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PROVINCIAL AND TERRITORIAL TAXATION - Ontario

Friday, August 09, 2019 @ 8:18 AM  


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Appeal by placement agencies from the dismissal of their appeals from the Minister’s assessment of a health tax under the Employer Health Tax Act. The appellants supplied temporary workers to the Public Service of Canada and federal agencies under agreements between the appellants and the Government of Canada. The appellants’ primary function was to pay the worker and administer the payroll based on time sheets signed off by the client. The appellants appealed their assessments, arguing that they were not obliged to pay the tax because they were not the employers of the workers placed with their clients for temporary work. The appeal judge acknowledged, as was typical in a tripartite arrangement, that the appellants and the Government of Canada each appeared to possess some of the traditional attributes of an employer. After an analysis of all the factors, the judge determined that the appellants were the employers.

HELD: Appeals dismissed. The appeal judge did not err in commenting that in the circumstances the workers had to be employees of either the appellants or the Government of Canada for health tax purposes. The payment of remuneration was a relevant factor and the appeal judge did not rely on it exclusively. The appeal judge also considered that the appellants were the only parties with contractual relationships with the workers and that the contractual documentation with the Government of Canada made it clear that it was the government’s intention that the workers be the employees of the placement agencies. The appeal judge did not misapprehend the evidence or fail to consider any relevant factor.

Azur Human Resources Ltd. v. Ontario (Minister of Revenue), [2019] O.J. No. 3429, Ontario Court of Appeal, C.W. Hourigan, D. Paciocco and J.M. Fairburn JJ.A., July 2, 2019. Digest No. TLD-August52019010