Date: 20010508
Dockets: 2000-2851-EI,
2000-2856-CPP
BETWEEN:
INTERNATIONAL MINERALS & CHEMICAL
(CANADA) GLOBAL LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasonsfor Judgment
Beaubier, J.T.C.C.
[1] These appeals were heard together on common arguments at Regina, Saskatchewan, on April 24, 2001. The parties filed a Partial Agreed Statement of Facts, which, in respect to 2000-2856 (CPP), reads as follows:
PARTIAL AGREED STATEMENT OF FACTS
The parties to the within action hereby agree, through their respective counsel, that for purposes only of this appeal and any appeal therefrom, the facts set out herein are true. No evidence inconsistent with this Partial Agreed Statement of Facts may be adduced at the hearing of this appeal or at any appeal therefrom but additional evidence, not inconsistent with this Partial Agreed Statement of Facts, may be adduced by either party.
1. At all relevant times, the Appellant was and is a corporation incorporated under the laws of Canada.
2. At all relevant times, IMC Esterhazy Ltd. ("IMC Esterhazy") was and is a corporation incorporated under the laws of the Province of Saskatchewan.
3. On and before August 31, 1998, the Appellant carried on a potash business principally located near Esterhazy, Saskatchewan (the "business"). The Appellant deducted and remitted contributions under the Canada Pension Plan, R.S.C. 1985, c. C-8 (hereinafter the "Plan") from January 1, 1998 to August 31, 1998 with respect to employees engaged in the business and, with respect to certain employees engaged in the business during this period, deducted and remitted contributions up to the maximum yearly amount.
4. At all relevant times, the employees engaged in the business were engaged under contracts of service.
5. On August 31, 1998, the Appellant and IMC Esterhazy formed a limited partnership under and in accordance with the laws of the Province of Saskatchewan ("IMC Limited Partnership"), pursuant to an agreement in writing between the Appellant and IMC Esterhazy dated August 31, 1998 (the "Limited Partnership Agreement"). The Appellant is the general partner of the IMC Limited Partnership and owns a 99.5% interest in the IMC Limited Partnership. IMC Esterhazy is the limited partner of the IMC Limited Partnership and owns a .5% interest in the IMC Limited Partnership.
6. On August 31, 1998, the Appellant transferred all or substantially all of the business to the IMC Limited Partnership.
7. As a result of the transaction referred to in paragraph 6 above, on and after September 1, 1998, the Appellant, as the general partner of the IMC Limited Partnership, carried on the business.
8. On August 31, 1998, the Appellant's auditors, Ernst & Young, requested Revenue Canada, Taxation to confirm in writing whether, on and after September 1, 1998, a new "employer" will be created for purposes of deducting and remitting contributions under the Plan as a result of the facts referred to in paragraphs 5 and 6 above.
9. On September 16, 1998, Revenue Canada, Taxation advised the Appellant through correspondence to its auditors, Ernst & Young, that where: "[a] new legal entity has been formed as part of a business reorganization, the employer is required to start deducting CPP and EI contributions as if no deductions had been made previously. In many cases the employees have already paid the maximum contribution for the year. As a result, the employer may request a waiver from the department to alleviate any undue hardship to the employees. The employer will continue remitting the employers CPP and the EI premiums as if the individual were a new employee. Unfortunately, there is no relief for the employer". As a result, Revenue Canada Taxation implicitly took the position that the IMC Limited Partnership was a new employer and, therefore, was obligated to deduct and remit contributions under the Plan on and after September 1, 1998 as if no deductions had been previously made by the Appellant in the 1998 calendar year.
10. On September 24, 1998, the Appellant, as general partner of the IMC Limited Partnership, deducted and remitted contributions under the Plan to Revenue Canada, Taxation with respect to salary and wages paid on September 15, 1998 to employees engaged in the business. Although the contributions deducted and remitted were calculated on the basis that the IMC Limited Partnership was a new employer, the Appellant expressly stated to Revenue Canada, Taxation that it was not in agreement with this position and was remitting on this basis to avoid any potential penalties and/or interest under the Plan with respect to these remittances.
11. On October 6, 1998, the Appellant, through its solicitors, MacPherson Leslie & Tyerman, again requested Revenue Canada, Taxation to confirm in writing that, on and after September 1, 1998, the Appellant, as general partner of the IMC Limited Partnership, was the "employer" required to deduct and remit contributions under the Plan with respect to employees engaged in the business and that IMC Limited Partnership was not an "employer" for purposes of the Plan.
12. As a result of the Minister of National Revenue's position referred to in paragraph 9 above that the IMC Limited Partnership was a new employer, the Appellant, as the general partner of the IMC Limited Partnership, deducted and remitted contributions under the Plan from September 1, 1998 to December 31, 1998 with respect to employees engaged in the business on the basis that IMC Limited Partnership was a new employer for purposes of the Plan.
13. On February 26, 1999, notwithstanding the Minister of National Revenue's position referred to in paragraph 9 above that the IMC Limited Partnership was a new employer, the Appellant filed the 1998 T4 - Summary of Remuneration Paid with Revenue Canada, Taxation on the basis that:
(i) Prior to September 1, 1998, the Appellant was the "employer" required to deduct and remit contributions under the Plan with respect to employees engaged in the business; and
(ii) On and after September 1, 1998, the Appellant, as general partner of the IMC Limited Partnership, was the "employer" required to deduct and remit contributions under the Plan with respect to employees engaged in the business.
The 1998 T4 - Summary of Remuneration Paid filed by the Appellant with Revenue Canada, Taxation indicated an overpayment of $852,896 with respect to deductions under the Plan and the Employment Insurance Act, S.C. 1996, c. 23 with respect to employees engaged in the business in 1998. The Respondent has not verified this overpayment to date.
14. On March 11, 1999, Revenue Canada, Taxation advised the Appellant in writing that IMC Limited Partnership was a "new legal entity" and as such was the employer of the employees engaged in the business for purposes of the Plan.
15. On May 26, 1999, the Appellant filed an Application for Ruling to Revenue Canada, Taxation requesting a ruling that, on and after September 1, 1998, the Appellant, as general partner of the IMC Limited Partnership, was the "employer" required to deduct and remit contributions under the Plan with respect to employees engaged in the business and that IMC Limited Partnership was not an "employer" for the purposes of the Plan.
16. On or about July 21, 1999, the Minister of National Revenue made a ruling which provided that "effective August 31, 1998 a new employer entity, International Minerals & Chemical (Canada) Limited Partnership was created".
17. In response to the ruling of the Minister of National Revenue referred to in paragraph 16 above, the Appellant filed an appeal to the Minister of National Revenue in accordance with section 27 of the Plan.
18. In response to the Appellant's appeal referred to in paragraph 17 above, on or about March 21, 2000 the Minister of National Revenue rendered a decision on the appeal which determined that the IMC Limited Partnership was a new employer and, as a result, had the obligation to deduct and remit contributions under the Plan without consideration for the amounts previously deducted in 1998 by the Appellant.
19. The Appellant and the Respondent admit the authenticity of all documents included in the Joint Exhibit Book attached hereto as Schedule "A" and agree that all such documents are admitted as exhibits and shall form part of the record in this appeal.
20.
[2] The following paragraphs from the Limited Partnership Agreement relate to the dispute before the Court:
Section 2.9 Partnership Property
The property of the Partnership shall consist of all the real and personal property, whether tangible or intangible, of any nature or kind whatsoever, acquired, purchased or owned from time to time by the Partnership. The General Partner may hold legal title to any of the assets or property of the Partnership in its name for the benefit of the Partnership.
Section 3.2 General Partner
The General Partner shall contribute as Capital Contributions to the Partnership the following:
...
(b) its interest in the assets (the "Operating Assets") constituting the IMC Business, under the terms and conditions and otherwise as provided for in the Instrument of Transfer attached hereto as Annex A,
(Annex A is not in evidence.)
...
Section 4.1 Profit
For the purposes of this Article 4, "profit" of the Partnership shall be calculated for each fiscal year (or part thereof) of the Partnership in accordance with generally accepted accounting principles in Canada consistently applied, and shall include, without limitation, all sales revenue generated from the Business (less any actual expenses incurred in connection with any such sales) after deducting all reasonable operating expenses properly incurred in connection with the Business.
Section 5.1 Control
The General Partner shall have the full and exclusive control of the Business. The Limited Partner shall have no control over and no right to control the business of the Partnership or the management or direction of its property, affairs or policy and shall not have any power to transact the business of, or sign for or in any way bind, the Partnership. Notwithstanding the foregoing, the Limited Partner may from time to time investigate the state and progress of the business and affairs of the Partnership and may advise as to its management, in accordance with and to the extent of the rights given to limited partners under the Act.
Section 5.2 Management Services
The General Partner shall have full and exclusive power and authority to manage, control, operate and direct the Business and the property and affairs of the Partnership. In connection therewith, and without limiting the generality of the foregoing or any other provision of this Agreement, the General Partner will have full power and authority for and on behalf of the Partnership to:
...
(i) employ, retain, engage or dismiss from employment, personnel, agents, representatives or professionals with the powers and duties, upon the terms and for the compensation as in the discretion of the General Partner may be necessary or advisable in the carrying on of the Business;
...
(k) act as attorney in fact or agent of the Partnership in dispersing and collecting monies for the Partnership, paying debts and fulfilling the obligations of the Partnership in handling and settling any claims of the Partnership;
...
(q) provide for accounting, maintenance of records, maintenance and safekeeping of all Partnership documents, the provision of office space, staff, equipment and all clerical services required for the operations and activities of the Partnership and the preparation and forwarding to the Partners of annual statements of account as of the end of each fiscal year;
...
(t) do anything that is in furtherance or incidental to the Business or that is provided for in this Agreement; and
...
All expenses incurred by the General Partner in managing and conducting the Business of the Partnership, including the cost of such professional, technical, administrative and other services and advice as it shall deem necessary, shall be paid by the Partnership.
...
Section 5.4 Books and Records
...
(2) The Limited Partner shall, in order to examine into the state and progress of the Business, have free access at all times to inspect and examine all books, securities, letters and other things concerning the Business of the Partnership and the General Partner shall, on request, promptly furnish to the Limited Partner correct information, accounts and statements of and concerning all such transactions without any concealment or suppression.
Section 5.8 Signing of Cheques
All cheques drawn on the Partnership's bank account shall be signed by such person or persons as shall from time to time be designated by the General Partner.
Section 5.9 Signing of Agreements
All contracts, agreements and other documents shall be signed by the General Partner on behalf of the Partnership by such person or persons as shall from time to time be designated by the General Partner.
Section 5.10 Conduct of Business
The Business shall be conducted under the name of the Partnership, as set forth in Section 2.2 hereof.
Section 5.11 Loans by Partnership
The General Partner, for and on behalf of the Partnership, may make loans to corporations which are related to the General Partner or Limited Partner, if such loans are otherwise not within the authority of the General Partner pursuant to section 5.2, in such amounts and on such terms and conditions as are approved by both the General Partner and the Limited Partner.
[3] It was agreed between the parties that Wesley N. Schwalm would be the nominal Appellant respecting all of the employees for whom the Limited Partnership's 1998 contributions after August 31, 1998 were made. The decision appealed from respecting the appeal of the Ruling on account of the Canada Pension Plan contributions reads:
ATTENTION: DON R HOOD
DIRECTOR OF STRATEGIC PLANNING
INTERNATIONAL MINERALS & CHEMICAL
(CANADA) LIMITED PARTNERSHIP
GENERAL DELIVERY
ESTERHAZY SK S0A 0X0
S. Copithorne
Appeals Division
(780) 449-0355
1-800-772-0292
Date of Mailing: Mar 21 2000
Dear Sir:
This letter concerns your appeal of the Ruling dated July 21, 1999 regarding whether Canada Pension Plan contributions were payable by you, on amounts paid to Wesley N Schwalm during the period August 31, 1998 to December 31, 1998
It has been decided that contributons [sic] were payable. This is because International Minerals & Chemical (Canada) Limited Partnership, as a new employer of Wesley N Schwalm, had the obligation to deduct and remit Canada Pension Plan contributions, without consideration for the amounts deducted previously in 1998 by International Minerals & Chemical (Canada) Global Limited.
If you disagree with this decision, you may appeal to the Tax Court of Canada within 90 days of the mailing date of this letter. Information on how to proceed is attached.
The decision in this letter is issued pursuant to section 27.2 of the Canada Pension Plan and is based on paragraph 6(1)(a) and subsection 21(1) of the Canada Pension Plan.
Yours sincerely,
Original signed by
RONALD SMITH
Ronald Smith
Team Leader
CPP/EI Appeals,
for
Minister of National Revenue
cc: Attention: Todd M. Rosenberg
MacPherson Leslie & Tyerman
1500 - 410 - 22 Street E
Saskatoon SK S7K 5T6
The Employment Insurance decision differs only in its last paragraph which reads:
The decision in this letter is issued pursuant to section 93 of the Employment Insurance Act and is based on paragraph 5(1)(a) and subsection 82(1) of the Employment Insurance Act.
[4] The following provisions in the Canada Pension Plan, R.S.C. 1985, c. C-8 are germane:
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2. (1) In this Act, ... "employer" means a person liable to pay salary, wages or other remuneration for services performed in employment, and in relation to an officer includes the person from whom the officer receives his remuneration; |
2. (1) Les définitions qui suivent s'appliquent à la présente loi. ... "employeur" Personne tenue de verser un traitement, un salaire, ou une autre rémunération pour des services accomplis dans un emploi. Est assimilée à un employeur, dans le cas d'un fonctionnaire, la personne qui lui verse sa rémunération. |
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21. (1) Every employer paying remuneration to an employee employed by the employer at any time in pensionable employment shall deduct from that remuneration as or on account of the employee's contribution for the year in which the remuneration for the pensionable employment is paid to the employee such amount as is determined in accordance with prescribed rules and shall remit that amount, together with such amount as is prescribed with respect to the contribution required to be made by the employer under this Act, to the Receiver General at such time as is prescribed and, where at that prescribed time the employer is a prescribed person, the remittance shall be made to the account of the Receiver General at a financial institution (within the meaning that would be assigned by the definition "financial institution" in subsection 190(1) of the Income Tax Act if that definition were read without reference to paragraphs (d) and (e) thereof). |
21. (1) Tout employeur payant une rémunération à un employé à son service, à une date quelconque, dans un emploi ouvrant droit à pension est tenu d'en déduire, à titre de cotisation de l'employé ou au titre de la cotisation pour l'année au cours de laquelle la rémunération au titre de l'emploi ouvrant droit à pension est payée à cet employé, le montant déterminé conformément à des règles prescrites; l'employeur remet au receveur général, à la date prescrite, ce montant ainsi que le montant qui est prescrit à l'égard de la cotisation qu'il est tenu de verser selon la présente loi. De plus, lorsque l'employeur est une personne prescrite à la date prescrite, le montant est versé au compte du receveur général dans une institution financière (au sens du paragraphe 190(1) de la Loi de l'impôt sur le revenu, compte non tenu des alinéas d) et e) de la définition de cette expression). |
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23. (2) Section 160, subsections 161(11) and 220(3.1), (4) and (5), sections 221.1 and 223 to 224.3, subsections 227(9.1) and (10), sections 229, 236 and 244 (except subsections 244(1) and (4)) and subsections 248(7) and (11) of the Income Tax Act apply, with such modifications as the circumstances require, in relation to all contributions, interest, penalties and other amounts payable by a person under this Act, and for the purposes of this subsection, the reference in subsection 224(1.2) of that Act to "subsection 227(10.1) or a similar provision" shall be read as a reference to "section 22 of the Canada Pension Plan". |
23. (2) L'article 160, les paragraphes 161(11) et 220(3.1), (4) et (5), les articles 221.1 et 223 à 224.3, les paragraphes 227(9.1) et (10), les articles 229, 236 et 244, à l'exception des paragraphes 244(1) et (4), et les paragraphes 248(7) et (11) de la Loi de l'impôt sur le revenu s'appliquent, avec les adaptations nécessaires, aux cotisations, intérêts, pénalités et autres montants payables par une personne en vertu de la présente loi. Pour l'application du présent paragraphe, le passage, au paragraphe 224(1.2) de cette loi, " du paragraphe 227(10.1) ou d'une disposition semblable " est remplacé par le passage " de l'article 22 du Régime de pensions du Canada ". |
[5] The following provisions of the Employment Insurance Act, S.C. 1996, c. 23 are germane:
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2. (1) In this Act, ... "employer" includes a person who has been an employer and, in respect of remuneration of an individual referred to as sponsor or co-ordinator of a project in paragraph 5(1)(e), it includes that individual; |
2. (1) Les définitions qui suivent s'appliquent à la présente loi. ... " employeur " Sont assimilés à un employeur une personne qui a été employeur, de même que, du point de vue de la rémunération qu'il en tire, le particulier promoteur ou coordonnateur d'un projet visé à l'alinéa 5(1)e). |
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68. Subject to sections 69 and 70, an employer shall pay a premium equal to 1.4 times the employees' premiums that the employer is required to deduct under subsection 82(1). |
68. Sous réserve des articles 69 et 70, la cotisation patronale qu'un employeur est tenu de verser correspond à 1,4 fois la cotisation ouvrière de ses employés qu'il est tenu de retenir au titre du paragraphe 82(1). |
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82. (1) Every employer paying remuneration to a person they employ in insurable employment shall (a) deduct the prescribed amount from the remuneration as or on account of the employee's premium payable by that insured person under section 67 for any period for which the remuneration is paid; and (b) remit the amount, together with the employer's premium payable by the employer under section 68 for that period, to the Receiver General at the prescribed time and in the prescribed manner. (2) The employer shall not make any deduction as or on account of the person's premium for a year if in that year the insurable earnings paid by the employer to the person have reached the maximum yearly insurable earnings. |
82. (1) L'employeur qui paie une rétribution à une personne exerçant à son service un emploi assurable est tenu de retenir sur cette rétribution, au titre de la cotisation ouvrière payable par cet assuré en vertu de l'article 67 pour toute période à l'égard de laquelle cette rétribution est payée, un montant déterminé conformément à une mesure d'ordre réglementaire et de le verser au receveur général avec la cotisation patronale correspondante payable en vertu de l'article 68, au moment et de la manière prévus par règlement. (2) L'employeur cesse les retenues à l'égard de cette personne lorsque la rétribution qu'il lui a versée, pour l'année, atteint le maximum de la rémunération annuelle assurable. |
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99. Section 160, subsections 161(11) and 220(3.1), sections 221.1 and 224 to 224.3 and subsections 227(9.1) and (10) and 248(7) and (11) of theIncome Tax Act apply to all premiums, interest, penalties and other amounts payable by a person under this Part, with such modifications as the circumstances require, and for the purposes of this section, the reference in subsection 224(1.2) of that Act to "sub-section 227(10.1) or a similar provision" shall be read as a reference to "section 85 of the Employment Insurance Act". |
99. L'article 160, les paragraphes 161(11) et 220(3.1), les articles 221.1 et 224 à 224.3 et les paragraphes 227(9.1) et (10) et 248(7) et (11) de la Loi de l'impôt sur le revenu s'appliquent, avec les adaptations nécessaires, aux cotisations, intérêts, pénalités ou autres sommes payables par une personne en vertu de la présente partie. Pour l'application du présent article, le passage " de l'article 85 de la Loi sur l'assurance-emploi " vaut mention de " du paragraphe 227(10.1) ou d'une disposition semblable " au paragraphe 224(1.2) de cette loi. |
[6] The parties' arguments respecting this appeal centred on the meaning of the word "person" in the Canada Pension Plan and Employment Insurance Act provisions. The Respondent's argument centred on the premise that the partnership is a "person" and a new employer on the facts in this case. The Appellant's argument centred on the premise that the limited partnership is a relationship and not a legal entity and therefore, is not a "person". Thus, the Appellant corporation, International Minerals & Chemical (Canada) Global Limited ("IM & C(C)GL"), which became the general partner on August 31, 1998 was, and remained, the sole employer.
[7] There is no definition of "person" in Saskatchewan's The Partnership Act. The Partnership Act of Manitoba included in its definition of "person" both a limited partnership and a trust. In The Queen v. Robinson et al., 98 DTC 6065 (F.C.A.), Stone, J.A., speaking for the panel of the Federal Court of Appeal dealt with the question as to whether a limited partner in Manitoba was carrying on an active business within the meaning of section 122 of the Income Tax Act. At pages 6069 and 6070, Stone J.A. said:
That being said, these provisions must be viewed in the context of the statute as a whole, particularly section 3 and the definitions of "partnership" and "person" in section 1. These provisions, in my view, appear clearly to contemplate that all of the partners of a limited partnership carry on the business of the partnership. Whether a partnership be limited or general under the Manitoba statute, it must consist of "persons carrying on business in common, with a view of profit". It is, therefore, the persons which compose the partnership that carry on the business rather than the limited partnership itself. The position of limited partners under the corresponding English statute would appear to be similar to that prevailing under the Manitoba statute. In Reed v. Young, [1983] BTC 430 (Ch. D.),2 a tax case, Nourse, J. stated at page 446:
For present purposes, the essential features of a limited partnership are twofold. First, there must be one or more general partners who are liable for all the debts and obligations of the firm. Secondly, there must be or one more limited partners who at the time of entering into the partnership must contribute capital (which cannot be drawn out during the continuance of the partnership) and who are not liable for the debts and obligations of the firm beyond the amount so contributed. ... There is another distinctive feature, which is that a limited partner cannot take part in the management of the partnership business and does not have power to bind the firm. ... These three features apart, there is no inordinate difference between a limited and an ordinary partnership. The result is that while the partnership is a going concern a limited partner adopts a pose as supine, and profits or loses as much or as little, as a sleeping partner in an ordinary partnership. The only difference between the two is that the sleeping partner may be rudely awoken to find that his liability for the debts and obligations of the firm is unlimited.
[Emphasis added]
That the appellant took no part in the management of the business does not, in my view, mean that it and the other limited partners did not carry on that business in conjunction with the general partners in that year. Neither must the direct evidence in the record be neglected. That all of the partners carried on the business in 1988 is precisely what they expressly agreed to do pursuant to clause 1 of the August 31, 1970, partnership agreement.
The recent decision of the Tax Court of Canada in Grocott v. R., [1996] 1 C.T.C. 2311, supports this conclusion. That case involved a question of whether a non-resident limited partner of a limited partnership formed pursuant to Ontario's Limited Partnership Act, R.S.O. 1990, c. L-16, had derived "incomes from businesses carried by him in Canada" within the meaning of subparagraph 115(a)(ii) of the Income Tax Act, despite the fact that the taxpayer had taken "no part in the control of the business ..." in the sense described in section 13 of the Ontario statute.3 The Tax Court concluded that the taxpayer had derived income from a business carried on by him in Canada. I would here adopt the following reasoning of Bowman, J.T.C.C., at pages 2316-17:
Limited partnerships are created by statute. In Ontario, unlike certain other provinces, the Limited Partnerships Act is a separate statute from the Partnerships Act. One of the most salient features is that the liability of the limited partner is, under section 9, limited to his capital contribution. Also, under section 13 a limited partner is not liable as a general partner unless, in addition to exercising rights and powers as a limited partner, the limited partner takes part in the control of the business. Mr. Grocott took no part in the control of the business. A limited partner of course has the right to be informed as to the business of the partnership and to receive his or her share of the income. A limited partner is nonetheless a partner in a partnership. It is simply that his liability is limited by statute provided that he does not participate in running the business.
I do not think it can be said that this limitation of liability and prohibition against any active part in the control of the business means that he is not carrying on business through the partnership.2 [Footnote omitted.] A non-resident partner who did not actively participate in the business of a general partnership but who was nonetheless a participant in the profits was held in Randall v. R. (sub nom. Randall v. The Queen, [1985] 1 C.T.C. 268, 85 DTC 5208 (F.C.T.D.) to be carrying on business in Canada. I do not think that the fact that the partnership is a limited partnership alters the nature of the non-resident limited partner's participation. I trust that I am being neither ... "results oriented" (Tennant v. R. (sub nom. Tennant v. Canada), [1994] 2 C.T.C. 113, 94 DTC 6505, 175 N.R. 332 (F.C.A.)) nor ... "purely mechanical" (Swantje v. R. (sub nom. Swantje v. Canada), [1994] 2 C.T.C. 382, 94 DTC 6633, 174 N.R. 224 (F.C.A.)) in my interpretation of these provisions when I observe that it would be a rather surprising result if a non-resident who is a limited partner in a Canadian limited partnership that carried on business in Canada could escape taxation under section 115 on his Canadian source profits from the partnership on the basis that he was not carrying on business in Canada.4
[Emphasis added]
[8] The quotation adopted from Bowman, J. is to the effect that a limited partner can carry on business "through the partnership". In this case the question becomes whether a general partner is an employer "through the partnership". While the partnership is a business entity, it is not a person within the definition of "employer" in the Employment Insurance Act or the Canada Pension Plan nor is it a person at common law. The general partner, the Appellant, is such a person and is also liable in law for everything relating to the enterprise, just as it was before September 1, 1998.
[9] In accordance with the inclusive definition of "employer" in the Canada Pension Plan, IM & C(C)GL is the employer. It remained the "person liable to pay salary, wages or other remuneration for services performed in employment" pursuant to subsection 2(1) of the Canada Pension Plan. Under this definition, although a new legal entity was formed, IM & C(C)GL was liable both before and after August 31, 1998 and therefore, there was no change in the employer under the definition in the Canada Pension Plan. For this reason, this appeal is granted.
[10] The Employment Insurance Act definition of employer "includes a person who has been an employer". After August 31, 1998, the Appellant became a member of the partnership. As a person at law it was an employer as a member of the new partnership firm and it is liable as a person who is an employer within the meaning of the Employment Insurance Act.
[11] For these reasons the Court finds that IMC Limited Partnership not a new employer of Wesley N. Schwalm during the period September 1, 1998 to December 31, 1998. Therefore, it did not have the obligation to deduct and remit contributions (or premiums) without consideration of the amounts it deducted previously.
[12] The appeals are allowed. Therefore:
1. Pursuant to section 103 of the Employment Insurance Act, the decision is referred to the Minister for reconsideration and reassessment pursuant to these reasons.
2. Pursuant to section 28 of the Canada Pension Plan, the decision is referred to the Minister for reconsideration and reassessment pursuant to these reasons.
3.
Signed at Ottawa, Canada, this 8th day of May, 2001.
"Beaubier"
"D.W. Beaubier"
J.T.C.C.
COURT FILE NO.: 2000-2851(EI) and 2000-2856(CPP)
STYLE OF CAUSE: International Minerals & Chemical (Global) Canada Limited v.
The Minister of National Revenue
PLACE OF HEARING: Regina, Saskatchewan
DATE OF HEARING: April 24, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D.W. Beaubier
DATE OF JUDGMENT: May 8, 2001
APPEARANCES:
For the Appellant: Douglas Hodson
Todd M. Rosenberg
Counsel for the Respondent: Lyle Bouvier
Cary Clark, Student-at-Law
COUNSEL OF RECORD:
For the Appellant:
Name: Todd M. Rosenberg
Firm: MacPherson Leslie & Tyerman
Saskatoon, Saskatchewan
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-2851(EI)
BETWEEN:
INTERNATIONAL MINERALS & CHEMICAL
(CANADA) GLOBAL LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard together on common evidence with the appeals of
International Minerals & Chemical (Canada) Global Limited(2000-2856(CPP))
on April 24, 2001 at Regina, Saskatchewan
by the Honourable Judge D.W. Beaubier
Appearances
Counsel for the Appellant: Douglas Hodson
Todd M. Rosenberg
Counsel for the Respondent: Lyle Bouvier
Cary Clark, Student-at-Law
JUDGMENT
The appeal is allowed and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada this 8th day of May, 2001.
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"D.W. Beaubier" |
J.T.C.C.
2000-2856(CPP)
BETWEEN:
INTERNATIONAL MINERALS & CHEMICALS
(CANADA) GLOBAL LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard together on common evidence with the appeals of
International Minerals & Chemical (Canada) Global Limited(2000-2851(EI))
on April 24, 2001 at Regina, Saskatchewan
by the Honourable Judge D.W. Beaubier
Appearances
Counsel for the Appellants: Douglas Hodson
Todd M. Rosenberg
Counsel for the Respondent: Lyle Bouvier
Cary Clark, Student-at-Law
JUDGMENT
The appeal is allowed and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada this 8th day of May, 2001.
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"D.W. Beaubier" |
J.T.C.C.