In an article published in the November 23, 2010 edition of the Toronto Star, Finance Minister Jim Flaherty pledged to widen the ability of a taxpayer to file a notice of objection and an appeal to the Tax Court of Canada. The pledge came after an individual’s appeal to the Tax Court of Canada was denied because he did not have any tax liability for the year in question. The taxpayer appealed to the Tax Court of Canada after CRA rejected his application for a disability certificate. The taxpayer sought the disability certificate to create a Registered Disability Savings Plan (RDSP).
Unlike the provincial Superior Courts, which are courts of inherent jurisdiction, the Tax Court of Canada is a statutory court whose jurisdiction and ability to grant relief is limited to what is defined in certain statutes, such as the Income Tax Act. This means that the Tax Court of Canada’s jurisdiction is limited to items defined by the Federal Government in those relevant statutes. Currently, taxpayers can only file a notice of objection to a particular notice of objection. However, a taxpayer cannot object to a “nil assessment”. Since the taxpayer could not file a valid notice of objection to the nil assessment, the Tax Court of Canada had no jurisdiction to hear the case, leading to the harsh outcome for this taxpayer.
I fully support an expansion of the Tax Court of Canada’s jurisdiction and I look forward to Mr. Flaherty’s proposed amendments to the Income Tax Act.