COVID-19 Tax Update: Comments from the Chief Justice of the Tax Court of Canada

On November 25, 2021, the Honourable Eugene P. Rossiter provided an update on behalf of the Tax Court of Canada at the Canadian Tax Foundation’s 73rd Annual Tax Conference.

The Chief Justice commented on administrative matters at the Court and identified some significant tax litigation trends. In general, he noted that the Court currently lacks the resources it needs to efficiently address the backlog of cases caused by the Covid-19 pandemic. Adding pressure on the Court are the trends toward longer trials, more adjournment requests, more written discoveries and more discovery-related disputes.

Personnel Updates

After a gradual process of re-staffing after the Covid-19 shutdown, all the Court’s support staff will be returning to the Court’s offices on a full-time basis within the coming weeks.

The Chief Justice also noted that there are presently three judicial vacancies at the Court and that progress is being made to fill them soon.

Improving Access to Court Services

The Court is in the process of transitioning from being a paper-based court to a digital court. It plans to have all its records digitized by December 2022 and subsequently offer e-trials by June 2023.

To provide faster and more efficient service to the public, the Court has requested from the federal government the creation of three prothonotary positions at the Court and additional courtrooms in Toronto, Hamilton and Ottawa.

Tax Litigation Trends

The Chief Justice made comments about significant tax litigation trends the Court has observed.

  1. Longer Trials

The Chief Justice noted that trials are becoming significantly longer. He expressed concern that this trend could negatively impact the Court’s ability to resolve tax disputes in a timely manner. Longer trials take up more Court time and resources, with a direct negative impact on access to justice for other litigants.

  1. More Adjournment Requests

He further noted that there has been a significant increase in requests to adjourn trials and that he does not believe this trend is strictly related to the Covid-19 pandemic.

  1. More Written Discoveries

Parties are more often choosing to conduct written discoveries instead of oral discoveries. In the Court’s experience, this is extending those parties’ litigation schedules by approximately six months. The Chief Justice expressed concern over how this trend is elongating the litigation process and indicated that the Court would be taking steps to limit this effect. In particular, litigants who opt to conduct written discoveries should be prepared to complete the process within a timeframe similar to that needed for oral discoveries.

  1. More Discovery-Related Disputes

Finally, the Chief Justice noted that there is a continuing yearly increase in disputes involving the discovery process. Specifically, the Court is seeing an increase in the number of motions related to refusals to answer questions and produce documents.

Prepared by: Chris Marta , Sarah Faber

Chris Marta is an associate practising in the firm’s Vancouver office. Chris Marta’s practice focuses on domestic and international tax planning for individuals, trusts and corporations. He also represents taxpayers in their disputes with the Canada Revenue Agency. Prior to… more »

Sarah Faber is an associate practicing in the firm’s Toronto office. Her practice focuses on tax litigation and taxpayer representation at every level and also includes tax planning for businesses, individuals, not-for-profits and charities. She is currently working on a… more »

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