Ahamed – Federal Court of Appeal finds that the Crown could not be compelled to explain an early Finance analysis of the TFSA proposals

A TFSA, which had been assessed on the basis that its securities’ trading was a business, had obtained, pursuant to an Access to Information request, a Finance table (prepared before the release of the TFSA legislation) comparing the treatment of an RRSP and the then-proposed “LSP” (an initial version of the TFSA), including a cryptic reference to non-exemption of income from an unrelated business. The taxpayer posed various written questions under Rule 113 regarding the table, including whether it reflected an intent that related business income was to be exempted.

After having canvassed a number of authorities, including quoting the admonition in Pepper v. Hart that a court should “be very cautious in opening the door to the reception of material not readily or ordinarily accessible to the citizen whose rights and duties are to be affected by the words in which the legislature has elected to express its will,” and before confirming the dismissal by Pizzitelli J of the taxpayer’s motion to compel answers to these and other questions, Locke JA stated:

In the end, though there are good reasons to be reluctant to consider non-public documents in the exercise of statutory interpretation, it is difficult to state unequivocally that such documents could never be relevant. The better question is whether the documents in question in the present appeal have an institutional quality such that they could represent the government’s position concerning the legislation at issue. If not, such documents are not relevant.

The implication may be that because it would have been reasonable for Pizzitelli J to consider that the preliminary thinking of Finance was not part of the final background package that accompanied the enactment of the TFSA legislation, the table (and more background on it) would not be admissible. Locke JA also found that Pizzitelli J had not made reviewable errors in refusing to order production of unredacted copies of various other requested internal documents – and, in this regard, he agreed with Pizzitelli J’s application of the view “that earlier drafts of a final position paper do not have to be disclosed, and … that even where relevance is established, the Court has a residual discretion to refuse document production.”

Neal Armstrong. Summary of Ahamed v. Canada, 2020 FCA 213 under Tax Court of Canada Rules (General Procedure), s. 116(2).