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The Impact of Intent in the Characterization Analysis of a Worker
by
Nabeel Peermohamed
A thesis submitted in conformity with the requirements for the degree of Master of Laws
Faculty of Law University of Toronto
© Copyright by Nabeel Peermohamed 2013
ii
The Impact of Intent in the Characterization Analysis of a Worker
Nabeel Peermohamed
Master of Laws
Faculty of Law University of Toronto
2013
Abstract
The Tax Court of Canada and the Federal Court of Appeal are regularly asked by taxpayers and
the Canada Revenue Agency to determine whether a worker is an employee or an independent
contractor. The distinction has significant tax consequences. The analysis and various legal tests
used by the courts to determine the characterization of a worker have been through significant
transformations over the last 15 years. The analysis remained objective for several years.
However, in 2002, courts began to consider the common intent held between the taxpayer and
the worker when characterizing that worker’s status as either an employee or an independent
contractor. Since its introduction, the courts have placed various levels of importance on this
common intent in the characterization process. This paper seeks to quantify the varied emphasis
placed by the courts on the intent held between a taxpayer and its worker.
iii
Table of Contents
List of Tables .......................................................................................................................................... v
List of Appendices ................................................................................................................................ vi
Part 1 Introduction .............................................................................................................................. 1
Part 2 The Characterization Process .............................................................................................. 3
1 The Objective Factors ................................................................................................................... 3
2 The Fall of Integration .................................................................................................................. 6
3 An Introduction to the Evolution of Intent ............................................................................ 8
4 A Detailed Account of the Evolution of Intent ....................................................................... 9
5 The Inconsistency caused by Intent ...................................................................................... 20
Part 3 The Study ................................................................................................................................. 22
1 Inspiration from the Wintermute Study .............................................................................. 22
2 Extrapolating Wintermute to the Present .......................................................................... 22
3 The “More Strongly than Royal Winnipeg” Standard ....................................................... 24
4 Methodology for Study .............................................................................................................. 27
4.1 The TCC or FCA’s Characterization (employee/independent contractor) ........................ 28 4.2 The Characterization of the MNR or TCC Below ......................................................................... 28 4.3 Finding of Common Intent (employee/independent contractor/none) ........................... 28 4.4 Finding Based on Factors (employee/independent contractor) .......................................... 29 4.5 The Courts’ Finding After an Application of each of the Four Wiebe Door factors (Control/Financial Risk/Ownership of Tools) ................................................................................... 29 4.6 Judge ......................................................................................................................................................... 29 4.7 Gender of the Judge .............................................................................................................................. 29 4.8 Province or Territory .......................................................................................................................... 30 4.9 Personal Service Business (PSB) ..................................................................................................... 30 4.10 Gender of the worker (male/female) .......................................................................................... 30 4.11 Nature of Organization (profit/non-‐profit) .............................................................................. 30 4.12 Industry of Organization ................................................................................................................. 30
iv
5 Assumptions ................................................................................................................................. 31
6 How to Interpret the Results ................................................................................................... 32
7 Results and Interpretation ....................................................................................................... 34
Part 4 Implications ............................................................................................................................ 43
1 Analysis is Mostly Objective .................................................................................................... 43
2 Emphasis and De-‐emphasis of Intent ................................................................................... 43
3 Property Management ............................................................................................................... 44
4 Reversed Decisions ..................................................................................................................... 44
5 Gender of Judge ............................................................................................................................ 44
Part 5 Conclusions ............................................................................................................................. 46
Bibliography ........................................................................................................................................ 48
Appendix: Additional STATA 12.0 Date Output Tables ......................................................... 50
v
List of Tables
• Table 1: Findings based on Common Intent
• Table 2: Court Findings based on Common Intent and Objective Factors
• Table 3: Example
• Table 4: The Probability of the Courts’ Characterization by Era
• Table 5: The Courts’ Emphasis on Intent by Era
• Table 6: The Courts’ Emphasis on Financial Risk by Era
• Table 7: The Courts’ Emphasis on Control by Era
• Table 8: The Courts’ Emphasis on Integration by Era
• Table 9: The Courts’ Emphasis on Ownership of Tools by Era
• Table 10: The Courts’ Emphasis in the Pre-Wolf Era
• Table 11: The Courts’ Emphasis in the Wolf to Tremblay Era
• Table 12: The Courts’ Emphasis in the Tremblay to Royal Winnipeg Era
• Table 13: The Courts’ Emphasis in the Royal Winnipeg to B-Pro Grooming Era
• Table 14: The Courts’ Emphasis in the B-Pro Grooming to Kilbride Era
• Table 15: The Courts’ Emphasis in the Kilbride to D.W. Thomas Era
• Table 16: The Courts’ Emphasis in the D.W. Thomas to TBT Personnel Era
• Table 17: The Courts’ Emphasis in the Post-TBT Personnel Services Era
vi
List of Appendices
• Appendix: Additional STATA 12.0 Data Output Tables
1
Part 1 Introduction
The Tax Court of Canada (TCC) and the Federal Court of Appeal (FCA) are routinely called
upon to characterize a worker as an employee or an independent contractor for tax purposes.
More precisely, these courts have been asked to review such characterizations made by the
Minister of National Revenue (the “Minister” or the “MNR”) when assessing taxpayers under
the Income Tax Act1 (the “Act”). The characterization of a worker determines the deductions
available to the worker, the existence of a personal services business, and the liability of an
alleged employer to remit Employment Insurance (EI) premiums and Canada Pension Plan
(CPP) contributions.
The introduction of common intent into the analytical process of characterizing a worker as an
independent contractor or an employee has caused a significant amount of inconsistency in the
characterization approach taken by the courts. The 1986 decision in Wiebe Door v. MNR2
provided a four-fold objective test to characterize a worker. The four tests established were
control, financial risk, integration, and ownership of tools. Several subsequent decisions from the
FCA have resulted in litigation uncertainty for both taxpayers and the taxing authorities. The
2002 FCA decision in Wolf v. MNR3 introduced the concept that the common intention held
between contracting parties was important in the characterization process. The court said the
common intent element could break a tie that results after the application of the four objective
factors. In 2006, the role of intention was elevated by the FCA in Royal Winnipeg Ballet v.
MNR4 such that intent was an additional important factor when characterizing a worker, not only
as a tie-breaker. Finally, in 2011, the FCA in TBT Personnel Services Inc. v. MNR5 characterized
1 RSC 1985, c 1 (5th Supp), as amended. 2 (1986) 87 DTC 5025 (FCA), [1986] 3 FC 553. 3 2002 FCA 96, 2002 DTC 6853. 4 2006 FCA 87, [2007] 1 FCR 35. 5 2011 FCA 256, (2011) 343 DLR (4th) 100.
2
a set of workers based on the four Wiebe Door factors alone. Thus, the last ten years of
jurisprudence has yielded significant variance regarding the role of intention in the
characterization process.
I explore here the trends in Canadian jurisprudence with respect to the characterization of a
worker. Beginning five years prior to the introduction of intent into the characterization process
in Wolf and including the ten years following, I analyze the jurisprudence according to several
variables such as the outcome, the judge, the province, the emphasis placed on intent, the
emphasis placed on each of the four objective factors, the gender of the worker, and the
corporate nature of the business. This analysis sheds light on this dynamic area of tax litigation
and helps to answer the question: how do the courts characterize a worker as an employee or an
independent contractor?
The paper proceeds as follows. Part 2 describes the characterization process by providing the
history of the four factors, the courts’ reduced emphasis on the integration test, the evolution of
intent, and the courts’ continued struggle with intent. Part 3 describes my study and the results in
detail. Part 4 discusses the implications of these results. Finally, Part 5 offers conclusions.
3
Part 2 The Characterization Process
In the majority of cases where the court is asked to characterize a worker as an employee or an
independent contractor, the taxpayer involved in the litigation unambiguously operates a
business. The worker whose status must be characterized is one who has entered into a contract
with the taxpayer’s business to provide services. The Minister usually characterizes the worker
as an employee and thus assesses the taxpayer for its failure to remit EI and CPP payments that
are due. The taxpayer invariably argues the worker is an independent contractor who is in
business on his or her own account and as such there is no obligation to make the EI and CPP
payments. Before intention was introduced into the characterization process, the courts solely
relied on so-called objective factors in its analysis.
1 The Objective Factors Since 1997, the TCC and FCA have been asked to characterize a worker as an employee or an
independent contractor in more than 540 cases. Four objective factors have emerged in the
jurisprudence. The four factors, namely control, ownership of tools, chance of profit, and risk of
loss, were originally articulated in the 1947 case of Montreal v. Montreal Locomotive Works.6
In Montreal Locomotive, the respondent entered into a number of contracts with the appellant for
the design, construction, and equipment of a government plant.7 The issue was whether the
appellant could charge the respondent for taxes owed in respect of the plant. In order to decide
the respondent’s tax liability, the court needed to determine whom the occupant of the plant was.
The court noted that previous cases had relied on the single test of control.8 However, the court
said that control was not always conclusive and in the complex conditions of modern industry, a
6 [1947] 1 DLR 161, [1946] 3 WWR 748, 1946 CarswellQue 231 (Quebec Privy Council). 7 Ibid, at para 3. 8 Ibid, at para 19.
4
fourfold test has often been applied.9 Therefore, the court decided to apply the four factors:
control, ownership of tools, chance of profit, and risk of loss.
The court found, based on the four factors, that the respondent was the appellant’s agent, and that
the appellant was the occupant of the plant. Therefore, the respondent could not be held liable for
the taxes levied against it by the appellant. Montreal Locomotive marked the birth of the four
objective factors used to characterize a worker as an employee or an independent contractor. In
1986, the four factors were changed in Wiebe Door Services Ltd. v. MNR.10
In Wiebe Door, the integration test was introduced as a factor in the characterization process.
The taxpayer operated a door-installation business and hired workers to assist. The Minister
characterized 12 of the taxpayer’s workers as employees and thus, assessed the taxpayer for
owing EI premiums. The taxpayer argued that the workers were independent contractors such
that no premiums were owed. The TCC below based its decision on four tests: control,
ownership of tools, financial risk, and the integration test. In applying the integration test, the
TCC cited the decision of Lord Denning in Stevenson, Jordan and Harrison Ltd. v. MacDonald
and Evans.11 In Stevenson, the English House of Lords was called upon to distinguish an
employee (under a contract of service) from an independent contractor (under a contract for
service). Lord Denning stated:
under a contract of service, a man is employed as part of the business, and his work is done as an
integral part of the business; whereas, under a contract for services, his work, although done for the
business, is not integrated to it, but is only accessory to it.12
The TCC, relying on this integration test, stated the taxpayer’s business could not function
without the door-installers. Thus, the court found the workers were integral to the taxpayer’s
door-installation business rather than incidental to it. As a result, the TCC characterized the
9 Ibid. 10 Supra note 2. 11 [1952] TLR 101, 69 RPC 10 (House of Lords). 12 Ibid, at 111, as cited in supra note 10, at para 3.
5
workers as employees. The taxpayer appealed to the FCA. The FCA said that the TCC’s decision
was in error as the TCC failed to apply the integration test from the point of view of the workers
and sent the matter back to the TCC for a determination consistent with the reasoning of the
FCA.
After Wiebe Door, the four factors used to characterize a worker have been control, financial
risk, integration, and ownership of tools. Chance of profit and risk of loss were combined into a
single financial risk factor. The Supreme Court of Canada (SCC) in 671122 Ontario Ltd. v.
Sagaz Industries Canada Inc., 13 approved of this approach to characterizing a worker and set the
precedent for the use of the “total relationship test”.
In Sagaz, 671122 Ontario Ltd., (the “respondent”) lost one of its major clients to Sagaz (the
“appellant”). The client’s president terminated the business relationship with the respondent
because of a bribery scheme with the appellant. As part of the scheme, the marketing firm
(AIM), retained by the appellant, paid a bribe to the client’s president. The respondent alleged
that but for the bribes, it would have maintained its relationship with the client. The issue before
the court was whether the appellant was vicariously liable to the respondent for the actions of
AIM. The trial court held that AIM was an independent contractor and that the appellant was not
vicariously liable for the actions of an independent contractor.14 The Ontario Court of Appeal
reversed, finding AIM was an employee and thus part of the “Sagaz sales team”.15 On appeal to
the SCC, the court had to characterize AIM as either an employee of the appellant or an
independent contractor. Applying the Wiebe Door factors the court found AIM was an
independent contractor, and thus the appellant was not vicariously liable for AIM’s actions.16
Thus, the SCC confirmed that the objective factors were to be used when characterizing a worker
as an employee or an independent contractor. The “total relationship test” was to be used such
13 2001 SCC 59, [2001] 2 SCR 983. 14 Ibid, at para 16. 15 Ibid, at para 22. 16 Ibid, at para 57.
6
that a court was to consider all the objective factors to characterize a worker. However the SCC
did not apply the integration test. Since Sagaz, the courts’ emphasis on the integration test has
declined significantly.
2 The Fall of Integration Over the last decade, the courts have reduced their reliance on the integration test, and as a result
placed a greater emphasis on the other factors. In Preddie v. The Queen,17 the court decided not
to apply the integration test when characterizing the worker as an employee or an independent
contractor. In Preddie, the taxpayer was engaged by a tutoring service. He tried to deduct motor
vehicle expenses from his income as business expenses. The Minister regarded the taxpayer as
an employee of the tutoring service and denied these expenses. The Minister argued the taxpayer
earned employment income, and that section 8 of the Act limited the deductions available against
employment income. Specifically, the Minister argued that section 8 made no provision for the
deduction of motor vehicle expenses from employment income. The taxpayer argued he was an
independent contractor in business on his own account. He argued that he earned business
income and that motor vehicle expenses could be deducted from business income under section 9
of the Act. Therefore, the issue before the court was whether the taxpayer was an employee or an
independent contractor. The court applied the factors. Control and financial risk indicated the
taxpayer was an independent contractor while an application of the ownership of tools test was
inconclusive. The court then turned its mind to the integration test and said:
17 2004 TCC 181, 2004 DTC 2427.
7
It is my understanding that Sagaz does not apply the integration test, formerly included as one of
the four tests set out in Montreal v. Montreal Locomotive Works Ltd., [1947] 1 D.L.R. 161 and
adopted by MacGuigan J. in Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025. To do so is to
answer the question of whose business was it and that is the primary question before me. The tests
referred to are simply to be used as evidence in deciding whose business it was. As stated, Sylvan's
business was to attract the students, provide a premise and promote a learning environment, the
Appellant's business was to tutor independently.18
The court did not apply the integration test, but instead regarded the factors as a whole to answer
the question, “whose business was it?” The court found that the taxpayer was in business on his
own account. Thus, the court found the taxpayer was an independent contractor and allowed the
motor vehicle expenses to be deducted from the taxpayer’s income. In so doing, the court
disregarded the integration test in its analysis. In a subsequent decision, the court refused to
apply the integration test.
In Royal Winnipeg Ballet v. MNR,19 the TCC was charged with characterizing ballet dancers and
other performers as employees or independent contractors. The Minister characterized the
performers as employees and assessed the ballet company for its failure to remit EI and CPP
payments. The ballet company argued that the performers were independent contractors. Upon a
review of the factors, the court found the performers were employees. However, the court’s
comments about the integration test are noteworthy:
Secondly, with respect to the integration test, whatever clarity can be attributed to that term, there
has been considerable confusion as to whether it was part of the Wiebe Door Services Ltd. v.
M.N.R test, a stand-alone test, or even an appropriate test at all. The Supreme Court of Canada has
not offered the integration test as a factor to consider. I interpret this as the death knoll of this
particular test, and will refer to it no more.20
18 Ibid, at para 18. 19 2004 TCC 390, 2004 CarswellNat 1836. 20 Ibid, at para 32.
8
The court said the integration test was the “death knoll” of the characterization process and
refused to apply it. The court based this decision on the fact that the SCC in Sagaz had not
referred to the integration test. As a result, the emphasis placed on the integration test was further
reduced. Three years later, the TCC described the danger of the integration test, and in its
warning, urged future courts to avoid applying the test.
In Lang v. MNR,21 the court said that, “the integration or organization test is of no assistance and
is substantially discredited and any trial judge who relies upon it does so at his or her peril.”22 In
Lang, the taxpayers carried out a furnace and duct cleaning business. The taxpayers hired
workers to help provide these services. The issue before the court was whether the workers were
employees or independent contractors. The Minister concluded the workers were employees and
that the taxpayers were liable to remit EI and CPP contributions. The taxpayers argued the
workers were independent contractors. After a review of the evidence and application of the
factors, namely control, financial risk, and ownership of tools, the court found the workers were
independent contractors and allowed the appeal. The court did not apply the integration test,
finding the test was not helpful at all to the characterization process. Since Lang, the courts have
placed very little emphasis on the integration test. Coinciding with the fall of integration, over
the last 10 years, the subjective element of intention has emerged as a factor in the jurisprudence
and its relative weight given by the courts has varied significantly.
3 An Introduction to the Evolution of Intent In the majority of cases over the last 15 years when the court has been called upon to
characterize a worker as an independent contractor or an employee, the ultimate result reached
by the court has determined whether a taxpayer is obligated to remit EI premiums and CPP
payments to the CRA. As a result, we find taxpayers who are assessed as employers by the CRA
appealing to the TCC, and subsequently to the FCA, arguing that their workers are independent
21 2007 TCC 547, 2007 DTC 1754. 22 Ibid, at para 14.
9
contractors. As previously mentioned, there is no obligation to remit EI premiums or CPP
payments on behalf of an independent contractor. However, since there is an obligation to remit
EI premiums and CPP payments on behalf of an employee, we usually find the CRA arguing that
a worker is an employee, such that the taxpayer is under an obligation to remit EI premiums and
CPP payments to the CRA. As a result, the courts are called upon to characterize a worker. The
manner in which the courts do that has changed repeatedly over the last 15 years.
The role of intent in the characterization process has evolved multiple times in the case law and
can be attributed to seven landmark cases: Wolf, Tremblay, Royal Winnipeg Ballet, B-Pro
Grooming, Kilbride, D.W. Thomas Holdings, and TBT Personnel Services. In each of these
cases, the court treated intent differently than in the previous landmark case. Therefore, we can
track the evolution of intent by analyzing these landmark cases. The following is a detailed
historical account of the evolution of intent in the jurisprudence.
4 A Detailed Account of the Evolution of Intent Before 2002, the courts had kept the characterization process of a worker purely objective. The
courts made their decisions, solely based on the four objective factors (with varying degrees of
weight), as to whether a worker was an employee or an independent contractor. However, that
changed after the FCA’s decision in Wolf.
The FCA in Wolf introduced the common intent held by the contracting parties into the
characterization process on March 15, 2002. The court said that if the objective four-fold test
was inconclusive, the subjective intention held by the contracting parties should be used to break
the tie. In Wolf, the taxpayer was an aerospace mechanical engineer who provided consulting
services to a corporation called Kirk-Mayer of Canada. Kirk-Mayer was able to subcontract
personnel to Canadair. Through this contract, the taxpayer was subcontracted by Kirk-Mayer to
Canadair. The taxpayer tried to deduct business expenses from his income. However, the
Minister characterized the taxpayer as an employee and denied these expenses. Therefore, the
issue before the FCA was whether the taxpayer was an employee or an independent contractor.
10
The TCC below found that the taxpayer was an employee of Kirk-Mayer when he worked for
Canadair. The TCC found that the factors of control, integration, and ownership of tools
indicated the taxpayer was an employee. The TCC also found that financial risk indicated the
taxpayer was an independent contractor. However, on balance, the TCC found the taxpayer was
an employee and disallowed the business expenses. On appeal, the FCA said that the Wiebe
Door factors overlooked an important element that captured the essence of the working
relationship between contracting parties. The court said:
I say, with great respect, that the courts, in their propensity to create artificial legal categories,
have sometimes overlooked the very factor which is the essence of a contractual relationship, i.e.
the intention of the parties.23
Therefore, the FCA paid careful attention to the contract between the taxpayer and Kirk-Mayer
and found the contracting parties intended the taxpayer would provide his services as an
independent contractor. The court said:
Taxpayers may arrange their affairs in such a lawful way as they wish. No one has suggested that
Mr. Wolf or Canadair or Kirk-Mayer are not what they say they are or have arranged their affairs
in such a way as to deceive the taxing authorities or anybody else. When a contract is genuinely
entered into as a contract for services and is performed as such, the common intention of the
parties is clear and that should be the end of the search. Should that not be enough, suffice it to
add, in the case at bar, that the circumstances in which the contract was formed, the interpretation
already given to it by the parties and usage in the aeronautic industry all lead to the conclusion that
Mr. Wolf is in no position of subordination and that Canadair is in no position of control. The
“central question” was defined by Major J. in Sagaz as being “whether the person who has been
engaged to perform the services is performing them as a person in business on his own account”.
Clearly, in my view, Mr. Wolf is performing his professional services as a person in business on
his own account.24
The court found that there was a bona fide contract between the contracting parties stating the
taxpayer was an independent contractor. The court found that the control and integration tests
23 2002 FCA 96, at para 117, 2002 DTC 6853. 24 Ibid, at para 119.
11
were neutral, financial risk indicated the taxpayer was an independent contractor, and ownership
of tools indicated the taxpayer was an employee. Since the objective factors on balance yielded a
neutral result, the court relied on the contract. With regard to the objective factors and the
subjective intent gathered from the contract, the court found the taxpayer was an independent
contractor. Thus, Wolf set the precedent that the subjective intent gathered from a contract could
be used alongside the four objective factors to characterize a worker. Since Wolf, the FCA has
released six other landmark judgments. Each of these treats intent differently in the
characterization process.
First, on May 3, 2004, the FCA decided Canada v. Tremblay25 and used the common intent held
between the contracting parties when deciding the outcome of the integration test. In Tremblay,
the taxpayers worked for a forestry management business. The workers performed general labor
for the business. The TCC below held the taxpayers were employees. On appeal, the Minister
argued the taxpayers were independent contractors, and the FCA agreed. In its decision, the FCA
analyzed the contract between the workers and the business. The FCA found the contract was
akin to an equipment rental contract and thus indicated the workers were independent
contractors. The court then went on to apply the Wiebe Door factors. The court found control,
ownership of tools, and financial risk indicated the workers were independent contractors. With
respect to integration, the court relied on the contract. Specifically, as the contract provided for
the rental of the equipment necessary for the work to be completed, the court found the workers
were not integrated into the business.26 Therefore, the court found the integration test indicated
the workers were independent contractors, as well. Thus, the court found the workers were
independent contractors. In so doing, the court promoted the role of intent in the characterization
process, such that this subjective factor could be used when deciding the outcome of the
objective factors.
25 2004 FCA 175, [2004] FCJ No 802 (FCA). 26 Ibid, at para 29.
12
Second, on March 2, 2006, the FCA decided Royal Winnipeg Ballet27 and stated that intention
was determinative of the relationship between the contracting parties insofar as it reflected the
reality of their relationship. On appeal from the TCC decision described above, the FCA was
tasked with characterizing the ballet performers as employees or independent contractors. In the
majority, Justices Sharlow and Desjardins of the FCA found the TCC’s decision was
unreasonable for failing to address the intent between the contracting parties, which indicated the
workers were independent contractors. The TCC relied on the proposition in Wolf, that the
intention of the parties is to be considered only to break a tie yielded by the Wiebe Door factors.
The majority of the FCA disagreed and said:
In these circumstances, it seems to me wrong in principle to set aside, as worthy of no weight, the
uncontradicted evidence of the parties as to their common understanding of their legal relationship,
even if that evidence cannot be conclusive. The Judge should have considered the Wiebe Door
factors in the light of this uncontradicted evidence and asked himself whether, on balance, the facts
were consistent with the conclusion that the dancers were self‑employed, as the parties understood
to be the case, or were more consistent with the conclusion that the dancers were employees.
Failing to take that approach led the Judge to an incorrect conclusion.28
The court found that when there is “uncontradicted” evidence regarding the intention between
contracting parties as to the nature of their relationship, that evidence should be regarded
alongside the Wiebe Door factors in the characterization analysis. The court described the correct
approach when characterizing a worker:
if the intention of the parties is uncontested, save by third parties, as in the case at bar, the
common-law judge has nevertheless the responsibility to “look to see” if the terms used and the
surrounding circumstances are compatible with what the parties say their contract is. The
common-law judge must make sure that what the parties say they have agreed upon is in fact what
is contained in the contract they have signed.29
27 Supra note 4. 28 Ibid, at para 64. 29 Ibid, at para 72.
13
The court said that the Wiebe Door factors were generally not inconsistent with the intent of the
parties. The majority thus reversed the decision of the TCC below and found the workers were
independent contractors. In doing so, the court elevated the role of intent even higher than that
done in Tremblay, to the extent that intent could be used as a standard against which the Wiebe
Door factors were applied when determining the nature of a worker as either an employee or an
independent contractor.
Third, on October 24, 2007, the FCA decided B-Pro Grooming v. MNR30 and said that intention
was not determinative but rather an element of consideration in addition to the four objective
tests. In B-Pro Grooming, the taxpayer operated a pet-grooming store and hired several workers
to assist with the business. The Minister, characterizing the workers as employees, assessed the
taxpayer for its failure to remit EI and CPP payments. The taxpayer argued the workers were
independent contractors. On appeal, the FCA upheld the reasons of the TCC. In particular, the
FCA supported the TCC’s determination on intent – that “the expressed intention of the parties is
not determinative of their relationship.”31 The court said that intention was not determinative and
that the Wiebe Door factors were to be considered when characterizing a worker. In dismissing
the appeal, the FCA demoted the role of intent in the characterization process below that which it
was given in Royal Winnipeg Ballet.
Fourth, on October 29, 2008, the FCA decided Kilbride v. Her Majesty the Queen32 and said that
the common intention between contracting parties was to be discarded when such intention was
not supported by the four objective tests. In Kilbride, the taxpayer worked as a bookkeeper for a
company that manufactured heating systems. He tried to deduct business expenses under section
18 of the Act. However, the Minister characterized the taxpayer as an employee and denied the
deductions. On appeal to the FCA, the issue was whether the taxpayer was an employee or an
independent contractor. Justice Sexton delivered a unanimous judgment dismissing the appeal,
30 2007 FCA 334, (2007) 371 NR 38. 31 Ibid, at para 7. 32 2008 FCA 335, 2009 DTC 5002.
14
thus characterizing the worker as an employee. The TCC below found control was inconclusive,
but that ownership of tools and financial risk indicated the worker was an employee. The TCC
did not apply the integration test, because of its criticism of the test in the jurisprudence, but
noted the test indicated the taxpayer was an employee, as well. The TCC found these factors did
not reflect the intent of the parties to treat the worker as an independent contractor. The FCA
upheld the TCC’s reasoning and dismissed the appeal. The FCA said:
This is not a close case where the Wiebe Door test is inconclusive, requiring the court to give
greater weight to the intention of the parties. Although the trial judge found that the parties may
have intended the appellant to be an independent contractor, she concluded that the actual
relationship did not reflect that understanding and their subjective intention must be disregarded.33
The FCA supported the finding that the taxpayer was an employee, denied the expenses, and
dismissed the appeal. By doing so, the court demoted the role of intent below that given to it in
B-Pro Grooming, stating that the intent between contracting parties was to be discarded if not
congruent with the finding upon which the application of the Wiebe Door factors was based.
Fifth, on December 14, 2009, the FCA decided D.W. Thomas Holdings v. Canada34 and said that
a worker was to be characterized based on the intention of the parties if such intention was
reflected by the factors. In D.W. Thomas, the taxpayer operated a commercial fishing business
and hired a worker to assist in its business. The Minister characterized the worker as an
employee and assessed the taxpayer for its failure to remit EI and CPP payments. The taxpayer
argued the worker was an independent contractor. The TCC found the worker was an employee.
The TCC found the intention indicating the worker was an independent contractor was not
supported by the Wiebe Door factors. The TCC thus disregarded the intention and characterized
the worker based on the factors alone. On appeal, the FCA also found the worker was an
employee. The FCA supported the TCC’s finding and dismissed the taxpayer’s appeal. The court
33 Ibid, at para 11. 34 2009 FCA 371, 2009 CarswellNat 4307.
15
further demoted the role of intention in the characterization process to say that the intent between
contracting parties will be disregarded if not supported by the Wiebe Door factors.
Sixth, on September 22, 2011, the FCA decided TBT Personnel Services Inc. v. MNR.35 In this
case, the FCA went through the characterization process for the workers involved. The court split
the workers into two groups based on whether or not they signed an agreement describing the
workers as independent contractors. The court said:
Such intention clauses are relevant but not conclusive. The Wiebe Door factors must also be
considered to determine whether the contractual intention suggested by the intention clauses is
consistent with the remaining contractual terms and the manner in which the contractual
relationship operated in fact.36
Therefore, the court applied the Wiebe Door factors to determine if the contractual intent was
reflective of the true nature of the working relationship. For the first group, the court found the
conclusions drawn from the objective factors contradicted the intention in the agreement. For the
second group, the court found no common intention and classified the workers as employees
based on the objective factors. In the end, the court found the workers were employees and
effectively disregarded the common intention held between the parties. In doing so, the FCA
demoted the role of intent to a secondary factor that simply confirmed the true character of a
worker determined primarily by the Wiebe Door factors.
Since TBT Personnel Services Inc. the courts have grappled with the role of intention when
characterizing a worker.37 There are three possible scenarios for the consideration of intent in the
jurisprudence. There is either no evidence of intention presented to the court, conflicting
evidence of intention, or evidence of a common intention held between the contracting parties.38
35 Supra note 5. 36 Ibid, at para 35. 37 Nabeel Peermohamed, “The Role of Intent in Characterizing a Worker” (2013) 3:1 Canadian Tax Focus. 38 Ibid.
16
In cases such as Dean v. MNR,39 where there is no evidence of intention, or in cases such as A&T
Tire & Wheel Limited v. MNR,40 and 875527 Ontario Inc. v. MNR,41 where there is conflicting
evidence of intention, the court characterizes workers as employees or independent contractors
based on the Wiebe Door factors alone.42
In Dean, the taxpayer operated a business, which provided home care services to seniors and
hired four caregivers. The Minister characterized the caregivers as employees and assessed the
taxpayer for delinquent EI and CPP payments. The taxpayer argued the caregivers were
independent contractors. The tax court applied the Wiebe Door factors and found control
indicated the caregivers were employees. The court also found ownership of tools and financial
risk were neutral factors. The court did not apply the integration test. Lastly, the court turned its
mind to intention. The court found the application of the Wiebe Door factors led to the
conclusion that the caregivers were employees and thus it was unnecessary to consider the
intention of the contracting parties. Also, the court acknowledged the record showed there was
no evidence of a common intention between the parties so that intention was not a relevant
factor. The court said:
In any event, the evidence suggests that there was no common intention between the parties. There
is little evidence that the Workers put their mind to the nature of the relationship or that Ms. Dean
discussed it with them. The Workers who testified were not sophisticated in business matters and
they may not have understood that Ms. Dean was treating them as independent contractors by not
taking source deductions. Intention is not a relevant factor in this case.43
Thus, the court disregarded intention as a relevant factor because there was no evidence of
common intention and characterized the workers based on the Wiebe Door factors alone.
39 2012 TCC 370, 2012 CarswellNat 4072. 40 2012 TCC 150, 2012 CarswellNat 1405. 41 2012 TCC 214, 2012 CarswellNat 1926. 42 Supra note 37. 43 Supra note 39, at para 28.
17
In A&T Tire, the taxpayer operated a small tire sales, installation, and service business. The
taxpayer hired five workers who were characterized by the Minister as employees. The Minister
further assessed the taxpayers for failure to remit EI and CPP payments. The taxpayer argued the
workers were independent contractors. The court analyzed the evidence regarding intent before
applying the Wiebe Door factors. There were significant discrepancies in the evidence regarding
the intent of the parties. Some workers felt they were employees while others said they agreed to
work as independent contractors. There was also evidence that the taxpayer initially hired the
workers through a verbal contract and later had the workers sign a written contract after the
Minister began an audit of the taxpayer’s business. The court relied on TBT Personnel Services
and said:
The Wiebe Door factors must be applied to determine whether the workers’ declared intentions, if
any, conform to the true nature of their relationship with the employer. Applying these tests, does
the evidence show that a particular worker is performing his services in the course of a business
conducted for his benefit? 44
Thus, the court relied exclusively upon the Wiebe Door factors, except integration, in its
characterization of the workers. The court found control and financial risk indicated the workers
were employees, while ownership of tools could be viewed as a neutral factors. Presented with
conflicting evidence of intention, the court characterized the workers as employees, relying
exclusively on the Wiebe Door factors.
In 875527 Ontario Inc., the taxpayer manufactured and sold customized wooden signs bearing
the names of children. The taxpayer hired a sales agent. The Minister characterized the sales
agent as an employee and assessed the taxpayer for its failure to remit EI and CPP payments. The
taxpayer argued the sales agent was an independent contractor. The court first analyzed the
intention between the parties, and found the taxpayer intended the sales agent to work as an
independent contractor, while the sales agent assumed she was an employee. The court thus
44 Supra note 40, at para 25.
18
found, “the parties did not have a mutual intention as to the nature of the relationship”45 and
proceeded to characterize the sales agent based on the Wiebe Door factors alone. The court found
control indicated the sales agent was an employee while the other factors were neutral.
Therefore, the court found the sales agent was an employee and dismissed the taxpayer’s appeal.
Thus, in cases where there is conflicting evidence of intention or no evidence of common
intention, the courts rely on the Wiebe Door factors when characterizing a worker. However,
where there is evidence of a common intent held between the contracting parties, the courts
struggle to apply that intent in the characterization process. Between 2011 and 2012, the TCC
seems to have applied several of the approaches from the evolution of intent described above in
the span of only one year.
On October 5, 2011, the TCC in Integrated Automotive Group v. MNR46 characterized the
worker on the four factors alone, as done in Wiebe Door. In Integrated Automotive, the taxpayer
operated a marketing business in the automotive industry. The taxpayer hired a project manager.
The Minister argued the project manager was an employee and that the taxpayer was liable for EI
and CPP payments. The taxpayer argued the project manager was an independent contractor. The
evidence supported it was the common intent of the contracting parties that the project manager
would provide work as an independent contractor. The issue before the court was whether that
intent was reflected in the reality of the working relationship. The court decided that the Wiebe
Door factors must be applied first. The court found control and ownership of tools indicated the
project manager was an independent contractor and that financial risk was neutral. Since the
factors indicated the project manager was an independent contractor, it was unnecessary to
consider intent. The court thus characterized the worker based on the objective factors alone, as
was done prior to Wolf.
45 Supra note 41, at para 12. 46 2011 TCC 468, 2011 CarswellNat 4048.
19
On August 8, 2012 the TCC in Zoltan v. MNR47 revitalized the tiebreaker approach originally
stated in Wolf. In Zoltan, the taxpayer operated an electrical installation and maintenance
business, and hired an electrician to assist. The Minister characterized the electrician as an
employee and assessed the taxpayer for its failure to remit EI and CPP payments. The taxpayer
argued the electrician was an independent contractor. The court decided to analyze intent first
and found the contracting intended the electrician to work as an independent contractor. The
court then applied the Wiebe Door factors, after which, it said:
The parties agreed to an independent contractor relationship at the outset of their relationship.
Their intention should be respected unless the application of the Wiebe Door factors shows that the
facts are inconsistent with that intention. The control factor points to an independent contractor
relationship. The chance of profit/risk of loss criterion is more indicative of an employee-employer
relationship. I place greater weight on intention and on the control factor.48
Therefore, the court found the objective factors resulted in a tie, but in an effort to respect the
intent of the contracting parties, placed more weight on the control factor, which led to a decision
congruent with that intent. The court thus characterized the electrician as an independent
contractor.
On October 19, 2012, the TCC in North Delta Real Hot Yoga v. MNR49 based the
characterization of the worker on the objective factors alone and found that the intent between
the contracting parties did not reflect the reality of their relationship, as was done in Kilbride. In
North Delta, the taxpayer operated a yoga studio and hired a worker. The Minister characterized
the worker as an employee and assessed the taxpayer for delinquent EI and CPP payments. The
taxpayer argued the worker was an independent contractor. The court turned its mind to the
Wiebe Door factors first. The court found control indicated the worker was an employee while
47 2012 TCC 286, 100 C.C.E.L. (3d) 218, 2012 CarswellNat 2917. 48 Ibid, at para 34. 49 2012 TCC 369, 2012 CarswellNat 4036.
20
the other factors were neutral. The court then found the intent of the parties was not consistent
with this finding. The court said:
The actual dealings between the parties, however, were not consistent with an independent
contractor relationship. If parties wish to have an independent contractor relationship respected for
purposes of the Employment Insurance Act and the Canada Pension Plan, their actions need to be
consistent with their intent. Unfortunately for the appellant in this case, the evidence as a whole
suggests that the parties did not act in a manner consistent with an independent contractor
relationship.50
Therefore, the court found the intent between the taxpayer and the worker did not reflect the
reality of their relationship, and thus characterized the worker on the factors alone. A review of
these recent cases demonstrates that the introduction of intent into the characterization process
has given rise to several varied approaches to characterizing a worker, which has resulted in
several inconsistent characterization approaches prescribed by the FCA.
5 The Inconsistency caused by Intent The problem with the introduction of intent into the characterization process is that over the last
decade, the courts’ treatment of intention has varied significantly creating substantial uncertainty
in tax litigation for both taxpayers and the tax authorities. The court’s frustration with the varied
approaches prescribed in previous FCA decisions was evident in Lang.51 After a review of the
relevant jurisprudence, Chief Justice Bowman of the TCC (as he then was) expressed his
frustration with the FCA’s inconsistent approach to the characterization process.
The court summarized the four approaches observed over time. The first approach observed was
that intention is irrelevant to the characterization process, as done in Wiebe Door. The second
approach observed was that intention served as a tiebreaker, as done in Wolf. The third approach
observed was that intention was determinative, as done in Royal Winnipeg Ballet. The final
50 Ibid, at para 25. 51 Supra, note 21.
21
approach observed was that the weight to be placed on intention depended on the circumstances.
Fortunately, all four approaches yielded the same result in Lang so the Chief Justice did not have
to decide among the four. However, his expressed frustration with the emergence of four
approaches from the FCA struggling to place common intention alongside the four objective
factors in the characterization process is reflective of the litigation uncertainty caused by the
introduction of intent. The magnitude of the impact of intent on the characterization process can
be determined through an empirical study.
22
Part 3 The Study
1 Inspiration from the Wintermute Study In his study, Wintermute52 conducted a trend analysis between 2000 and 2007 regarding the role
of intent in the characterization process. He took a random sample of 40 cases in each of the four
periods he studied: 2000-2002, 2003-2004, 2005-2006, and 2006-2007.53 He characterized each
case based on whether the decision made reference to a common intention held by the
contracting parties and on the ultimate decision reached.54 He found that after Royal Winnipeg
Ballet was decided, the courts’ reliance on contractual intent increased significantly.
2 Extrapolating Wintermute to the Present If Wintermute’s study were extrapolated to analyze the present case law from the TCC and FCA,
we find a marked emphasis on intent after Royal Winnipeg Ballet and a significant de-emphasis
on intent placed afterwards.
Following Wintermute, I selected a random sample of 40 cases in each of eight periods
demarked by the landmark cases from the FCA described above. I analyzed each case based on
the previous ruling, the ultimate decision, and reference to a common intention between the
contracting parties. However, I also analyzed the cases for incidents where the factors and
common intent pointed in opposite directions. In such cases, I recorded whether the factors or
common intent prevailed.
52 Kurt G Wintermute, “A Worker’s Status as Employee or Independent Contractor: Recent Case Law, Trends, and Planning,” Report of Proceedings of Fifty-Ninth Tax Conference, 2007 Tax Conference (2008) 34:1. 53 Ibid, page 16. 54 Ibid.
23
Table 1: Findings based on Common Intent Era Common Intent of
Independent Contractor Found and Independent Contractor Found
Common Intent of Independent Contractor Found and Employee Found
January 1, 2000 to March 15, 2002 (Wolf) 50% 50% March 16, 2002 to May 3, 2004 (Tremblay) 73% 27% May 4, 2004 to March 2, 2006 (Royal Winnipeg Ballet) 71% 29% March 3, 2006 to October 24, 2007 (B-Pro Grooming) 86% 14% October 25, 2007 to October 29, 2008 (Kilbride) 57% 43% October 30, 2008 to December 14, 2009 (D.W. Thomas) 53% 47% December 15, 2009 to September 22, 2011 (TBT) 65% 35% September 23, 2011 to December 31, 2012 (Present) 50% 50%
As seen from Table 1, prior to Wolf and the introduction of intention as a consideration in the
characterization process, whether a common intent was found or not made no difference to the
court – the court was 50% likely to characterize a worker as an independent contractor and 50%
likely to characterize a worker as an employee.
Over the years however, that trend grew significantly one-sided up to March 2, 2006. This makes
sense because Tremblay said common intention could be implemented into the four-factor test
and specifically deployed common intention into the integration test. As seen from the review of
the case law above, taxpayers generally argue their intention to treat their workers as
independent contractors to avoid EI and CPP payments. A melding of intention and the four
factors explains the increased likelihood for a court to find in favor of that intention. The next
period shows an even greater likelihood of the court to find in favor of a common intent. After
Royal Winnipeg Ballet, which said a common intention was determinative of the characterization
of a worker, the trend shows the courts were 86% likely to find in favor of the intention held
between contracting parties. Subsequent courts then started to apply Royal Winnipeg Ballet as a
standard to assess the degree of factors indicating an employment relationship.
24
3 The “More Strongly than Royal Winnipeg” Standard During my review of the case law, I observed an interesting emergence of a standard used by the
courts in the characterization process – the “more strongly than Royal Winnipeg Ballet” standard.
This standard demonstrates the effect the FCA’s Royal Winnipeg Ballet decision had on the
characterizations of a worker in the subsequent jurisprudence. On September 13, 2007, the TCC
decided Maxwell C. Bishop o/a Ultra-Max Construction v. MNR.55 In Maxwell, the taxpayer
carried out a general construction contracting business and hired five workers to assist. The
Minister argued the workers were employees and that the taxpayer owed EI and CPP payments
for the relevant taxation years. The taxpayer argued the workers were independent contractors. In
its decision the court employed a “more strongly than Royal Winnipeg Ballet” standard and said:
The application of the facts to the Wiebe Door factors in Royal Winnipeg Ballet was not sufficient
to alter the arrangement from that which was intended by the parties. Therefore, unless the
application of the facts in this case to the Wiebe Door factors would more strongly indicate an
employer-employee relationship than in the case of the Royal Winnipeg Ballet, it seems to me
that the individuals, for whom the intention was to create an independent contractor relationship,
would be independent contractors.56 (emphasis added)
The court found the contracting parties mutually intended the workers were independent
contractors. The court then proceeded to determine if the application of the Wiebe Door factors
could alter this intention. The court found that control, ownership of tools, or financial risk, did
not suggest an employer-employee relationship “more strongly than did the facts in Royal
Winnipeg Ballet.”57 Thus, the court found the workers were independent contractors and allowed
the taxpayer’s appeal.
Interestingly, this “more strongly than Royal Winnipeg Ballet” standard was adopted by the
courts for exactly four years. On September 13, 2011, the TCC decided SIP Distribution Inc. v
55 2007 TCC 541, 2007 CarswellNat 2996. 56 Ibid, at para 9. 57 Ibid, at para 18.
25
MNR,58 and employed the “more strongly” standard in its characterization of a worker as an
employee or an independent contractor. In SIP Distributions, the taxpayer imported and sold
building materials and retained a worker to handle the marketing and administrative tasks. The
Minister characterized the worker as an employee and argued the taxpayer owed EI and CPP
payments. The taxpayer argued the worker was an independent contractor. The court found the
contracting parties mutually intended the worker was an independent contractor and deployed the
“more strongly than Royal Winnipeg Ballet” standard. The court said:
In the Royal Winnipeg Ballet case, the facts related to the dancers and the circumstances of their
work were not sufficient to alter the arrangement from that which was intended by the parties.
Therefore it seems to me that “in keeping with the approach set out in Royal Winnipeg Ballet”, the
relevant facts in this case, as determined by the factors as set out in Wiebe Door and Sagaz,
would have to more strongly indicate an employer-employee relationship than did the facts
in the case of the Royal Winnipeg Ballet in order for Erin Hrushowy to be considered to be an
employee. In both the Royal Winnipeg Ballet case and in this case, there was an intention to create
an independent contractor relationship and not an employer-employee relationship.59 (emphasis
added)
The court found the control and financial risk factors did not indicate an employment
relationship more strongly than that in Royal Winnipeg Ballet. The court found ownership of
tools was not useful in the analysis because very little equipment was required. Thus, the court
characterized the worker as an independent contractor and allowed the appeal.
After SIP Distributions, the “more strongly than Royal Winnipeg Ballet” standard was not
applied by the courts. However, referring to Table 1, during the standard’s four years in the
limelight, a reduced emphasis on intention can be observed. It is logical to find a reduced
likelihood of the courts to find in favor of intention after cases such as B-Pro Grooming and
Kilbride, which demoted the role of intention. Finally, a return to the 50% likelihood is observed
after TBT Personnel Services Inc., which characterized the relevant workers according to the
58 2011 TCC 423, 2011 CarswellNat 3519. 59 Ibid, at para 11.
26
objective factors alone. Although this trend reflects the history of the jurisprudence, I was
interested to learn whether the objective factors or subjective intent prevailed in cases where the
conclusions from each led in opposite directions.
Table 2: Court Findings based on Common Intent and Objective Factors Era Independent
Contractor Intent Overrides Factors
Independent Contractor Factors Override Intent
Employee Intent Overrides Factors
Employee Factors Override Intent
January 1, 2000 to March 15, 2002 (Wolf) 0% 55% 0% 95% March 16, 2002 to May 3, 2004 (Tremblay) 0% 39% 0% 95% May 4, 2004 to March 2, 2006 (Royal Winnipeg Ballet) 0% 62% 0% 100% March 3, 2006 to October 24, 2007 (B-Pro Grooming) 17% 25% 6% 81% October 25, 2007 to October 29, 2008 (Kilbride) 15% 60% 0% 95% October 30, 2008 to December 14, 2009 (D.W. Thomas) 5% 45% 0% 89% December 15, 2009 to September 22, 2011 (TBT) 8% 38% 0% 88% September 23, 2011 to December 31, 2012 (Present) 8% 25% 0% 100%
Based on Table 2, the objective factors override intent exclusively from January 1, 2000 to
March 2, 2006. However, when after Royal Winnipeg Ballet, we see the start of intent overriding
the objective factors. This makes sense because that case said intention was determinative.
Slowly, however, we see the incidence of intention overriding the objective factors reducing to
present day. However, it is interesting to find that even after TBT Personnel Services Inc. was
decided, there are still cases where intention has been followed over the objective factors. Cases
such as Zoltan can explain this trend, where the TCC has struggled to place a consistent weight
on intent in the characterization process.
Although this survey is not that sophisticated, it serves to preliminarily demonstrate a general
trend. However, for a more precise and reliable trend analysis, more sophisticated tools and
analysis must be implemented. I therefore expand my study to cover a greater period of time, a
greater number of cases, and a greater number of variables for a more complete and reliable
trend analysis employing technical statistical regression.
27
4 Methodology for Study I have conducted and analyzed a survey of all the decisions from the TCC and FCA
characterizing a worker as an employee or an independent contractor. I have expanded the
timeframe of my survey beyond my previous analysis to include the five years prior to Wolf in
order to gain a perspective of the relevant jurisprudence leading up to the introduction of intent
in the characterization process (i.e. from October 14, 1997 to March 14, 2002)60. There are 540
decisions over the 15-year period I cover, which have been broken down into the following eras:
• October 14, 1997 to March 15, 2002 (pre-Wolf)
• March 16, 2002 to May 3, 2004 (Wolf to Tremblay)
• May 4, 2004 to March 2, 2006 (Tremblay to Royal Winnipeg Ballet)
• March 3, 2006 to October 24, 2007 (Royal Winnipeg Ballet to B-Pro Grooming)
• October 25, 2007 to October 29, 2008 (B-Pro Grooming to Kilbride)
• October 30, 2008 to December 14, 2009 (Kilbride to D.W. Thomas)
• December 15, 2009 to September 22, 2011 (D.W. Thomas to TBT Personnel Services)
• September 23, 2011 to December 31, 2012 (Post-TBT Personnel Services)
Using STATA 12.0’s probative regression function, I hope to find statistically significant results
that reveal any trends in the jurisprudence. Specifically, I set out to determine what statistically
significant factors contribute to the probability of the court characterization of a worker as either
an employee or an independent contractor. I have set out to establish how the relative emphasis
on intent has fluctuated over the past 15 years. I have also set out to determine if any other
factors contribute to the courts characterization of a worker. Therefore, I consider the following
variables and offer an explanation of their importance.
60 The first case I found dealing with the characterization process was W.A. Pacific Rim Co. v. MNR, 1997 TCC 942355, 1997 CanLII 96, decided on October 14, 1997.
28
4.1 The TCC or FCA’s Characterization (employee/independent contractor)
This is the responding or dependent variable in the regression. The court’s final characterization
of the worker will be extremely relevant to the entire analysis, as it will show how the courts
finding is affected by the controlled or independent variables. A dummy variable of 0 for
employee and 1 for independent contractor has been used. Dummy variables are useful because
trends can be detected when each variable is recorded in the same fashion. Thus, if I use 0s and
1s for all the variables, I am essentially comparing apples to apples rather than apples to oranges.
Several cases reported at the TCC level have been appealed to the FCA. I record both the TCC
and FCA decisions in my survey for a more complete analysis of the jurisprudence. I assume the
court’s ultimate characterization is dependent upon the following independent variables.
4.2 The Characterization of the MNR or TCC Below This variable will show which finding is appealed more often in the jurisprudence. A dummy
variable of 0 for employee and 1 for independent contractor has been used. Maintaining a
consistent dummy variable for the dependent variable and the independent variables will reveal
any trends after the regressions are conducted. Examining this variable may show a trend
regarding which decisions (either decisions that a worker is an employee or independent
contractor) have been appealed more so over time. As stated earlier, I have included decisions
from the TCC (appeals from decisions by the MNR) and decisions from the FCA (appeals from
decisions by the TCC) for a more complete picture of the characterization process in the
jurisprudence.
4.3 Finding of Common Intent (employee/independent contractor/none)
This factor is still highly relevant to the analysis. I record the courts’ finding on intent to
determine how heavily the courts rely on intent when characterizing a worker. The dummy
variable of 0 for employee, 1 for independent contractor, and 0.5 if common intent is not found
in the decision shall be used. Many times, the courts are presented with evidence of common
29
intent. I record this variable based on the courts’ finding regarding intent. If a common intention
is found, I have recorded the result. If a common intention is not found or not relied upon in the
decision, I record the result as neutral. The regressions will show the trend between this variable
and the courts’ ultimate characterization.
4.4 Finding Based on Factors (employee/independent contractor)
This variable will also be relevant to determine the emphasis placed on the factors over intent. In
their decisions, the courts find on balance which direction the Wiebe Door factors point to. The
dummy variable will be used (0 for employee, 1 for independent contractor, and 0.5 for neutral).
4.5 The Courts’ Finding After an Application of each of the Four Wiebe Door factors (Control/Financial Risk/Ownership of Tools)
This variable will be useful to determine which factor the courts most heavily weigh. The
dummy variable for each factor shall be used (0 for employee, 1 for independent contractor, and
0.5 for neutral or no consideration shall be used). I record the courts’ finding on each individual
factor to determine which factor is most heavily relied upon. I also hope to establish an ordering
of the factors for each time period and determine if that priority of factors changes over time.
4.6 Judge This variable will tell me which judges from the TCC or FCA are more likely to characterize a
worker as an employee or an independent contractor. This will indicate how widespread the
positions of bench are. The names of the judges will be recorded for the purposes of this
variable.
4.7 Gender of the Judge The gender of the judge may reveal a trend where either male judges or female judges from the
TCC or the FCA are more likely to characterize a worker one way or the other. A dummy
variable will be used – 0 for a male judge and 1 for a female judge.
30
4.8 Province or Territory As the TCC and FCA sit in each province and territory, analyzing this variable may show a trend
that indicates workers from certain provinces are more likely to be characterized one way over
the other. The name of the province will be recorded for the purposes of this variable.
4.9 Personal Service Business (PSB) PSBs (or incorporated employees) are used by taxpayers for the ability to deduct more expenses
from income than normally allowed. However, there are anti-avoidance rules in place that
depend on the characterization process between employee and independent contractor to prevent
PSBs. Therefore, this variable may show the courts’ treatment of PSBs in an effort to prevent tax
avoidance. A dummy variable will be used – 1 for found, 0 for not found, and 0.5 if PSBs were
not relevant to the decision.
4.10 Gender of the worker (male/female) The gender of the worker may indicate a trend, or it may not. Thus, I will record the gender just
in case. A dummy variable of 0 for male and 1 for female will be used.
4.11 Nature of Organization (profit/non-profit) The courts are cognizant of the financial restraints on non-profit organizations. The courts’
finding may be affected in this regard. Therefore, to examine this trend I will record the nature of
the organization in this regard using a dummy variable of 0 for profit and 1 for non-profit.
4.12 Industry of Organization A trend may emerge regarding the industry of the organization. Therefore, I will record the
industry of the organization the worker provided services to. The cases I have surveyed can be
placed in the following industries:
31
Accounting Information technology/telecommunications Arts and entertainment Insurance Auto repair Legal Broadcasting/marketing Manufacturing Church/charity Native affairs Cleaning Natural resources (lumber, oil and gas, etc.) Construction/landscaping Property management Consulting Restaurant/bar Education Retail/sales Employment placement service Safety/security Engineering Salon/spa Finance Software development Fitness/recreation Taxi service Food processing/farming Technical service and repair Health services/residential care Trucking/delivery
After conducting regressions on all of these variables, I not only hope to determine how the
reliance on intent and the Wiebe Door factors have shifted over time, but also if there are any
other factors that affect the courts’ finding in any statistically significant way.
5 Assumptions In my approach, I have surveyed the 540 cases over the last 15 years for the purposes of
identifying any discernable trends, specifically with regards to the emphasis or de-emphasis on
intention as an analytical factor used by the courts. Grouping the last 15 years of jurisprudence
on the characterization of a worker as either an independent contractor or employee in this
manner requires certain assumptions to be made.
I assume that both taxpayers and the CRA litigate the same issue in the same way over time even
though the law gradually shifts. I believe this is a reasonable assumption to make for the
purposes of this survey because I separate my analysis of the 15 years of case law by eight
separate eras. In each of these eras the legal analysis used by the courts changes. Different
trends, such as the “more strongly than Royal Winnipeg Ballet” standard, emerge in the case law
during these eras. The purpose of my survey is to quantify the effects of these trends on the
outcome ultimately reached by the courts.
32
I also ignore whether the taxpayers or the CRA change their litigation strategy, such as the
evidence called or the arguments used, over time. I have narrowed my survey of the case law to
only the characterization process used by the courts. I believe this is also reasonable. Courts will
base their ultimate characterization of a worker on the findings of fact and application of the
prevailing jurisprudence to those facts. This approach remains constant. What does change is the
characterization analysis the court employs and thus, this is the target of my survey.
6 How to Interpret the Results I have used STATA 12.0 to run the regressions on the 540 cases I gathered. Characterizing each
case based on the variables previously described, I was able to run regressions on different
combinations of variables to determine if any had a statistically significant effect on the courts’
characterization of a worker. However, before I present and interpret the results, I think it is
helpful to first demonstrate how results from the output generated by STATA are presented in
the Appendix and how they should be interpreted.
Consider the following example. If I want to examine how the outcome of a case, represented by
X, was affected by the independent variables A, B, C, D, E, F, G, and H, I would record each
variable in a spreadsheet. I would take each case, record the X value, and then record the value
of A, B, C, D, E, F, G, and H gathered from each case’s decision. STATA is then able to run
regressions on that data set. From the output generated, any trends STATA detects are then
displayed in the output. As an example, consider Table 3. Table 3 provides an example output of
data from a regression.
33
Table 3: Example Variable
Coefficient z P-value 95% Confidence Interval
A 0 (omitted) B 0.010
(0.179) 0.06 0.954 -0.340 0.361
C 0.397 (0.174)
2.27 0.023 0.054 0.740
D 0.403 (0.198)
2.03 0.042 0.014 0.791
E 0.070 (0.228)
0.31 0.759 -0.377 0.517
F 0.132 (0.237)
0.56 0.576 -0.332 0.598
G 0.272 (0.267)
1.02 0.308 -0.251 0.796
H 0.055 (0.179)
0.31 0.758 -0.296 0.407
constant -0.132 (0.113)
-1.17 0.241 -0.355 0.089
As can be seen in Table 3, each of the independent variables I chose to consider have been
displayed. I have run the “probit” regression using all the variables to determine how the
probability of X changes based on changes in the value of all the independent variables. Each
variable has been listed, along with a constant value, for the regression equation. STATA detects
trends by using certain variables it determines are appropriate to use as a base. In Table 3,
STATA has determined that A is an appropriate base from which to detect trends that variables B
through H have on the probability of X’s outcome. The coefficient, standard error in parentheses,
z-score, P-value, and 95% confidence interval is generated by STATA. The standard error of
each coefficient is used to calculate the z-score, which in turn is used to calculate the P-value.
It is inappropriate to interpret results that are not statistically significant. From the outset, it was
determined that statistically significant results would have a P-value of less than 0.05. The
convention is to only consider results with a P-value of less than 0.05. I have thus set the level of
significance to 5%. Doing so eliminates results that are considered extraordinary. In other words,
results with P-values grater than 0.05 are observed by chance, and are not statistically significant.
Significant results (those with P-values less than 0.05) are in blue.
The coefficient of each variable indicates by how much the probability of X will change with
one-unit change of the observed variable. Thus, the probability of X of changing (if C is
34
increased by one unit) is 0.397, or 39.7%. However, it is inappropriate to interpret the results
with this much certainty, and therefore, one must also consider the 95% confidence interval.
The 95% confidence interval provides an upper and lower limit on the coefficient to 95%
confidence. Considering the variable C, using A as a base, I am 95% confident that with one unit
increase in C, the probability of X will increase between 0.054 and 0.740, or between 5.4% and
74%. These principles should be kept in mind when interpreting the following results. After
running the regressions, these are the results I encountered.
7 Results and Interpretation The following tables and those in the Appendix show the affects of the listed independent
variables on the responding/dependent variable, which is the courts’ characterization of a worker
as an employee or an independent contractor. Table 4 shows the probability of the courts’ finding
in each of the eight eras described above.
Table 4: The Probability of the Courts’ Characterization by Era Era
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 0 (omitted) Wolf-Tremblay 0.010
(0.179) 0.06 0.954 -0.341 0.362
Tremblay-Royal Winnipeg Ballet 0.398 (0.175)
2.27 0.023 0.055 0.740
Royal Winnipeg Ballet-B-Pro Grooming
0.403 (0.198)
2.03 0.042 0.015 0.792
B-Pro Grooming-Kilbride 0.070 (0.228)
0.31 0.759 -0.378 0.518
Kilbride-D.W.Thomas 0.133 (0.238)
0.56 0.576 -0.333 0.599
D.W. Thomas-TBT Personnel Services 0.273 (0.267)
1.02 0.308 -0.251 0.796
Post-TBT Personnel Services 0.055 (0.180)
0.31 0.758 -0.297 0.408
Constant -0.132 (0.113)
-1.17 0.241 -0.355 0.089
As can be seen in Table 4, the statistically significant results are in the eras between Tremblay
and B-Pro Grooming. With 95% confidence and using the Pre-Wolf era as a base, between
Tremblay and Royal Winnipeg Ballet, the courts were between 5% and 74% more likely to find a
worker was an independent contractor. That range rose after Royal Winnipeg Ballet was decided.
35
Between Royal Winnipeg Ballet and B-Pro Grooming, the courts were between 1.5% and 79%
more likely to characterize a worker as an independent contractor.
Table 5: The Courts’ Emphasis on Intent by Era Era x intent (interaction variable)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 0.004 (0.201)
0.02 0.982 -0.390 0.399
Wolf-Tremblay 0.198 (0.266)
0.74 0.456 -0.323 0.720
Tremblay-Royal Winnipeg Ballet 0.269 (0.214)
1.26 0.208 -0.150 0.690
Royal Winnipeg Ballet-B-Pro Grooming 0.675 (0.248)
2.72 0.007 0.188 1.163
B-Pro Grooming-Kilbride 0.128 (0.323)
0.40 0.692 -0.506 0.762
Kilbride-D.W.Thomas 0.253 (0.300)
0.84 0.398 -0.335 0.842
D.W. Thomas-TBT Personnel Services 0.399 (0.324)
1.23 0.219 -0.237 1.036
Post-TBT Personnel Services 0.237 (0.232)
1.02 0.307 -0.218 0.693
constant -0.146 (0.124)
-1.18 0.238 -0.391 0.097
Using an interaction variable, any trends in each era between variables can be detected. Table 5
shows how intent interacted with each era described. Between Royal Winnipeg Ballet and B-Pro
Grooming, the courts’ finding was between 19% and 116% dependent on the common intent
held between the contracting parties.
Table 6: The Courts’ Emphasis on Financial Risk by Era Era x Financial Risk (interaction variable)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 1.864 (0.240)
7.75 0.000 1.393 2.336
Wolf-Tremblay 2.028 (0.267)
7.57 0.000 1.503 2.553
Tremblay-Royal Winnipeg Ballet 2.912 (0.367)
7.93 0.000 2.192 3.631
Royal Winnipeg Ballet-B-Pro Grooming 3.202 (0.510)
6.27 0.000 2.202 4.203
B-Pro Grooming-Kilbride 2.254 (0.448)
5.02 0.000 1.374 3.134
Kilbride-D.W.Thomas 2.554 (0.587)
4.34 0.000 1.401 3.706
D.W. Thomas-TBT Personnel Services 2.402 (0.488)
4.92 0.000 1.445 3.360
Post-TBT Personnel Services 2.367 (0.340)
6.95 0.000 1.700 3.035
constant -0.998 (0.093)
-10.71 0.000 -1.181 -0.815
36
Table 7: The Courts’ Emphasis on Control by Era Era x Control (interaction variable)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 2.578 (0.260)
9.89 0.000 2.067 3.089
Wolf-Tremblay 3.038 (0.406)
7.48 0.000 2.242 3.835
Tremblay-Royal Winnipeg Ballet 3.233 (0.376)
8.58 0.000 2.495 3.972
Royal Winnipeg Ballet-B-Pro Grooming 3.166 (0.452)
6.99 0.000 2.279 4.053
B-Pro Grooming-Kilbride 2.88 (0.502)
5.74 0.000 1.897 3.866
Kilbride-D.W.Thomas 2.453 (0.443)
5.53 0.000 1.583 3.322
D.W. Thomas-TBT Personnel Services 3.37 (0.778)
4.34 0.000 1.849 4.898
Post-TBT Personnel Services 2.815 (0.336)
8.37 0.000 2.156 3.475
constant -1.286 (0.102)
-12.57 0.000 -1.487 -1.086
Table 8: The Courts’ Emphasis on Integration by Era Era x Integration (interaction variable)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 2.382 (0.300)
7.94 0.000 1.794 2.970
Wolf-Tremblay 2.413 (0.351)
6.86 0.000 1.724 3.103
Tremblay-Royal Winnipeg Ballet 3.178 (0.391)
8.11 0.000 2.410 3.946
Royal Winnipeg Ballet-B-Pro Grooming 3.124 (0.437)
7.14 0.000 2.267 3.981
B-Pro Grooming-Kilbride 2.240 (0.479)
4.67 0.000 1.301 3.180
Kilbride-D.W.Thomas 2.313 (0.501)
4.61 0.000 1.329 3.296
D.W. Thomas-TBT Personnel Services 2.755 (0.578)
4.76 0.000 1.620 3.889
Post-TBT Personnel Services 2.397 (0.380)
6.30 0.000 1.651 3.143
constant -1.167 (0.131)
-8.89 0.000 -1.424 -0.909
37
Table 9: The Courts’ Emphasis on Ownership of Tools by Era Era x Ownership of Tools (interaction variable)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf 1.643 (0.248)
6.62 0.000 1.157 2.130
Wolf-Tremblay 2.036 (0.304)
6.69 0.000 1.439 2.633
Tremblay-Royal Winnipeg Ballet 2.299 (0.313)
7.33 0.000 1.684 2.914
Royal Winnipeg Ballet-B-Pro Grooming 2.379 (0.377)
6.30 0.000 1.639 3.119
B-Pro Grooming-Kilbride 1.765 (0.439)
4.02 0.000 0.904 2.626
Kilbride-D.W.Thomas 1.885 (0.535)
3.52 0.000 0.835 2.934
D.W. Thomas-TBT Personnel Services 2.785 (0.702)
3.97 0.000 1.408 4.162
Post-TBT Personnel Services 1.478 (0.268)
5.50 0.000 0.951 2.004
constant -0.808 (0.091)
-8.88 0.000 -0.986 -0.629
As seen in Tables 6 to 9, the courts in all the eras relied heavily on Control, Financial Risk,
Integration, and Ownership of Tools with statistical significance. These indicators are very
powerful given the P-values are 0.
Table 10: The Courts’ Emphasis in the Pre-Wolf Era Pre-Wolf Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 1.950 (0.361)
5.40 0.000 1.242 2.658
Intent -1.911 (0.344)
-5.56 0.000 -2.585 -1.237
Integration 0.869 (0.470)
1.85 0.064 -0.052 1.790
Financial risk 0.204 (0.396)
0.52 0.606 -0.572 0.982
Ownership of tools 0.290 (0.430)
0.67 0.500 -0.552 1.133
constant 0.007 (0.060)
0.12 0.906 -0.111 0.125
Though the courts in the Pre-Wolf era heavily relied upon Control when characterizing a worker,
the court hardly relied upon Intent. In Table 10, the coefficient of Intent is negative, which
means an increase in Intent reduced the likelihood of the court finding the worker was an
independent contractors.
38
Table 11: The Courts’ Emphasis in the Wolf to Tremblay Era Wolf to Tremblay Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 2.257 (0.571)
3.95 0.000 1.138 3.377
Ownership of tools 1.912 (0.685)
2.79 0.005 0.570 3.255
Financial risk 1.625 (0.550)
2.95 0.003 0.546 2.705
Intent -2.699 (0.627)
-4.30 0.000 -3.929 -1.468
Integration -1.057 (0.839)
-1.26 0.208 -2.703 0.588
constant 0.005 (0.058)
0.09 0.927 -0.108 0.119
As seen in Table 11, the courts have established a priority of factors they rely on in the
characterization process. The courts rely on Control, then Ownership of Tools, then Financial
Risk. The courts place the reliance on Intent and that factor actually has a negative impact on the
outcome of the characterization process.
Table 12: The Courts’ Emphasis in the Tremblay to Royal Winnipeg Era Tremblay to RWB Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 2.098 (0.577)
3.63 0.000 0.965 3.230
Financial risk 1.587 (0.774)
2.05 0.040 0.070 3.105
Intent -1.565 (0.497)
-3.15 0.002 -2.541 -0.590
Integration -0.453 (0.941)
-0.48 0.630 -2.299 1.392
Ownership of tools 0.487 (0.798)
0.61 0.542 -1.078 2.053
constant -0.052 (0.058)
-0.90 0.368 -0.167 0.062
As in the previous era, the courts prior reliance on Control is maintained in the Tremblay to
Royal Winnipeg Ballet era. The courts place a reduced emphasis on Financial Risk than in the
previous era. Finally, the courts still place very little reliance on intent, and the coefficient is still
negative. This means the court is more likely to characterize a worker in a manner opposite that
intended by the contracting parties. However, the coefficient on Intent is weaker in this era than
in the previous era.
39
Table 13: The Courts’ Emphasis in the Royal Winnipeg to B-Pro Grooming Era RWB to B-Pro Grooming Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 2.114 (0.666)
3.17 0.002 0.808 3.421
Financial risk 1.667 (0.801)
2.08 0.037 0.096 3.238
Integration -1.390 (0.861)
-1.61 0.106 -3.079 0.297
Ownership of tools -0.509 (0.807)
-0.63 0.528 -2.091 1.072
Intent -0.294 (0.432)
-0.68 0.496 -1.141 0.552
constant -0.037 (0.056)
-0.65 0.516 -0.148 0.074
As seen in Table 13, the only statistically significant results found are the courts’ reliance on
Control and then Financial Risk. Using these interaction variables, no statistically significant
reliance can be found on Intent in this era. However, if we look back at Table 5, the only
statistically significant reliance on Intent amongst all the eras, was found in the Royal Winnipeg
Ballet to B-Pro Grooming era. Thus, although Intent was relied upon most heavily in that era,
that reliance is outweighed by the courts’ reliance on Control and Financial Risk.
Table 14: The Courts’ Emphasis in the B-Pro Grooming to Kilbride Era B-Pro Grooming to Kilbride Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 3.791 (1.165)
3.25 0.001 1.507 6.076
Financial risk 2.234 (1.132)
1.97 0.048 0.015 4.453
Integration -1.950 (1.430)
-1.36 0.173 -4.754 0.853
Ownership of tools -1.436 (1.230)
-1.17 0.243 -3.848 0.975
Intent -1.684 (0.997)
-1.69 0.091 -3.639 0.269
constant 0.016 (0.055)
0.29 0.770 -0.093 0.125
As seen in Table 14, the courts have maintained their reliance on Control and Financial Risk. No
other statistically significant results were found regarding the courts’ reliance on the other
objective factors or Intent.
40
Table 15: The Courts’ Emphasis in the Kilbride to D.W. Thomas Era Kilbride to D.W. Thomas Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 1.620 (0.671)
2.41 0.016 0.304 2.937
Integration -1.348 (0.975)
-1.38 0.167 -3.259 0.563
Financial risk 1.083 (0.846)
1.28 0.201 -0.576 2.743
Ownership of tools 0.792 (0.904)
0.88 0.381 -0.980 2.565
Intent -0.676 (0.485)
-1.39 0.164 -1.628 0.275
constant 0.011 (0.055)
0.20 0.838 -0.097 0.120
Table 16: The Courts’ Emphasis in the D.W. Thomas to TBT Personnel Services Era D.W. Thomas to TBT Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 2.986 (1.516)
1.97 0.049 0.014 5.958
Integration -2.583 (1.689)
-1.53 0.126 -5.894 0.726
Financial risk 0.649 (0.891)
0.73 0.466 -1.097 2.397
Ownership of tools 2.057 (1.639)
1.25 0.209 -1.155 5.271
Intent -1.476 (1.265)
-1.17 0.243 -3.957 1.004
constant 0.005 (0.055)
0.11 0.915 -0.102 0.114
In the Kilbride to D.W. Thomas and the D.W. Thomas to TBT Personnel Services eras, the only
significant result was the courts’ reliance on Control.
Table 17: The Courts’ Emphasis in the Post-TBT Personnel Services Era Post-TBT Era (interaction variable)
Coefficient z P-value 95% Confidence Interval
Control 1.950 (0.361)
5.40 0.000 1.242 2.658
Intent -1.911 (0.344)
-5.56 0.000 -2.585 -1.237
Integration 0.869 (0.470)
1.85 0.064 -0.052 1.790
Financial risk 0.204 (0.396)
0.52 0.606 -0.572 0.982
Ownership of tools 0.290 (0.430)
0.67 0.500 -0.552 1.133
constant 0.007 (0.060)
0.12 0.906 -0.111 0.125
41
Interestingly, the significant results show the courts’ reduced reliance on Control as compared to
other eras. Also, the courts’ do not rely on Intent in this era. The results show that in this era, the
courts’ characterization of a worker is opposite that intended by the contracting parties. This is a
similar trend found in the eras before Royal Winnipeg Ballet was decided.
The remaining tables can be found in the Appendix. After a review of the industries and
according to Table 18, the only statistically significant result found was that for the Property
management industry. The results show that in that industry, a worker is between 1.32% and
147% likely to be found an independent contractor than an employee.
Taking all the judges into account in Table 19, no statistically significant results can be found.
Thus, no one judge is more likely to characterize a worker as either an independent contractor or
an employee. Separating the judges by their court, we see in Table 20, that no one judge from the
FCA characterizes a worker one way or the other in a statistically significant way. Examining the
TCC however, reveals an interesting result. According to Table 21, Justice Sheridan was found
more likely to find a worker as an independent contractor. With all due respect to Justice
Sheridan, the results show that she was approximately 80% more likely to characterize a worker
as an independent contractor than an employee than the omitted justices.
As seen in Table 22, the province of the hearing has no statistically significant bearing on the
courts’ characterization of a worker.
However, a very strong trend observed is where the court reverses. Either the TCC reverses the
characterization of the Minister, or the FCA reverses the characterization made by the TCC. In
either circumstance, when the court reverses the decision below, it is more likely to characterize
the worker as an independent contractor. According to Table 23, with 95% confidence, I can say
when the court reverses, it is between 146% and 195% more likely to characterize a worker as an
independent contractor than an employee.
Table 24 reveals a very interesting trend. Though the gender of the worker has no statistically
significant bearing on the characterization finding, the gender of the judge does. It seems that a
42
female judge between 5.5% and 56% more likely to find a worker is an independent contractor
than a male judge. Tables 25 and 26 confirm this.
According to Table 25, after isolating for the gender of the judge, we see that indeed, with 95%
confidence, a female judge is between 5.5% and 56% more likely to characterize a worker as an
independent contractor. The opposite is true for a male judge. According to Table 26, we also see
that with 95% confidence, a male judge is between 5.5% and 56% less likely to find a worker is
an independent contractor. Instead, a male judge is more likely to find a worker is an employee.
I wanted to see in which era the gender of the judge had the greatest effect on the
characterization process. In Table 27, isolating for each era and the gender of the judge, we find
that the gender of the judge had a statistically significant affect on the characterization of a
worker in the Tremblay to Royal Winnipeg Ballet era. With 95% confidence, a female judge was
between 1.55% and 111% more likely to find a worker was an independent contractor than an
employee.
As previously mentioned, the gender of the worker had no statistically significant influence in
the characterization process. For completeness, I checked that result against each era. According
to Table 28, the gender of the worker is not a statistically significant variable in any of the eras.
According to Table 29, the type of representation the taxpayer has, whether it by a lawyer or an
agent, or if the taxpayer is self-represented, has no statistically significant bearing on how the
worker will be characterized.
In the next part, I outline the implications of the observations described above.
43
Part 4 Implications
1 Analysis is Mostly Objective As we saw in Tables 6 through 9, there are very powerful statistical results that indicate the
courts’ reliance on the four objective factors. Control is also the most heavily relied upon factor
in the courts’ analysis. Interestingly enough however, is the courts’ reliance on integration
despite Chief Justice Bowman’s comments in Lang. There is still a powerful reliance on
integration found in all the eras over the last 15 years. Therefore, regardless of the fluctuation of
intent, the courts’ have maintained the characterization analysis as mostly an objective process.
2 Emphasis and De-emphasis of Intent Intent was negative in the eras before Royal Winnipeg Ballet. Also, the courts’ reliance on Intent
was only statistically significant in the Royal Winnipeg Ballet to B-Pro Grooming era. After this
era, no statistically significant reliance on intent was observed until the Post-TBT Personnel
Services era. Here we saw the coefficient of intent drop back down into the negative value. This
indicates that the courts have returned to a similar reliance on intent as observed before Royal
Winnipeg Ballet. This also means that the courts’ have returned to a more objective
characterization process. Intent was not significantly relied upon before Royal Winnipeg Ballet.
After Royal Winnipeg Ballet, intent was significantly relied upon and we also observed the
“more strongly” standard adopted by the courts. This was the case until TBT Personnel Services
was decided, after which we observed an abandonment of the “more strongly” standard and the
reduced reliance on intent. Thus, the emphasis on intent has more or less come and gone, and the
courts have returned to a more objective characterization process. Intent still remains a
consideration, though the amount of weight given to it has dropped dramatically in the Post-TBT
Personnel Services era.
44
3 Property Management None of the industries revealed any statistically significant trend, except for Property
management. The court is more likely to find a worker in Property management is an
independent contractor, rather than an employee. This means that unless the worker is in
Property management, the industry will have no statistically significant bearing on the
probability of the courts’ characterization of a worker.
4 Reversed Decisions As seen in Table 23, if the court reverses the decision made below it, the court is likely to find a
worker is an independent contractor, rather than an employee. This means that the previous
characterization was that of an employee. Thus, on appeal, if the court reverses, the
characterization is then that of an independent contractor.
5 Gender of Judge Amongst all the factors I considered, such as the province, adjudicative forum, type of
representation, gender of the judge, gender of the worker, consideration of PSBs, and whether
the taxpayer was in the profit or non-profit sector, only the gender of the judge showed a
statistically significant result. The gender of the worker does not yield a statistically significant
result, but the gender of the judge does.
As found in Tables 24 to 27, female judges are more likely to find a worker is an independent
contractor and male judges are more likely to find a worker is an employee. Also, as seen in
Table 27, this trend is only statistically significant in the Tremblay to Royal Winnipeg Ballet era.
After the courts decided Royal Winnipeg Ballet and said intent was determinative of the nature of
the relationship between contracting parties, no statistically significant results regarding the
gender of the judge were observed.
45
I can only say with 95% confidence that a female judge is between 5% and 56% more likely to
find a worker is an independent contractor. However, it was an interesting trend I found in the
540 cases I analyzed.
46
Part 5 Conclusions
After conducting my study, my ultimate conclusion is that intent was prevalent in the courts as a
factor heavily relied upon in the characterization process after Royal Winnipeg Ballet was
decided. My study also revealed many other significant trends. To my surprise, the process over
the last 15 years has remained relatively objective. Only between Royal Winnipeg Ballet and B-
Pro Grooming was a spike in the courts’ reliance on intent observed. Observing the courts
keeping the analysis mainly objective was comforting.
Also comforting is the finding that most of the non-legal factors, such as province, forum,
industry, gender of the worker, and type of representation the taxpayer had, all yielded
statistically insignificant results. The courts are not influenced by such matters, nor should they
be. The courts should make their findings based on the merits of each case. And in large part
they do. The only observable trend I found that is disconcerting is that female judges are more
likely to find a worker is an independent contractor, and male judges are more likely to find a
worker is an employee. I cannot explain this trend. All I can say is that I observed this trend and
that the trend was statistically significant.
However, the most important part of this study was to discover the magnitude of the fluctuation
of the courts’ reliance on intent over the last 15 years of characterizing a worker. I found the
objective factors have been most heavily relied upon, with powerful statistical descriptors. I have
also found relatively few statistically significant trends with respect to intent. Other than the
spike after Royal Winnipeg Ballet and the decline after TBT Personnel Services, no other trends
regarding intent were observed. Therefore, it seems that while the courts placed a heavy reliance
on intent after Royal Winnipeg Ballet, the present era shows the courts have reduced their
reliance on intent to that of the Pre-Wolf era, before intent was introduced into the
characterization analysis.
In conclusion, I have observed the characterization process has evolved several times over the
last 15 years. Precedential case law has changed and the courts below have applied the law as it
47
has transformed. Different standards and trends have emerged and disappeared while others have
remained. This study has led to several interesting deductions regarding the role of intent in the
characterization process. It will be interesting to see how the courts move forward and establish
new eras in the case law for further studies to be conducted.
48
Bibliography Statutes
1. Income Tax Act, RSC 1985, c 1 (5th Supp), as amended.
Jurisprudence
2. 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 SCR 983.
3. 875527 Ontario Inc. v. MNR, 2012 TCC 150, 2012 CarswellNat 1405.
4. A&T Tire & Wheel Limited v. MNR, 2012 TCC 214, 2012 CarswellNat 1926.
5. B-Pro Grooming v. MNR, 2007 FCA 334, (2007) 371 NR 38.
6. Canada v. Tremblay, 2004 FCA 175, [2004] FCJ No 802 (FCA).
7. Dean v. MNR, 2012 TCC 370, 2012 CarswellNat 4072.
8. D.W. Thomas Holdings v. Canada, 2009 FCA 371, 2009 CarswellNat 4307.
9. Integrated Automotive Group v. MNR, 2011 TCC 468, 2011 CarswellNat 4048.
10. Kilbride v. Her Majesty the Queen, 2008 FCA 335, 2009 DTC 5002.
11. Lang v. MNR, 2007 TCC 547, 2007 DTC 1754.
12. Maxwell C. Bishop o/a Ultra-Max Construction v. MNR, 2007 TCC 541, 2007 CarswellNat 2996.
13. Montreal v. Montreal Locomotive Works, [1947] 1 DLR 161, [1946] 3 WWR 748, 1946 CarswellQue 231 (Quebec Privy Council).
14. North Delta Real Hot Yoga v. MNR, 2012 TCC 369, 2012 CarswellNat 4036.
15. Preddie v. The Queen, 2004 TCC 181, 2004 DTC 2427.
16. Royal Winnipeg Ballet, 2004 TCC 390, 2004 CarswellNat 1836.
17. Royal Winnipeg Ballet v. MNR, 2006 FCA 87, [2007] 1 FCR 35.
49
18. SIP Distribution Inc. v. MNR, 2011 TCC 423, 2011 CarswellNat 3519.
19. Stevenson, Jordan and Harrison Ltd. v. MacDonald and Evans, [1952] TLR 101, 69 RPC 10 (House of Lords).
20. TBT Personnel Services Inc. v. MNR, 2011 FCA 256, (2011) 343 DLR (4th) 100.
21. W.A. Pacific Rim Co. v. MNR, 1997 TCC 942355, 1997 CanLII 96.
22. Wiebe Door v. MNR, (1986) 87 DTC 5025, [1986] 3 FC 553 (FCA).
23. Wolf v. MNR, 2002 FCA 96, 2002 DTC 6853.
24. Zoltan v. MNR, 2012 TCC 286, 100 C.C.E.L. (3d) 218, 2012 CarswellNat 2917.
Scholarship
25. Nabeel Peermohamed, “The Role of Intent in Characterizing a Worker” (2013) 3:1 Canadian Tax Focus.
26. Kurt G Wintermute, “A Worker’s Status as Employee or Independent Contractor: Recent Case Law, Trends, and Planning,” Report of Proceedings of Fifty-Ninth Tax Conference, 2007 Tax Conference (2008) 34:1.
50
Appendix: Additional STATA 12.0 Date Output Tables
51
Table 18: The Courts’ Characterization based on Industry Industry (trucking, 59, as a base) Coefficient z P-value 95% Confidence Interval Accounting 0.274
(0.590) 0.47 0.642 -0.881 1.431
Arts and entertainment 0.251 (0.315)
0.83 0.426 -0.366 0.869
Auto repair -0.653 (0.425)
-1.53 0.125 -1.487 0.181
Broadcasting and marketing 0.178 (0.354)
0.50 0.615 -0.516 0.873
Church and charity -0.092 (0.412)
0.27 0.822 -0.901 0.715
Cleaning 0.095 (0.345)
0.28 0.783 -0.581 0.771
Construction and landscaping -0.007 (0.251)
-0.03 0.975 -0.500 0.484
Consulting 0.160 (0.338)
0.48 0.634 -0.502 0.824
Education 0.328 (0.287)
1.29 0.253 -0.235 0.892
Employment agency -0.544 (0.528)
-0.97 0.302 -1.579 0.490
Engineering 0.021 (0.428)
0.05 0.960 -0.818 0.861
Finance -0.232 (0.590)
-0.39 0.694 -1.388 0.924
Fitness -0.118 (0.338)
-0.31 0.726 -0.781 0.544
Food and farming 0.021 (0.337)
0.06 0.950 -0.640 0.682
Healthcare -0.005 (0.245)
0.10 0.982 -0.485 0.474
Information technology 0.303 (0.341)
0.89 0.374 -0.365 0.972
Insurance -0.409 (0.461)
-0.89 0.375 -1.314 0.495
Legal -0.503 (0.447)
-1.12 0.261 -1.380 0.374
Manufacturing -0.129 (0.299)
-0.43 0.665 -0.717 0.458
Native affairs -0.946 (0.630)
-0.99 0.133 -2.181 0.289
Natural resources 0.510 (0.365)
1.44 0.163 -0.206 1.226
Property management 0.742 (0.372)
2.00 0.046 0.013 1.472
Restaurant and bar -0.409 (0.461)
-0.89 0.375 -1.314 0.495
Retail 0.263 (0.246)
1.07 0.285 -0.219 0.746
Safety and security -0.158 (0.503)
-0.32 0.753 -1.145 0.828
Salon and spa -0.544 (0.390)
-1.39 0.163 -1.310 0.221
Taxi 0.757 (0.417)
1.82 0.069 -0.060 1.575
Technician -0.481 (0.398)
-1.21 0.228 -1.263 0.300
Trucking 0 (omitted) constant -0.021
(0.163) -0.13 0.896 -0.341 0.298
52
Table 19: The Courts’ Characterization based on the Judges Judge Coefficient z P-value 95% Confidence Interval Angers 0.475
(0.492) 0.96 0.335 -0.490 1.440
Archambauld 0 (omitted) Beaubier 0.727
(0.742) 0.98 0.327 -0.728 2.183
Bedard -0.718 (0.553)
-1.30 0.194 -1.804 0.366
Bell -0.114 (0.732)
-0.16 0.876 -1.549 1.320
Bocock 0 (omitted) Bonner 0.316
(0.650) 0.49 0.627 -0.959 1.592
Bowie -0.407 (0.517)
-0.79 0.431 -1.422 0.607
Boyle -0.544 (0.505)
-1.08 0.281 -1.535 0.445
Bowman 0.374 (0.500)
0.75 0.454 -0.606 1.355
C Miller 0 (omitted) Cudihy -0.114
(0.963) -0.12 0.906 -2.003 1.774
Cain 0.316 (0.838)
0.38 0.706 -1.327 1.960
Campbell -0.070 (0.444)
-0.16 0.873 -0.942 0.800
Darcy 0 (omitted) D’Auray 0 (omitted) Desjardins 0.316
(0.838) 0.38 0.706 -1.327 1.960
Evans 0 (omitted) Favreau 0.065
(0.608) 0.11 0.914 -1.127 1.258
Hamlyn -0.114 (0.636)
-0.18 0.858 -1.361 1.133
Hershfield -0.017 (0.514)
-0.03 0.973 -1.026 0.990
Hogan -0.367 (0.681)
-0.54 0.590 -1.704 0.969
Jorre 0 Lamarre -0.187
(0.485) -0.39 0.699 -1.140 0.764
Lamarre-Proulx 0.139 (0.681)
0.20 0.838 -1.197 1.475
Layden-Stevenson 0 (omitted) Letourneau 0 (omitted) Linden 0 (omitted) Little 0.204
(0.495) 0.41 0.680 -0.766 1.175
MacLatchy -0.544 (0.486)
-1.12 0.263 -1.498 0.408
Malone -0.114 (0.963)
-0.12 0.906 -2.003 1.774
Margeson -0.114 (0.732)
-0.16 0.876 -1.549 1.320
McArthur 0.065 (0.506)
0.13 0.897 -0.927 1.059
Mogan -0.462 (0.541)
-0.86 0.392 -1.523 0.597
Nadon 0 (omitted) Noel 0 (omitted) O’Connor 0.139 0.25 0.801 -0.941 1.220
53
(0.551) Paris
0.204 (0.589)
0.35 0.729 -0.950 1.359
Pizzitelli -0.114 (0.963)
-0.12 0.906 -2.003 1.774
Porter -0.210 (0.428)
-0.49 0.623 -1.051 0.629
Prevost 0 (omitted) Rip -0.462
(0.541) -0.86 0.392 -1.523 0.597
Rothstein 0 (omitted) Rowe -0.306
(0.412) -0.74 0.458 -1.115 0.502
Sarchuk 0.316 (0.838)
0.38 0.706 -1.327 1.960
Savoie 0.234 (0.541)
0.43 0.665 -0.825 1.295
Sexton -0.544 (0.650)
-0.84 0.402 -1.820 0.730
Sharlow 0 Sheridan 0.824
(0.488) 1.69 0.091 -0.132 1.781
Somers -0.114 (0.636)
-0.18 0.858 -1.361 1.133
Strayer 0 (omitted) Tardif -0.367
(0.681) -0.54 0.590 -1.704 0.969
Taylor 0 Teskey 0.560
(0.779) 0.72 0.472 -0.967 2.088
V Miller 0 (omitted) Webb 0.560
(0.509) 1.10 0.271 -0.438 1.558
Weisman -0.432 (0.459)
-0.94 0.347 -1.333 0.468
Woods -0.059 (0.460)
-0.13 0.897 -0.961 0.842
constant 0.114 (0.378)
0.30 0.763 -0.628 0.856
*Omitted because predicted failure perfectly
Table 20: The Courts’ Characterization based on the FCA Judges
FCA Judge Coefficient z P-value 95% Confidence Interval Desjardins 0.406
(0.750) 0.54 0.588 -1.064 1.877
Evans 0 (omitted) Layden-Stevenson 0 (omitted) Letourneau 0 (omitted) Linden 0 (omitted) Malone -0.024
(0.887) -0.03 0.978 -1.764 1.715
Nadon 0 (omitted) Noel 0 (omitted) Rothstein 0 (omitted) Sharlow 0 (omitted) Sexton -0.455
(0.532) -0.86 0.392 -1.498 0.587
Strayer 0 (omitted) constant 0.024
(0.055) 0.44 0.659 -0.083 0.132
54
Table 21: The Courts’ Characterization based on the TCC Judges TCC Judge Coefficient z P-value 95% Confidence Interval Archambault 0 (omitted) Beaubier 0.706
(0.660) 1.07 0.285 -0.587 2.001
Bedard -0.739 (0.437)
-1.69 0.091 -1.597 0.118
Bell -0.134 (0.648)
-0.21 0.836 -1.406 1.136
Bocock 0 (omitted) Bonner 0.296
(0.555) 0.53 0.594 -0.792 1.384
Bowie -0.428 (0.391)
-1.09 0.274 -1.194 0.338
Bowman -0.565 (0.374)
-1.51 0.131 -1.299 0.168
Boyle 0.354 (0.367)
0.96 0.336 -0.367 1.075
C Miller 0 (omitted) Cuddihy -0.134
(0.902) -0.15 0.881 -1.902 1.633
Cain 0.296 (0.767)
0.39 0.700 -1.207 1.799
Campbell -0.091 (0.287)
-0.32 0.750 -0.654 0.471
Darcy 0 (omitted) D’Auray 0 (omitted) Favreau 0.045
(0.505) 0.09 0.929 -0.944 1.035
Hamlyn -0.134 (0.538)
-0.25 0.803 -1.190 0.920
Hershfield -0.038 (0.386)
-0.10 0.921 -0.795 0.719
Hogan -0.388 (0.591)
-0.66 0.512 -1.547 0.771
Jorre 0 (omitted) Lamarre -0.208
(0.347) -0.60 0.549 -0.889 0.472
Lamarre-Proulx 0.118 (0.591)
0.20 0.841 -1.040 1.277
Little 0.183 (0.360)
0.51 0.610 -0.523 0.890
MacLatchy -0.565 (0.348)
-1.62 0.105 -1.248 0.118
Margeson -0.134 (0.648)
-0.21 0.836 -1.406 1.136
McArthur 0.045 (0.376)
0.12 0.904 -0.692 0.783
Mogan -0.483 (0.421)
-1.15 0.251 -1.309 0.342
O’Connor 0.118 (0.434)
0.27 0.785 -0.733 0.970
Paris 0.183 (0.481)
0.38 0.703 -0.760 1.127
Pizzitelli -0.134 (0.902)
-0.15 0.881 -1.902 1.633
Porter -0.231 (0.262)
-0.88 0.377 -0.744 0.282
Prevost 0 (omitted) Rip -0.483
(0.421) -1.15 0.251 -1.309 0.342
Rowe -0.327 (0.234)
-1.39 0.164 -0.787 0.133
55
Sarchuk 0.296 (0.767)
0.39 0.700 -1.207 1.799
Savoie 0.214 (0.421)
0.51 0.611 -0.611 1.039
Sheridan 0.804 (0.350)
2.29 0.022 0.116 1.491
Somers -0.134 (0.538)
-0.25 0.803 -1.190 0.920
Tardif -0.388 (0.591)
-0.66 0.512 -1.547 0.771
Taylor 0 (omitted) Teskey 0.539
(0.701) 0.77 0.442 -0.835 1.915
V Miller 0 (omitted) Webb 0.539
(0.379) 1.42 0.155 -0.204 1.284
Weisman -0.453 (0.310)
-1.46 0.144 -1.06 0.154
Woods -0.080 (0.310)
-0.26 0.796 -0.689 0.529
constant 0.134 (0.168)
0.80 0.423 -0.194 0.464
Table 22: The Courts’ Characterization based on the Provinces/Territories Province/Territory Coefficient z P-value 95% Confidence Interval Alberta -0.307
(0.290) -1.06 0.289 -0.875 0.261
British Columbia -0.439 (0.264)
-1.66 0.096 -0.957 0.078
Manitoba -0.193 (0.357)
-0.54 0.589 -0.893 0.507
New Brunswick -0.113 (0.342)
-0.33 0.741 -0.784 0.558
Newfoundland -0.307 (0.917)
-0.33 0.738 -2.105 1.490
Nova Scotia -0.108 (0.374)
-0.29 0.773 -0.841 0.625
Northwest Territories* 0 (omitted) Ontario -0.246
(0.252) -0.98 0.329 -0.741 0.248
Quebec -0.442 (0.283)
-1.56 0.118 -0.998 0.113
Saskatchewan** 0 (omitted) Yukon*** 0 (omitted) constant 0.307
(0.236) 1.30 0.194 -0.156 0.771
*Northwest Territories omitted because predicts success perfectly
**SK omitted because of collinearity
***YK omitted because predicts failure perfectly
56
Table 23: Overview Variable Coefficient z P-value 95% Confidence Interval Representation 0.004
(0.152) 0.03 0.976 -0.293 0.302
Gender of Judge 0.260 (0.151)
1.72 0.086 -0.036 0.558
TCC 0.064 (0.292)
0.22 0.826 -0.508 0.637
FCA 0 (omitted) Previous finding 0.225
(0.134) 1.68 0.093 -0.037 0.488
Court reverses 1.709 (0.125)
13.66 0.000 1.464 1.954
Profit or non-profit -0.440 (0.256)
-1.72 0.086 -0.943 0.062
Gender of worker -0.011 (0.141)
-0.08 0.938 -0.287 0.265
PSB -1.728 (1.107)
-1.56 0.118 -3.899 0.441
constant -0.090 (0.621)
-0.14 0.885 -1.308 1.128
Table 24: The Courts’ Characterization based on Gender Gender Coefficient z P-value 95% Confidence Interval Judge 0.308
(0.129) 2.39 0.017 0.055 0.561
Worker -0.044 (0.121)
-0.37 0.715 -0.283 0.194
constant -0.039 (0.073)
-0.54 0.586 -0.183 0.103
Table 25: The Courts’ Characterization if a Female Judge Presides Gender Coefficient z P-value 95% Confidence Interval Female Judge 0.308
(0.129) 2.38 0.017 0.054 0.560
constant -0.054 (0.061)
-0.88 0.378 -0.174 0.066
Table 26: The Courts’ Characterization if a Male Judge Presides Gender Coefficient z P-value 95% Confidence Interval Male Judge -0.308
(0.129) -2.38 0.017 -0.560 -0.054
constant 0.253 (0.113)
2.23 0.025 0.031 0.475
57
Table 27: The Courts’ Characterization based on the Gender of the Judge by Era Era (interaction variable with judge gender)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf -0.085 (0.423)
-0.20 0.840 -0.915 0.745
Wolf-Tremblay -0.059 (0.383)
-0.16 0.876 -0.812 0.692
Tremblay-Royal Winnipeg Ballet 0.566 (0.280)
2.02 0.044 0.015 1.116
Royal Winnipeg Ballet-B-Pro Grooming 0.527 (0.285)
1.85 0.064 -0.031 1.085
B-Pro Grooming-Kilbride 0.620 (0.506)
1.23 0.220 -0.371 1.612
Kilbride-D.W.Thomas 0.484 (0.379)
1.28 0.201 -0.258 1.228
D.W. Thomas-TBT Personnel Services 0.620 (0.506)
1.23 0.220 -0.371 1.612
Post-TBT Personnel Services 0.054 (0.223)
0.24 0.808 -0.383 0.492
constant -0.054 (0.061)
-0.88 0.378 -0.174 0.066
Table 28: The Courts’ Characterization based on the Gender of Worker by Era Era (interaction variable with judge gender)
Coefficient z P-value 95% Confidence Interval
Pre-Wolf -0.115 (0.218)
-0.53 0.598 -0.542 0.312
Wolf-Tremblay -0.117 (0.245)
-0.48 0.631 -0.598 0.363
Tremblay-Royal Winnipeg Ballet 0.112 (0.279)
0.40 0.688 -0.436 0.660
Royal Winnipeg Ballet-B-Pro Grooming 0.518 (0.293)
1.77 0.077 -0.056 1.093
B-Pro Grooming-Kilbride -0.349 (0.327)
-1.07 0.286 -0.992 0.293
Kilbride-D.W.Thomas 0.163 (0.409)
0.40 0.691 -0.640 0.966
D.W. Thomas-TBT Personnel Services -0.554 (0.486)
-1.14 0.254 -1.508 0.398
Post-TBT Personnel Services -0.169 (0.273)
-0.62 0.537 -0.706 0.367
constant 0.028 (0.067)
0.42 0.672 -0.103 0.159
Table 29: The Courts’ Characterization based on Type of Representation Coefficient z P-value 95% Confidence Interval Representation (Lawyer, Self, or Agent) 0.025
(0.125) 0.20 0.840 -0.221 0.271
constant 0.007 (0.070)
0.10 0.918 -0.130 0.144