C.J. McCarty Inc. – Tax Curt of Canada finds that a CCPC providing the services of its engineer shareholder at an hourly rate to a single client over the course of a large project did not have a personal services business

A CCPC providing the engineering services of its principal employee to a single client at an hourly rate during the course of three successive consulting contracts with that client was found by Lyons J not to be carrying on a personal services business. Hourly rates were the norm in the industry, the client had very little control over how the engineer went about managing the project, in these instances he spent all his time for the one client because it was a big project, and he had risks (e.g., being sued).

This case will be welcomed in the oil patch (see Virji, Muirhead, see also Dynamic).

Neal Armstrong. Summary of C.J. McCarty Inc. v. The Queen, 2015 TCC 201 under s. 125(7) – personal services business.