On March 30, our Tax team published a tax bulletin on Canadian and Québec tax measures announced by various government levels. Among these measures, the question of different time limits applicable to the contestation of a notice of assessment both at the level of objection and on appeal to the courts.

On that date, the measures taken by the federal entities were known, but those of Québec were not. They are now.

Furthermore, on April 17, the Tax Court of Canada (TCC) updated its Practice Direction and Order.

This bulletin therefore updates the relevant information concerning the contestation of a notice of assessment.

Federal

Processing of files during the COVID-19 pandemic

Objections related to the right of Canadian taxpayers to benefits and credits have been identified as a critical service that will continue to be provided during the COVID-19 pandemic. Therefore, there should be no delay in dealing with these objections.

As for the other cases currently being handled by the Appeal Division, the Canada Revenue Agency (CRA) is currently holding these files in abeyance. At this time, the CRA is announcing that no collection action will be taken with respect to these files.

Filing of a notice of objection with the CRA

For notices of objection that must be filed since March 18, the CRA has announced that the time to file a notice of objection has been effectively extended to June 30, 2020. On the other hand, the time limit for filing a notice of objection to an assessment issued on or after April 2, 2020 is not affected by these measures since it ends after June 30, 2020.

In addition, it is not extended by these measures since they do not have the effect of suspending the time limit for filing a notice of objection.

Filing of a notice of appeal with the TCC

On April 17, 2020, the TCC released a Practice Direction and Order announcing that all sittings and conferences calls scheduled between March 16, 2020 and May 29, 2020 inclusively are cancelled. The TCC and its offices will be closed until further notice.

The TCC also announced that it is suspending, from March 16, 2020 to the day that is 60 days after the TCC reopens for the transaction of business, the time limits provided for in the TCC Rules and any TCC orders and directions made prior to March 16, 2020.

The TCC also orders that all notices of appeal filed during the period beginning on March 16, 2020 and ending on the sixtieth day following the possible reopening of the TCC and its offices be treated as including an Application for Extension of Time to Appeal brought on the exceptional grounds that the COVID-19 pandemic and the closure of the Registry prevented the timely filing of a notice of appeal.

The TCC will be very flexible in applying its rules considering the circumstances of the current crisis. In this regard, upon being advised of this fact by the Registry when served with a notice of appeal, the Respondent will be asked to confirm that the appeal has been filed:

  1. in a timely manner and no extension is necessary;
  2. after the statutory deadline but that the Respondent consents to the application; or
  3. after the statutory deadline and that the Respondent opposes the application.

The time limits for filing a notice of appeal relating to notices of assessment or reassessment in respect of income tax and GST continue to apply. Thus, these notices of appeal must be filed electronically or by fax. The parties are then exempted from producing a paper version of their documents and procedures. When no prescribed time limit is applicable, taxpayers are requested to wait until the ICC resumes its operations.

Québec

Processing of files during the COVID-19 pandemic

On March 18, 2020, Revenu Québec announced the measures applicable to the files currently active within its organization. For Revenu Québec, all files considered to be priority, that is to say files relating to a refund request, tax credit or other files that may allow taxpayers to receive a sum of money, will be processed by the different directions. Thus, whether at the audit, objection or collection level, Revenu Québec will process files in which the requests are aimed at providing the taxpayer with a sum of money.

As for the rest, all files are suspended during the health emergency period. Thus, in principle, no collection measure will be taken, no audit or objection file will be processed by Revenu Québec.

Filing of a notice of objection with Revenu Québec

On March 27, 2020, Revenu Québec announced in a press release that the time limit for "administrative tax actions" was postponed to June 1, 2020. However, no other details were provided in this press release regarding the time limits for filing notices of objection. This question is now clarified. On March 31, 2020, Revenu Québec announced flexibility measures for citizens and businesses.

In these measures, Revenu Québec announces that the end of the 90-day period for filing an objection that expires in the period beginning on March 15, 2020 and ending on June 29, 2020 is postponed to June 30, 2020. An objection for which the time limit to file an objection would normally end during this period is therefore postponed to June 30, 2020. On the other hand, the time limit for filing an objection with respect to an assessment issued on or after April 1, 2020 is not affected by these flexibility measures since it currently ends after June 29, 2020.

Filing of a notice of appeal with the Court of Québec

On March 15, 2020, the Chief Justice of Québec and the Minister of Justice of Québec issued an order (2020-4251) which suspends the time limits for prescription until the expiry of the health emergency period. In addition, the Bulletin of March 31, 2020 confirms that the 90-day time limit for filing an appeal with the Court of Québec from an assessment under section 93.1.13 of the Tax Administration Act is suspended by virtue of this order until the expiry of the health emergency period. The time limits to file an appeal which had not expired on March 15, 2020 will therefore start to run again at the end of the health emergency period. Taxpayers will have to make sure to follow up on renewals of the state of health emergency in order to know exactly when it will expire and to correctly calculate how many days were left to run on their time limits to file an appeal on March 15, 2020 and therefore determine when their time limit to file an appeal will expire after the end of the health emergency period.

Recommendations

The time limits for filing notices of objection with the CRA as well as Revenu Québec and appeals from assessments to the Court of Quebec must therefore be made taking into account these new measures and the facts of each case. Preparing and filing notices of objection and notices of appeal to the Tax Court of Canada within the usual prescribed time limits and preparing your notices of appeal now so that you are ready to file them as soon as the Court of Québec will resume normal operations remain the best option in the current circumstances in order to avoid jeopardizing a right of objection or appeal.