When you hire somebody, or get hired, a gray area sometimes surfaces as to whether you are an employee or a contractor (aka sub-contractor or self-employed). Both parties quite often see it as a contractor role but the CRA prefers it to be an employee relationship. Why? They collect payroll taxes from employees AND employees do not get to write-off expenses incurred to generate that income.
The Wiebe Door case previously established that this determination be based on 1) control, 2) ownership of tools, 3) chance of profit, and 4) risk of loss. A more recent case was brought forward arguing the intention of the parties has to be considered as well. The Tax Court agreed as long as the four factors of the Wiebe Door case were not sufficiently strong enough to overcome the “intention” of the parties.
In this court case, both the company and its driver had clearly considered this a contractor relationship and the Court agreed.