The taxpayer in Howard v Canada (Attorney General), 2022 FC 1673, over-contributed to her TFSA. The CRA denied her request for relief on the basis that she had not made a “reasonable error” when she relied on advice from her financial adviser about her contribution room and that she had not withdrawn the excess contribution within a reasonable time even though the delay was arguably attributable to the pandemic.
The Court returned the matter to the CRA for a review by a different decision maker. Citing Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, the Court noted that a CRA decision must not only be justifiable, it must be justified as well. The CRA must provide reasons for its decisions so that the courts can assess whether there was “justification, transparency and intelligibility within the decision-making process” (at paragraph 86). The Court found that the CRA could not simply state that an error is unreasonable because it was caused by third-party advice (which is a matter between the taxpayer and the adviser according to the CRA decision-maker). This was a conclusion without reasons, especially in light of Connolly v Canada (National Revenue), 2019 FCA 161. Similarly, the CRA decision-maker, in written reasons, had essentially ignored the taxpayer’s justification for not removing the over-contribution sooner (the pandemic).
