After 35 years of practice in Tax and Trade, one thing I am sure of is that there are no “magic” answers for dealing with administrative delay by the Canada Revenue Agency (“CRA”) or the Canada Border Services Agency (“CBSA”).  

A recent decision of the Canadian International Trade Tribunal (“CITT”) underscores this problem, and leaves taxpayers and importers in some potentially hard situations when faced by governmental inaction.

Akzo vs. the CBSA

In the appeal of Akzo v. the CBSA, (AP-2022-042), an importer (the “Appellant”) submitted a request for re-determination of the value for duty (“VFD”) of its imported goods – as permitted under the Customs Act.

Although acknowledged by the CBSA in February of 2020, no CBSA decision was made for over 3 years!  Taking issue with the delay, the Appellant filed an appeal with the CITT in March 2023 seemingly seeking to overturn the CBSA’s deemed “negative decision” to re-determine the VFD.  The CBSA cross-appealed indicating that the CITT lacked jurisdiction to hear the matter prior to CBSA’s actual decision.

Ultimately, the CITT held that although the CBSA was obligated to handle the request “without delay” and that “non-decisions” (i.e., refusals to make decisions) by the CBSA could be appealed to the CITT in some limited circumstances, this was not such a case. 

In doing so, the CITT reviewed the relevant rules for deciding whether the “without delay” standard is breached – which involved taking account the facts of each case, including the needs of the particular appellant and the operational requirements of the CBSA.  However, the CITT then concluded that the “inherent complexity and intricacy of VFD matters” and the effect of the COVID-19 pandemic were enough to distinguish this case from precedent, thus ruling that the standard was not breached here.

Why do I Care?

What goes unsaid in this decision is the likelihood that had the importer wanted to actually spur the CBSA into action, it may have been advisable to bring an Application for Judicial Review directly to the Federal Court (i.e., seeking an application for mandamus requiring a CBSA decision on the request for reconsideration within a reasonable time).  (The Federal Court would have had the jurisdiction to move the CBSA forward!)

Alternatively, the importer might have been more responsive to CBSA’s informational request.

Takeaways

In my career I have seen CRA take 9 years to address a Notice of Objection and the Ontario Ministry of Finance take 13 years to deliver a Reply to a Notice of Appeal.  In both those cases, there were no easy answers for the taxpayers, and our advice remains the same in these situations:  be as responsive to requests for information, and work with the tax administrator to best address their needs.  Even if supervisorial action by a Court was called for, that should be the path of last resort, given the cost and difficulty one often has in convincing a Court to force administrative action on the part of the CRA, CBSA or other government entities. 

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