2015-0621571E5 officer - public hospital board appointment

Principal Issues: Is a physician appointed by a public hospital board considered an officer for purposes of the Act?

Position: Question of fact, in this case, likely yes.

Reasons: The definition of office in 248(1)

Author: Waugh, Phyllis
Section: 248(1): meaning of officer

XXXXXXXXXX                                                                                                               2015-062157
                                                                                                                                       P. Waugh
April 12, 2016

Dear XXXXXXXXXX:

Re:  Public hospital board appointee

We are writing in response to your letter received December 4, 2015, and our conversations of January 25 and 29, 2016 (Waugh/XXXXXXXXXX), concerning whether a member of the professional staff (Professional) of a public hospital, who is appointed by the board of directors of the public hospital (Board), is considered to hold an office for the purposes of the Income Tax Act (Act) and the Canada Pension Plan.  The CPP/EI Rulings Division, Field Operations Section, will respond under separate cover regarding whether the Professional is considered to hold an office under the Canada Pension Plan.

In the situation you described, the Board appoints a Professional, who you have indicated is not an employee of the public hospital, to serve as a Chief of Department (Chief). The Chief is responsible for the professional standards and quality of care rendered by members of the department at the hospital.  The appointment by the Board and the Chief’s duties are outlined in the public hospital’s by-laws.  The Chief receives a stipend in respect of the duties assigned to him or her.

Our Comments

This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.

Subsection 248(1) of the Act defines an “office” as:

“the position of an individual entitling the individual to a fixed or ascertainable stipend or remuneration and includes a judicial office, the office of a minister of the Crown, the office of a member of the Senate or House of Commons of Canada, a member of a legislative assembly or a member of a legislative or executive council and any other office, the incumbent of which is elected by popular vote or is elected or appointed in a representative capacity and also includes the position of a corporation director, and “officer” means a person holding such an office.”

The definition of “employee” in subsection 248(1) of the Act includes an “officer.”

Generally, it is our view that an individual holds an office for purposes of the Act where the individual is appointed to a position and is entitled to a fixed or ascertainable stipend in exchange for services to be provided.  This position is consistent with case law on the subject, which specifies that a person holds an office when he or she is given a fixed or regular payment for performing duties of the position to which he or she is appointed.  We are not aware of anything in the Act or related case law that changes this result when the individual is appointed by a public hospital board.  As such, a Professional who is appointed by the Board to serve as Chief and receives a stipend for assigned duties would likely hold an office for purposes of the Act.

We trust these comments will be of assistance to you.

Yours truly,

Nerill Thomas-Wilkinson, CPA, CA
Manager
Business and Employment Income Section
Business and Employment Division
Income Tax Rulings Directorate

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