Deluca – Ontario Superior Court finds that CRA has no duty to protect taxpayers from participating in tax shelters

The taxpayer’s claim against CRA for negligence in failing to revoke the registration of a charity on a timely-enough basis (so that he suffered losses as a result of making supposedly valuable donations to the charity) was struck by Dunphy J in its entirety. Among other grounds, he stated:

The ITA cannot be construed to impose a duty on the Minister or his or her officials to administer the registration and supervision of registered charities in order to protect taxpayers from the risk of dealing with them…

Tax shelters are an instance where the private good competes directly with the public good. … [T]he risk of such deductions being disallowed ought most efficiently to rest with those seeking to benefit from the scheme rather than with taxpayers at large. …

Neal Armstrong. Summaries of Deluca v Canada, 2016 ONSC 3865 under s. 171(1), General Concepts – Negligence, Charter s. 15.