Jason Elliot Jerome DeFreitas

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.

Capcorp Planning (2003) Inc. sold a health and welfare plan (HWP) that provided coverage for health, dental, vision, and hearing care, as well as protection against income loss due to illness or accident.

The plan was particularly attractive to owner-managers of small businesses who could not obtain equivalent coverage through traditional insurance due to pre-existing medical conditions.

The Minister of Revenue assessed Capcorp for failure to collect and remit retail sales tax (RST) on amounts paid by employers under the HWP, imposing a penalty of $278,625.31 including interest.

The Superior Court of Justice quashed the assessment, finding that the HWP was not subject to RST because participants could not obtain equivalent insurance coverage.

The Court of Appeal reversed, holding that the HWP constitutes an "unfunded benefits plan" under the Retail Sales Tax Act and is therefore subject to RST.

The court found that the statutory definition focuses on whether protection against risk "could otherwise be obtained" through insurance generally, not whether specific individuals could obtain such coverage.