Section 238

Williams J found that the Provincial Court erred in acquitting the accused for failing to comply with the Minister's requirement under ITA s. 231.2(1) and ETA s. 289(1) to file returns within 90 days. The onus was not on the Minister to prove, beyond a reasonable doubt, that 90 days was a reasonable time-limit, because whether the time limit is reasonable is not part of the actus reus of the offence (para. 44).

Subsection 238(1) establishes a strict liability offence, for which the accused may raise a defence of due diligence - it is in raising this defence that the taxpayer may call the reasonableness of the Minister's time-limit into question (para. 45).

The taxpayer was charged with six counts of failing to comply with demands to file returns within 90 days, in respect of 2001-2006. O'Byrne J. found that the taxpayer did not have a defence of due diligence. The charges were not laid until 10 months after the notice of requirement was personally served on the taxpayer, and the returns were not completed (they were not signed and just had the words "Nil" written on them). Although the taxpayer had suffered a stroke in 2006, O'Byrne J. noted (at para. 36) that "courts have rejected the submission that some attempts to comply, together with compassion, equate to due diligence."

The taxpayer failed to establish that he and his company had taken all reasonable steps to comply with the demands served upon them by Revenue Canada for the filing of returns in light of his lack of energy and firmness in dealing with his accountants both before and after the receipt by him of the demands.

The failure on each successive day to file a return, after demand, constitutes a separate offence under s. 238(1).

Where the Minister has already successfully laid a charge for failure to comply with a s. 231(3) demand for information, he is not precluded, following conviction for the first offence, from making a fresh demand, laying a charge and obtaining a conviction for failure to comply with the fresh demand. "Further demands by the Minister create fresh time periods within which the taxpayer is required to comply and fresh offences for non-compliance within those time periods for which he may be prosecuted."

S.238(2) establishes a strict liability offence.

When faced with the failure of the accused to file a return as required by the Minister pursuant to s. 231(3), the Minister then reiterates substantially the same demand upon the accused which is again met by the same failure to file a return, then for the purpose of s. 238(2), only one offence has been committed by the accused. Ambiguous penal provisions should be given an interpretation that favours the accused.

"[M]ens rea, in the traditional sense is not an essential ingredient of the offence of failing to remit money deducted from the wages of employees pursuant to Section 153." The requisite mental elements of the offence were established when it was shown that the respondent, in his capacity of secretary-treasurer and director of a company, did not exercise due diligence in ensuring compliance with s. 153, by not taking reasonable care to ensure that cheques issued to the Receiver-General would be honoured.