Martin Service Station Ltd. v. Minister of National Revenue

Appellant owns a certain number of motor vehicles in Montreal which are used for the purpose of carrying passengers for hire.

Pursuant to the provisions of the Unemployment Insurance Act, 1971, the Minister of National Revenue has assessed the Appellant for unemployment insurance premiums with respect to the drivers of its motor vehicles in the total sum of $49,476.92, including penalties for the years 1969, 1970, 1971 and 1972, the whole as appears from a copy of the notices of assessments for the said years attached hereto as exhibit 1.

The amounts assessed for the years 1969, 1970 and 1971 are claimed as amounts owing by virtue of Regulation 64B of the Unemployment Insurance Regulations approved by Order-in-Council P.C. 1966-610 dated April 4, 1966 as amended by Order‑in-Council P.C. 1968-1181 dated June 19, 1968 which reads in part as follows:

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“64B. (1) Except for employment that is excepted employment, the employment of every person who

a) is employed in driving any taxi, commercial bus, school bus or other vehicle that is used by a business or public authority for carrying passengers, and

b) is not the owner of the vehicle or the proprietor or operator of the business or public authority that uses the vehicles for carrying passengers,

shall be included in insurable employment notwithstanding that such employment may be self-employment or employment not under a contract of service.

(2) The operator or proprietor of a business or a public authority that uses a vehicle described in subsection (1) for carrying passengers shall, for all the purposes of the Act and these Regulations, be deemed to be the employer of every person whose employment is included in insurable employment pursuant to subsection (1).”

The said Regulation 64B was adopted under the authority of section 26(1)(d) of the Unemployment Insurance Act of 1955, as amended (Statutes of Canada, 1955, c. 50).

The assessment for the year 1972 is based on Regulation 53(e) of the Unemployment Insurance Regulations adopted on December 17th, 1971 (P.C. 1971-2795-SOR/DORS 657). It reads as follows:

“53. Employment in any of the following employments, unless it is excepted employment under subsection 3(2) of the Act or excepted from insurable employment by any other provision of these Regulations, is included in insurable employment:

e) employment of a person as a driver of any taxi, commercial bus, school bus or any other vehicle that is used by a business or public authority for carrying passengers, where that person is not the owner of the vehicle or the proprietor or operator of the business or public authority.”

The said Regulation 53 was adopted under the authority of section 4(1)(c) of the Unemployment Insurance Act, 1971.

It is the Appellant’s main submission that section 26(1)(d) of the Unemployment Insurance Act of 1955 and section 4(1)(c) of the 1971 Act are ultra vires the Parliament of Canada in that they authorize the Commission to make regulations to include in insurable

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employment, employment that is not under a contract of service, and that the assessments levied against it are for this reason null and void.

Subsidiarily, Appellant submits that even if the provisions of the Acts on which the assessments are based are intra vires, Regulations 64B and 53 are inapplicable to it because it is not in the business of carrying passenger within the meaning of the said Regulations but in the business of leasing motor vehicles for use as taxis.

The subsidiary argument of the Appellant raises issues of fact which the parties would like to see left for determination until the main constitutional issue has been finally resolved.