Boguski – Federal Court of Appeal confirms rejection of attempt by CRA to use the expanded s. 174 application procedure
In 2013, s. 174 was expanded so that it could be used to request a determination by the Tax Court on questions involving a large group of unrelated taxpayers who entered into similar transactions with a third party. CRA sought to have the Tax Court make a determination as to the validity of Canadian development expense claims by a significant number of different taxpayers respecting their purchase of rights from a resource company. The Tax Court previously had directed that certain of the appeals proceed under the Court’s lead case rules. The Tax Court dismissed the s. 174 application on the basis, inter alia, that directing a hearing of the s. 174 question would be “significantly more expensive and time-consuming than proceedings that would otherwise occur under the Court’s Lead Case Rules.”
In dismissing the Minister’s appeal, Stratas JA stated that the “Tax Court has broad discretion to act or refuse to act under section 174,” that the “Tax Court was entitled to take into account issues of efficiency and procedural fairness,” and that “this Court must defer to such a factually suffused, discretionary finding.”
Neal Armstrong. Summary of Canada (National Revenue) v. Boguski, 2021 FCA 118 under s. 174(3).