Canadian Musicians Employment Status Archive Excerpt from February 2000 SSD Canada Newsletter
Tax/Employment Status: News from the Front
The taxman has struck again. This time the unwelcome news has come from the Employer Health Tax (EHT) auditors of the Province of Ontario. As the result of a region-wide audit of not-for-profit organizations, both the Windsor Symphony and Orchestra London have been found by the Ontario Ministry of Finance to be employers of their contracted musicians, including Windsor's Music Director. The most punishing parts of these rulings are the retroactive assessments, totaling $65,000 for Windsor and $128,000 for London. The EHT itself represents an additional cost to the organizations of 1.95% of payroll on an ongoing basis. It is important to understand that these latest rulings come from the Province of Ontario only and do not necessarily affect the employment status of these organizations with Revenue Canada. The EHT auditors have made it clear, however, that they share information with Revenue Canada. These new rulings and the accompanying retroactive assessments are causing the AFM and other interested parties to question the prevailing strategy which has been to change a few words in our agreements and then lie low and hope for the best. Some symphonic organizations are considering a more proactive approach, such as asking Revenue Canada for a ruling in exchange for assurance that there will be no retroactive assessment. Others are asking Locals to reopen existing agreements in the hope that these agreements can be restructured in such a way that an employment relationship will not be found. The Thunder Bay experience in this regard is instructive in that a major overhaul of the agreement that was submitted to Revenue Canada failed to result in a finding of self-employed status for the musicians. Although cases that arise will continue to be assessed on the basis of unique local facts and circumstances, it is becoming apparent that benefits such as guaranteed ongoing work, tenure, pension, and participation in organizational decision-making (e.g. audition committees) will not likely survive the scrutiny of Revenue Canada or provincial finance ministries if the retention of self-employed status remains the ultimate goal. It is this tough new reality that is gradually causing some musicians and their symphonic organizations to realize that there might be worse things than being employees. The AFM is working closely with Locals, individual symphony managers, and Orchestras Canada. All organizations are freely sharing information and experiences and are participating in joint lobbying efforts. Resources that are available include an excellent legal summary (CCH Canadian Limited) of recent court decisions on the employee/self-employed question, copies of various relevant decisions, and a legal opinion procured by the AFM on the question of directors' liability. Most of these items and other related materials are available to registered users of the AFM website at http://www.afm.org/cmesa, the home of the Canadian Musicians' Employment Status Archive which is created and maintained by Paul Sharpe, President of AFM Local 279, London.
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