Lucie Beaulieu v. Her Majesty the Queen (Informal Procedure)., [1993] 2 CTC 2323

Lamarre Proulx, T.C.C.J.:—This is an appeal under the informal procedure from a reassessment of the Minister of National Revenue (the “ Minister”) for the 1988 taxation year.

The point at issue is whether the appellant was an employee or a self- employed worker in respect of her activities carried on in the context of the business Services Généraux de Formation et d’Animation Inc. ("SGFA").

Facts

The facts on which the Minister relied in order to make his reassessment are described at paragraph 5 of the reply to the notice of appeal, as follows:

(a) In an audit of source deductions conducted by the Minister of National Revenue in July 1989, it was determined that the appellant was an employee and not a self-employed worker in the service of the company "Services Généraux de Formation & d"Animation Inc." ("SGFA");

(b) According to the special mandate signed on February 2, 1988 by the appellant and SGFA, the appellant received professional fees of $150 for each day or fraction of a day of consultation explicitly requested during the period starting on February 8, 1988 and terminating at the end of the said training program in September 1988”. The appellant received the amount of $24,120 in professional fees under this mandate during the 1988 taxation year and reported the said income as business income;

(c) The appellant also received "a monthly amount of $1,200 in compensation for travel and accommodation expenses incurred under this mandate". The amount thus received amounted to $7,820 and was not included in the appellant's income for the 1988 taxation year;

(d) The appellant claimed no expenses relating to her employment during the 1988 taxation year;

(e) The appellant filed a statement of her business income and expenditures with her income tax return for the 1988 taxation year. Her gross business income of $24,120 came from amounts received under her special mandate with the firm SGFA, as described in paragraph (b) above;

(f) The appellant claimed the following business expenses:

Office rental	$2,600
Administrative expenses	314
Entertainment expenses	475
Transportation expenses	161
Professional fees	95
Automobile expenses (80%)	1,628
Total expenses	$5,273
These business expenses were not documented;

(g) The expenses incurred by the appellant in addition to the amount authorized by the Minister were not incurred in order to earn income from a business or property or to produce income from a business or property, but rather constituted the appellant's personal expenses and living expenses. . . .

[Translation.]

At the start of the hearing, counsel for the respondent informed the Court that the respondent consented to the appeal's being allowed in part on the ground that the amount of $7,820 received as allowances for personal or living expenses and described at paragraph 5(c) of the reply to the notice of appeal were not to be included in the appellant's income and that the amounts of $1,628 and $161 described at paragraph 5(f) of the said reply were to be allowed as expenses relating to her automobile as an employee, notas a self-employed worker.

The appellant worked as a teacher from September 1970 until August 1986. In September 1986, she began working with SGFA as a [translation] "consultant". Certain SGFA “consultants” were employees on salary; others were classified as self-employed workers and remunerated at the rate of $150 per day.

The appellant was occupied on a full-time basis with SGFA. If she had no contracts to fulfil outside the head office, she worked at the head office. The appellant did no promotion. The contracts which she executed were contracts negotiated by SGFA. The teaching manual, which was the subject of the services provided to the clients, had been developed by SGFA and was its property.

The appellant had no paid vacation. The hours were set, seven hours per day, and overtime was paid.

The appellant filed Exhibit A-1, entitled “Special Mandate” [translation], which was the appellant's job description, as well as the terms and conditions for the period from February to September 1988. It shows that the appellant received fees of $150 per day, that she received an amount of $1,200 for travel and accommodation expenses, and that the mandate had to be carried out in Jonquière.

Clauses 3, 5 and 7 read as follows:

3. The CONSULTANT keeps a daily record of activities carried out under her mandate and hands it over to the person designated by SGFA at the end of each week.

5. The CONSULTANT works in collaboration with any person designated by SGFA and within the administrative framework determined or accepted by SGFA. In her relations with SGFA clients, the CONSULTANT identifies herself as an agent of this firm.

The regular consulting day is that of the client, that is eight hours. Every significant surplus over and above this time will be considered as exceptional and will be worked at the express request of the Director of Personnel of Cascades (Jonquiére) Inc., and paid as a fraction of a consultation day.

Services will normally be provided during the hours and days of work of the inhouse instructors with whom the consultant works. It will, however, be possible to make changes to this schedule from time to time upon agreement with the Director of Personnel of Cascades (Jonquiére) Inc. and after informing SGFA.

7. The CONSULTANT forwards the relevant information on developments in the training program to SGFA so that SGFA may intervene as necessary.

[Translation.]

Analysis

SGFA found the clients, determined what services to provide on the clients’ premises, as well as the "consultants" [translation] who would do the work. The latter had to carry out the project in accordance with the SGFA method. The appellant worked exclusively for SGFA and was paid for the hours spent at work.

Counsel for the respondent referred to Wiebe Door Services Ltd. v. M.N.R., [1986] 2 C.T.C. 200, 87 D.T.C. 5025, and to the tests developed in the case law for determining whether there is a contract of service or contract for services.

Control:

SGFA exercised control over the appellant: fixed schedule, weekly reports, manual in accordance with SGFA norms. The appellant was not independent with regard to time, place or method.

Tools:

Everything was provided by SGFA or by the client: the office and secretariat. The appellant supplied neither tools nor premises.

Chance of profit or risk of loss:

None. The appellant was remunerated for work done. She could not have rendered her services in less time and obtained the same remuneration. She could not have carried out a number of contracts at the same time. Overtime was paid. She did no client prospecting.

Integration:

The appellant performed the work provided on a continuous basis by SGFA. Thus this was not the appellant's undertaking, but rather the undertaking of SGFA, to which the appellant leased her services.

I must therefore conclude that all the tests point toward a contract of service, not one for services.

The appeal is allowed, without costs, on the basis of the amounts allowed by the Minister. Otherwise, the appellant was correctly assessed as having acted as an employee, not a contractor.

Appeal allowed in part.