Franco-Nevada has settled its appeal of CRA reassessments of its 2013 to 2019 taxation years in respect of its Barbados and Mexican subsidiaries on the basis that:

• it will not be required to recognize any FAPI in respect of those subsidiaries for those taxation years; and
• the service fees charged by Franco-Nevada for certain services provided to those subsidiaries will be adjusted to increase the markup applied to Franco-Nevada's cost of providing those services from the current range of 7% to 20%, to 30%.

Franco-Nevada will not be subject to tax on the additional service fees for those years due to the application of non-capital losses.

Neal Armstrong. Summary of 11 September 2025 Press Release of Franco-Nevada Corporation entitled “Franco-Nevada Reaches Settlement on Canadian Tax Disputes” under s. 247(2).

The taxpayer did not satisfy one of the mandatory requirements for the Ontario new housing rebate (contained in ETA s. 254(2)(g)) because, when the new residential unit in Caledon was ready for occupancy, she leased it to a third party for a number of months before her family moved in, rather than her family being the first occupants.

Bodie J. nonetheless accepted that the new housing rebate was available to her because her intention of occupying the property from the outset as her place of residence had been frustrated due to COVID-related challenges. He stated that “the family had no real choice but to stay in Windsor until the conditions caused by the pandemic stabilized and to earn rental income from their unoccupied property in the interim.” He refrained from discussing principles of statutory interpretation.

Neal Armstrong. Summary of Osagie v. The King, 2025 TCC 114 under ETA s. 254(2)(g).

CRA has substantially amended its ITA Circular and GST/HST Memorandum on the voluntary disclosure program (VDP). It has ditched the concept of the “Limited Program,” e.g., not waiving any interest if there is some indication of intentional conduct or, perhaps, if the taxpayer is large and sophisticated.

CRA now recognizes two categories of voluntary disclosure, with corresponding scaling of the degree of relief. If the VDP application was “unprompted”, then the application will be eligible for the "general relief," i.e., receiving 75% relief of the applicable interest and 100% relief of the applicable penalties. Where there is a “prompted” application, the applicant will receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties. (As before, where there is a “wash transaction” for GST/HST purposes, there is 100% interest relief.)

An unprompted application includes one made following an education letter or notice that offers general guidance and filing information related to a particular topic such as unreported income or ineligible expenses. A prompted application would include an application made following verbal or written communication about an identified compliance issue related to the return or other disclosure, or one made after CRA had already received information from third-party sources regarding the potential involvement of the taxpayer or a related taxpayer in tax non-compliance.

The applicant should include documents for foreign-sourced income or assets for the most recent 10 years, for Canadian-sourced income or assets for the most recent six years, and for the most recent four years regarding information about GST/HST.

CRA indicates that these changes to the VDP will come into effect on October 1, 2025, and that applications received prior to that date will be considered for VDP relief under the old guidelines. Presumably, somebody will make an application for judicial review if CRA rigidly refuses to apply the more generous relief regarding applications that were made prior to October 2025.

Neal Armstrong. Summary of IC00-1R7 dated 10 September 2025 under ITA s. 220(3.1) and summary of GST/HST Memorandum 16-5-1 dated 10 September 2025 under ETA s. 281.1(1).

The taxpayer devoted approximately 15 to 20 hours per week in 2019 and 2020 selling Amway products, generating a total of $8,706 in revenues from sales to 40 customers over the two years, while claiming expenses of over $32,000 for those years.

In finding that the taxpayer’s Amway activities did not constitute a source of income, so that his losses were not deductible, Cook J. first found that there was a significant, if not predominant, personal element in the taxpayer’s Amway activities. In particular, his level of activity (e.g., attending numerous workshops and other Amway functions) was disproportionate to his modest sales and likely reflected a strong interest in business networking, developing business partners, and participating in educational programs.

That was not the end of it, as Stewart had indicated that “where a taxpayer’s venture has elements that suggest it could be considered a hobby or other personal pursuit, it will be considered a source of income if it is undertaken in a sufficiently commercial manner”. However, Cook J found that the taxpayer’s activities were not undertaken in a sufficiently commercial manner to be considered a source of income.

Neal Armstrong. Summary of Sennaike v. The King, 2025 TCC 122 under s. 3(a) – business.