Company under CRA audit gave workers letters saying wages were 'non-taxable'

Many workers at a companion the Nova Scotia authorities contracts to give care for vulnerable adults and children sense they've been below the belt treated, after they say Arden Professional Client Care let them believe for years their pay was not taxable — and that the company went so far as to put it in writing.

"It feels like we're being the scapegoat somewhat in this whole situation," said Steve Keddy, an Arden worker and retired teacher and school principal.

Arden's funding comes from the provincial Department of Opportunities and Social Development. Over the past eight years, the company accepted more than $184 million in public money, according to provincial government financial statements.

The company declined to comment on this story.

Keddy says he and many other workers believed the pay from Arden was not taxable.

He's worked for Arden for the last seven years and says he was told about taxes in a face-to-face orientation session after he was hired.

He says Arden pointed to a section of tax law to suggest the pay was non-taxable, and compared their work to that of foster parents.

"The way it was described, basically, was we're foster care workers with someone funneling the money in between," he said.

Keddy has been advocating for himself and his fellow workers since Arden announced in March the company had been audited by the Canada Revenue Agency. He organized that petition, which has been forwarded to a local MLA, MP, and the federal taxpayers' ombudsperson.

Keddy says about five years ago Arden management asked workers to sign contracts that stated they are independent contractors and responsible for "applicable taxes."

But according to Keddy, since the company didn't collect his social insurance number or issue tax slips after he signed the contract, he assumed there were no applicable taxes and continued on as before.

"We're talking tens of millions [in] public money every year, and hundreds of people working under this belief, a contract with the provincial government," he said.

"I guess we all believed that everyone knew what they were doing and that it was non-taxable."

A couple of years after signing the contract, Keddy says he had to ask Arden for a letter to prove his income when he was applying for refinancing on a loan.

Keddy says the letter he received in 2023 cemented his belief that the money was not taxable.

All the letters use the phrase "non-taxable wage." Keddy says some of his co-workers have also shown him their letters.

"It's not one person who misinterpreted one letter," he said. "There are lots of letters out there." 

For Ottawa labour lawyer Malini Vijaykumar, the language of the Arden letters is "a little bit of an oxymoron."

"A wage is the income that you get for performing work," she said, adding that income in Canada is taxable.

"And so to call something a non-taxable wage is — I'm not sure that that's a thing that exists in Canada," she said.

Steve Keddy acknowledges that he's heard some of his coworkers discussing whether they need to get legal advice to investigate their rights.

But for now, he's holding out hope for a different solution.

"That's a bridge I guess people will cross when they get to it," he said. "But I'm really hoping that we can deal with this in a positive way."

"It's a huge issue and it really does need to be addressed."

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