Quinco Financial – Federal Court of Appeal confirms that a retroactive amendment to the GST credit note rules is not “for greater certainty”

The Tax Court confirmed that there was a legislative oversight in the wording of the GST credit note rules, so that Quinco Financial received full input tax credits for the GST on its original purchases notwithstanding that it subsequently received credit notes for $2.3M of those ITC claims.  In affirming this decision, Pelletier JA stated that "absent words allowing us to address situations of abuse or windfall, where the provisions are precisely-worded, clear and unambiguous, they must be given their plain effect."

As is its wont, Finance introduced subsequently to the Tax Court dispute a "for greater certainty" amendment to s. 225(3.1) (in Bill C-31, now in second reading) to reverse this approach, retroactive back to 1996.  The outrageous, if continually repeated, becomes routine.

Although its ITCs were claimed after 1996, Quinco Financial may still be sitting pretty following the passage of Bill C-31 as the dispute will be res judicata.

Neal Armstrong.  Summaries of The Queen v. Quinco Financial Inc., 2014 FCA 108, under Statutory Interpretation – Ordinary Meaning and ETA, s. 232.