Appearances:
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Counsel for the Appellant:
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Timothy Fitzsimmons
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Counsel for the Respondent:
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Erin Strashin
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JUDGMENT
WHEREAS
the Respondent has brought a motion for an Order quashing the Notice of Appeal
pursuant to paragraph 53(3)(a) of the Tax Court of Canada Rules (General
Procedure) (the “Rules”);
AND WHEREAS, the Appellant opposed the
motion;
UPON hearing the representations made by
the parties at the hearing of this motion and considering their written
argument;
THIS COURT ORDERS that:
The motion is granted and the appeal is quashed.
The Respondent is awarded its costs for this motion.
Signed at Ottawa,
Canada, this 12th day
of February 2016.
“V.A. Miller”
REASONS
FOR JUDGMENT
V.A. Miller J.
[1]
This is a motion by the Respondent for an Order
quashing the Notice of Appeal pursuant to paragraph 53(3)(a) of the Tax
Court of Canada Rules (General Procedure) (the “Rules”). The ground
for the motion is that this Court does not have jurisdiction over the subject
matter raised in the Notice of Appeal.
[2]
The circumstances which gave rise to this motion
were as follows.
[3]
The Appellant filed its income tax returns for
the 2007, 2008, 2009 and 2010 taxation years on the basis that it was a
resident of the Province of Alberta. On reassessing the Appellant, the Minister
of National Revenue (the “Minister”) determined that the Appellant was a
resident of the Province of Ontario and the Minister applied gross negligence
penalties for each of the years.
[4]
The Appellant filed a Notice of Appeal in this
Court with respect to these reassessments and it raised the following issues:
a)
Under which Ontario statute(s) did the Minister
assess the Appellant?
b) Was the Appellant resident in Alberta or Ontario during the 2007,
2008, 2009 and 2010 taxation years?
c)
Are gross negligence penalties applicable for
the 2007 to 2010 tax years?
[5]
The Appellant has also filed pleadings in the
Ontario Superior Court of Justice (the “Ontario Court”) with respect to the
same issues and the same taxation years and the Respondent has responded to
those pleadings.
Appellant’s Position
[6]
Counsel stated that the Appellant was assessed
under both the Income Tax Act (Ontario), RSO 1990, c 12 for the
Appellant’s 2007 and 2008 taxation years and the Taxation Act, 2007, SO
2007, c 11 Schedule A, for its 2009 and 2010 taxation years (“the Ontario
Acts”).
[7]
Under both of the Ontario Acts, a taxpayer can
raise only certain issues on an appeal and the Ontario Court has jurisdiction
to consider only the restricted matters listed in the appeal provisions of the
Ontario Acts.
[8]
There is no provision in either of the Ontario
Acts which explicitly establishes that the Ontario Court has jurisdiction to
make a determination in respect of the assessment of gross negligence
penalties.
[9]
Although counsel for the Appellant agreed that
the Ontario Court is “likely the correct forum”
to decide the issues in this appeal, he has asked that this appeal be held in
abeyance pending the decision from the Ontario Court.
[10]
Furthermore, the letter enclosed with the Notice
of Confirmation from the Minister directed that if the Appellant wished to
appeal the reassessments, it must appeal to the Tax Court of Canada.
Law
[11]
Paragraph 53(3)(a) of the Rules provides:
53(3) On
application by the respondent, the Court may quash an appeal if
(a)
the Court has no jurisdiction over the subject
matter of the appeal;
Analysis
and Decision
[12]
The Tax Court of Canada is a statutory court and
its jurisdiction is limited by the Tax Court of Canada Act and the
statutes it adjudicates. It has jurisdiction with respect to provincial income
tax only to the extent that the jurisdiction is conferred on it by the
provinces: Gardner v Canada, 2001 FCA 401 at paragraph 16.
[13]
It is clear that this Court does not have
jurisdiction to hear appeals where the only issue is residency in the Province
of Ontario. That jurisdiction is with the Ontario Courts: See Income Tax Act,
R.S.O. 1990. c. I.2, s. 23; Taxation Act, 2007, S.O. 2007, c. 11, ss. 125;
and also see Gardner (supra) at paragraph 17.
[14]
It is my view that it is also clear that the Tax
Court of Canada does not have jurisdiction to decide if a provincial penalty is
properly imposed: Andrew Paving & Engineering Ltd v Minister of National
Revenue, [1984] C.T.C. 2164 (TCC) at paragraph 8 and Raboud v Canada,
2009 TCC 99 at paragraph 12.
[15]
It is unfortunate that the Canada Revenue Agency
misdirected the Appellant to appeal to this Court but that error cannot change
the legislation or give this Court jurisdiction to hear this appeal.
[16]
The motion is granted and the appeal is quashed.
[17]
The Respondent is awarded its costs for this
motion.
Signed at Ottawa, Canada, this 12th day of February 2016.
“V.A. Miller”
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