Re: Update on Workstreams [CWILSON-C.FID2144802]

Hi Teio,

Thank you for your inquiry. I am not the best person to answer that
specific question, so I ask @Timothy Thomas <tt@thekey.com>  to provide
further insight.

To clarify our current status, we do not have any employees in Nova Scotia.
Previously, employees were hired there for only a few months and were
managed under our Montreal province operations, which is why we originally
registered for WCB in Nova Scotia.

Best regards,

*Germaine Daniels*

Director Payroll | TheKey

Email: germaine.daniels@thekey.com

Mobile: 562.784.1800

<http://www.thekey.com>



On Fri, Jan 23, 2026 at 8:32 AM Teio Senda <TSenda@cwilson.com> wrote:

> Hi Germaine,
>
>
>
> If I can add, TheKey is not extra-provincially registered in Nova Scotia
> from a corporate perspective. It will need to do so if it has a business
> presence in Nova Scotia. We will wait to hear from you on the below before
> taking any action. We can extra-provincially register TheKey in Nova Scotia
> if you decide it will conduct business there.
>
>
>
> Regards,
>
> Teio
>
>
>
> *From:* Germaine Daniels <germaine.daniels@thekey.com>
> *Sent:* Thursday, January 22, 2026 3:16 PM
> *To:* Singh, George <georgesingh@kpmg.ca>
> *Cc:* Ip, Renee <reneeip@kpmg.ca>; michael.jichetti@thekey.com; Teio
> Senda <TSenda@cwilson.com>; seth.poindexter@thekey.com; Timothy Thomas <
> tt@thekey.com>; Vara Prasad, Shiva Shankar P <svaraprasad@kpmg.ca>;
> Leslie Westmoreland <LWestmoreland@cwilson.com>; Rubinstein, Brian <
> brubinstein@kpmg.ca>; Sin, Cecilia <ceciliasin@kpmg.ca>
> *Subject:* Re: Update on Workstreams [CWILSON-C.FID2144802]
>
>
>
> *[CAUTION: This email originated from outside of the organization. Do not
> click links or open attachments unless you recognize the sender and know
> the content is safe.]*
>
>
> ------------------------------
>
> Hi George,
>
>
>
> In response to your question regarding Nova Scotia annual returns: 2025
> was the first year we registered in the province, and the year-end return
> has already been submitted online.
>
>
>
> I am hesitant to close the account at this time as we may have employees
> there in the future. I will wait for follow-up from Nova Scotia regarding
> the pending questions before we make a final decision.
>
>
>
> Thanks,
>
>
>
> *Germaine Daniels*
>
> Director Payroll | *TheKey*
>
> Email: germaine.daniels@thekey.com
>
> Mobile: 562.784.1800
>
>
>
> [image: Image removed by sender.] <http://www.thekey.com>
>
>
>
>
>
>
>
> On Thu, Jan 22, 2026 at 9:13 AM Singh, George <georgesingh@kpmg.ca> wrote:
>
> Hi Germaine,
>
>
>
> Hope you are doing well.
>
>
>
> Generally, the obligation of an employer with respect to employee source
> deductions for federal and provincial income taxes as well as CPP and EI
> premiums depends upon the employee's “province of employment” (*POE*).
>   Based on this, different withholding tax rates may apply (i.e., ON or NS
> versus Quebec rates), and certain other payroll tax obligations may or may
> not apply as well.
>
>
>
> The POE is determined based on the establishment of the employer at which
> the employee reports to work, based on factors discussed in further detail
> below. The term “establishment” (for payroll tax purposes) has a
> substantively similar meaning to “permanent establishment” (‘*PE*’) (for
> income tax purposes) and in practice they are used somewhat interchangeably
> (with the primary distinction being that an “establishment” can be
> short-term/temporary). This generally comprises – amongst other things – a
> fixed place of business (such as an office) or an employee or agent with
> general authority to contract on behalf of the company. There is no minimum
> amount of time the employee has to report to the establishment, and the
> establishment to which they report is not necessarily the place where they
> are physically located or perform their work.  I am not certain if TheKey
> may previously had employees working from home offices in other provinces
> or whether in fact there may have been physical offices outside of Ontario,
> BC, MB, or Quebec.  For the amalgamation process, there are notification
> requirements to be issued based on which provinces/accounts the business
> was registered in.  Going-forward, the various jurisdictions will advise as
> to the accounts to continue going-forward.  If you have employees in any
> locations for which it is determined payroll accounts may be required, the
> registrations will need to be requested accordingly.
>
>
>
> The Canadian tax authorities normally take the view that a remote
> employee’s home office is usually *not* a PE of the employer in ordinary
> circumstances (i.e., unless the employer subsidizes or exercises control
> over the employee’s home office, the employee’s home address is presented
> to clients or suppliers as a place of business, the employer regularly
> maintains a server or other goods or equipment at the employee’s home,
> etc.). Further, although there is limited official guidance in this regard,
> “general authority to contract” is typically understood to comprise the
> ability to exercise wide discretion to conclude substantive contracts
> without approval from higher management, beyond minor or routine agreements
> (such as customer contracts below de minimis thresholds or subject to
> strict pre-approval criteria, or for small purchases such as office
> supplies) – in practice, this normally captures executive leadership (e.g.,
> CEO, CFO, President, etc.).
>
>
>
> Therefore, in most circumstances, an employee who works remotely from home
> will not necessarily be considered to have a default POE where they reside.
> Instead, the CRA’s position for employees who enter into a full-time remote
> work agreement is that the POE is determined based on the employer's
> establishment to which the employees may reasonably be considered attached.
> The primary indicator of this is whether the employee would physically come
> to work to carry out the functions related to their employment duties at a
> particular establishment if it were not for the full-time remote work
> agreement. For employees who physically reported to an establishment of the
> employer immediately before entering a full-time remote work agreement,
> that establishment is the one to which they would be reasonably considered
> to be attached, unless the employee's circumstances or the nature of their
> duties have changed.
>
>
>
> For other employees, the CRA has indicated that the following secondary
> indicators can together assist in this determination:
>
> (i)     the establishment where the employee attends or would attend
> in-person meetings, through any type of communication;
>
> (ii)     the establishment where the employee receives or would receive
> work-related material or equipment or associated instructions and
> assistance;
>
> (iii)    the establishment where the employee comes or would come in
> person to receive instructions from their employer regarding their duties,
> through any type of   communication;
>
> (iv)    the establishment that is responsible for or supervises the
> employee, as indicated in the contractual agreements between the employer
> and the employee; and
>
> (v)     the establishment to which the employee would report based on the
> nature of the duties performed by the employee.
>
>
>
> In situations where an employee cannot be attached to a particular
> establishment, the CRA’s view is that the POE is determined by the
> establishment of the employer from which the employee's salary is paid,
> being generally the location of the employer's payroll department or
> payroll records, or alternatively the establishment "which actually incurs
> the expense for T2 reporting purposes". The latter expression is not
> defined, but appears to refer to the allocation of the salaries and wages
> for provincial income allocation purposes; this is effectively circular, as
> the CRA's guidance on provincial income allocation refers to the POE for
> payroll tax purposes, and in our experience the POE is often relied upon
> for provincial income allocation purposes.
>
>
>
> Further guidance, including an interactive assessment, is available on the
> CRA’s webpage, “Determine the province of employment (POE)
> <https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/set-up-new-employee/determine-province-employment.html>”.
>   Revenu Quebec generally adopts the CRA’s positions on these matters in
> most or all material respects.
>
>
>
> TheKey/Home Care Assistance will need to be evaluate whether or not the
> employees in question report to a PE in the province of ON, NS, BC, or
> Quebec and if they are paid from B.C., ON, NS or Quebec, as those answers
> will have consequences in terms of which jurisdictional payroll taxes would
> apply.  Basically, HomeCare Assistance will need to assess whether the
> employees in Quebec can reasonably be considered to be employees of Home
> Care Assistance establishments in Québec (if applicable).  Based on the
> limited information available/provided, my understanding is that Home Care
> Assistance previously had registered a payroll account with Revenu Quebec
> and utilized Ceridan as a third-party payroll provider for that account.  I
> am not aware if KPMG is authorized with either the CRA or Revenu Quebec on
> their payroll accounts (you may want to confirm internally with either Irin
> Eva or Lyndsey Organ as to who may be authorized on the CRA/Quebec
> accounts).  I would also recommend that you review the employment
> agreements for the employees in question so we can determine which
> deductions should apply and we can evaluate whether additional Quebec
> accounts should be opened.  You may want to re