CIBC – Tax Court of Canada states that the continued correctness of PC Bank “now hangs by a thread” because of the narrowing of the financial services definition

After President's Choice Bank (the “2009 Decision”) determined that services supplied by a subsidiary of Loblaw (“PC Bank”) to CIBC were exempt arranging-for “financial services,” the ETA definition was then retroactively amended (through the addition of paras. (r.4) and (r.5)) to narrow its scope. CIBC nonetheless applied for a refund of GST that PC Bank had commenced charging to it (for subsequent periods) on the basis that the supplies made continued to be exempt. In connection with its appeal of the CRA denial of these rebate claims, CIBC brought a motion for its appeal to be allowed on the basis that the substance of the supply was already determined in the 2009 Decision.

In dismissing the motion on the basis that res judicata (and, in particular, issue estoppel) did not apply, Hogan J first found that the CIBC appeal did not raise the same issue as in the 2009 Decision since the scope of the financial services exemption had “been narrowed by virtue of these new exclusions” in paras. (r.4) and (r.5), and further stated:

The judgment … rendered [in the 2009 Decision] now hangs by a thread because of the new financial services definition. This is hardly a case where the principle of finality requires me to give effect to the issue estoppel and/or abuse of process doctrines.

Neal Armstrong. Summary of Canadian Imperial Bank of Commerce v. The Queen, 2022 TCC 26 under General Concepts – Res Judicata.