http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/98483/index.do 
Free v. The Queen (November 7, 2014 – 2014 TCC 329) was a case involving a determination of whether the Treasurer/CFO of a small Ontario municipality was an employee or an independent contractor:
[1] The Appellant failed to file his income tax returns for 2005 and 2006 and the Minister of National Revenue (the “Minister”) assessed him pursuant to subsection 152(7) of the Income Tax Act (“ITA”) on the basis that he had received employment income of $60,416 and $92,700 in 2005 and 2006 respectively.
[2] In this appeal, the Appellant took the position that in 2005 and 2006 he was not an employee but was an independent contractor and the income he received in these years was business income. He claimed that he had a net business loss of $67,338 and $61,353 in 2005 and 2006 respectively.
[3] At the hearing, counsel for the Respondent stated that the only issue in this appeal was whether the Appellant was entitled to claim expenses against his employment income. However, the Reply to Notice of Appeal identifies the issues as follows:
a) whether the Minister properly determined that the Appellant was an employee of the Municipality of Meaford in 2005 and 2006; and,
b) whether the Appellant is entitled to claim expenses against the income he received from the Municipality of Meaford.
The factual background was somewhat confused:
[5] On March 21, 2005, the Appellant was engaged as Treasurer/CFO by the Corporation of the Municipality of Meaford (the “Municipality”). According to the by-law which was passed to effect this engagement, the Appellant was appointed to this position as an independent contractor and the Mayor of the Municipality was given the authority to sign a contract with the Appellant on that basis. His contract (the “Contract”) was signed by him and the Mayor on March 21, 2005 and included the following:
a) The contract was for a period of one year and included the option to renew.
b) The compensation was $70,000 annually plus GST to be paid in equal twice monthly payments on the 15th and last working day of the month.
c) Receipted travel expenses associated with activities and business on behalf of the Municipality would be reimbursed.
d) Computer equipment and software would be supplied by the Municipality.
[6] The Appellant took the position at the hearing of this appeal that his Contract had been revised and a Management Consulting Agreement (the “Agreement”) was entered into by the parties on March 22, 2005. The major terms of this Agreement were:
a) The Agreement was to last for a period not exceeding three years;
b) The Appellant’s consulting services included the review, analysis and recommendation of organizational structures, procedures, accounting systems and processes. He was to prepare reports and present them with his recommendations to the management and Council of the Municipality and then manage the implementation of the recommendations which were approved by Council.
c) The Fees for services were $70,000 for 2005 and $100,000 for 2006 plus GST. The fees were to be billed in equal amounts on the 15th and 30th of each month.
d) The Appellant would be reimbursed for the following receipted expenses; (i) travel at the rate of $0.45/km; (ii) telephone; (iii) office supplies and other expenses; and (iv) sub-consultants.
[7] However, the invoices submitted by the Appellant to the Municipality do not support his position that the Contract was revised and that the Agreement governed the parties’ relationship. Contrary to the Appellant’s evidence, he invoiced the Municipality for the period October 2005 to August 30, 2006 on the basis that his compensation was $90,000 annually. Thereafter in 2006, he invoiced the Municipality on the basis that his compensation was $92,700 annually. In 2005 and 2006, he invoiced the Municipality for travel at the rate of $.40/km.
…
[12] In a letter dated May 23, 2007 to the Mayor and the Director of Human Resources for the Municipality, the Appellant’s counsel took the position that the Appellant was and had always been an employee of the Municipality. He wrote that he wished to finalize the Appellant’s “Employment Agreement” and to resolve the outstanding issues with respect to the Appellant such as the liability for income taxes owing for 2005 and 2006, enrolment in OMERS (a pension plan), and compensation for overtime. According to this letter, when the Appellant became the CAO in October 2005, he was not presented with either a Consulting Contract or an Employment Contract but his compensation was increased to $92,700 annually. Counsel wrote that the Municipality continued to treat the Appellant as an independent contractor when the Appellant consistently took the position that he was an employee. According to counsel, the Appellant was clearly employed on a full time basis as Treasurer/CFO and Acting CAO.
[13] Shortly after the Municipality received the letter of May 23, it informed the Appellant that it had decided to end its relationship with him. In order to settle their disagreement, the Appellant and the Municipality submitted to mediation and completed Minutes of Settlement on August 3, 2007.
The court concluded that the appellant was an employee:
[28] His records indicate that while he was Treasurer, he performed numerous tasks including training staff in corporate records management; interviewing candidates for the position of Deputy Treasurer; performing the duties of Deputy Treasurer from July 2005 until September 2005 and performing the duties for various staff members while they were on vacation. Some of the Appellant’s accomplishments when he was CAO were: he performed the duties of various positions when those positions were vacant or the occupant was on vacation; he developed the management team and handled many personnel problems; he was involved in the recruitment and hiring of staff; he developed corporate performance reports; he delivered business plans; he reengineered corporate websites; and, he dealt with corporate health and safety concerns. He was instrumental in invoking changes from hourly pay to salaries for administrative staff and developing a municipal water bylaw.
[29] The Appellant was paid a fixed salary in 2005 and 2006. It is my view that this method of payment was more like that of an employee who is part of management than that of an independent contractor. He worked extra hours without pay.
[30] The Appellant stated that he used his own computer. However, according to his Contract, the Municipality provided him with a computer and an office. It was his choice to use his own computer and it does not negate the fact that one was made available to him by the Municipality.
[31] All of these facts from the Policy and the Appellant’s records lead me to conclude that the Appellant was an employee while he performed the duties of Treasurer and CAO for the Municipality.
Oddly, the appellant did not produce any evidence of expenses (whether he was an employee or an independent contractor):
[32] After the Appellant was assessed pursuant to subsection 152(7) of the Act, he filed income tax returns for 2005 and 2006. Even these returns do not support the position he took in this appeal. In those returns, he reported employment income of $60,416 and $92,700 in 2005 and 2006 and claimed nil business income but business losses of $67,338 and $61,353 in 2005 and 2006.
[33] There was evidence that the Municipality reimbursed the Appellant for his mileage and cell phone expense. Other than this evidence, there was no evidence that the Appellant incurred any other expenses. He submitted no receipts to the Court.
As a result the appeal was dismissed with costs.