CRA indicates in its draft VDP Circular that it intends to unlawfully fetter its discretion

In a draft revised version of its Information Circular on the Voluntary Disclosures Program (to become effective on January 1, 2018), CRA states that it will not provide any penalty relief other than for the gross negligence penalty, and no interest relief, where the taxpayer has disclosed major non-compliance. CRA will consider the occurrence of one or more of various listed markers to represent major non-compliance, including: large dollar amounts; multiple years of non-compliance; or a sophisticated taxpayer.

CRA has a statutory obligation to exercise its discretion under s. 220(3.1) to determine whether or not to grant interest and penalty relief having regard to the circumstances of each taxpayer, rather than being permitted to pre-announce narrow criteria for the provision of relief which it then applies rigidly (see TD Bank and Stemijon). If the announced criteria for refusing to provide relief (other than for the gross negligence penalty) are not rigid, that is only because they are too capricious and vague to qualify as such. That presumably will not improve the CRA legal position in seeking to follow the approach in the draft Circular.

Neal Armstrong. Summary of June 2017 Draft Information Circular - IC00-1R6 - Voluntary Disclosures Program under s. 220(3.1).