Society of Professional Engineers and Associates (SPEA)

Society of Professional Engineers and Associates (SPEA)

July 05, 2012 10:54 ET

Is SNC-Lavalin Bending Rules to Avoid Paying Taxes?

Society of Professional Engineers and Associates Urges Canada Revenue Agency and Ontario Ministry of Finance to Investigate Potential Tax Avoidance

TORONTO, ONTARIO--(Marketwire - July 5, 2012) - The Society of Professional Engineers and Associate (SPEA) is holding an information picket this morning at the Toronto offices of the Canada Revenue Agency (CRA) to urge them and the Ontario Ministry of Finance to investigate the inappropriate use of contractors at SNC-Lavalin's newly acquired subsidiary, Candu Energy Inc. to avoid paying taxes and Workplace Safety and Insurance Board (WSIB) premiums.

Both companies and individuals pay considerably less in taxes if they label their relationship as a "contractor" relationship, rather than an "employment" one. The company or the individual in a contractor relationship does not pay CPP, EI and WSIB premiums.

"We understand why individuals and companies are tempted to mislabel their relationship so as to minimize taxes," said Peter White President of SPEA. "However we are troubled why the CRA does not take a more active role in combating this abuse, the result of which is lower tax revenue for our governments, which results in higher taxes for the rest of us."

Since the federal government announced the sale of the commercial division of Atomic Energy of Canada Limited (AECL) to SNC-Lavalin in June of 2011, scientific and technical staff has been reduced by approximately 25%. The number of contractors has more than tripled since the October 2011 sale closed.

According to White, "Some of the contractors pre-date SNC-Lavalin's acquisition of AECL. They have been around for three, four or more years. The vast majority of these contractors and the more recent hires easily meet the CRA's definition of employees."

With a few notable exceptions, Candu Energy's contractors are totally integrated into the organization, often in supervisory, management or mentoring roles. They are indistinguishable from employees in terms of the role they play in the workforce. In fact, at least half the contractors at SNC-Lavalin are former employees of AECL.

Many of the newly hired contractors brought on by SNC-Lavalin are also former AECL employees. These employees took a voluntary separation package last fall prior to the federal government's sale of AECL to SNC-Lavalin, which cost the federal government approximately 15 million dollars. Employees were offered voluntary layoff packages because SNC-Lavalin claimed the need to reduce the workforce. Now, months later, many of these "voluntarily laid-off" employees are back, doing the same jobs. But now they are called contractors instead of employees and honest Canadian taxpayers are the losers.

"To be sure, a few contractors are legitimate while there are some "contractors" who are not contractors by choice based on information we have received," said White. "Increasingly, it seems, SNC-Lavalin is not giving new hires a choice between employee or contractor status. These are not tax cheats but victims of a company which appears to have decided that one way to improve the bottom line may be by cheating Canadians by not paying their fair share of taxes."

Note to Media: SPEA members will be picketing in front of the CRA offices at 4 Front Street, Toronto from 8:00 AM to 12:00 PM calling for the CRA to investigate SNC-Lavalin.

The following native language speakers are available for interview: French; Chinese; Farsi; Hindi; Arabic; Polish; Serbian; Vietnamese; Romanian and Italian.

About SPEA

The Society of Professional Engineers and Associates (SPEA) represents engineers, scientists, technologists and trades people who collectively represent the majority of Canada's nuclear power design expertise employed by Candu Energy Inc., a wholly owned subsidiary of SNC-Lavalin International. The Federal Government sold off the commercial business of Atomic Energy of Canada Limited (AECL) to SNC-Lavalin International, in a deal which closed in October of 2011.

Contact Information

  • SPEA
    Michelle Duncan
    External Relations
    (416) 427-3525 (cellular)
    duncanm@spea.ca