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Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Canada's Federal Court of Appeal Makes Interesting Observation About Canada Revenue Agency Publications

I know that certain people at the Canada Revenue Agency (they know who they are) are not going to be happy with me for sharing this statement written by the Federal Court of Appeal.  But, the statement is useful for persons who are appealing a decision of the Canada Revenue Agency and it is only fair that the Canadian public should be made aware of the statement.  This blog is a forum for sharing such information even if (or should I say epecially if) it is not in the interests of the Government of Canada.

On April 16, 2009, Canada's Federal Court of Appeal issued a very important decision in Her Majesty the Queen v. The Canadian Medical Protective Association.  In that case, Madam Justice Desjardins wrote:

"I find that the policy statements and various other documents referred to by the respondents, namely GST Policy Statement P-119 – Trailer Commission Servicing Fees, dated February 22, 1994; GST Policy Statement P-239 – Meaning of the Term “Arranging For” as Provided in the Definition of “Financial Service”, dated January 30, 2002; Michael Wilson, Department of Finance, “Goods and Services – Notice of Ways and Means Motion”, Canadian Goods and Services Tax Reports No. 4, (December 19, 1989);  Michael Wilson, Department of Finance, “Goods and Services Tax Technical Paper”, Canadian Goods and Services Tax Reports No. 1, (August 8, 1989), are not useful:  either they are too general or the examples described are not those of the case at bar, or they assert propositions without demonstrating their well-foundedness."

Many Canadian taxpayers who are in disputes with the Canada Revenue Agency have experienced an auditor or official who is relying on something written in a Canada Revenue Agency document. 

I am not suggesting in any way that all words written in Canada Revenue Agency documents, or any particular Canada Revenue Agency document, are incorrect or that they should be ignored.  I am not saying that at all.  I have recently been accused by CRA officials of using this blog as a forum to criticise the CRA when I have not. 

There are areas of goods and services tax law in which there are valid disagreements between the Canada Revenue Agency and taxpayers.  Canada would not have a specialized Tax Court of Canada if their were not differences in interpretations of the law.  The Canada Revenue Agency would not put out for public review publications on their interpretations of the law, which are important for taxpayers to review in order to understand the Canada Revenue Agency's position, if there were not ssues relating to the intepretation of the legislation and regulations. If the legislation and regulations were so very clear, nothing further would need to be said.

The Federal Court of Appeal quote addresses a situation where the was a valid issue of interpretation.  The quote essentially says that the Court has the power to decide whether the Canada Revenue Agency's positions, as stated in their publications, are a correct interpretation of the law or not. 

It must be stated that a general principle of Canadian tax law is that an ambiguity of a tax statute is resolved in favour of the taxpayer.

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