Héroux – Quebec Court of Appeal finds that ETA s. 296(2.1) requires the acceptance of late refund claims

The taxpayer, who was not a registrant, constructed various new rental units in 2014 and 2015. After the expiry of the two-year period under the Quebec equivalents of ETA s. 257(1) for claiming input tax refunds (ITRs), and under ETA s. 256.2(7)(a)(iii) for claiming the new rental housing rebate (NRHR), the taxpayer filed QST returns in which he self-assessed QST on the fair market value (FMV) of the facilities when they were first rented out and claimed NRHR and ITR rebates, resulting in a net refund claim.

The ARQ denied the refund claims on the basis that the two-year periods for making such claims had expired. Did s. 30.5 of the Tax Administration Act (Quebec) require the ARQ to take such refund claims into account when assessing, given that para. 2(a) of that provision stipulated that such requirement did not apply where "a claim was made and not refused in respect of the refund before the day on which the Minister made the assessment"?

In finding that the 2(a) exclusion only applied where a refund claim had previously been made within the two-year normal claim period, so that it did not apply to the taxpayer whose refund claims instead had been made late, Hamilton JCA stated:

The [2(a)] exception aims to prevent double refunds: if the person has a refund claim that is pending at the time of the notice of assessment, it must, in principle, proceed. However, in this case, the refund claims were late … [and] were doomed to fail from the outset due to the expiration of the deadline. … Those claims should not, however, prejudice his rights. In other words, exception (a) must be interpreted as being limited to claims that could be accepted and could lead to double refund, and thus only to those submitted within the two-year period prescribed by statute.

After referring to the “presumption of coherence between provincial and federal statutes in GST/QST matters,” Hamilton JCA indicated that it appeared that ETA s. 296(2.1)(b) should be similarly interpreted. He did not discuss ETA s. 296(4)(b), which also could be relevant to a late claim for ITCs.

Neal Armstrong. Summaries of Agence du revenu du Québec v. Héroux, 2025 QCCA 1167 under ETA s. 296(2.1)(b), s. 225(1) - B and Statutory Interpretation – Similar Statutes.