CNG Producing Co. v. Provincial Treasurer (Alberta), 2002 DTC 7537 (Alta CA)

amendment clearly intended to be retroactive

An amendment that was stated to apply "to taxation years beginning after December 31, 1980" and that was enacted in 1997 clearly was intended to apply retroactively and, therefore, the presumptions that applied, in case of ambiguity, against retroactive operation of a statute and against interference with vested rights had no application. Further, the taxpayer's position was not advanced by it having commenced litigation based on the state of the law prior to the introduction of the amendment. "If an enactment operates retroactively, as it does in this case then, by definition, it applies to pending litigation." (p. 7543)

The Queen v. Corbett, 99 DTC 5624, 1999 CanLII 9367 (FCA)

presumption against interference with vested rights

Rothstein J.A. applied (at para. 79, and quoting from Morguard Properties Ltd.. v. City of Winnipeg, [1983] 2 S.C.R. 493, at p. 509) "the strong and well established presumption in statutory interpretation that the legislature does not intend to 'abolish, limit or otherwise interfere with the rights of subjects'".

Hokhold v. The Queen, 93 DTC 5339, [1993] 2 CTC 99 (FCTD)

A retroactive amendment to s. 110(1)(f)(iii) of the Act was not contrary to ss.7 and 15 of the Charter.

Roseland Farms Ltd. v. The Queen, 92 DTC 6417, [1992] 2 CTC 67 (FCTD)

The enactment of the current version of s. 179, which affected procedures to be followed following its enactment, did not represent retrospective legislation.

First Fund Genesis Corp. v. The Queen, 91 DTC 5361, [1991] 2 CTC 14 (FCTD)

In finding that s. 194(4.2) had a retroactive effect, Joyal J. stated (p. 5369):

"Although there may be a presumption that statutes are not intended to be retrospective or retroactive in their application, such a presumption must give way when the language of the statute and the context in which the statute was enacted dictate that a retroactive effect be given to it."

Placer Dome Inc. v. The Queen, 91 DTC 5115 (FCTD)

change prejudicial so that presumption applied

In finding that a 1984 amendment to the Act should not be interpreted so as to give the Minister the ability to reassess a taxation year of the taxpayer which previously had been statute barred, MacKay J. stated (p. 5122):

"The presumption against retrospective application is ignored where the statute is deemed beneficial in its effects, or where it is merely procedural without affecting substantive interest, or where, within comparatively narrow limits it is deemed to be enacted to protect special public interests. The legislation here in question, in my view, fits none of those categories. Rather, if deemed to apply to past events its effects are primarily prejudicial or adverse to the substantive interest of the taxpayer, and the presumption against retrospective application applies."

Aluminium Enterprises Ltd. & Ors. v. The Commissioners of Income Tax, [1985] BTC 550 (PC)

"While it is always open to a sovereign Parliament to change tax rules for the future, and even to do so retrospectively provided that the requisite intention is made clear, one intention not readily to be attributed to the legislature is that of disturbing legitimate expectations upon the faith of which development companies had earlier made irrevocable elections not to claim initial allowances."

Laurentide Rendering Inc. v. The Queen, 84 DTC 6153, [1982] CTC 400 (FCTD), aff'd 88 DTC 6331, [1988] 2 CTC 200 (FCA)

Legislation was not retrospective merely because it took into account an event that took place prior to its enactment (namely, an expropriation), when it applied only when a subsequent event occurred (namely, the expropriation proceeds becoming "receivable").

Davis v. The Queen, 80 DTC 6056, [1980] CTC 88 (FCA)

The fact that capital appreciations that have accrued to the end of taxation year 1 may be initially exempt from capital gains tax in year 1 does not mean that the taxpayer has a vested right to be protected against retroactive legislative changes taxing those accrued gains.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 48 - Subsection 48(1) 91

Beique v. The Queen, 78 DTC 6452, [1978] CTC 646, aff'd 81 DTC 5050 [1981] CTC 75 (FCA)

The community of movables and acquests established in Quebec in 1971 was held not to have retroactive effect to the date of the taxpayer's marriage in 1939 in light of "a fundamental principle of law that, unless otherwise stated, an enactment is presumed not to have retroactive effect" and the consideration that "from a practical standpoint, giving a new regime acquired later in life retroactive effect to the date of marriage would plunge society into a state of chaos."

Agnew Estate v. The Queen, 78 DTC 6237, [1978] CTC 351 (FCA)

The principle was applied that "a statute should not be construed so as to have a greater retrospective operation than its language renders necessary."

Barkman Developments Ltd. v. MNR, 67 DTC 5227, [1967] CTC 325, briefly aff'd 67 DTC 5306 (SCC)

In finding that s. 138A(2) of the pre-1972 Act, which was assented to on December 5, 1963 and made applicable to 1964 and subsequent taxation years (including the taxation years of the taxpayers ending on February 29, 1964), was not retrospective, Cattanach J. stated (p. 5229):

"[s.138A(2)] does not purport to change the tax payable by the appellants in their 1963 and previous taxation years. That is the appellants' vested right. If an Act provides that as at a past date the law shall be taken to have been that which was not then that Act would be retrospective. That is not the present case. Retrospective operation is one matter. Interference with existing rights is another. There is a presumption that an Act speaks only as to the future, but there is no corresponding presumption that an Act is not intended to affect existing rights. Most Acts of Parliament do just that."

Procureur Général du Canada v. La Compagnie de Publication La Presse, Ltée, 66 DTC 5492, [1967] S.C.R. 60

presumption against retroactivity

"[G]enerally speaking, a law is not to be interpreted as having a retroactive effect unless it contains express words or there is the plainest implication to the contrary effect."

See Also

Chevron Australia Holdings Pty Ltd v Commissioner of Taxation, [2017] FCAFC 62

retroactive tax was constitutional if it could be judicially challenged based on the facts

The U.S. subsidiary (“CFC”) of the Australian taxpayer (“CAHPL) borrowed in the commercial paper market at a borrowing cost of about 1.2% with the benefit of a guarantee from their ultimate U.S. parent, and on-lent U.S.$2.45 billion of such funds under an unsecured Australian-dollar credit facility to CAHPL at about a 9% interest rate. CAHPL deducted such interest in computing its income for Australian purposes, and received tax-free dividends from CFC of most of CFC’s profits (based on the 7.8% spread).

The Commissioners initially denied much of the interest deductions by the Australian taxpayer (“CAHPL) for interest at a 9% rate paid to its U.S. subsidiary under the sui generis domestic transfer pricing (Division 13) rule. However, a new (Division 815) transfer pricing rule was subsequently enacted, but with retroactive effect to most of the tax years at issue. The Commissioners issued replacement assessments for three of the tax years in issue based on the Division 815 rule.

In rejecting a CAHPL submission that the assessments under the retroactive legislation were constitutionally invalid, Pagone J quoted extensively from MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 including the quotation therein of the statement by Dixon C.J. in Deputy Federal Commissioner of Taxation v. Brown that:

Although there is no judicial decision to that effect, it has, I think, been generally assumed that under the Constitution liability for tax cannot be imposed upon the subject without leaving open to him some judicial process by which he may show that in truth he was not taxable or not taxable in the sum assessed, that is to say that an administrative assessment could not be made absolutely conclusive upon him if no recourse to the judicial power were allowed.

and then stated (at paras. 143-4):

In MacCormick it was said that it must not only be possible to point to the criteria themselves, but also to show that the way in which they are applied does not involve the imposition of liability in an arbitrary or capricious manner. In Roy Morgan the majority explained that these passages, sourced from what had been said in Brown, established that compliance with the Constitution required that liability for tax not be imposed without leaving open to the taxpayer some judicial process by which the taxpayer may show that in truth the tax was exigible or not exigible in the sum assessed… :

Division 815-A does not impose an arbitrary or incontestable tax in the sense contemplated by the authorities. … That a person may not be aware at an earlier point in time what the criteria of liability may subsequently be made to apply to that earlier point in time does not make the legislation arbitrary or incontestable… .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) cross-border loan made on arm’s length terms would have benefited from a parent guarantee or other security 675
Tax Topics - Treaties - Income Tax Conventions - Article 9 cross-border loan interest improperly reflected lack of security 387

Ben Nevis (Holdings) Ltd. v. Revenue and Customs Commissioners, [2013] BTC 485, [2013] EWCA Civ 578

creation of new collection right did not entail retrospectivity

Before rejecting the taxpayer's submission that the enacting U.K. legislation for Article 25A of the Convention between South Africa and the U.K., which if it permitted the South African Revenue Service to collect tax debts arising prior to the coming into force of the Convention through the respondent (HMRC) of South African taxes, would thereby entail retrospective application of such legislation, Lloyd Jones LJ, in confirming the decision below, referred with approval (at para. 48) to:

the distinction drawn by Lord Rodger in Wilson v First County Trust (No. 2) [2004] 1 AC 816 at paras. 186 et seq., between retroactive operation of legislation and statutes making prospective changes to existing rights. In the present case the judge found that an enactment is not retrospective in any objectionable sense where the enactment is simply applied at a time after its commencement to a state of affairs existing at that time, even though that state of affairs came in to existence before the commencement.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions Vienna convention approach applies to non-signatories 207
Tax Topics - Statutory Interpretation - Revenue Rule 124
Tax Topics - Treaties - Income Tax Conventions - Article 26A new tax collection Article applied to old tax debts 228

Collins & Aikman Products Co. v. The Queen, 2009 DTC 1179 [at 958], 2009 TCC 299, aff'd 2010 DTC 5164 [at 7293], 2010 FCA 251

In an obiter indication that ss.152(1.11) and (1.12), pursuant to which the Minister had made a retroactive redetermination of paid-up capital, should likely be interpreted restrictively, Boyle, J. stated (at para. 28) that "instinctively, it seems that retroactive determinations, like retroactive tax legislation, should be avoided except in cases where the legislator has clearly and unambiguously set out its intent to impose or permit the tax to be imposed retroactively."

Locations of other summaries Wordcount
Tax Topics - General Concepts - Payment & Receipt payment by direction 142
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1.12) 190
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) limited scope of PUC provisions reflected a policy choice 289

MIL (Investments) S A v. The Queen, 2006 DTC 3307, 2006 TCC 460, aff'd 2007 FCA 236

Before going on to find that transactions engaged in by the taxpayer were not contrary to the general anti-avoidance rule notwithstanding subsequent retroactive amendments to that rule that expanded its potential application to transactions that the taxpayer had engaged in, Bell J. stated:

"Retroactive legislation, although within the power of Parliament is legal but undesirable. The inappropriateness of reassessing taxpayers who completed transactions in accordance with the law in force at the time of those transactions without any expectation of adverse retroactive effect is self-evident."

Upper Lakes Shipping Ltd. v. MNR, 92 DTC 2381, [1993] 1 CTC 2011 (TCC)

It was found that an amendment to s. 17(1), which replaced a requirement that loans made to non-residents have an interest rate of at least 5% by a requirement that the interest rate be the prescribed rate, should not be interpreted as having the retrospective effect of creating an obligation to increase the interest rate on existing loans to higher than 5%. Christie A.C.J. quoted Lambert J.A. who stated inter alia in Hornby Island Trust Committee v. Stormwell (1989), 53 DLR (4th) 435 (BCCA) that "... 'the legislature should not be presumed to have enacted a statute that treats those it affects, or some of them, not just adversely, but unfairly, with respect to acts they have undertaken in the past' ...".

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 17 - Subsection 17(1) 198

Administrative Policy

15 December 2021 External T.I. 2021-0907881E5 - Bill C-208 - Entry into Force

no "necessary implication” that amendments applied to dispositions before Royal Assent

Did the amendments to s. 84.1 pursuant to Bill C-208 apply to dispositions of shares that occurred in the 2021 taxation year but prior to the day of Royal Assent (June 29, 2021)?

CRA noted that Bill C-208 did not contain a coming into force provision, and stated:

In cases where an enactment is silent with respect to the particular day it comes into force, subsection 6(2) of the Interpretation Act provides that it is construed as coming into force at the end of the day before the day the enactment received Royal Assent … (June 29, 2021).

Regarding the particular question, CRA noted the presumption in Gustavson Drilling [1977] 1 S.C.R. 271 that “statutes are not to be construed as having retrospective operation unless such a construction is expressly or by necessary implication required by the language,” and then stated:

Bill C-208 does not contain express language that would require its application to a disposition of shares occurring before the day of Royal Assent and, in our view, the language in Bill C-208 does not require such application by necessary implication. … [T]he amendments to section 84.1 … apply only to dispositions that occur on or after … June 29, 2021 … .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(e) s. 84.1(2)(e) and s. 55(5)(e)(i) amendments apply to dispositions on or after June 29, 2021 317


Verchere, "Jurisprudence from Foreign Jurisdictions", 1992 Conference Report, pp.51:33-51:50

Discussion of the Decision in Carlton v. U.S., 972 F. 2d 1051 (9th Cir. 1992), where it was held that a retroactive amendment to a federal estates tax provision was not applicable to a taxpayer.