Two bakery plants of Fiera were staffed in significant part by temporary workers (“TWs”), who were sourced from third parties (the “Agencies”), which solicited for the TWs and directed them to Fiera and used part of the payments from Fiera on their invoices to pay the TWs in cash without taking or remitting source deductions. They pocketed rather than remitting the HST collected by them. CRA denied Fiera’s ITC claims.
Owen J found that Fiera “chose to ignore the obvious signs that the Agencies were not treating the TWs as employees and/or were not meeting the obligations of an employer” (para. 215) - but nonetheless concluded that Fiera was entitled to its ITC claims given his finding that Fiera in fact was the recipient of a taxable supply of the TW services from the Agencies.
The Crown also took the position that the invoices received by Fiera did not satisfy the documentary requirements of ETA s. 169(4)(a) and the related Regulations, apparently on the grounds that the invoices were issued, not by the Agencies but, rather, by unauthorized “representatives” of the Agencies who in fact were not “linked” to the Agencies (see, e.g., paras. 155, 267). Before finding that such documentary requirements were met, Owen J indicated that:
- S. 169(4)(a) did not require information to enable a determination of the ITCs to be in any particular form.
- However, the specific information listed in s. 3 of the Regulations was required to be obtained by the ITC claimant in some form (para. 289), a requirement which was satisfied here.
- If (contrary to his view), the definition of “supporting documentation” in the Regulations had a significant role to play, para. (h) of that definition “does not impose a requirement that all forms in which information prescribed by section 3 is contained be validly issued or signed by a registrant in respect of a supply made by the registrant” (para. 309).