Jayco – Tax Court of Canada finds that the taxpayer has no remedy in a costs award for LC fees paid to secure its GST/HST obligation until reversed

After its successful appeal of a GST/HST assessment, Jayco sought to include, in the costs recoverable from the Crown, the $1.4 million paid by it to JP Morgan in order to obtain a letter of credit to secure the GST/HST it owed until the assessment was reversed. In rejecting this claim, D’Auray J stated:

In essence, Jayco is submitting that the Minister ought to have exercised her discretion differently and not taken any collection action on the GST/HST assessed. …

This Court does not have jurisdiction to review the Minister’s exercise of that power—that jurisdiction rests with the Federal Court. …

The Rules are clear that disbursements will only be awarded if they are essential to the conduct of the proceedings. … The interest was not paid by Jayco to establish that the Minister’s assessment was incorrect … .

Neal Armstrong. Summary of Jayco, Inc. v. The Queen, 2018 TCC 239 under Tax Court Rules, Rule 147(3)(j).