Case: Jennings-Clyde (Vivatas, Inc.) v. Canada (Attorney General), 2025 FCA 225 (CanLII)
Keywords: “L’État, c’est moi”; administrative law; Canada Revenue Agency; ss. 164(1) and 220(3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (
Synopsis:
The Appellant seeks to quash the refusal of the Canada Revenue Agency (“CRA”) to let him file tax returns late. Section 220(3) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) allows for the exercise of discretion to allow late filings. The Federal Court (Turley J.) declines. The Federal Court of Appeal (Stratas, Biringer, and Rochester JJ.A.) allows the appeal, finding CRA did not provide an “adequate explanation for the refusal”. (See paras. 1-2). However, while the Federal Court of Appeal grants the application for judicial review and orders CRA to provide the Appellant a “fair opportunity to make submissions on all relevant issues, to consider those submissions, and to redetermine the matter with adequate reasons”, it rejects the Appellant’s request for tax relief, finding it is CRA that decides “whether to allow for late returns”. (See paras. 20-21).
Importance:
Citing Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the Federal Court of Appeal per Stratas J.A. affirmed the legal requirement for administrative decision-makers to provide “an adequate explanation” when deciding matters affecting Canadians’ rights or practical interests. (See para. 3).
The Federal Court of Appeal set out the following “good practical reasons” why Canadian courts “insist on seeing adequate explanations for administrative decisions”:
- Adequate explanations lead often to more thinking, better thinking, and, thus, better decision-making. This is because administrative decision-makers, while they write up adequate explanations for their decisions, often discover gaps or flaws in their reasoning or the need for more submissions.
- Adequate explanations tell affected persons that the administrative decision-maker took on board their key arguments and rejected them for certain reasons: this vindicates the interests served by procedural fairness.
- Adequate explanations further the transparency, legitimacy and accountability of administrative decision-makers to the parties before them, other regulatees, reviewing courts, and the wider public—something needed more than ever in these days of widespread skepticism, cynicism, and mistrust of government. (See para. 5; Canadian National Railway Company v. Canada (Transportation Agency), 2025 FCA 184 at para. 46).
Applying these principles to the Appellant’s case, the Federal Court of Appeal found CRA failed to provide an adequate explanation for why his case was distinguishable from Bonnybrook Park Industrial Development Co. Ltd. v. Canada (National Revenue), 2018 FCA 136, a decision in which the Federal Court of Appeal applied s. 220(3) of the Income Tax Act to another refund provision. (See paras. 6-8).
Further, whereas the CRA indicated that s. 220(3) “may not be relied upon by the Minister to exercise discretion”, the Federal Court of Appeal found this explanation did not meet the requisite standard: “when administrative decision-makers interpret a legislative provision, they must show a genuine, non-tendentious, explicit or implicit analysis of the text, context and purpose behind a legislative provision when interpreting it. On this, silence”. (See paras. 9-11).
Finally, the Federal Court of Appeal observed that the Canada Revenue Agency failed to properly record who had raised the Bonnybrook decision. Whereas the CRA’s reasons indicated that the Appellant had done so, the Federal Court of Appeal found no such evidence in the record. (See paras. 13-15).
As a general comment, the Federal Court of Appeal indicated that there is a “disappointing recent pattern” with respect to adequacy of reasons in taxpayer relief cases. (See para. 16). While the Federal Court of Appeal acknowledged “the pressures on the Agency”, it emphasized that brevity in reasons must work:
Thus, reviewing courts are fine with brevity that works. They will connect the dots on the page so to speak, as long as (unlike here) the Agency has put down the dots and it’s easy to know how to connect them: Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431 at para. 11. The Agency can cross-reference with precision to explanations in particular portions of cases, key documents or taxpayer’s submissions in the record, and Agency documents like recommendation memos, interpretation bulletins, or working group conclusions, so long as those Agency documents are publicly accessible. And lastly, these days, the Agency need only invent good, plain-language reasons on a recurring issue once: they can be cut and pasted in later decisions with just a couple of keystrokes, Ctrl-C and Ctrl-V. (See para. 18).
Of further interest, the Federal Court of Appeal indicated that the CRA “must complain” about “inadequate resources and funding” and that “those responsible for considering the complaint, including the politicians who oversee and instruct them, had better take note”. (See para. 19). However, despite this warning, the Federal Court of Appeal ultimately declined to grant the Appellant tax relief – finding that the ultimate call belongs to the CRA. (See para. 20). Might Government be more inclined to respond to the Federal Court of Appeal’s concerns if it were subject to a more significant penalty for inadequate reasons?
Counsel for the Appellant (Unrepresented): Patrick Lacour
Counsel for the Respondent: Alexander Millman (Justice Canada, Edmonton)