Tax & Trade Blog

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AUDIT WAIVERS: GENERALLY A BAD IDEA?

AGREEING TO WAIVING AN AUDIT LIMITATION PERIOD COMES WITH SEVERAL RISKS

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When it comes to Tax Audits, most Tax Auditors — whether the federal Canada Revenue Agency (CRA) or its counterparts auditing for tobacco, fuel or other provincial compliance matters — are operating with one particular deadline in mind: a three or four-year limitation period governing what the Auditor can review and assess.

When Tax Audits are conducted late in that period, Tax Auditors will typically request Audit Waivers to provide themselves with additional time to complete their audits and issue assessments.

In this Tax Audits Series Report, we review what Audit Waivers are, how they operate, and why they can often be a very bad idea for the taxpayers and businesses agreeing to them.

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EMPLOYER HEALTH TAX: RELATED PARTY RULES

INCOME TAX RULES REIGN, BUT AS INTERPRETED BY ONTARIO?

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Ontario’s Employer Health Tax Act (the “Act” and the “EHT”) regime contains important associated-employer and related-party rules impacting things like EHT Exemptions and the calculation of payroll thresholds, as well as ultimate EHT liability. While the rules borrow heavily from Income Tax Act (“ITA”) definitions and concepts, the application of the rules in the EHT context is not always straight-forward and often influenced by administrative interpretation.

In this Indirect Tax Report, we review the EHT associated-employer variation of these rules and highlight practical difficulties arising when income tax concepts are applied for provincial purposes.

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LEGAL QUESTION – SHOOULD YOU ASK AN AI?

PITFALLS ASSOCIATED WITH USING AI TOOLS FOR "LEGAL SERVICES"

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The use of Large Language Model tools (commonly referred to as “AI”) such as ChatGPT and Claude, is becoming quite common in Canada. But what are the ramifications of using such tools for legal issues, such as legal research, legal advice, and the drafting of legal documents such a contracts, pleadings, or legal submissions?

In this report, we review some of the risks associated with relying on AI tools as a replacement for legal professionals.

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加拿大对中国钢制货架进行调查

反倾销调查或导致加征额外关税

CBSA Investigating Steel Racks from China

Anti-Dumping Investigation Could Impose Additional Duties

For the English Version of this Report, please click here.

2026年4月20日，加拿大边境服务署（CBSA）根据《特别进口措施法》(SIMA) 发布 立案通知 ， 就从中国进口的钢制货架涉嫌倾销行为展开调查。本次调查系由加拿大钢制货架生产商提出的投诉所引发。

本次调查所涉及的货物具体描述如下：

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CBSA INVESTIGATING STEEL RACKS FROM CHINA

ANTI-DUMPING INVESTIGATION COULD IMPOSE ADDITIONAL DUTIES

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On April 20, 2026, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping of steel racks from China. This investigation was prompted by a complaint filed by producers of steel racks in Canada.

Contextual Background

The goods under investigation are more specifically described as:

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GOVERNMENT PROCUREMENT CHALLENGES

REQUIREMENT TO BE LIBERAL PARTY MEMBER, NOT ENOUGH TO TRIGGER SUCCESS?

Yes, this is a bit of clickbait title above – the government contract in question had a requirement that the successful bidder be a member of the Canadian Roofing Contractors Association (“CRCA” and the “Membership Requirement”), and our point is that it could well have required membership in any other organization, even a political one! BUT the Canadian International Trade Tribunal's (“CITT”) refusal to provide relief here is the interesting part.

We review this case below and the tricky nature of challenging government procurement decisions.

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SAFEGUARD INQUIRY: CERTAIN WOOD GOODS

CITT TO DETERMINE WHETHER IMPORTS THREATEN CANADIAN PRODUCERS

On April 21, 2026, the Canadian International Trade Tribunal (“CITT”) issued a Notice of Commencement of Safeguard Inquiry (the “Notice”) under the Canadian International Trade Tribunal Act in respect of imports of certain wood goods (“Subject Goods”). The matter was referred to the CITT by the Government of Canada through an Order in Council on April 20, 2026, which was prompted by a formal request from the Canadian Wood Products Alliance.

Contextual Background

It is worth noting that one potential catalyst for the CITT’s safeguard inquiry into the Subject Goods is the fact that United States (“US”) has placed 25% tariffs on similar wooden products (i.e., upholstered wooden furniture, kitchen cabinets and vanities, etc.) since October 14, 2025, through a Presidential Proclamation. It is possible, if not likely, that many of these products destined for the US market have been diverted to the Canadian market to avoid the US tariffs.

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加拿大对中国钢铁和铝产品征收附加税

加拿大公布最终商品清单！

Canadian Surtax on Chinese Steel/Aluminum

Canada Releases Final List of Goods Subject to 25% Surtax!

For the English Version of this Report, please click here.

2024年10月1日，加拿大政府公布了最终清单，明确哪些商品将被征收针对来自中华人民共和国的钢铁和铝产品的25%附加关税，该措施将于2024年10月22日生效（最终清单)。

该最终清单涵盖的产品范围很广，包括多种由钢铁或铝制成的可被不同行业制造商使用的产品，例如钢锭、平轧卷材、棒材和杆材、挤压型材及型材制品，以及管材管道和空心型材等。

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FEDERAL FUEL TAX HOLIDAY

GOVERNMENT TO SUSPEND FEDERAL EXCISE TAX ON CERTAIN FUELS

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The Department of Finance Canada and Office of the Prime Minister both announced today that the Government of Canada will be temporarily suspending the Federal Fuel Excise Tax on gasoline, diesel and certain aviation fuels (the “Fuel Tax Holiday”).

In this report, we provide some legislative and socio-economic/political background on the Fuel Tax Holiday and explain its parameters.

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TAX OBJECTIONS: WHAT HAPPENS NEXT?

APPEALS PROCESS MOVES SLOWLY UNTIL SUDDEN ACTION IS REQUIRED

As we have reported on, Canada Revenue Agency (“CRA”) and other government authorities appear to be ramping up their tax audit activity. While taxpayers have statutory rights to appeal assessments they view as incorrect by filing a Notice of Objection, what happens after filing those documents can be unclear.

Appeals processes initially move slowly and can feel a bit like a “black box”. Government officials are generally not forthcoming with updates, and it is not uncommon for taxpayers to hear nothing for months – or even years! However, when the appeal does advance, the timelines for action can suddenly become very short.

A failure to respond in time can result in an objection being denied, or the permanent loss of one’s further appeal rights.

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CRA INFORMATION REQUESTS - SHOPIFY 2

FEDERAL COURT DISMISSES CRA UNNAMED PERSON REQUIREMENT IN SHOPIFY 2

Among the most important decisions for GST/HST practitioners in 2025 were two Federal Court rulings dismissing applications by the Canada Revenue Agency (“CRA”) for unnamed persons requirements (“UPRs”) – a type of information demand in respect of an ascertainable group of unnamed persons that requires Court authorization – directed to Shopify Inc. (“Shopify”).

Below, we review the second of these two Federal Court decisions involving Shopify (Canada v. Shopify Inc., 2025 FC 969 – “Shopify 2”), in which the CRA failed to satisfy the requirement that the target group under its UPR be “ascertainable”.

For our review of the first Shopify decision, click here.

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CRA INFORMATION REQUESTS - SHOPIFY 1

FEDERAL COURT DISMISSES CRA UNNAMED PERSON REQUIREMENT IN SHOPIFY 1

Among the most important decisions for GST/HST practitioners in 2025 were two Federal Court rulings dismissing applications by the Canada Revenue Agency (“CRA”) for unnamed persons requirements (“UPRs”) – a type of information demand in respect of an ascertainable group of unnamed persons that requires Court authorization – directed to Shopify Inc. (“Shopify”).

Below, we review the first of these two Federal Court decisions (Canada v. Shopify Inc., 2025 FC 968 – “Shopify 1”), in which the CRA’s UPR was found not to have the required purpose of verifying compliance with a duty or obligation under Canadian tax law.

For our review of the second Shopify decision, click here.

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CBSA INVESTIGATING PLYWOOD IMPORTS AGAIN

ALLEGED DUMPING OF DECORATIVE AND NON-STRUCTURAL PLYWOOD FROM CHINA

On April 10, 2026, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping of certain Plywood originating in or exported from the Peoples’s Republic of China (“China”). This investigation was prompted by complaints filed by Columbia Forest Products and the Canadian Hardwood Plywood and Veneer Association, and it is the second such investigation by the CBSA scrutinizing imports of plywood from China.

The Subject Goods

The goods under investigation are more specifically defined as:

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TCC: NEW HOUSING REBATES & SOCIAL JUSTICE

TCC DECISIONS SEEM TO BE RECOGNIZING MODERN HOUSING REALITIES

Homeowners who claim New Housing Rebate often face Canada Revenue Agency (“CRA”) review. The central issues in these cases are often whether the homeowners intended to use the subject home as a primary place of residence (or for some other purposes) and whether the home was in fact occupied as a place of residence following construction or renovation.

While the Tax Court of Canada (“TCC”) has traditionally adopted a fairly rigorous approach when interpreting and applying these two requirements, two recent TCC decisions seem to reflect a more flexible approach, perhaps aligning with modern housing realities.

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SUPPLY CHAIN LABOUR REPORTS DUE MAY 31

FEDS NOW EXPECT MORE TO PREVENT FORCED/CHILD LABOUR IN SUPPLY CHAINS

May 31, 2026 is the due date for annual reports (“Annual Reports”) required under Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act (the “Act”).

In this International Trade Report, we explain what these Annual Reports require, how those requirements have changed for 2026, and other useful guidance for businesses impacted by the Act’s mandatory reporting regime.

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CANADA HAS A JONES ACT!

COASTING TRADE ACT BARS FOREIGN SHIPS FROM MOVING GOODS WITHIN CANADA

The Jones Act is a United States (“US”) statute barring foreign vessels from moving goods between two points in the US. The little-known Coasting Trade Act (the “CTA”), administered by Transport Canada, is Canada’s equivalent to the Jones Act.

In this International Trade Report, we compare the CTA with its US counterpart and explore how to navigate its complex rules.

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CRA REQUESTS FOR INFORMATION

RFI ONE OF CRA'S MOST POWERFUL TOOLS – AND MAY SOON GET MORE POWERFUL

A Request for Information (RFI) is the Canada Revenue Agency’s (CRA) formal written request for answers and documents which it subsequently uses as the factual foundation of its Audit.

In the previous entry in our Tax Audits Series, we provided practical guidance on responding to initial communications from the CRA. In this entry, we dive deeper into RFIs specifically, which are one of CRA’s most powerful tools in the early stages of an Audit.

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SAFEGUARD INQUIRY: CANNED/FROZEN VEGGIES

 CITT TO DETERMINE WHETHER IMPORTS THREATEN CANADIAN PRODUCERS

On March 16, 2026, the Canadian International Trade Tribunal (“CITT”) issued a Notice of Commencement of Safeguard Inquiry under the Canadian International Trade Tribunal Act in respect of imports of certain canned and frozen vegetables (“Subject Goods”). The matter was referred to the CITT by the Government of Canada through an Order in Council on March 13, 2026, which was prompted by a formal request from the Canadian Association of Vegetable Growers and Processors.

The Subject Goods

The goods under investigation are more specifically described as:

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PROCEDURAL RULES TRUMP INDIGENOUS TAX RIGHTS?

FCA: BEFORE CONSTITUTIONAL RIGHTS ASSERTED, NORMAL PROCESS TO BE FOLLOWED

Our Indirect Tax Practice often involves the intersection of Indigenous Peoples’ rights, especially under sections 87-89 of the Indian Act, and tax legislation.

Below, we review Zachary v. Canada, 2026 FCA 55 (“Zachary”), a recent Federal Court of Appeal (“FCA”) decision ruling that despite the substantive rights afforded by the Indian Act and constitutionally to Canada’s Indigenous Peoples, Status Indians are still required to comply with all “procedural” requirements (e.g. time requirements, Notices of Constitutional Questions, etc.) in the applicable taxing legislation before asserting those substantive rights!

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CBSA INVESTIGATING UNARMOURED BUILDING CABLES

DUMPING OF UNARMOURED BUILDING CABLES FROM CHINA

On March 16, 2026, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping of unarmoured building cables from China. This investigation was prompted by a complaint filed by a manufacturer in Quebec.

The goods under investigation are more specifically described as: