Tax & Trade Blog

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FCA OVERTURNS CITT IN MEDLINE

FCA RESTORES NARROW “FOR USE IN” TEST FOR CHAPTER 99 RELIEF

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Importers seeking duty relief under Chapter 99 of the Customs Tariff often need to establish that imported goods are “for use in” other qualifying goods or activities. In Canada (Attorney General) v. Medline Canada Corporation, 2026 FCA 74 (“Medline Canada”), the Federal Court of Appeal (“FCA”) clarified that this phrase requires more than goods being used together in a practical or commercial sense with limited or no physical connection — overturning a prior Canadian International Trade Tribunal ("CITT”) decision.

In Ghermezian v. MNR, 2023 FCA 183, the Federal Court of Appeal may have put the last nail in the coffin for taxpayers trying to dispute the broad reach of the CRA’s audit powers.

CRA’s Use of 3^rd Party Requests for Information

The case revolved around the CRA’s Related Party Initiative, and the CRA’s issuance of various requests and requirements for information under section 231.1 of the Income Tax Act (and parallel provisions in section 289 of the Excise Tax Act (alternatively, the “RFIs” and the “Demands”, and the “ITA” and “ETA”).