Équipements Boifor, 2019 CAF 69 concluded that two shareholders did not have insurable employment by virtue of s. 5(2)(b) of the EIA given that they controlled more than 40% of Boifor's shares, taking into account those individuals’ shares held indirectly through a holding corporation, even though the shares were held on a 50-50 basis and no one individually held control of the holding corporation. Does CRA accept this decision and not the contrary position stated at the 2009 APFF Conference? Would CRA’s position change if one shareholder held 51% of Holdco and the other held 49%? CRA responded:
In light of the FCA's decision, the CRA must now consider the proportionate attribution approach in similar situations to determine whether the employment of a person who controls more than 40% of the voting shares of the employing corporation is insurable. …
… The proportionate attribution approach leads to the conclusion that the two shareholders each control more than 40% of Opco's voting shares (50% of 100%) for the purposes of EIA paragraph 5(2)(b). …
The approach remains the same where the shareholders held 51% and 49% of the voting shares of Holdco, respectively. Thus, their employment would not be insurable because they had effective control of 51% and 49% of the voting shares of Opco, respectively, for the purposes of section 5(2)(b) of the EIA.