Tozer – Tax Court of Canada confirms that bankruptcy does not start the two year director’s assessment period running

Smith J confirmed that the appointment of a receiver upon a corporation’s bankruptcy did not cause the taxpayer to cease to be a director, so that the two-year time limitation for assessing director’s liability for unremitted corporate GST did not start running at that point. As to the due diligence defence, the taxpayer was required to take active efforts to pursue the timely remittance of the GST rather than relying on his CFO once he became aware of the corporation’s financial difficulty, which did not occur in this case.

The relevant ITA directors' liability provisions are essentially the same.

Neal Armstrong. Summaries of Tozer v. The Queen, 2018 TCC 56 under ETA s. 323(5) and s. 323(3).