Osnat Nemetz

The appellant taxpayer sought to challenge the Minister of National Revenue's discretionary decision under s. 247(10) of the Income Tax Act to deny a downward transfer pricing adjustment through an appeal of the associated reassessment to the Tax Court of Canada.

The majority held that the Minister's discretionary decision under s. 247(10) is qualitatively distinct from an 'assessment' within the settled meaning of that term, and falls outside the Tax Court's exclusive appellate jurisdiction; the Federal Court holds exclusive jurisdiction to judicially review such discretionary ministerial decisions pursuant to the Federal Courts Act.

Dow's argument that the decision could be appealed 'by necessary implication' as part of the assessment was rejected, as Parliament has consistently created express rights of appeal to the Tax Court where it intends that court to have jurisdiction over ministerial decisions.

The dissenters would have allowed the appeal, finding the Minister's mandatory exercise of discretion under s. 247(10) inextricably linked to the correctness of the assessment and reviewable in the Tax Court on a deferential standard.

Appeal dismissed with costs, Karakatsanis, Côté and Rowe JJ. dissenting.

The appellant, a fraternal benefit society and life insurer, appealed an assessment for its 2014 taxation year regarding the taxation of investment income.

The Minister reassessed the appellant to include World Surplus assets in its Canadian Investment Fund (CIF) and to exclude amounts in respect of its Accident and Sickness (A&S) Business.

The Tax Court allowed the appeal, finding that the appellant correctly included A&S Business assets and liabilities in computing its CIF, correctly designated investment property in respect of its A&S Business, and correctly excluded certain World Surplus assets that were not used or held in the course of carrying on an insurance business.

The applicants applied for judicial review of decisions by the Minister of National Revenue denying their request to file amended election forms under s. 85(7.1) of the Income Tax Act.

The applicants had engaged in a pre-sale reorganization that resulted in unintended tax consequences for minor beneficiaries due to the application of s. 120.4(5).

The Minister's delegate denied the request, characterizing it as impermissible retroactive tax planning based on principles of rectification.

The Federal Court allowed the applications, finding the decisions unreasonable as the delegate failed to explain the application of rectification principles to the statutory remedy of amendment and failed to address the CRA's own guidance on correcting unintended tax consequences.