The Tax Court of Canada

If a taxpayer receives an assessment or reassessment from the Canada Revenue Agency (CRA) with which they disagree, their first opportunity to dispute the assessment is by filing a notice of objection with the CRA and attempting to resolve the matter with the CRA Appeals Division. If, after the objection process has ended, the taxpayer still disagrees with the CRA’s assessment, the next step is to file an appeal in the Tax Court of Canada.


The Tax Court is a statutory court and cannot grant equitable relief (ie, if applying the law creates an unfair or absurd result, the Tax Court must apply the law). The Tax Court hears appeals for matters arising under legislation for which it has exclusive jurisdiction. This includes matters under: the Old Age Security Act, War Veterans Allowance Act, Cultural Property and Export and Import Act, etc. Most appeals filed with the Court are for matters arising under the Income Tax Act and the Excise Tax Act (GST/HST).

Filing an Appeal

After having received a (re)assessment or notice of confirmation, a taxpayer has 90 days to file an appeal in Tax Court. If the deadline is missed, it is possible to apply for an extension of up to one year. Therefore, the deadline to file an appeal after receiving a (re)assessment / confirmation is effectively one year and 90 days. It is not possible to extend the time to file an appeal beyond one year and 90 days. Extensions are not automatically granted, however. The application for an extension of time must be in writing and must explain why the objection was not filed in time.

Informal Procedure

Before a taxpayer files an appeal, they must decide which procedure will apply: informal procedure or general procedure.

This is for income tax matters where the amount at issue is less than $25,000 per year and for GST/HST matters where the amount at issue is less than $50,000. If the amount at issue is more, you can elect to have the informal procedure apply. There is no filing fee for filing an informal procedure appeal. A taxpayer can represent themselves or have anyone else represent them at the hearing. Informal procedure is intended to minimize and simplify the steps involved in the appeals process. After the appellant receives the Department of Justice’s (DOJ) reply, the Court schedules the trial.

General Procedure

Appeals under the general procedure are subject to formal procedures and legal steps. A taxpayer can represent themselves or be represented by a lawyer. A corporation must be represented by a lawyer, unless the Court grants leave to the corporation to be represented by an officer of the corporation.

Similar to an informal procedure matter, the appeal is initiated by the appellant serving and filing a notice of appeal. After a period of time, the DOJ will serve and file its reply. Next, the parties will undertake several pre-trial steps only necessary under the general procedure.

First, the parties will exchange lists of documents. Under the general procedure, parties can only refer to documents at trial which were included in their lists of documents. Usually, parties will exchange copies of the documents around the time they exchange their lists.

Second, the parties will hold examinations for discovery. The purpose of discovery is to enable parties to know the case they have to meet at trial, to know the facts upon which the opposing party relies, to narrow or eliminate issues, and to avoid surprises at trial. This is all with a view to making the trial streamlined and to ensure that the parties are focused on the appropriate issues. Discoveries can be done orally or in writing.

After the parties have completed examinations for discovery and answered any undertakings arising out of discovery, the parties write to the Court and request that the case be set down for trial.

At trial, the parties call their evidence and then make their respective arguments.


Tax litigation, like other forms of litigation, is prone to settlement. After a taxpayer files an appeal, a DOJ lawyer will be assigned to the file to represent the CRA. Once a DOJ lawyer is assigned, the parties can have settlement negotiations if they wish.

Unlike many other types of legal disputes, a tax appeal settlement must have a “factual or legal basis.” The DOJ will not enter into a settlement which does not have some factual or legal basis.

Before a hearing, one or both parties can also request that the Court hold a settlement conference. If the Court agrees, a Tax Court judge will preside over a settlement conference. A settlement conference is similar to a mediation in that the judge will attempt to have the parties come to a mutually satisfactory settlement. The judge cannot impose a settlement. The judge who presides over the conference will not be the judge who presides over the trial (if the parties are unable to settle the matter).

Appealing to the Federal Court of Appeal

If an appellant is dissatisfied with the decision of the Tax Court, that person may appeal to the Federal Court of Appeal within 30 days of the issuance of the Tax Court decision. If an appeal is not filed within 30 days, a motion to extend the time to appeal must be made to the Federal Court of Appeal. Except in exceptional circumstances, these motions are not usually granted.