What is the Tax Court of Canada?

The Tax Court of Canada is the specialised federal court that hears appeals from federal tax assessments. The Tax Court was established by the federal Tax Court of Canada Act of 1983 (replacing the older Tax Review Board) and operates under that Act and the federal Tax Court Rules. The Tax Court has exclusive jurisdiction over disputes under the federal Income Tax Act, the federal Excise Tax Act (which includes the GST and HST), the federal Employment Insurance Act, the Canada Pension Plan, the Old Age Security Act, customs disputes, and several other federal tax statutes.

The Tax Court has about 30 judges based in Ottawa, with hearings held in cities across Canada. The Court has registry offices in Toronto, Montreal, Vancouver, Edmonton, Calgary, Halifax, Winnipeg, and elsewhere, and travels to hold hearings near the taxpayer's home. The Chief Justice of the Tax Court of Canada (currently Eugene Rossiter, since 2014) leads the court. Tax Court judges are appointed by the Governor in Council on the advice of the Prime Minister, after screening by the Independent Judicial Advisory Committees, and serve until age 75.

The Tax Court operates two procedural tracks. The Informal Procedure (for income-tax appeals up to $25,000 per year, GST appeals up to $50,000, and EI/CPP appeals) provides simplified, low-cost hearings without the strict rules of evidence. About 60 per cent of Tax Court appeals proceed under the Informal Procedure. The General Procedure follows more conventional civil-litigation rules and is used for larger or more complex disputes. About 40 per cent of Tax Court appeals proceed under the General Procedure.

The Tax Court hears about 2,000 to 3,000 appeals per year. Decisions can be appealed to the Federal Court of Appeal (under the General Procedure as of right on questions of law, with leave on questions of fact or mixed fact and law) and ultimately to the Supreme Court of Canada with leave. Recent major Tax Court decisions include the 2024 ruling on cryptocurrency tax treatment, the 2023 ruling on residency requirements for the principal-residence exemption, and many cases on the general anti-avoidance rule (GAAR). The Court operates alongside the Canada Revenue Agency's internal Notice of Objection process (the administrative appeal step that taxpayers usually must complete before going to the Tax Court).