Christian Lemay

The appellant appealed a reassessment for its 2015 taxation year in which the Minister treated profit from the sale of a Gatineau office building as business income under the Income Tax Act rather than a capital gain.

Applying the Canada Safeway and related adventure-in-the-nature-of-trade factors, the Court held that the appellant acquired, developed, financed, and leased the property as a long-term investment and not with a primary or determining secondary intention to resell at a profit.

The Court relied on the multi-phase development plan, long-term financing, sustained leasing efforts, building choices consistent with long-term ownership, and the fact that the eventual sale followed an unsolicited offer and later changes in surrounding circumstances, including zoning issues affecting future phases.

The reassessment was therefore incorrect, and the profit remained on capital account.

The appeal was allowed with costs.

The appellant appealed a reassessment for her 2014 taxation year that included an unreported capital gain from the sale of a vacant lot and imposed a gross negligence penalty.

The appellant argued the lot was part of her principal residence.

The Tax Court of Canada found that the appellant did not own a housing unit at the time she owned and sold the vacant lot, so it could not qualify as a principal residence.

The Court also upheld the gross negligence penalty, finding the appellant was wilfully blind in not consulting her accountant about the tax treatment of the sale.

The appeal was dismissed without costs.

The appellants, holding companies owned by a majority shareholder, appealed reassessments adding taxable benefits to their income for the 2014-2017 taxation years.

The benefits related to life insurance premiums paid by an operating company, R3D, on policies owned by the appellants.

The Tax Court of Canada dismissed the appeals, finding that the payment of premiums by R3D constituted a taxable benefit to the appellants under subsections 15(1) and 246(1) of the Income Tax Act, as the appellants were enriched by not having to pay the premiums themselves.

The appellant, a residential construction company, failed to report and remit GST on two building sales in its 2011 return.

The Minister imposed a penalty under section 285 of the Excise Tax Act, alleging the omission was made knowingly or in circumstances amounting to gross negligence.

The taxpayer appealed, arguing it had no accounting knowledge and had reasonably relied on a chartered professional accountant and a third-party loan management company to handle its bookkeeping and tax filings.

The Tax Court of Canada allowed the appeal, finding that the taxpayer provided all necessary information to its accountant and did not act with wilful blindness or gross negligence.

The penalty was vacated.

The appellant trustee challenged a formal demand for information and documents issued by the Quebec tax authority (ARQ) to an out-of-province bank branch as beyond the ARQ's territorial jurisdiction.

The ARQ had sent the demand to a Calgary branch of the National Bank of Canada pursuant to s. 462(2) of the Bank Act, which requires notifications pertaining to bank customers to be sent to the branch of account.

The Court unanimously dismissed the appeal, holding that s. 462(2) — not s. 462(1) — applied to the demand, that the Bank Act does not treat a branch as a distinct entity from the bank for purposes of such a demand, and that complying with s. 462(2)'s procedural requirements did not render the ARQ's actions extraterritorial or ultra vires, since enforcement could only be effected in Quebec against a bank operating within the province.