Originally Published in CCH Canadian Ltd. on March 21, 2013.
One might think that it would go without saying, but obviously not, that the Tax Court of Canada is neither a court of equity nor a section 96 court. That is, it is not created, continued, or recognized by section 96 of the Constitution Act, 1867. Rather, it is a “statutory court”, created under the authority of section 101 of that Act. This means, among other things, that its powers are limited to those granted to it by the Tax Court of Canada Act, the Income Tax Act (the “ITA”), and other relevant statutes, and to those that are necessarily inherent in or implied by those statutes or that are necessarily incidental to the proper operation of itself as a court.
Nothing in any of those powers permits the Tax Court to invalidate, vacate, or dismiss an assessment issued by the Minister of National Revenue (the “Minister”) to a taxpayer merely because of the improper actions of the Canada Revenue Agency (the “CRA”). This was brought home forcefully to the taxpayer in Ereiser v. Canada, 2013 DTC 5036 (F.C.A.), February 4, 2013, which upheld an unreported, interlocutory judgment of Justice Hershfield of the Tax Court of Canada. To call the CRA’s actions in this case Kafkaesque would be an understatement, yet the taxpayer still did not get what he wanted.
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