minister are disregarded, the
Minister's decision still seems to me to be justifiable. It
may be considered justifiable on the basis that Mr.
Vigneault's employment would not have lasted until January
1999 if he had not been related to Location.
[43] When Mr.
Poirier testified, I asked him whether Location's two
competitors kept two or three employees all year long—it
should be remembered that those competitors each had a fleet of
about 25 cars—and he did not know. It is rather surprising
that he did not know, since he associated with the Tilden
agency's employees at the Îles-de-la-Madeleine airport
and the other competitor had its offices very close to the
airport, a few hundred metres from Location's garage.
According to the official
Îles-de-la-Madeleine tourist guide, the
islands had a population of just 13,802 in 1996. It should be
added that Mr. Poirier has been working in the car rental
business since 1985 and that it would be quite normal in the
circumstances for him to have such information on his
competitors.
[44] Even if
Location's goal was to create two or three full-time jobs, it
was open to the Minister, in exercising his discretion, to
conclude that the employment would not have lasted as long as it
did if Mr. Vigneault had not been related to Location.
[45] That
intention to create permanent jobs does not strike me as very
reasonable. It must be borne in mind that Location had only 15
cars during the relevant period. Moreover, before Mr.
Vigneault's employment began, Location was unable to pay a
reasonable salary to just one employee throughout the year. Mr.
Poirier's salary was subsidized for a year through the SEA
Program. The salary paid for the first fiscal period was $2,100.
Even after the first year of operations, Mr. Poirier was not paid
a weekly salary. He was given $6,000 at the end of December 1997.
That lump sum represents 13 weeks of pay at $450 or a weekly
salary of $115 for 52 weeks. Finally, in 1998, Location did not
pay Mr. Poirier any salary from January to May.
[46] In such
circumstances, how could Location hope to pay two employees
salaries of $450 throughout the year? Even if account is taken of
the fact that there were six additional cars at the time Location
began paying Mr. Vigneault and Mr. Poirier $450 a week, it is
hard to imagine that such a business could pay such salaries all
year long. The fact of the matter is that Location had always
incurred losses since it began operating. Even if the salaries of
Mr. Vigneault and his daughter are not included in calculating
the losses for the 1999 and 2000 fiscal years, Location would
still have incurred an after-tax loss of $5,447 for 1999 and
$1,549 for 2000.[10]
[47] In her
argument, counsel for Mr. Vigneault submitted that, to determine
whether Location was operating at a loss, its profits must be
calculated before capital cost allowance. However, in Moldowan
v. The Queen, [1978] 1 S.C.R. 480, 77 DTC 5213, a decision by
the Supreme Court of Canada, Dickson J. stated that, to
determine whether an activity is a business and thus a source of
income, profit must be calculated after capital cost allowance.
Moreover, it seems quite reasonable to me to take account of
capital cost allowance in determining whether Location made a
profit. That company's main asset was its fleet of cars. To
take no account of capital cost allowance when calculating its
profit would be to ignore an item that, along with salaries, was
one of its most substantial expenses. It is well known that the
value of cars decreases significantly after they are purchased.
This is even more true of cars belonging to a rental agency.
[48] It is
true that depreciation does not necessarily correspond to an
outlay. However, it must be remembered that it represents the
deduction of part of the acquisition cost, which cost represents
an outlay even if it was incurred during a previous year.
[49] Mr.
Poirier admitted that, when he managed the Budget agency,
employees were hired only during the busiest period of the year.
At certain times, employees were taken on for the entire year,
but it should be noted that Budget had as many as about 50 cars.
Finally, I would add that the fact that Tilden had a full-time
employee throughout the year at the time Mr. Vigneault managed it
cannot be used as a precedent, since that employee was his
daughter and he himself bore the cost of her wages. Given the
non-arm's-length relationship between
Mr. Vigneault and his daughter, it cannot be concluded that
the duration of her employment at Tilden was reasonable.
[50] It must
be borne in mind that Mr. Poirier, Mr. Vigneault and
Ms. Vigneault are people who have a great deal of experience
in running a car rental business. Thus, they are very aware of
the fluctuations in the volume of business for a rental agency in
their area.
[51] I am
unable to conclude on the evidence as a whole that it can
reasonably be thought that, with a fleet of 15 cars, Location
could offer Mr. Vigneault year-round employment given the
economic conditions on the
Îles-de-la-Madeleine during the relevant
period.
[52]
Location's financial situation in the fall of 1998 must also
be borne in mind, as must the significant decrease not only in
the number of rental contracts but also in rental income. In
light of these facts, I consider it reasonable to believe that
the Minister could have concluded that a company operating its
business efficiently would have laid Mr. Vigneault off at the end
of the busy season if he had not been related to that
company.
[53] In
conclusion, Location and Mr. Vigneault have not been able to
prove that the Minister's decision resulted from the improper
exercise of his discretion. Location's appeal is therefore
dismissed.
Signed at Ottawa, Canada, this 15th day of November 2000.
"Pierre Archambault"
J.T.C.C.
Translation certified true on this 13th day of December
2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-4448(EI)
BETWEEN:
9033-9979 QUÉBEC INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
ROBERT VIGNEAULT,
Intervenor.
Appeal heard on August 11, 2000, on the
Îles-de-la-Madeleine, Quebec, by
the Honourable Judge Pierre Archambault
Appearances
Agent for the
Appellant:
Mario Poirier
Counsel for the
Respondent:
Alain Gareau
Counsel for the
Intervenor:
Manon Dubé
JUDGMENT
The
appeal is dismissed and the Minister's decision
confirmed.
Signed at Ottawa, Canada, this 15th day of November 2000.
J.T.C.C.
Translation certified true
on this 13th day of December 2001.
Erich Klein, Revisor
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