Section 148

Friedlander J. found that although the Uber app governed many crucial aspects of the taxpayer’s activities as an Uber driver, including access to the market, the pricing of rides, and payment, he nonetheless (on the basis of the “very limited” evidence) should be treated as an independent contractor rather than an Uber employee given his complete control over his car and its hours of driving, and as to whether or not to use another ride sharing service. This meant that his fares for the assessed years (2015 and 2016) were subject to HST subject to the small supplier exclusion.

In assessing the taxpayer, the Minister had taken the position that the taxpayer ceased to be a small supplier at the particular point at which the $30,000 threshold was exceeded in 2015. Friedlander J found that this represented an incorrect application of the small supplier test and that it would be procedurally unfair to the taxpayer to conclude anything but that he had not ceased to be a small supplier until his 2016 year. As a result, the small supplier exemption applied for all of 2015 and the first month of 2016. As the Minister relied solely on the absence of small supplier status, it was unnecessary to consider whether the small supplier exemption was ousted by virtue of the taxpayer having engaged in a “taxi business” (whose definition was not expanded until effective July 1, 2017, to include ride-sharing programs).

The taxpayer carried on a proprietorship (referred to as Varx Technology) for manufacturing building panels, which was registered in February 2009 with the BC Registry Services and assigned a GST/HST registration. A short time later, the taxpayer incorporated this enterprise under the name Varx Technology Incorporated. She communicated this change with BC Registry Services, and testified that she was assured the “sole proprietorship would be closed”. The now-incorporated business was unsuccessful, and ultimately dissolved, with its GST/HST registration terminated effective July 31, 2014. The taxpayer began to carry on a new business of providing secretarial and administrative services for her husband’s business, and did not report any GST/HST as being remittable for her annual calendar reporting periods for the 2011 through to 2016 years. In 2018, the Minister assessed on the basis that she had made an aggregate of $205,519 in taxable supplies in those six years. Days after that assessment, the BC Registry Services forwarded a certificate of “dissolution of sole proprietorship registration”, dated April 25, 2018, and showing a retroactive date of dissolution of December 31, 2009. On November 20, 2018, she received notification of a “pending cancellation notice” effective December 31, 2017 for the GST/HST Registration of the Varx Technology proprietorship.

Before vacating the assessments of the taxpayer’s 2011 to 2013 years (in which her sales were less than the small supplier threshold) on the basis that she was not a “registrant” in those years, Fournier DJ stated (at paras 18, 24, 28):

[I]n my view, what a “registrant” does to generate revenue matters, in fact it is largely, what defines her status. …

… I appreciate the Appellant would remain a “registrant” within the meaning of the law, in respect of any business activity conducted in the field of technology and manufacturing, in association with Varx Technology Incorporated or its predecessor sole proprietorship. However, having abandoned those initiatives and moved across the country, she took steps to dissolve those ventures and to cancel all related GST/HST registrations. In terms of her new business initiatives providing “secretarial and administrative services” for her husband, in my opinion, she was not a “registrant” within the meaning of the law. As such she should have been allowed to carry on business in her new field of endeavour, without a registration number, provided she qualified as a “small supplier” of goods or services. ...

[The taxpayer] at best was a “registrant” in name only but not so, within the meaning of the law, insofar as we are concerned in these circumstances. … I find it hard to reconcile the notion that somehow a GST/HST registration number could survive the dissolution of its assigned holder.

The assessments for the subsequent (2014 to 2016) years) were confirmed on the basis that she had exceeded the small supplier thresholds for those years (albeit by “a ‘de minimis’ overage of $250” for 2014, as to which he “invite[d] the Minister to exercise his discretion with a view of affording the Appellant some clemency,” perhaps by “allowing her ‘small supplier status’ pursuant to section 148(1)(b)” (para. 30).)