The employer is located on a reserve and carries on a construction business. In addition, the employer provides employee lease-out services as to approximately 10% of its total activities. Is the Indian employee’s income from the latter exempt? CRA stated:
In the case of a corporation, some of whose activities are employee lease-out services, that is, that the employee's services are retained by that corporation but the employee's duties are performed, in whole or in part, for another organization …, it is necessary to determine whether the corporation is carrying on a separate business … because … the employment income of an Indian from each of the businesses of such a corporation is … a separate property for the purposes of … section 87 … .
[A] corporation's employee lease-out services generally do not relate to its activities other than the provision of employees. As a result, we are of the view that employee lease-out services should generally be considered a separate business from other activities of the corporation.