Drost v. M.N.R. (November 20, 2015 – 2015 TCC 291, V. Miller J.).
Précis: This decision is essentially a textbook example of the parties intending the worker to be an independent contractor but the facts pointing strongly in the direction of an employment relationship. Mr. Drost worked for McHatten Builders Ltd. (“McHatten). McHatten did home renovations largely as a subcontractor for Kent Building Supplies. Mr. Drost was one of the workers performing the renovations for McHatten. He first applied to CRA for a ruling on his status for EI and CPP purposes. The Rulings Officer held he was an employee. His employer, McHatten, appealed that ruling successfully to the Minister and Mr. Drost initiated this appeal to the Tax Court asserting that he was an employee.
The Court allowed his appeal on the basis that the facts strongly pointed in the direction of an employment relationship.
Decision: The Court concluded that the original intention of the parties was to enter into an independent contractor relationship:
 Mr. Drost said that prior to working for McHatten, he worked for Renovations Plus as its foreman. He left this position in 2006 to be foreman for McHatten and to run its job sites. I have inferred from this testimony that he was an employee of Renovations Plus in 2006 and he left this employment to become an employee of McHatten in late 2006. However, the evidence showed that in his income tax return for 2006, Mr. Drost reported only business income and no employment income. He has not filed an income tax return since 2006. I have concluded that Mr. Drost was not an employee with Renovations Plus and when he started to work for McHatten he did not intend to be an employee.
 It is my view that both parties intended that Mr. Drost would be an independent contractor.
However the surrounding circumstances negated that intention. McHatten determined the hours of work and Mr. Drost did not issue invoices to McHatten. He brought small tools to the job site but any large tools were supplied by McHatten. He had no realistic chance of making a profit or incurring a loss:
(d) Chance of Profit
 In 2006, Mr. Drost received $18 an hour from McHatten. He stated that he did not negotiate his hourly rate but he received a series of raises so that during 2012 and 2013, he was paid $22 per hour.
 The Minister assumed that Mr. Drost could hire assistants or replacements. However, this assumption was not based on reality. Mr. Drost never hired an assistant and he didn’t ask if he could hire an assistant. I have inferred from his evidence that he could not hire an assistant. He stated that if a job required an additional worker, Joe McHatten asked him to recommend another worker and the hourly rate that should be paid to this worker. McHatten then hired and paid the additional worker. This favours the conclusion that Mr. Drost was an employee.
(e) Risk of Loss
 The only financial risk which Mr. Drost bore related to his tools and this cost was minor. If work had to be redone, Mr. Drost was paid to do it. The facts relating to financial risk are more consistent with Mr. Drost being an employee than an independent contractor.
 Mr. Drost had his own business card on which he advertised as “Odd Job Services”. It was his evidence that he did work for other people on weekends but this work did not interfere with his duties for McHatten. In today’s economy it is quite normal for people to have a weekend job.
As a result the Court concluded that Mr. Drost was an employee and allowed his appeal.