The extension of the normal reassessment period on seeking judicial review of a CRA notice of non-compliance may coerce taxpayers into not challenging unreasonable demands

The apparent effect of the revised proposals under Bill C-31 respecting the issuance by the Minister of a notice of non-compliance (“NONC”) regarding an information demand made under s. 231.1 is to provide, by virtue of draft ss. 231.8(1)(f) and 231.9(10), for an extension of the normal reassessment period (“NRP”) by the period in which a NONC is under judicial review, regardless of the outcome of that review. In contrast, where the NONC is vacated on internal Ministerial review, no comparable extension of the NRP applies.

A taxpayer considering whether to challenge an unreasonable NONC must now weigh the extension of the reassessment period, resulting from the initiation of judicial review, for the duration of the ensuing litigation, which may have the effect of encouraging taxpayers to provide information to the CRA in compliance with an unreasonable NONC.

Neal Armstrong. Summary of Ziyad Zeidan, Isabel Caguioa, and Sumayya Kheireddine, “Notices of Non-Compliance, Judicial Review, and the Reassessment Clock,” Canadian Tax Focus, Vol. 16, No. 1, p. 3, August 2026 under s. 231.9(10).