Créations Guimel – Federal Court applies the principle that the CRA “obligation of fairness in reaching a decision under the VDP program is minimal”

In October 2022, which was more than three years after receiving the taxpayer’s VDP application for its 2008 to 2017 taxation years (which reported income generated from the investment of the proceeds from a 2007 European sale transaction), CRA requested that the taxpayer’s authorized representative provide documentation regarding the 2007 sale, including an amended 2007 T2 return. Some of this information but not, for instance, the amended return, was then so provided.

CRA made various follow-up attempts and the last communication from the representative was in May 2023, when he indicated that the taxpayer was attempting to retrieve the requested documentation relating to the 2007 sale.

On August 1, 2023, CRA left a voicemail message (which the representative apparently missed) indicating that if the requested information was not provided, the VDP application would be closed as incomplete. After no further communication, this occurred in October 2023.

In denying the taxpayer’s request regarding judicial review of the October 2023 decision, Régimbald J indicated:

• The applicant itself effectively raised the importance of the 2007 transaction in its VDP application which related to the use of proceeds of that transaction. Accordingly, its argument that the VDP application should be limited to the taxation years 2008 to 2017, because those were the only taxation years for which CRA could grant relief under the VDP program given the 10-year limitation in s. 220(3.2)(b), was without merit.
• No evidence was adduced to demonstrate that the information on the 2007 taxation year was impossible to obtain, and no request was made by the applicant to the CRA to accept that such information could not be legitimately obtained.
• Given that “’the obligation of fairness in reaching a decision under the VDP program is minimal’,” the taxpayer had no legitimate expectation that CRA would provide yet a further (and “final”) extension in writing on August 1, 2023, before making a final rejection decision.

Neal Armstrong. Summary of Créations Guimel Inc. v. Minister of National Revenue, 2025 FC 814 under s. 220(3.2).