Tax & Trade Blog

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TCC: NO EASY WAY TO PRE-PAY QUARTERLY GST

TAX AUTHORITIES WILL NOT AUTOMATICALLY APPLY SURPLUS TO INSTALLMENTS DUE

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Quarterly GST/HST installments are a persistent administrative headache for many business owners. However, a recent Tax Court of Canada (“TCC”) decision proves there are no easy shortcuts around these recurring compliance duties.

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PRIVILEGE AT RISK IN CRA RFI PROCEEDINGS?

FEDERAL COURT DECLINES PRIVILEGE REVIEW & ORDERS PRODUCTION TO CRA

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As discussed in our review of Federal Court’s (“FC”) 2025 pair of decisions in Shopify here and here, the Canada Revenue Agency (“CRA”) has judicial means to compel information from taxpayers through Requests for Information (“RFI”). These powers are usually subject to important limits, including solicitor-client privilege.

However, a recent decision from the FC shows that asserting privilege may not be enough to protect documents from disclosure. In Canada v. KPMG Canada LLP, 2026 FC 793, the FC considered a compliance application under section 231.7 of the Income Tax Act (“ITA”) – for which a parallel mechanism exists under section 289.1 of the Excise Tax Act (“ETA”) – and granted an order compelling production of more than 900 documents over which privilege was asserted.

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GST/HST REPRIEVE FOR TRAILING COMMISSIONS

CRA DELAYS GST/HST ENFORCEMENT ON MUTUAL FUND TRAILING COMMISSIONS

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As we have blogged here, the Canada Revenue Agency (“CRA”) previously announced that mutual fund trailing commissions paid by mutual fund managers to licensed dealers — and by dealers to their agents — would become taxable effective July 1, 2026.

However, in May 2026, through an updated GST/HST Notice 344, the CRA delayed enforcement of its new administrative position to January 1, 2028. This is a welcome development for mutual fund managers, dealers, and advisors, but industry participants should use the transition period to prepare for the new GST/HST treatment.

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SOLICITOR-CLIENT PRIVILEGE CAN BE LOST!

ONCA FINDS “DEEMED WAIVER” IN SUBSTANCE OF PLEADINGS

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Solicitor-client privilege generally entitles clients to seek and obtain legal advice without fear that those communications will later be disclosed – a foundational doctrine in the Canadian legal system.

However, a recent case from the Ontario Court of Appeal (“ONCA”) shows that in some cases, privilege may be lost where a party relies on its understanding of its legal position in its court pleadings – even without expressly referring to the legal advice it has received.

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JURISDICTION IN TAX DISPUTES TRICKY

INTERPRETATION OF APPEAL PROVISIONS CAN BE A COMPLICATED TASK!

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We have previously written about jurisdictional issues between the Tax Court of Canada (“TCC”) and Provincial Superior Courts here. A recent decision of the TCC – Desjardins v. the King, 2026 CCI 109 [Desjardins] – further illustrates the tricky nature of jurisdiction in tax disputes and that getting the forum correct is not a simple task.

In this update to our Tax Appeal Series on jurisdiction in tax disputes, we review the Desjardins decision with a view to highlighting the complicated task of statutory interpretation and its intersection with jurisdiction in tax disputes.