Jacques Bernier

The appellant trust appealed from a summary judgment motion dismissal regarding a reassessment of provincial income tax under the Ontario Income Tax Act for the 2007 taxation year.

The central issue was whether waiver form T2029, a prescribed form under the federal Income Tax Act, operated to waive the limitation period for reassessing Ontario income tax.

The appellant argued that T2029 had never been prescribed for Ontario purposes and that government advice calling into question its prescription status prevented the waiver from operating.

The Court of Appeal upheld the motion judge's decision, holding that section 48(15) of the Ontario Act deems any form purporting to be prescribed by the Provincial Minister to be a prescribed form unless called into question by the Provincial Minister.

The court found that T2029 clearly purports to be a prescribed form and had not been called into question by the appropriate authority.

The Aubrey Dan Family Trust (ADFT) brought a summary judgment motion to allow its income tax appeal for the 2007 taxation year and vacate a reassessment issued by the Minister of Finance.

The motion focused on whether the reassessment was issued outside the statutory limitation period and, if so, whether the limitation period was properly waived.

The court found that the original notice of assessment triggered the normal reassessment period, which expired before the reassessment was issued.

However, the court also found that the T2029 waiver form signed by ADFT was valid under the Ontario Income Tax Act, deeming it a prescribed form and thus effectively waiving the limitation period.

Consequently, ADFT's motion for summary judgment was dismissed.

A corporation incorporated in the British Virgin Islands appealed Ontario tax reassessments requiring it to include interest received from a related Canadian company as taxable corporate income under the Corporations Tax Act.

The interest arose from specialty debt instruments issued as part of a corporate tax planning structure intended to replace retained earnings with intercompany borrowings.

The court considered whether the interest constituted income from a business carried on in Canada, whether the Ontario General Anti-Avoidance Rule applied, and whether the income triggered corporate minimum tax.

Relying on the Court of Appeal’s decision in Inter-Leasing, the court held the interest was income from property rather than business income and therefore not taxable under the applicable provisions.

The GAAR did not apply and the corporate minimum tax regime was also inapplicable.