TAX STATUS UPDATE

Canadian Musicians Employment Status Archive

Excerpt from May 2002 SSD Canada Newsletter

TAX STATUS UPDATE

The Canada Customs and Revenue Agency (CCRA, formerly Revenue Canada) has come forward with long-awaited draft guidelines for determining the employment status of artists (i.e. employee or self-employed). The document was prepared at the request of the arts community following discussions at the November 22, 2000 Chalmers Conference.

On January 9, 2002 the federal Department of Canadian Heritage (DCH) hosted a meeting in Ottawa for the purpose of discussing the draft guidelines. The meeting involved DCH officials as well as representatives from the Canada Customs and Revenue Agency (CCRA, formerly Revenue Canada), the Human Resources Development Commission (HRDC), and the arts community, including management and artists' organizations. Many concerns were raised during the meeting. Because of the potential impact of the document and the complexity of the issue, the arts community was granted an additional six months to provide comments. The draft document will be held in abeyance until the feedback has been considered. So where does that leave us? A few things have become clear.

The CCRA has not targeted the cultural sector and has no plans to do so. Rulings will be made only at the request of individuals or organizations.
There will not be a blanket ruling for orchestras. Decisions will continue to be made based on the facts of each situation.
Arts organizations will not be treated differently from other industries. Rulings will continue to be based on the application of what is known as the "four-fold test" i.e. control, ownership of tools, chance of profit/loss, and integration.
The onus is on the organization to become familiar with the letter and spirit of the law and to comply as appropriate.
Taking a reactive stance can be costly. Penalties and retroactive assessments are likely to be considerably lighter for those organizations that request a ruling and/or voluntarily comply with the legislation.

The implications of these clarifications will vary from one organization to the next. It is important to remember that action taken by one Canadian orchestra affects many others. For more detailed information please contact AFM Symphonic Services.

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