Tax & Trade Blog

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TCC: DISCOVERY QUESTIONS NEED ANSWERS!

BROAD DISCOVERY RULES CAN WORK FOR TAXPAYERS TOO

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Taxpayers who appeal to the Tax Court of Canada (“TCC”) under the General Procedure must submit to Examinations for Discovery (“Discovery”) and must answer “any proper question relevant to any matter in issue”: see Rule 95(1). That means virtually any question relevant to the appeal must be answered, aside from those subject to Solicitor-Client Privilege. This obligation continues even if the relevant business has been sold, the knowledgeable employees have left, or key documents are hard to find.

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TCC: THE CRA CAN HAVE ITS CAKE AND EAT IT TOO!

TCC CONFIRMS THE CRA CAN TAX HOUSE FLIPS WHILE DENYING OFFSETTING ITCs

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When auditing many isolated residential real estate developments, the Canada Revenue Agency ("CRA") often insists on having its cake and eating it too: it assesses GST on the full selling price of a newly constructed home but denies the vendor every single Input Tax Credit ("ITC") on their selling costs.

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CHATBOTS ARE DANGEROUS FOR PRIVILEGE!

US COURT CONCLUDES USE OF AI IN LITIGATION MAY PUT PRIVILEGE AT RISK

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Canadian Courts are still trying to wrap their minds around AI and Solicitor-Client Privilege, with not a lot out there right now. The US appears to be on the forefront of this issue, however, with a District Court decision in United States v. Heppner (No. 25 Cr. 503, S.D.N.Y. 2026) (“Heppner”) highlighting the dangers of clients relying on AI for their legal analysis – or legal defences – without first engaging a dues paying lawyer.

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REGISTERED BUT NOT REGISTERED!

CRA BUSINESS NUMBER TRAP: ACCOUNTS ASSIGNED DURING AUDIT NOT ENOUGH

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When the Canada Revenue Agency ("CRA") assesses an individual for unremitted GST/HST on a real property transaction, the agency typically creates an administrative business number to process the assessment. Many taxpayers assume that once the CRA opens this account and assesses tax, the taxpayer is officially GST "registered" and entitled to claim offsetting Input Tax Credits ("ITCs") on related expenses, for example real estate commissions.

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NO EXCUSE FOR MISSED CRA PORTAL ALERTS

TCC CONFIRMS BUSINESS CARRIES ALL THE RISK WHEN DIGITAL PORTALS IGNORED

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A recent Tax Court of Canada (“TCC”) case highlights the harsh consequences of failing to monitor an online Canada Revenue Agency (“CRA”) portal, like MyCRA or My Business Account. In Web Listings Inc. v. His Majesty the King, 2026 TCC 101 (“Web Listings”), the TCC confirmed that if a business’s authorized representative receives online portal notifications and ignores them, the tax consequences for the business are severe.

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MYCRA LOCKOUTS HAVE REAL TAX COSTS

MINOR COURT WIN FOR TAXPAYERS WITH PORTAL ISSUES – BUT LITTLE REAL RELIEF

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A recent Federal Court (“FC”) case is a minor win for taxpayers who have struggled with the buggy, confusing mess that is the MyCRA web portal (“MyCRA”) run by Canada Revenue Agency (“CRA”). It also brings to light how serious MyCRA access issues can become.

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CRA ADOPTS 2-YEAR AUDIT WORKPLANS

LARGE BUSINESSES UNDER AUDIT TO FACE BROADER INITIAL RECORDS REQUESTS

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The Canada Revenue Agency (“CRA”) has recently announced an important administrative change affecting many large business audits (“Audits”). More specifically, CRA has advised at a major industry roundtable that rather than examining one taxation year at a time, Auditors may now adopt a two-year Audit workplan and request records from multiple years at the outset of an Audit.

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CHAT GPT, HAVE I COMMITTED CUSTOMS FRAUD?

UPTICK IN FRADULENT UNDER-VALUATION WITH NEW TARIFF ENVIRONMENT

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Not since the 1980s and ‘90s has our specialized Customs, Trade & Indirect Tax Firm seen such an uptick in clients with significant under-valuation issues with the Canada Border Services Agency (“CBSA”).

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COST AWARDS IN TAX LITIGATION

PROSPECTIVE TAX COURT LITIGANTS MUST UNDERSTAND COST RISKS

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"Costs" are awarded to successful litigants in tax litigation, as in most forms of litigation, but are not well understood by the public. Indeed, many litigants may head to the Tax Court of Canada (“TCC”) without first understanding the rules behind cost awards and without contemplating how these "costs" awards work when on the losing end of the litigation and/or appreciating that they may well be on the hook for the government’s legal bills when they do lose.

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LATE TAX OBJECTIONS FACE STRICT DEADLINES

NO SECOND CHANCES WHEN APPLYING FOR AN EXTENSION OF TIME TO OBJECT

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A Notice of Objection (“NoO”) may be filed late – but ONLY if certain conditions and deadlines are met. Many taxpayers are unaware of the ability to apply for a late filing, and equally unaware that when THOSE deadlines are missed, it is all over!

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TRUMP PLAYS HARDBALL WITH CANADA

NEW 50% US TARIFFS DIRECTLY LINKED TO CANADA'S SUPPLY MANAGEMENT POLICIES?

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On July 20, 2026, President Donald Trump invoked a Great Depression-era trade statute to announce 50% tariffs on a wide array of Canadian exports. The sweeping orders rely on Section 338 of the Tariff Act of 1930 (“Section 338”, codified at 19 U.S. Code § 1338) and specifically target Canadian dairy, alcohol, and automobiles.

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SURETY BONDS CAUGHT IN INSURANCE TAX NET

SUPERIOR COURT CONFIRMS SURETY BONDS SUBJECT TO CORPORATE INSURANCE TAX

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Commercial surety bonds ("Surety Bonds") are a vital but frequently misunderstood staple of international trade. Importers and customs brokers rely on Surety Bonds to secure various financial obligations with the Canada Border Services Agency ("CBSA"), including Release Prior to Payment ("RPP") bonds under CARM, bonded warehouses, carrier agreements, and customs appeal bonds.

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STATUTE OF LIMITATIONS IN TAX AUDITS

WHEN THE FOUR-YEAR RULE DOES - AND DOES NOT - PROTECT YOU

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When it comes to Tax Audits, most Tax Auditors — whether from the federal Canada Revenue Agency (“CRA”) or provincial counterparts auditing for tobacco, fuel or other provincial compliance matters —operate within a four-year general limitation period.

In this Tax Audits Series Report, we review the general statute of limitations rules applicable to tax audits, as well as the key exceptions that allow Tax Auditors to reassess beyond that four-year period.

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TCC POWERLESS OVER CRA COLLECTIONS

CRA FREE TO GARNISH UNREMITTED GST/HST - EVEN WITH TCC APPEAL PENDING

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In the recent Tax Court of Canada (“TCC”) decision Harris v. The King, 2026 TCC 89 (“Harris”), a taxpayer assessed for unremitted GST/HST learned the hard way about the Canada Revenue Agency’s (“CRA”) extremely broad Collection Rights.

In this Tax Audits Series we review the Harris decision and the key differences it highlights between the CRA’s ability to collect GST/HST debts and Income Tax debts – and why it demonstrates that retaining Experienced Tax Counsel at the front-end of the audit process can help avoid harsh collections action later on.

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DIRECTORS’ LIABILITY FOR UNREMITTED GST/HST

RESIGNING AS DIRECTOR TO AVOID CORPORATE INDIRECT TAX LIABILITY A TRICKY TASK

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The GST/HST framework under the Excise Tax Act (“ETA”), as with other indirect tax regimes (like federal and provincial alcohol, tobacco and vaping taxes) includes “directors’ liability” provisions that are triggered when the corporation does not have the money to pay an assessed amount. Most of these systems have “statutory limitation rules” and “due diligence defences” which may limit liability, but these rules are extremely tricky to apply in practice.

We review these in a two-part series here, with reference to the helpful recent case Stevens v. The King, 2026 TCC 76 (“Stevens”), which revolves around this directors’ liability framework.

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THE DUE DILIGENCE DEFENCE & DIRECTORS’ LIABILITY

PROVING DUE DILIGENCE TO AVOID DIRECTORS’ GST/HST LIABILITY NO EASY FEAT!

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The GST/HST framework under the Excise Tax Act (“ETA”), as with other indirect tax regimes (like federal and provincial alcohol, tobacco and vaping taxes) includes “directors’ liability” provisions that are triggered when the corporation does not have the money to pay an assessed amount. Most of these systems have “due diligence defences” and “statutory limitation rules” which may limit a director’s liability, but these rules are tricky to apply in practice.

We review these rules in a two-part series, with reference to the recent case Stevens v. The King, 2026 TCC 76 (“Stevens”), which revolves around this directors’ liability framework.

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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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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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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!