From personal experience, I’m sure Tara Birtwhistle and Johnny Wright are quite relieved to here about this! My own 2000, 2001 and 2002 income tax returns were amended from an initial audit where I, as an independent contractor, was deemed to be an employee of a company. What this meant to the company was a whole bunch of “employer share” of payroll deductions were being requested. What this meant to ME .. was that being deemed as an employee, all of a sudden my operating business that I had operating since 1991 became non-existent – all my deductions were ignored.
Imagine if you are a store selling products and earning a gross profit after buying those products. Then you have costs to maintain your store. Ultimately, you have a net profit, pay your taxes and think you are a good citizen. Then, you get a letter in the mail saying – Your Gross Sales is your income and you should pay taxes on the GROSS …
Despite my troubles which lasted about 15 months … I found Canada Revenue Agency quite fair and reasonable to deal with – once it got to the appeal level (out of Edmonton) ..
Court ruling huge for arts groups
Fri Mar 10 2006
By Paul Samyn
OTTAWA — The Royal Winnipeg Ballet has won a key tax battle with the federal government that has nationwide implications for the way arts groups pay their performers.
The ruling means two of the ballet’s biggest stars — Tara Birtwhistle and Johnny Wright — are still classified as independent contractors and not employees. If their status had changed to employees, the ballet company would have been liable for Employment Insurance and Canada Pension Plan premiums for its dancers.
“It’s really premature to tell you how this is going to affect us, because we don’t know,” Wright said last night “It’s got many, many implications.”
The stakes were huge. The RWB took on the legal tug of war with Revenue Canada on behalf of the arts community whose shoestring budgets were hard pressed to come up with the extra cash needed to pay benefits if the independent contractors became employees.
“The RWB became a test case for this,” Judy Murphy, the ballet’s chief operating officer, said yesterday.
“Stratford, the Shaw Festival, the National Ballet, symphonies — they were all affected by this. So everyone was looking with great interest at the RWB case.”
The RWB, Birtwhistle and Wright were on the same side.
They took the fight to the Tax Court of Canada and lost in 2004. However, in a split decision, the RWB and the dancers won their appeal in Federal Court last week.
The ruling comes after a decades-long struggle by the country’s performing arts community. The revenue minister’s attempt to classify performers as employees instead of independent contractors nearly pushed Thunder Bay’s symphony orchestra into bankruptcy.
In the RWB’s case, the decision will save the dance company about $50,000 a year, as it won’t be forced to pay benefits to dancers.
Wright said he volunteered to be part of the case. “They needed a couple of dancers in order to build a case to make a ruling,” he said.
“There’s a couple of dancers that were, as I like to call them, the guinea pigs that volunteered and asked a bunch of questions based on how we get to work, if we buy our costumes, if we supply our own shoes, all of that stuff.”
“This is a big deal for the arts,” said Antoni Cimolino, executive director of the Straftord Festival, who helped underwrite the legal costs of the court battle. Cimolino said that had the RWB lost, arts companies could have faced a 30 per cent increase in their costs, as they would have also had to pay for artists’ training and travel as they move about the country. Cimolino said the court case put on the line the very independence of performing artists, who have long resisted any attempt to classify them as employees who simply take orders from their superiors.
The RWB court case revolved around the question of whether Birtwhistle, Wright and Kerrie Souster, who has since left the company, were employees or independent contractors, as has long been the case within the arts community. In fact, the Canadian Ballet Agreement reached between the RWB and the Canadian Actors’ Equity Association declared the dancers independent contractors.
As such, the dancers weren’t eligible for Employment Insurance or CPP. But they were able to claim expenses such as agent’s fees, specialized training, clothing and costs associated with travel across the country as they freely took on engagements with different companies.
As part of a broader effort by Ottawa to capture lost revenue from independent contractors working in a number of industries, the RWB was told it had to treat its dancers as employees.
“The ruling was clear,” Cimolino said of the Federal Court decision. “I would ask our politicians and the Canada Revenue Agency to show leadership and accept the ruling.”