23 January 1998 External T.I. 9729845 - PARAGRAPH 37 OF IT-474R (U.I. PREMIUMS)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether the Department's position in paragraph 37 of Interpretation Bulletin IT-474R applies equally to the Employment Insurance Act?

Position:Yes.

Reasons:

Upon an amalgamation, corporate law would not generally result in there being a new corporation (e.g. new employer).

972984
XXXXXXXXXX Jim Wilson
(613) 957-2123

Attention: XXXXXXXXXX

January 23, 1998

Dear Sirs:

Re: Paragraph 37 of Interpretation Bulletin IT-474R (the “Bulletin”)

We are writing in response to your letter of November 5, 1997 wherein you requested our comments as to whether the Department’s position in paragraph 37 of the Bulletin applies equally to the Employment Insurance Act. Paragraph 37 of the Bulletin states “The Department takes the position that a statutory amalgamation under the laws of Canada or any of the provinces does not result in the new corporation being a new employer for the purposes of the Canada Pension Plan. Therefore, where there has been such an amalgamation at some point in the calendar year, contributions by employees and by predecessor corporations before the amalgamation should be taken into account in determining the required contribution to be made after the amalgamation”.

The comments provided in paragraph 37 of the Bulletin stating that the Department would not consider the amalgamated corporation to be a new employer for the purposes of the Canada Pension Plan would apply equally for the purposes of the Employment Insurance Act.

The foregoing comments represent our general views with respect to the subject matter of your letter. As indicated in paragraph 22 of Information Circular 70-6R3, this is not an advance income tax ruling and is therefore not binding on Revenue Canada.

We trust that our comments will be of some assistance.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch