Case information

Taxation — Income tax — Offences — Sentencing — Judgments and orders — Interlocutory orders — Applicants convicted of making false or deceptive statements in claim for investment tax credit —Applicants each sentenced to fine on each count — Superior Court upholding convictions but entering conditional stay on second count and varying fine — Provincial Court of Appeal judge refusing leave to appeal — Whether Court of Appeal erred in applying criteria for granting motion for leave to appeal — Whether Court of Appeal erred in law in finding that there was no bona fide business relationship to support claim for credit — Whether case raises issues of public importance — Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 239(1.1).

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicants (Les Éléments chauffants Tempora inc. and its directors and shareholders, Maged and Shady Elhami) tried to claim an investment tax credit from the Canada Revenue Agency for scientific research and experimental development. The three applicants were convicted by a Court of Québec judge on two counts of making false or deceptive statements contrary to the Income Tax Act. The applicants were each sentenced to a fine of $662,147 on each count.

On appeal, the Quebec Superior Court allowed the appeal in part, but only to enter a conditional stay on the second count (because the same factual elements were common to both counts) and to vary the fines imposed on each applicant ($1,000,000 in total on the first count rather than $662,147 on each count). A Quebec Court of Appeal judge refused to grant the applicants leave to appeal from the Superior Court’s decision.