Aubrey Dan Family Trust v. Minister of Finance, 2016 ONSC 3801, aff'd 2017 ONCA 875

In 2011, and shortly before the third anniversary of the original assessment in 2008 of the taxpayer’s 2007 federal and Alberta return, the trustees of the taxpayer (“ADFT”) provided a waiver on form T2029 to CRA in order for CRA to grant it an extension (beyond that third anniversary date) for ADFT to make representations that it was resident in Alberta rather than Ontario. Early in 2012, the federal Minister issued a notice (styled as a Notice of “Reassessment”) reversing the Alberta tax in the 2008 assessment and assessing ADFT instead for Ontario tax.

S. 48(15) of the Income Tax Act (Ontario) (the “Ontario Act”) provided:

Every form purporting to be a form prescribed or authorized by the Provincial Minister shall be deemed to be a form prescribed by order of the Provincial Minister [effectively defined in s. 1(1) to be the federal Minister] under this Act… .

ADFT argued that this provision required “that the form itself must purport to be prescribed” for the provision to be operative (para. 31). Before rejecting this submission, Lederman first found against a Crown argument that, as the 2008 assessment had not dealt with Ontario taxes, it was the 2012 “reassessment” which in fact was the original assessment of the taxpayer’s Ontario tax (so that the normal reassessment period did not start running until then).

In turning to ADFT’s argument, Lederman J found that there was a valid waiver pursuant to the Ontario Act for purposes of waiving the normal reassessment period, stating (at paras. 32, 34):

The word “purporting” means “signify, imply, profess to be … appear ostensibly to be”… . On its face, the T2029 Waiver Form bears the insignia of the CRA… and is regularly used by the CRA. In this way, it implies or purports to be a prescribed form.

… The prescription imposed by the Minister is sufficiently evidenced by the …indicia on the form. Explicit wording on the form that it purports to be a form prescribed under the Ontario Act is not required for subsection 48(15) to apply.

In 2011, and shortly before the third anniversary of the original assessment in 2008 of the taxpayer’s 2007 federal and Alberta return, the trustees of the taxpayer (“ADFT”) provided a waiver on form T2029 to CRA in order for CRA to grant it an extension (beyond that third anniversary date) for ADFT to make representations that it was resident in Alberta rather than Ontario. Early in 2012, the federal Minister issued a notice (styled as a Notice of “Reassessment”) reversing the Alberta tax in the 2008 assessment and assessing ADFT instead for Ontario tax.

S. 48(15) of the Income Tax Act (Ontario) (the “Ontario Act”) provided:

Every form purporting to be a form prescribed or authorized by the Provincial Minister shall be deemed to be a form prescribed by order of the Provincial Minister [effectively defined in s. 1(1) to be the federal Minister] under this Act… .

ADFT argued that this provision required “that the form itself must purport to be prescribed” for the provision to be operative (para. 31). Before rejecting this submission, Lederman J first found against a Crown argument that, as the 2008 assessment had not dealt with Ontario taxes, it was the 2012 “reassessment” which in fact was the original assessment of the taxpayer’s Ontario tax (so that the normal reassessment period did not start running until then). He stated (at para 17):

… If the original notice does not constitute notification of no tax payable in all provincial or territorial jurisdictions, then a taxpayer receiving such a notice, could be assessed for income taxes in any other province or territory indefinitely. …

He also indicated that it was contradictory to treat the same (2012) Notice as a reassessment of Alberta tax and as an original assessment of Ontario tax.

A purported Alberta trust which wanted to have more time to make submissions to CRA that it was not resident in Ontario provided a related waiver on the prescribed (T2029) federal form. When it was ultimately reassessed for Ontario income tax (with the previously assessed Alberta tax being reversed) it unsuccessfully argued that the waiver was invalid because the T2029 form did not refer to the fact that it was a prescribed form for provincial purposes.