Subsection 23(2) of the Financial Administration Act provides that the Governor in Council may, on the recommendation of the appropriate Minister, remit any tax or penalty, including any interest paid or payable thereon, where the Governor in Council considers that the collection of the tax or the enforcement of the penalty is unreasonable or unjust or that it is otherwise in the public interest to remit the tax or penalty.
Subsection 23(2.1) expands this discretion to all other debts owing to Her Majesty, including accrued interest.
The use by Parliament of the word “considers” shows that the Governor in Council must weigh a variety of factors and thus must enjoy a broad discretion. Further, the purpose of the legislation is that the Governor General in Council shall determine whether the remission is “in the public interest”. The reference to this notion, as well as the wording of the provision, tends to indicate that Parliament intended to give the competent Minister and his officials a broad discretion.
In determining the merits of a request for a recommendation, the Canada Revenue Agency (“CRA”) has established the Remission Guidelines as internal administrative guidelines setting out the criteria to be considered. The CRA takes the position that a recommendation is “generally” limited to four situations:
- Extreme hardship;
- Incorrect action or advice by the CRA;
- Financial setback combined with extenuating factors; or
- The unintended result of legislation.
In the within application, we are seeking a remission order on the basis of
- Extenuating Circumstances;
- Unintended Results of Legislation; and
- Incorrect Action by the CRA.
It should be noted that these guidelines only serve to give officials broad limits, with supporting examples, and to explain the procedure to be followed.
Each remission request is considered on its own merits to determine whether collection of the tax or enforcement of the penalty is unreasonable or unjust, or if remission is in the public interest, in accordance with the broad terms set out in section 23 of the Financial Administration Act.
If you are interested in seeking a remission order please give us a call or contact us via our website to see if we can help.
This posting provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All taxation situations are specific to their facts and will differ from the situations in the articles and postings. If you have specific legal questions you should consult with a lawyer.