Citation: 2018 FCA 136
BONNYBROOK PARK INDUSTRIAL DEVELOPMENT CO. LTD.
MINISTER OF NATIONAL REVENUE
REASONS FOR JUDGMENT
Bonnybrook Industrial Park Development Co. Ltd. appeals from a decision of the Federal Court (2017 FC 642) which dismissed an application for judicial review of a decision of the Minister of National Revenue.
Bonnybrook is a private corporation that earns rental income and as such qualifies for a partial refund of tax when its income is distributed to shareholders as a dividend. Commonly referred to as a dividend refund, the refund is provided for in subsection 129(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) which aims to achieve tax neutrality in respect of passive income whether the income is earned directly by an individual or through a corporation.
One of the requirements of the dividend refund is that the corporation file a tax return within three years after the end of the relevant taxation year. Bonnybrook failed to file tax returns for many years and missed the deadline for the 2003 to 2011 taxation years, inclusive. It submits that this was due mainly to ongoing medical problems of its principal.
Bonnybrook sought to overcome this difficulty by applying for relief from the Minister with respect to the tax return filing requirement under the discretionary taxpayer relief provisions in subsections 220(2.1) and (3) of the Act. When relief was denied, Bonnybrook applied for judicial review in the Federal Court.
The Federal Court (per Campbell J.) dismissed the application for judicial review, except to grant some relief for interest on the consent of the parties. Bonnybrook has appealed from this decision to this Court.
The statutory provisions that are most relevant to this appeal are reproduced in an appendix to these reasons.
In February 2015, Bonnybrook took advantage of the voluntary disclosure program and disclosed unreported income by filing its delinquent tax returns. The voluntary disclosure program is designed to encourage taxpayers to voluntarily report previously undisclosed income and for this purpose it relieves interest and penalties.
The Minister issued notices of assessment pursuant to the voluntary disclosure on May 13, 2015. In the notices, Bonnybrook was advised that its claim for dividend refunds for the 2003 to 2011 taxation years was denied because the corporation had failed to satisfy the requirement to file tax returns within three years from those taxation years.
On May 6, 2016, Bonnybrook again applied for dividend refunds, this time pursuant to taxpayer relief provisions found in section 220 of the Act. Bonnybrook submitted that the Minister should grant the relief due to its principal’s medical condition, and the punitive double tax that results from missing the filing deadline. Three specific types of relief were requested:
Pursuant to subsection 220(2.1) of the Act, Bonnybrook sought a waiver of the dividend refund requirement to file corporate tax returns within three years.
To the same effect, pursuant to subsection 220(3) of the Act, Bonnybrook sought an extension of this three year deadline.
Pursuant to subsection 220(3.1), related relief with respect to penalties and interest was also sought.
The Minister’s response, which was to deny the request in its entirety, was set out in a letter from the Appeals Division of the Canada Revenue Agency (CRA) dated October 12, 2016. The relevant part of the letter reads:
Denied Dividend Refund:
You have requested under subsection 220(3) that the Minister exercise discretionary powers to waive or extend the requirement to file the corporation’s tax returns within three years for the purposes of dividend refund. Subsection 220(3) states, “The Minister may at any time extend the time for making a return under this Act”. Filing requirements and refund of overpayment of tax are governed by two different section of the Act. Subsection 150(1) of the Act sets out the tax return requirements and filing deadlines for taxpayers and Subsection 164(1) of the Act provides rules governing the refunds of overpayments of tax. It is our position that Subsection 220(3) is only applicable to the provisions of Subsection 150(1) and has no application to Subsection 164(1).
On October 21, 2016, Bonnybrook applied for judicial review of the Minister’s decision in the Federal Court. As mentioned earlier, the application was dismissed except for some relief of interest.
The Federal Court issued a single set of reasons for Bonnybrook and an unrelated taxpayer which had a similar issue. This appeal concerns only Bonnybrook.
The Federal Court decision
Before the Federal Court was an application to judicially review the Minister’s decision, which was set out in the CRA’s letter. Bonnybrook sought an order compelling the Minister to issue the dividend refunds and to cancel any related penalties and interest. The only relief granted by the Court was for interest, on consent.
With respect to the dividend refunds, the Court determined that there was a threshold question concerning the jurisdiction of the Federal Court to decide the matter. The Court concluded that it had no jurisdiction, as the matter involved an interpretation of the Act which was within the exclusive jurisdiction of the Tax Court of Canada (Reasons, paras. 22-25).
There are two main issues.
Did the Federal Court make a reviewable error in concluding that it did not have jurisdiction?
Did the Minister err in concluding that the Minister had no authority to exercise the discretion requested?
In this Court, Bonnybrook no longer seeks an order compelling the Minister to issue the dividend refunds. It merely seeks a determination that the Minister has the discretionary power to do so. Bonnybrook acknowledges that it was for the Minister, and not the Court, to exercise that discretion.
Did the Federal Court err regarding jurisdiction?
Both parties submit that the Federal Court made a reviewable error in concluding that it lacked jurisdiction to decide the judicial review application on the basis that the issue involves an interpretation of the Act which is within the exclusive jurisdiction of the Tax Court of Canada. I agree with the parties’ submissions.
With respect to the applicable standard of review, the question of jurisdiction is a pure question of law for which the standard of review is correctness (Pembina County Water Resource District v. Manitoba, 2017 FCA 92, 409 D.L.R. (4th) 719, at paragraph 35).
Applying this standard, the Federal Court was incorrect in deciding that the Tax Court of Canada has the exclusive jurisdiction to decide questions involving interpretations of the Act. The Tax Court’s jurisdiction is limited by statute, and in income tax matters its jurisdiction is generally limited to hearing appeals concerning the correctness of assessments. Its jurisdiction does not extend to judicial review of decisions of the Minister under discretionary relief provisions of the Act (The Minister of National Revenue v. JP Morgan Asset Management (Canada) Inc., 2013 FCA 250, 2014 D.T.C. 5001, at paragraph 90). Accordingly, the Federal Court does have the jurisdiction to decide this judicial review application.
In light of this error, it is appropriate for this Court to consider Bonnybrook’s application for judicial review afresh (Minister of Citizenship and Immigration v. Kandola, 2014 FCA 85, 372 D.L.R. (4th) 342, at paragraph 29).
Did the Minister err regarding authority?
It is necessary at the outset to consider the appropriate standard of review. Although this is an appeal from a decision of the Federal Court, the focus is on the decision of the Minister (Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36,  2 S.C.R. 559 at paras. 45-46).
The relevant general principle on standard of review is well known − a deferential, reasonableness standard presumptively applies if the issue concerns an interpretation of a decision-maker’s home statute (Dunsmuir v. New Brunswick, 2008 SCC 9,  1 S.C.R. 235, at para. 62), and see most recently Groia v. Law Society of Upper Canada, 2018 SCC 27 at paras. 46 and 175 and Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2018 SCC 31 at paras. 27-30.
In one post-Dunsmuir decision, the presumption was overcome and a correctness standard applied by this Court in circumstances not dissimilar to this appeal (Bozzer v. The Queen, 2011 FCA 186, 2011 D.T.C. 5106, at para. 3). In Bozzer, the Court relied on a pre-Dunsmuir decision also of this Court which held that a correctness standard should apply because the Minister did not have a greater expertise than the courts in interpreting the relevant provisions of the Act (Redeemer Foundation v. M.N.R., 2006 FCA 325, at para. 24, affirmed, without comment on this point, at 2008 SCC 46).
Bozzer can be explained as a case that applied paragraph 62 of Dunsmuir, namely where a pre-Dunsmuir authority has satisfactorily settled the standard of review, the reviewing court should simply adopt that standard of review.
However, nothing turns on the difference between reasonableness and correctness in this particular case. The Supreme Court has often said that reasonableness
“takes its colour from the context” and
“must be assessed in the context of the particular type of decision making involved and all relevant factors.” (See for example Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29,  1 S.C.R. 770 at para. 22.) In addition, as a matter of practice, when a reasonableness standard is applied, reviewing courts often afford administrators less leeway where they have not set out the rationales underlying the view of the statute they have reached, as in this case (Vavilov v. Canada (Citizenship and Immigration), 2017 FCA 132, 52 Imm. L.R. (4th) 1 at paras. 38-39 (leave to appeal granted by the Supreme Court of Canada on May 10, 2018)).
A second preliminary issue concerns two obvious errors on the face of the Minister’s decision.
The first error is that the decision refers to the refund in subsection 164(1) of the Act instead of the dividend refund in subsection 129(1). Subsection 164(1) provides a procedure for obtaining refunds of overpayments of tax. There are similarities between these two refund provisions, notably with respect to the requirement to file a tax return within three years, but Bonnybrook was not seeking a refund under subsection 164(1) of the Act.
The second error is that the decision fails to discuss one of the two forms of relief that Bonnybrook was seeking. The Minister’s decision deals with the request for an extension of time to file the return (subsection 220(3) of the Act) but it does not mention the request for a waiver of the filing requirement (subsection 220(2.1) of the Act).
At the hearing, both parties urged the Court to treat these errors as minor in nature that should be ignored. I would agree with this approach concerning the reference to the wrong refund section. The Minister was clearly notified that Bonnybrook was seeking relief with respect to the refund in subsection 129(1). In this computerized age of
“cut and paste,” this error is best explained as an oversight which should be overlooked. It is relatively clear that the Minister intended to refer to this provision.
I reach a different conclusion with respect to the second error. There is no evidence that the Minister gave any consideration to the request for a waiver pursuant subsection 220(2.1). In light of this, it is appropriate to remit the matter back to the Minister for consideration.
Bonnybrook submits that remitting the matter back unfairly protracts this proceeding, particularly since the Minister’s view is on this issue is generally known. I disagree that this result is unfair. Bonnybrook could have gone back to the Minister after the decision was issued to request a decision concerning the waiver. As it stands, there is no decision for a court to review concerning the waiver application.
Accordingly, the analysis below will only deal with the application for an extension of time pursuant to subsection 220(3) of the Act.
In deciding on this approach, I have taken into account the dissenting reasons of Justice Stratas. I share the concerns expressed by my colleague with respect to the reasons in the Minister’s decision. The Minister supplemented these reasons significantly by its submissions in this appeal. As Justice Stratas notes, the Supreme Court of Canada has recently commented on situations in which a court supplements the reasons in a judicial review application. In my view, it is appropriate in this case to decide the appeal with respect to subsection 220(3) by taking into consideration the Minister’s arguments presented at the hearing.
Applicable principles of statutory interpretation
The proper approach to statutory interpretation was described in Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54,  2 S.C.R. 601 at paragraph 10:
 It has been long established as a matter of statutory interpretation that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: see 65302 British Columbia Ltd. v. Canada,  3 S.C.R. 804, at para. 50. The interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the provisions of an Act as a harmonious whole.
I turn now to the main issue.
Did the Minister have the authority to provide relief?
The dividend refund provision in subsection 129(1) includes a condition that the taxpayer file a corporate tax return within three years after the end of the relevant taxation year. The legislation is clear on this point and it has been confirmed many times in judicial decisions involving taxpayers who have missed the deadline.
Bonnybrook does not take issue with this. Rather, it submits that the Minister has the authority under subsection 220(3) of the Act to extend the three year filing deadline under subsection 129(1).
As described in the CRA letter above, the Minister refused to grant the relief sought, stating briefly that
“Subsection 220(3) is only applicable to the provisions of Subsection 150(1) and has no application to Subsection 164(1).” Other than this conclusory statement, no reasons were provided.
This is not the first time that this issue has come before the CRA. The Court was referred to other letters of the CRA, spanning the period 2008 to 2014, in which it took the same position. (2008-026958, 2011-040570, 2011-042633, 2013-049942). The rationale for the CRA’s position is perhaps best set out in its latest letter (2013-049942):
… The provisions of 220(2.1) or 220(3) do not indirectly permit the Minister to issue a dividend refund when subsection 129(1) directly restricts the issuance of the dividend refund. Accordingly, it is our view that granting an extension of time to make a return of income using subsection 220(2) or (3.1) does not have the effect of eliminating the requirement in subsection 129(1) that the return of income be filed within three years of the end of the taxation year.
The CRA’s view expressed above is that the taxpayer relief provisions cannot affect a filing requirement which restricts the issuance of a dividend refund. The problem with this reasoning is that this is exactly what the taxpayer relief provisions are intended to do — enable the Minister to provide relief from strict filing requirements.
There is no question that the text, context and purpose of subsection 129(1) of the Act is to require a tax return to be filed within three years. This is not the end of the matter, however, as it is also necessary to consider the text, context and purpose of the taxpayer relief provision. Interpreted in this manner, subsection 220(3) gives the Minister a broad discretion to override strict filing requirements in other provisions.
Subsection 220(3) of the Act provides the Minister with a broad discretion to extend the time to file a
“return”. The provision is not new, as it can be traced back to the Income War Tax Act, 1917, S.C. 1917, c. 28. Given its long history, and its broad language, the reach of subsection 220(3) has no doubt expanded over time as new
“return” filing requirements have been enacted.
For example, the provision applies to any type of
“return,” which would include information returns that are required to be filed in various circumstances. It has also been applied by the Federal Court in respect of an income tax return filing requirement for non-residents under subsection 216(4) (Kutlu v. Canada, 130 F.T.R. 85,  4 C.T.C. 129 (F.C.)).
In its memorandum, the Crown submits that the waiver authority in subsection 220(2.1) does not apply to subsection 129(1) because the return requirement is a condition rather than a requirement. This argument was only with respect to the waiver authority in subsection 220(2.1) of the Act. In any event, it is worth noting that in Kutlu, above, an extension of time was granted under subsection 220(3) in respect of requirement that was essentially a condition.
It is also useful to note that the CRA has authorized waivers that are conditions to obtaining a benefit. Some examples are set out below.
The CRA has waived the filing requirement in subsection 8(10) of the Act which is a condition of obtaining a deduction for certain employment expenses (CRA Guide T4044 at p. 5).
The CRA has also waived the filing requirement in subsection 63(1) of the Act which is a condition of obtaining a deduction for child care expenses (CRA Income Tax Folio S1-F1-C2, para. 1.47).
In the past, the CRA had extended the time for filing research and development forms under subsection 37(11) which are a requirement to claiming R&D benefits. (See Alex Parallel Computers Research Inc. v. Canada, 157 F.T.R. 247,  2 C.T.C. 180.) This practice was later prohibited by an amendment to the Act in subsection 220(2.2).
Based on the text alone, subsection 220(3) provides the Minister the discretion to grant the relief that Bonnybrook seeks.
This interpretation also aligns with the context and purpose of taxpayer relief provisions such as subsection 220(3). From time to time, Parliament has enacted various measures to blunt the harsh effects of strict filing requirements in the Act. Some of these relieving provisions are specific to particular requirements and others are more general. There is no one size fits all for the type of relief that is granted. Sometimes the relief is granted automatically subject to payment of a penalty (e.g., subsection 85(7) of the Act), and in other cases the relief is subject to specific conditions (e.g., subsection 166.1(7) of the Act).
Subsections 220(2.1) and (3) are examples of relief measures which have broad application and give the Minister the authority to provide relief from filing requirements throughout the Act. The decision of the Minister regarding subsection 220(3)fails to give due regard to the breadth of this provision.
I now address specific submissions made by the Minister.
Counsel for the Minister submits that a proper contextual interpretation of subsection 129(1) requires one to take into account two unrelated provisions, subsections 152(4.2) and 164(1.5) of the Act. They are relief provisions that were enacted in 1994, with retroactive effect to 1985, and apply mainly to individuals.
Subsection 152(4.2) permits the Minister to issue a reassessment to reduce tax if a taxpayer applies for such relief within ten years. It is intended to allow for non-controversial adjustments in a taxpayer’s favour and it overrides the usual limitation periods for reassessments. The provision does not apply to corporations.
Subsection 164(1.5) of the Act is a companion provision which applies to refunds of overpayments of tax rather than reassessments. It allows for relief from the strict requirement in subsection 164(1) of the Act that a tax return be filed within three years, and enables the Minister to extend this deadline to ten years. Similar to the related provision in subsection 152(4.2), corporations are excluded from this relief.
The CRA’s policy concerning when discretion under the 1994 provisions will be exercised is set out in Technical Notes issued by the Department of Finance when the provisions were introduced. Generally, the policy is to grant relief as long as the Minister is satisfied that the taxpayer would otherwise be entitled to it. As illustrated in the Technical Note regarding subsection 164(1.5), below, no exceptional circumstances need be shown.
In most circumstances, a refund will be made to a taxpayer under this new subsection where the Minister is satisfied that it would have been made had the taxpayer’s return been filed on time … and that the resulting assessment would be correct in law.
It is not clear what led Parliament to enact the 1994 amendments, but their introduction corresponds in time with a decision of the Tax Court of Canada which is scathing in its rebuke of the harshness of the three year deadline to file a tax return in order to obtain a refund of an overpayment of tax: Chalifoux v. M.N.R., 91 D.T.C. 946 at p. 947,  2 C.T.C. 2243:
… This abrogation of a taxpayer’s right of ownership, one of the most fundamental rights in a democratic society, seems to me to be abusive on the part of the legislature and should be removed from the statute book, at least in its present form.
The significance of the 1994 amendments, counsel suggests, is that if Parliament intended that the Minister have the discretion to extend the three year deadline in the dividend refund provision, it would have done so expressly as it did in subsection 164(1.5).
In my view, counsel suggests a leap too far in suggesting that subsection 220(3) of the Act does not apply to dividend refunds in light of the 1994 amendments. In circumstances where a provision provides relief to taxpayers, such as subsection 220(3), the provision should be given effect unless it is quite clear that Parliament intended otherwise. Parliament has not done so in subsection 129(1), even taking into account subsections 152(4.2) and 164(1.5) of the Act. If Parliament had intended that the general relief provisions in subsections 220(3) not apply to subsection 129(1), it would have been an easy matter for Parliament to have provided for this explicitly.
Counsel for the Minister further submits that the three year deadline in subsection 129(1) is a practical and generous rule that is intended to provide finality.
I would agree that the filing deadline in subsection 129(1) is intended to provide some finality, but I would not agree that it was intended to be generous or override general taxpayer relief provisions. Filing deadlines in the Act are generally intended to be reasonable and provide some finality, but the Act also recognizes that strict filing requirements may result in unfairness in particular circumstances.
I would also comment that the legislative scheme contemplated by subsection 129(1) is quite different from the detailed scheme for filing notices of objection which included extensions of time that was recently considered by this Court in M.N.R. v. ConocoPhillips Canada Resources Corp., 2017 FCA 243, 2017 D.T.C. 5135. That case does not assist in the interpretation of subsection 129(1).
The Minister also submits that the consequences to Bonnybrook of missing the filing deadline are not as harsh as Bonnybrook suggests because the corporation has not necessarily lost the dividend refunds forever. The refund can be carried over to be used in future taxation years, subject to the computations provided for in subsection 129(1).
Bonnybrook asserts that in its particular circumstances it is very unlikely that it could ever recover the lost refunds in light of the computations in subsection 129(1). The Minister has not disputed this.
Finally, the Minister submits that an extension of time to file a return should not be granted because an extension was already granted to Bonnybrook under the voluntary disclosure program.
I do not agree. Even if Bonnybrook was previously granted an extension, which is not clear on the record, the extension was granted for the limited purpose of waiving interest and penalties. This is no reason to prohibit another extension for a different purpose in the Act.
For the reasons above, I have concluded that there is no principled basis on which to give subsections 129(1) and 220(3) of the Act the restrictive meaning suggested by the Minister. The Minister’s decision is both unreasonable and incorrect.
I would allow the appeal, set aside the judgment of the Federal Court, allow the application for judicial review, and set aside the Minister’s decision. I would refer the matter back to the Minister to consider Bonnybrook’s application for relief under subsections 220(2.1) and 220(3) in accordance with the principles in these reasons. I would also award costs to Bonnybrook both here and below.
“Judith M. Woods”
D.G. Near J.A.”
STRATAS J.A. (Dissenting reasons)
I have read my colleague’s reasons. I agree with her analysis and conclusions concerning the jurisdiction of the Federal Court to consider the application for judicial review. I also agree with her that the Minister’s reference to the refund in subsection 164(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) instead of the dividend refund in subsection 129(1), must be seen as a typographical error that can be overlooked—albeit a very careless one.
I also agree with my colleague’s reasoning concerning the Minister’s failure to deal with subsection 220(2.1) of the Act. I agree that this must be sent back to the Minister. As I shall explain, it is not for the Federal Court, as a reviewing court, and this Court, sitting on appeal, to do the work Parliament has assigned exclusively to the Minister. It is not for these Courts to interpret subsection 220(2.1) for the Minister. Under the Act, that is the Minister’s job.
On the Minister’s disposition of the taxpayer’s application for an extension of time under subsection 220(3), in substance the Minister has failed to do the work Parliament assigned to her. As was the case with the subsection 220(2.1) application, the Minister has not done her job. So, as we are doing in the case of the subsection 220(2.1) application, we should order the Minister to do her job concerning the subsection 220(3) application, including interpreting the subsection and giving reasons for it.
My colleague (at para. 33) shares my concern about the Minister’s underperformance concerning the subsection 220(3) application. But, unlike the subsection 220(2.1) application, she has gone ahead and interpreted subsection 220(3) for the Minister. Thus, my colleague’s proposed disposition of this application is different: she would send it back to the Minister for the limited purpose of applying to the taxpayer’s situation the interpretation of the subsection she has done for the Minister.
As her proposed disposition is different from mine and is supported by a majority of the appeal panel, my reasons are dissenting reasons.
The nature of this case
This is an administrative law case. We are to review the decision of the Minister, only one component of which is statutory interpretation. To be acceptable and defensible, the decision also has to meet minimum standards under administrative law. In this case, the Minister has fallen short of one of those standards, a rather fundamental one.
The problem with the Minister’s decision concerning subsection 220(3)
The Minister has asserted a position concerning subsection 220(3) but, except for referring to a couple of other sections, has not offered meaningful or coherent reasons in support of that position. In substance, we have only a bottom-line assertion without explanation.
In this Court, the submissions of counsel for the Minister effectively concede the inadequacy of the non-reasons offered by the Minister. In reality, the submissions were reasons that the Minister could have thought about and written up to support her decision but did not: a bootstrapping of the Minister’s decision after she became functus officio. This gives rise to all of the concerns sounded by the Supreme Court in cases such as Ontario (Energy Board) v. Ontario Power Generation Inc., 2015 SCC 44,  2 S.C.R. 147 and R. v. Teskey,  2 S.C.R. 267, 2007 SCC 25. But given how little the Minister had done, what else could counsel do?
My colleague’s response to this is to interpret subsection 220(3) herself in the course of conducting reasonableness review, in effect doing the job of statutory interpretation and reasons-writing that the Minister should have done. On this, for the reasons set out below, I decline to join her.
The applicable law
Following the hearing, we invited the parties to provide written submissions on the issue of adequacy of the Minister’s reasons and the decisions of the Supreme Court in Delta Air Lines Inc. v. Lukács, 2018 SCC 2, 416 D.L.R. (4th) 579 and Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, 417 D.L.R. (4th) 239, both of which were released soon after the hearing of this appeal. We have received and considered those submissions.
I accept that the Supreme Court has instructed reviewing courts that they are supposed to supplement the reasons of administrative decision-makers in some circumstances, in effect participating in the reasons-giving process: Delta at para. 23.
But there is a limit to our participation. Delta does not require us to figure out for ourselves the merits of the matter, decide the merits for the administrator, and then draft the administrator’s reasons. Instead, Delta underscores that administrators must still do their job. Delta declares (at para. 27) that
“reasons [given by the administrator] still matter” and play a
“vital role…in administrative law.” For good measure, Delta reiterates (at para. 24) the warning the Supreme Court sounded in Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61,  3 S.C.R. 654: namely that reviewing courts do not have carte blanche to draft reasons for the administrative decision-maker.
Alberta Teachers tells us that it is one thing for reviewing courts to interpret reasons in light of the record and conclude that—despite silence in the reasons on certain matters—the matters must have been considered and dealt with in a certain way. But it is quite another thing to draft the administrator’s reasons from scratch or to cross out portions of the administrator’s reasons and write our own.
In Delta (at para. 23), the Supreme Court instructs reviewing courts that
“[s]upplementing reasons may be appropriate in cases where the [administrator’s] reasons are either non-existent or insufficient” [my emphasis]. This covers off the situation where despite the administrator’s silence in the reasons on certain matters, the context shows that the matters must have been considered and dealt with in a certain way. One such situation is where we can see the dots in the administrator’s decision and their relationship, so we can draw the lines connecting them: Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431, 16 Imm. L.R. (4th) 267 at para. 11 per Rennie J. (as he then was), cited with approval in Delta at para. 28 and Williams Lake at para. 154. As Delta explains (at para. 28), the entitlement of a reviewing court to supplement reasons does not allow it to put its own dots on the page and connect them, thereby dictating reasons to the administrator.
Delta has clamped down on the seemingly open-ended standard in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62,  3 S.C.R. 708. Newfoundland Nurses was taken by some to go so far as to require reviewing courts to do the administrator’s job of deciding the merits and to draft reasons for it. Coming just one day after Alberta Teachers, not referring to Alberta Teachers, and so different from Alberta Teachers, Newfoundland Nurses caused some to query whether Alberta Teachers was good law: see, e.g., Lemus v. Canada (Citizenship and Immigration), 2014 FCA 114, 372 D.L.R. (4th) 567 at paras. 28-38. Now Delta has told us it is.
Effectively, Delta has also clamped down on Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd., 2016 SCC 47,  2 S.C.R. 293. In Edmonton East, the administrator did not interpret the taxation provision before it, let alone write reasons in support of any interpretation. But rather than sending the matter back to the administrator and telling it to do its job, the Supreme Court went ahead and did the administrator’s job itself. See Prof. Leonid Sirota,
“Law in La-La-Land: The Post-Truth Jurisprudence of Canadian Administrative Law,” in Double Aspect (blog), online: https://doubleaspect.blog/2016/12/04/law-in-la-la-land. See also Prof. Paul Daly,
“Reasons and Reasonableness in Administrative Law: Delta Air Lines Inc. v. Lukács” (2018) 31 Can. J. Admin. L. & Prac. 209 at p. 215, who writes that in Delta, Edmonton East was
“passed over in silence like an unloved distant relative.”
Delta is supported by a fundamental constitutional principle: Parliament’s law binds all, including administrators and courts: British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49,  2 S.C.R. 473; Canada (Minister of Citizenship and Immigration) v. Fisher-Tennant, 2018 FCA 132 at paras. 23 and 24. If Parliament has passed a law assigning a job to an administrator, the administrator should do it, not the reviewing court.
Delta is also supported by the well-established role of a reviewing court. A reviewing court is to review the work of an administrator, not do the work of an administrator. Parliament has made the administrator the merits-decider, not the reviewing court: Association of Universities and Colleges of Canada v. Canadian Copyright Licensing Agency (Access Copyright), 2012 FCA 22, 428 N.R. 297 at paras. 17-20; Bernard v. Canada (Revenue Agency), 2015 FCA 263, 479 N.R. 189 at paras. 17-19; Robbins v. Canada (Attorney General), 2017 FCA 24 at para. 17; Tsleil-Waututh Nation v. Canada (Attorney General), 2017 FCA 128 at paras. 85 and 87. Here Parliament has vested the responsibility of interpreting these provisions in this context to the Minister, not us: McLean v. British Columbia (Securities Commission), 2013 SCC 67,  3 S.C.R. 895 at paras. 33-34. Administrators and reviewing courts—each bound by law—must stick to the role Parliament has given them.
Two weeks after Delta, the Supreme Court released its decision in Williams Lake. There, it reaffirmed the principles in Delta.
The dissenting opinions in Williams Lake suggest that the majority failed to follow the principles in Delta and engaged in impermissible supplementing of the tribunal’s reasons (see paras. 141-146, 151-155, 206-207). But this criticism is directed to how the majority applied the principles in Delta; in no way did the majority mean to modify or disparage the principles themselves. When the Supreme Court’s application of principles differs from its statement of the principles, it is best for us to take our direction from the latter, not the former: Prof. Paul Daly,
“The Signal and the Noise in Administrative Law” (2017) 68 U.N.B.L.J. 68.
And surely in Williams Lake the Supreme Court—as a court of law mindful of the rule of law, the binding nature of law, and the importance of legal precedent—did not intend to depart from the principles it had painstakingly set out in Delta just two weeks before.
Application to the facts of this case
In the case before us, a law, the Income Tax Act, binds us all. In this law, Parliament has given the Minister a job to do: to look at subsection 220(3), interpret it, and decide on the taxpayer’s application. To comply with this law, the Minister at least has to grapple with these things.
But here the Minister asserted only a bottom-line position concerning subsection 220(3). The Minister’s reasons do not adequately disclose how she reached that position. Because of this, our ability to conduct reasonableness review is fatally hobbled: Leahy v. Canada (Citizenship and Immigration), 2012 FCA 227,  1 F.C.R. 766 at paras. 116-137. By not explaining her decision, the Minister is basically saying
“trust me, I got it right,” an assertion that impermissibly undermines this Court’s responsibility to engage in meaningful review: Fisher-Tennant, above at paras. 23-24. In the words of Dunsmuir v. New Brunswick, 2008 SCC 9,  1 S.C.R. 190 at para. 47, the Minister’s decision—an important one that effectively imposes a civil liability to the state—lacks transparency and justification.
In this case I have a deeper concern: I cannot conclude that the Minister has grappled with this matter and done her job.
Should I do the Minister’s job, interpret the subsections and write up the reasons the Minister should have written? No.
My job is judicial review of the Minister, not judicial impersonation of the Minister. I do not work for the Minister. I am not the Minister’s adviser, thinker, or ghostwriter. I am an independent reviewer of what the Minister has done.
In conducting review, I am entitled to interpret the reasons given by the Minister seen in light of the record before her. Through a legitimate process of interpretation, I can sometimes understand what the Minister meant when she was silent on certain things.
But faced with a silence whose meaning cannot be understood through legitimate interpretation, who am I to grab the Minister’s pen and
“supplement” her reasons? Why should I, as a neutral judge, be conscripted into the service of the Minister and discharge her responsibility to write reasons? Even if I am forced to serve the Minister in that way, who am I to guess what the Minister’s reasoning was, fanaticize about what might have entered the Minister’s head or, worse, make my thoughts the Minister’s thoughts? And why should I be forced to cooper up the Minister’s position, one that, for all I know, might have been prompted by inadequate, faulty or non-existent information and analysis?
The Minister should do the job Parliament assigned to her and her alone: to look at the relevant provisions, interpret them, and decide upon their meaning with an explanation that permits meaningful review.
Therefore, like my colleague, I would quash the Minister’s decision concerning the taxpayer’s application for an extension of time under subsection 220(3). But I would remit it to the Minister for full consideration and decision. I concur with the rest of my colleague’s proposed disposition.