James Michael Elcombe

Placement agencies that supplied temporary workers to the federal government appealed assessments requiring them to pay employer health tax under the Employer Health Tax Act.

The agencies argued they were not employers of the workers because the Government of Canada managed and directed the workers.

The appeal judge found the parties were involved in a tripartite relationship and determined the agencies were the employers because they paid remuneration to the workers, held contractual obligations to the workers, and the government's contractual documentation indicated its intention that the workers be employees of the placement agencies.

The Court of Appeal upheld the decision, finding the appeal judge undertook a comprehensive review of all circumstances and did not err in concluding the agencies were employers for tax purposes.

Mary Aquino brought a motion for a garnishment hearing under Rule 60.08(16) of the Rules of Civil Procedure to vary garnishment letters issued by the Minister of Finance.

The Minister had assessed Aquino for her common law spouse's pre-existing unpaid tax debt under the Retail Sales Tax Act (RSTA) and subsequently issued garnishment letters against her commissions and wages.

The court dismissed Aquino's motion, holding that Rule 60.08(16) does not apply to the Minister's garnishment letters issued under section 36 of the RSTA, and therefore, the court lacked jurisdiction to grant the requested relief.

The appellants, placement agencies, appealed tax assessments by the Minister of Revenue under the Employer Health Tax Act, arguing they were not the employers of temporary workers supplied to the federal government.

The court considered the tripartite relationship between the agency, the worker, and the client, and the definition of "employer" under the EHTA.

The court found that the appellants were the only entities with contractual obligations to pay the workers, and therefore were the employers for the purposes of the Act.

The appeals were dismissed.