CCA BULLETIN / BULLETIN DE LA CCA
ONGOING STRUGGLE FOR FAIR TAX TREATMENT FOR ARTISTS
Ottawa , November 12, 2004 - The struggle for fair tax treatment for artists has been a major concern for the CCA for a number of decades. The players and pieces shift slightly from time to time, but the end result is usually much the same – Canada Revenue Agency increasingly views independent contractors within the cultural sector as employees.
Earlier this year, the local Thunder Bay CRA office ruled an actor at Magnus Theatre (on two short-term contracts undertaken in 2002 and 2003) to be an employee. A subsequent ruling determined that all artists hired as independent contractors in that theatre company (actors, playwrights, designers and directors), were similarly deemed employees. The theatre was ordered to pay retroactive CPP and EI benefits and the artists had their income tax returns reassessed to disallow legitimate business expenses.
The working group on taxation issues coordinated by CCA raised concerns during a meeting with CRA officials in June. The CRA ruling was appealed by Magnus Theatre, Canadian Actors Equity Association, and the Professional Association of Canadian Theatres, as well as by the individuals involved.
We have now learned that CRA has agreed to allow the appeal in the matter of Magnus Theatre Northwest vs. Minister of National Revenue, thereby overriding its earlier ruling. It is to be hoped this reversal means other artists at Magnus who were implicated through the original ruling, will be similarly exonerated, and returned to their proper status as self-employed individuals.
An official at CRA described the news about Magnus as “not exactly earth shattering”. CCA wonders whether the case was dropped because it lacked merit or because the issue was beginning to resonate with politicians. On 8 October, as part of the government's response to the Speech from the Throne, MP Sarmite Bulte, Parliamentary Secretary to the Minister of Canadian Heritage, stated “For the better part of a century, Canada 's performing artists have provided services as independent contractors. This contractual relationship between producers, artists and governments stimulates a healthier cultural economy though a number of incentives. Unfortunately, this relationship has been eroded recently. In recent years Canada Revenue Agency auditors have increasingly challenged the independent contractor status of performing artists. This must be corrected as soon as possible because the implications for our artists and our arts organizations are huge.”
A draft strategy regarding fair tax treatment for artists will be presented to delegates attending CCA's national policy conference in Regina , Saskatchewan , on 19 and 20 November. CCA will continue to fight in the trenches on this issue.
For more information:
Kevin Desjardins
Communications and Public Relations Manager
(613) 238 3561 ext.11
Fax (613) 238 4849
55/04
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