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Summary

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Charter of Rights - Taxation - Assessments - Penalties - Misrepresentation of a tax matter by a third party - Whether an individual assessed a penalty under s. 163.2 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), is entitled to the rights guaranteed by s. 11 of the Canadian Charter of Rights and Freedoms - Whether the requirement that a notice of constitutional question be served on the attorneys general is a matter going to the jurisdiction of the court to consider the constitutional issue - Application of R. v. Wigglesworth, [1987] 2 S.C.R. 541, and Martineau v. M.N.R., [2004] 3 S.C.R. 737, 2004 SCC 81.

The Minister of National Revenue assessed against Ms. Guindon, the appellant, penalties under s. 163.2 of the Income Tax Act in the amount of $546,747, for false statements she made in the context of a charitable donation program. The Minister took the position that Ms. Guindon participated in, assented to or acquiesced in the making of 135 tax receipts she knew, or would reasonably be expected to have known, constituted false statements that could be used by participants in the donation program to claim an unwarranted tax credit under the Income Tax Act. Ms. Guindon appealed the assessment. She argued, among other things, that the third party penalty imposed under s. 163.2 of the Income Tax Act is a provision with true penal consequences and therefore falls within the ambit of s. 11 of the Canadian Charter of Rights and Freedoms. Accordingly, she claimed she should have been entitled to the fundamental substantive and procedural legal rights for which that section provides, such as the right to be presumed innocent, which would raise the burden of proof from proof on a balance of probabilities to proof beyond a reasonable doubt. The Tax Court accepted Ms. Guindon’s argument and vacated the assessment. The Court of Appeal reversed that decision.

Lower Court Rulings