Libicz – Federal Court suggests that a clear representation made by CRA officials within the scope of their authority as to an administrative process they will follow is binding

Not surprisingly, Elliott J found that CRA was not bound to follow a procedure in its Collections Manual that, by the time it actually implemented the action that the taxpayers complained about (merely withdrawing a certificate of taxes owing that CRA had filed under ETA s. 316 rather than permanently canceling it), had been amended by a subsequently-issued internal directive. Of particular interest is the way in which she rejected an argument of the taxpayers that “there was a legitimate expectation that CRA would follow their own policies and procedures as set out in the 2015 Manual.” She stated:

A legitimate expectation arises when a government official makes “clear, unambiguous and unqualified” representations within the scope of their authority to an individual about an administrative process that the government will follow: … Mavi, 2011 SCC 30 … .

Such representations will be considered sufficiently precise for purposes of the doctrine of legitimate expectations if, had they been made in the context of a private law contract, they would be sufficiently certain to be capable of enforcement: Mavi at para 69.

However, in applying this principle, she stated:

I agree with CRA that an internal policy that was rescinded at the time that the certificates were filed is not a representation that is sufficiently precise to constitute a binding contractual obligation. As such, a legitimate expectation did not arise.

Neal Armstrong. Summary of Libicz v Attorney General of Canada, 2021 FC 693 under ETA s. 316(2).