CCA Treating Artists with Respect – Presumption of Independent Contractor Status

Legal Analysis

In recent years, the Canada Revenue Agency (the “CRA”) has aggressively targeted artists, arts organizations, and engagers (meaning all persons or organizations who engage the services of artists) in respect of their contractual dealings with one another. For reasons only fully known to the CRA, it has begun to question the long-standing practice of artists being engaged as independent contractors. Classifying an artist as an independent contractor or as an employee has consequences under the Income Tax Act (the “ITA”), the Canada Pension Plan Act (the “CPP”), the Employment Insurance Act (the “EIA”) and various other provincial statutes.

Engagers and artists have, historically, dealt with each other as independent contracting parties with each accepting the costs and benefits of such a relationship and the arts have developed around such a practice. In fact, and as will be explored later in this paper, artists were put to a form of an election as to their status for purposes of the ITA, the CPP and the EIA in or about 1971. The artists elected to continue their engagements as independent contractors and, with few exceptions, that status has continued since that time.

CCA Treating Artists with Respect - Presumption of Independent Contractor Status

Scope:

Legal Analysis

In recent years, the Canada Revenue Agency (the “CRA”) has aggressively targeted artists, arts organizations, and engagers (meaning all persons or organizations who engage the services of artists) in respect of their contractual dealings with one another. For reasons only fully known to the CRA, it has begun to question the long-standing practice of artists being engaged as independent contractors. Classifying an artist as an independent contractor or as an employee has consequences under the Income Tax Act (the “ITA”), the Canada Pension Plan Act (the “CPP”), the Employment Insurance Act (the “EIA”) and various other provincial statutes.

Engagers and artists have, historically, dealt with each other as independent contracting parties with each accepting the costs and benefits of such a relationship and the arts have developed around such a practice. In fact, and as will be explored later in this paper, artists were put to a form of an election as to their status for purposes of the ITA, the CPP and the EIA in or about 1971. The artists elected to continue their engagements as independent contractors and, with few exceptions, that status has continued since that time.