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Highlights
REQUIREMENTS
The Minister's Power to Issue Requirements: Minister of
National Revenue v. Greater Montreal Real Estate Board
Margaret Nixon
The Minister of National Revenue has
extremely broad powers under section 231.2 of the Income Tax Act to require any
person to provide any information or document for any purpose related to the
administration or enforcement of the Act. However, the Minister cannot issue a
requirement that relates to one or more unnamed persons without first obtaining
judicial authorization, pursuant to subsection 231.2(3) of the Act. In
Minister of National Revenue v. Greater Montreal Real Estate Board, the
Federal Court of Appeal overturned Madam Justice Gauthier's decision to cancel
her earlier order authorizing the Minister to require the Greater Montreal Real
Estate Board ("GMREB") to provide information and documents related to its
members – the unnamed persons. The
Court held that Gauthier J. had not properly considered whether the information
sought was required for a tax audit conducted "de bonne foi." As Margaret
Nixon explains, this decision may come as a surprise to many tax practitioners,
since the Court departed from the approach taken by the Supreme Court of Canada
in James Richardson & Sons Ltd. v. M.N.R., and held that in order for
a requirement to be valid, it was not necessary for the Minister to demonstrate
that the requirement relates to "genuine and serious inquiry" into the tax
liability of a specific person or persons. The GMREB has sought leave to appeal
to the Supreme Court of Canada.
INJUNCTIVE RELIEF
Suspending the Suspension: International Charity
Association Network v. The Queen
Shayne Saskiw
Until recently, the only statutory
remedy available to the Minister of National Revenue in relation to a charity
that was in violation of the general records, audit and inspection provisions in
sections 230 to 231.5 of the Income Tax Act was to revoke the charity's
registration. Recognizing the need for a less drastic penalty, Parliament, in
its 2004 Budget, introduced section 188.2 of the Act, which permits the Minister
to suspend, for a period of one year, a charity's authority to issue official
receipts and to receive gifts or transfers of property from other charities. Any
charity that wishes to seek a postponement of its suspension may file an
application to the Tax Court of Canada, pursuant to subsection 188.2(4) of the
Act. Earlier this year, the case of International Charity Association Network
v. The Queen ("ICAN") gave the Court its first opportunity to
consider in what circumstances it is appropriate to grant a postponement under
subsection 188.2(4) – which Associate Chief Justice Rip characterized as
"essentially a statutory injunction" against the Minister's suspension. Shayne
Saskiw reviews both the legislative history of section 188.2 and the reasons for
judgment of Rip A.C.J. in ICAN.
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Board
David C. Nathanson, QC
Editor-in-Chief
Lerners LLP
Jacques Bernier
Bennett Jones LLP
Thomas M. Boddez
Thorsteinssons LLP
Chia-yi Chua
Fraser Milner Casgrain LLP
William I. Innes
Fraser Milner Casgrain LLP
Edwin G. Kroft
McCarthy Tétrault LLP
Clifford L. Rand
Stikeman Elliott LLP
Kenneth S. Skingle, QC
Felesky Flynn LLP
David E. Spiro
Blake, Cassels & Graydon LLP
Roger E. Taylor
Couzin Taylor LLP
Matthew G. Williams
Thorsteinssons LLP
Adrienne K. Woodyard
Lerners LLP |