Scheuer – Federal Court of Appeal indicates that investors in a gifting tax shelter might be better off suing their own advisors – rather than CRA for issuing a tax shelter number

The taxpayers, who participated in the same gifting tax shelter as Ficek, sued CRA for negligence in issuing a tax shelter registration number to the promoter and in not warning them of potential problems. In finding that their statement of claim should be struck “for failing to assert a cognizable cause of action,” Dawson JA noted that issuance of a tax shelter number was not discretionary (i.e., was required if the specified information was submitted) and that the “written warning tax shelter promoters are mandated by paragraph 237.1(5)(c)… to display” (that the number does not confirm any tax benefits)

is consistent with Parliament’s intent that taxpayers should participate in a tax shelter at their own peril, not at the peril of Canadian taxpayers generally. … The issuers of [the related] opinions, who benefited financially from the provision of their professional advice, are better placed to indemnify the plaintiffs in the event of negligence in the exercise of their professional responsibilities.

…The above conclusions … reflect that the performance of statutory duties does not generally give rise to private law duties of care.

Neal Armstrong. Summary of The Queen v. Scheuer, 2016 FCA 7, under General Concepts – Negligence.