Do Members Of An Advisory Board Hold An 'Office' For Purposes Of Canadian Tax Law?

Author:Mr Mike Harris
Profession:Fraser Milner Casgrain LLP

On April 26, 2012, Justice J.E. Hershfield of the Tax Court of Canada heard arguments in Nuclear Waste Management Organization v. The Queen in respect of a reassessment under the Canada Pension Plan (the "Plan"). In written reasons released on June 18, 2012, Justice Hershfield found in favour of the Crown and upheld the assessment under the Plan.

The facts of the matter were not in dispute. The issue was entirely a matter of statutory interpretation, that being whether individuals appointed to the Advisory Board of the taxpayer were appointed to an "office" within the meaning of subsection 2(1) of the Plan. If so, the members of the Advisory Council were engaged in pensionable employment as per section 6 of the Plan. The Advisory Council was appointed in accordance with the Nuclear Fuel Waste Act and was composed of representatives of various interested parties. The Advisory Council had no decision-making power over the taxpayer and could only make non-binding recommendations.

The taxpayer took the position that because the Advisory Board's remuneration was paid in part on a per diem basis, and because the number of meetings was not fixed from year to year, the remuneration was neither fixed nor ascertainable, such that it was not contemplated in the definition of "office" contained in the Plan. Unfortunately for the taxpayer, two recent decisions (M.N.R. v. The Queen in Right of Ontario and M.N.R. v. Real Estate Council of Alberta) unequivocally confirm that compensation that is paid on a per diem basis is "ascertainable".

The taxpayer's second ground for appeal was that the definition of "office" should not be read to include volunteers, because it is not contained in the enumerated positions listed. The definition contained in the Plan reads as follows:

"office" means the position of an individual entitling him to a fixed or ascertainable stipend or remuneration and includes a judicial office, the office of a minister of the Crown, the office of a lieutenant governor, the office of a member of the Senate or House of Commons, a member of a legislative assembly or a member of a legislative or executive council and any other office the incumbent of which is elected by popular vote or is elected or appointed in a representative capacity, and also includes the position of a corporation director, and "officer" means a person holding such an office;

Justice Hershfield noted that the definition contains an exhaustive definition ("means") and a...

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