INCOME TAX
Practice
Limitation periods—Appeal from Federal Court decision (2004 FC 809) granting application for judicial review, declaring Canada Customs and Revenue Agency (CCRA) statute barred, pursuant to Crown Liability and Proceedings Act (CLPA), s. 32 or former Limitations Act, s. 45, from initiating or carrying through any action for collection against applicant (respondent herein) of any federal and provincial tax debt allegedly owing by respondent for 1990 and 1991 taxation years—Federal Court Judge therein found respondent’s request, before expiry of limitation periods, that losses from subsequent tax years be carried back, applied to 1990, 1991 taxation years, did not amount to acknowledgment of tax debt, extending six-year limitation period provided in CLPA, s. 32—With respect to collection by CCRA of part of tax debt owed to Government of Ontario, Judge found collection would be beyond two-year limitation period set out in former Ontario Limitations Act, s. 45(1)(h)—Appeal allowed—Ten-year limitation period recently set out in Income Tax Act (ITA), s. 222 applicable with respect to federal tax (Crown had not raised this argument in Federal Court)—ITA, s. 222 amply clear so as to rebut any presumption against retroactive application: C.I. Mutual Funds Inc. v. Canada, [1999] 2 F.C. 613 (C.A.)—Hearing before Federal Court proceeded in April 2004; Bill C-30, introducing above-noted amendment, receiving Royal Assent in May 2004; impugned decision rendered on June 4, 2004—ITA, s. 222(10) providing amendment applicable to any judgment made after March 3, 2004 declaring tax debt not payable by taxpayer because of limitation period ending before Royal Assent given—ITA, s. 222(10) deeming such tax debt to have become payable on March 4, 2004—Impugned judgment having been made on June 4, 2004, tax debt at issue herein deemed to have become payable on March 4, 2004, limitation period expiring on March 3, 2014—Limitations Act, s. 45(1)(h) only applicable to penal actions, not applicable herein—New Ontario Limitations Act, 2002, s. 3 expressly stating no limitation period in respect of fines, taxes, penalties—As Crown should have raised ITA, s. 222 before Federal Court, respondent awarded costs on appeal as against appellant—Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 222 (as am. by S.C. 2004, c. 22, s. 50)—Crown Liability and Proceedings Act, R.S.C., 1985, c. C‑50, ss. 1 (as am. by S.C. 1990, c. 8, s. 21), 32 (as am. idem, s. 31)—Limitations Act, R.S.O. 1990, c. L. 15, s. 45(1)(h)—Limitations Act, 2002, S.O. 2002, c. 24, s 3.
Gibson v. Canada (A-442-04, 2005 FCA 180, Décary J.A., judgment dated 13/5/05, 11 pp.)