Derek B. Brett

The corporate taxpayer appealed reassessments for the 2010, 2011, 2012, 2013, and 2015 taxation years.

The Minister disallowed deductions for management fees and professional fees related to a tax avoidance strategy and imposed gross negligence penalties.

The Tax Court of Canada dismissed the appeal, finding that the taxpayer made misrepresentations attributable to neglect or carelessness, justifying reassessment beyond the normal period.

The Court also upheld the gross negligence penalties, concluding the taxpayer was wilfully blind in claiming the deductions.

Finally, the Court found the professional fees were not incurred for the purpose of earning income from the business and were therefore not deductible.

The applicant sought judicial review of a decision by Health Canada to refuse him a security clearance under the Cannabis Regulations, which he required for a producer's licence.

The refusal was based on police reports alleging his involvement with an unauthorized cannabis dispensary and related illegal activities.

The Federal Court dismissed the application, finding that the decision-maker owed only a low level of procedural fairness, which was met when the applicant was provided with a detailed summary of the police information and an opportunity to respond.

The Court also held that the decision was reasonable, as the decision-maker had reasonable grounds to suspect the applicant's involvement in prohibited cannabis activities and his risk to public safety based on the police reports, despite the applicant's denials.