Attendees
-
Tax Court of Canada (TCC)
- The Honourable Eugene Rossiter Chief Justice
- Louis-Alexandre Guay (LAG) Executive Legal Counsel
- Joel Kom (JK) Legal Counsel
- Christian Nielson (CN) Acting Deputy Registrar
Courts Administration Service (CAS)
- Darlene Carreau (DC) Chief Administrator
Justice Canada (DOJ)
- Jade Boucher (JB) Acting Assistant Deputy Minister, Tax Law Services Portfolio
- Daniel Bourgeois (DB) Senior General Counsel, Tax Law Services Portfolio
Canadian Bar Association (CBA)
- Mark Tonkovich (MT) – Committee Chair Blake, Cassels & Graydon LLP (Toronto)
- Neil Bass (NB) - Aird Berlis LLP (Toronto)
- Pooja Mihailovich (PM) Osler, Hoskin & Harcourt LLP (Toronto)
- Tamra L. Thomson (TLT) - CBA – Executive Director, Advocacy
I. Welcome and approvals
A. Introductory remarks
NB assumed role of Chair as MT was ill and attended remotely. NB welcomes the Committee to its first in-person meeting since 2019.
Committee congratulates Nathalie Goyette for her appointment to the Federal Court of Appeal. Justice Goyette previously served as Chair of this Committee and was an active participant in our work.
B. Review of Proposed Agenda
Accepted
C. Approval of Minutes of January 21 and June 13, 2022 meetings
Minutes of prior meetings approved, with minor corrections.
II. What’s new at the TCC
A. Current Operations (including continuing impact of COVID-19)
CJ: The Court is fully operational and has returned to the same level of scheduled hearings as prior to the pandemic. Ten or eleven Tax Court Judges sit weekly. The docket is prepared a year in advance. There was a recent change in the Judicial Administrator due to retirement. The Court continues to face the same limitations as before.
Virtual hearings and hybrid hearings have occurred, but there remains very little uptake and interest from the parties in having full virtual hearings. Virtual/hybrid hearings are limited to General Procedure appeals with representation by counsel. The Court aims to ensure the smooth running of hearings, but is significantly limited by a lack of resources, facilities, staff for backup and preparation. The Court has published guidance on virtual hearings on the Court’s website. Parties should consult the Tax Court’s specific guidance, noting in particular that requests for virtual hearings must be filed at least 10 days before the hearing.
There appears to be little ongoing impact from COVID. Court staff currently have a work-from-home policy based on a 4:1 in-office/from-home schedule. Working from home is complicated by lack of technology and support. The policy may be revisited once the Tax Court is fully digitized. Court staff continue to be masked in office facilities (but not necessarily in courtrooms).
B. Resignations, Appointments and Vacancies
Anick Pelletier was appointed Judge of the Tax Court, effective October 2022. She is undertaking the Court’s orientation and is expected to begin hearing cases as of March 1, 2023.
Two vacancies remain on the Court. It is unclear when these will be filled
Two Associate Judge positions were approved in the prior federal budget, with their jurisdiction to be determined by the Rules Committee. The expectation is that Associate Judges will reside in Ottawa and will preside over:
- Informal Procedure appeals
- Case Management and Settlement Conferences in Informal Procedure appeals
- General Procedure appeals of small amounts
- motions for adjournment
- interlocutory motions in less complex matters and uncontested applications
- some duty judge functions
- status hearings
- management of group appeals
- taxation of costs
This jurisdiction has been approved by the Rules Committee and a formal process is underway for the Rules to be adopted. There are currently six Deputy Judges, who are assigned to several cities to deal with the Court’s backlog.
Two of the Court’s Judges are eligible to become supernumerary, which would create two more vacancies.
C. Statistics and Trends / Current Inventory
The Court currently has 12,000 matters in its inventory. There was only a 20% hearing uptake since COVID (in 2022), with considerably more requests for adjournments/matters to be held in abeyance, and significant delays in file movement. Written discoveries are also affecting the age of the case inventory. The Court continues to closely watch the aging of its case inventory.
Another trend is that there have not been as many discovery motions as in the past.
D. Regional Matters / Issues
Group appeals: this issue has been brought to the attention of the DOJ repeatedly over the years, and there has been no development. CJ has received no response from the DOJ (after proposing in May 2022 that a solution be proposed within six months). Access to justice has been delayed in thousands of files. If no proposal is made by December 31, 2022, it is anticipated that group appeals will be held in abeyance indefinitely. The Court does not have resources to deal with these appeals.
There is also a lack of access to fundamental information for these appeals. The DOJ does not advise the Court when there is a group, the issue, the number of files at the CRA Appeals stage, the number of files at the CRA Audit stage, the number of objections or confirmations made, and the timelines.
There are further complications due to the fact that the courts records management project has collapsed, and the Court needs Court Registry and Management System (CRMS) to process group appeals expeditiously. In 2019, it was projected that CRMS would be created to have a single system for all four federal courts. The TCC advised that this would not work well for several reasons, including because the four courts are significantly different in function. However, the TCC was not involved directly in the process of considering/presenting the new CRMS. There was insufficient IT expertise in pursuing the system, and Treasury Board insisted that the new system would be immediately bilingual (rather than being translated into the second official language). Although the TCC met every deadline for participation in the CRMS project, it collapsed. Treasury Board is now commissioning an independent body to review the project.
Agents in the Tax Court continue to be an issue. The Court will advance a proposed rule to deal with agents and requisite training, as discussed at prior Committee meetings.
Increasing demands are put on resources in the CJ’s chambers by CAS and the government for reporting. Court staff work for the CJ and take direction from the CJ, and their first priority is the operation of the Court.
DB: We are unclear as to the exact nature of the legislative amendment contemplated by the Court. Although some taxpayers who come before the Court may appear not to have legal capacity, questions remain as to whether, absent a motion brought by a party, the Court has the authority to order an examination to assess capacity, or to instruct on the retention of counsel in these cases (and who will pay for the litigation guardian). The DOJ policy for payment of legal fees is currently not available in tax matters.
DB: The case management process for group appeals appears to be working.
CJ: The Court disagrees, remains appalled and concerned by the matter, which is an access to justice issue and suggests a lack of respect for the TCC and for taxpayers. The Court will not hear a further group appeal until the DOJ develops a proposal.
DB: providing additional information to the Court on all the group appeals that are currently before the TCC and that the DOJ is aware of will not be an issue for the DOJ.
CJ: TCC has been advised that Treasury Board approved $254 million over five to six years, to address court modernizations and renovations. This is expected to allow the TCC to add two floors at 180 Queen St W, Toronto, with eight courtrooms in total and allowing the Court to have eight sitting judges per week in Toronto.
A new court facility is anticipated for Hamilton and will house two courtrooms, which is a priority.
Renovations at 200 Kent St, Ottawa will include eight new judicial chambers and will affect registry, clerks, security and projects offices, two additional courtrooms, breakout rooms and settlement conference rooms. Planning is now underway.
There will be new court facilities in Montreal, with the TCC having four courtrooms and four chambers.
Renovations to be undertaken in Halifax and Fredericton. There will also be new court facilities in Saskatoon, with Saskatchewan being one of two provinces where the Court does not have standalone facilities. The TCC is looking at having a new facility in Victoria (as a satellite of the Vancouver office) for hearings for two weeks at a time.
III. Courts administration service
A. Update from CAS
DC gives the update from CAS.
Digital Courts: CAS is pursuing a new CRMS – it was determined that the project should be closed out and the approach should be changed. Formal independent third-party review has been undertaken to create a springboard to move forward. Future plans will be more agile and iterative. In the meantime, CAS is also working to advance tactical projects (finalizing a new trial tool kit; improvement to ASP system (current CRMS for the TCC) including e-stamping documents). There is also a pilot project to address strategic business and data for the TCC.
National court facilities: $250+ million to make investments in courtrooms and court facilities across Canada. The Montreal project will be the first (spring 2027 occupancy); plans for Toronto will be announced in the coming months, and CAS will be adding technology in the courtrooms in the meantime. This will take 3-5 years, given current funding levels.
Of the 56 courtrooms, not all are equipped for electronic or hybrid hearings. There are ten full e-courtrooms across the country, and more are planned for this fiscal year: three in Toronto, one in Vancouver, one in Ottawa, and one in Calgary.
People: CAS is focusing on attracting, training/developing, and retaining people. We have solid plans in place. Although there were key departures recently due to the pandemic, staff departures seem to have stabilized. Focus is on training new hires – especially in the Registry.
Service excellence: remaining focused to ensure we are providing excellent service to courts and litigants. We required staff on site in varying degrees, and are trying to accommodate some hybrid work arrangements.
Our health/security measures have remained unchanged, and we are assessing whether to remove plexiglass system.
IV. TCC rules committee
A. Update from Rules Committee
The Rules Committee has had one meeting since June, to deal with Associate Judge jurisdiction. Another meeting scheduled for February 13, 2023, to deal with a host of issues, including: amendments and other proposals to General Procedure and Informal Procedure rules (e.g. rules with respect to agents); costs (The Court held a CLE in October 2022, all Tax Court Judges attended to discuss the state of the law on costs. The Court will try to arrive at a new position on costs as the current tariff is not effective. The Court will circulate a proposal to be discussed at the Rules Committee and will proceed to a vote if there is no consensus).
For suggestions or amendments for discussion by the Rules Committee, please contact JK (Tax Court’s Legal Counsel). Matters can also be brought forward by practice note, if not by the Rules Committee process.
V. Issues raised by justice Canada
DB lead the discussion on Justice Canada matters.
A. Greater Access to TCC Hearings Schedule:
In the past, the TCC website gave greater public access to its hearings schedule. The sitting week and location and names of cases were posted as soon as General Procedure cases were set down for hearing; Informal Procedure cases were gradually added to the list as they were set down. This information enabled DoJ managers to forecast travel needs and the assignment of counsel to various sitting locations. The website has changed, so that the hearing schedule at various sitting locations is posted only one month in advance. Would it be possible to give public access to the information, to increase the notice period for hearings from 30 to 90 days? The DOJ had been told by managers, prior to the change of the TCC website, that DOJ could have access to court sittings for several months in advance.
CJ: The TCC is in the process of moving to 90-day notice periods for Informal Procedure appeals. DB: clarifies that files for Informal Procedure appeals are sent to the DOJ once a Reply is filed (which is prepared by a CRA agent), but DOJ counsel are not assigned to the file until a trial date is set. DOJ’s experience is that, until the hearing date is set, there is little pressure on taxpayers to communicate with the DOJ for discussions about resolving the dispute. The DOJ requests the additional notice period to assist with appeal management, planning and efficiency. The TCC will consider the request and advise the DOJ in writing in due course.
VI. Issues raised by CBA members
A. Extension/Permanency of TCC Notices to the Public and Profession: A CBA member asks, given the apparent convenience and success of the TCC current practices on Remote Commissioning of Affidavits (Notice to the Public and the Profession, June 29, 2022) and Electronic Signatures (Notice to the Public and the Profession, June 29, 2022), both of which are set to expire on January 31, 2023, will the Court make these practices permanent? Is there a need to modify the practices in any way before doing so?
CJ: confirms that the intent is to make these notices permanent as of January 31, 2023. Discussion is had to note that the current directive on remote commissions refers to the practices in the province, and there are some differing practices in different provinces (including some that have COVID-related approaches, which may not be permanent). The Court will further consider the matter.
B. Electronic Service: A CBA member asks: What has been the experience of Court and DoJ with electronic service of documents? Can the process be simplified? Or is consent necessary in each case: Practice Direction and Order, February 3, 2022?
DB: a main concern is that the address used needs to be staffed at all times, and we recognize that different lawyers have different approaches to their emails which might allow some messages to slip through the cracks. The Committee discussed the matter, and agreed to put it back on the agenda for the next Committee meeting.
C. Videoconferencing for case/trial management: A CBA member invites discussion of the possibility of conducting case management/trial management conference calls by videoconference (Zoom) rather than by telephone (experiences to be discussed).
CJ: whether to proceed by videoconference is up to the individual Judge, in consultation with the parties. A key consideration is the timeline for requesting virtual hearing (10 business days’ notice) and the scheduling challenge this presents, given that judges’ sittings are scheduled far in advance without room for virtual hearings; even regular motion days have recently been cancelled because they were no longer an efficient use of the Court’s resources. The Court will consider creating a virtual motion docket, if the volume of requests justifies it.
D. Mandatory Participation in Settlement Conferences: A CBA member invites discussion at the Committee of the possibility of making settlement conferences mandatory both pre- and post-discovery in any case likely to require significant trial time or meets a monetary threshold (parameters and experiences to be discussed).
CJ: raises a number of issues. First, complex files are invariably case managed, which puts the case management judge in the driver’s seat. The case management judge is already close to the matter, and could serve as the settlement conference judge. Second, parties in these proceedings typically have sophisticated counsel, and it is up to the parties to drive the train on settlement discussions or conference. Unless the parties are both willing to engage in settlement conferences/discussions, and even where only one party does not wish to do so, the Court is unlikely to impose a settlement conference on the parties. Accordingly, the Court is not inclined to make settlement conferences mandatory or to compel the parties to discuss settlement if they do not wish to do so, and doing so may be a waste of resources.
The Committee further discusses examples and experiences pertaining to settlement conferences and discussions.
CJ: settlement conferences will be ordered if an offer has been exchanged and not responded to.
DB: the DOJ is firmly opposed to mandatory settlement conferences.
The Committee observes that a mandatory mediation rule exists in other jurisdictions, including Ontario (although there is practically the option to waive mediation, if parties agree). It may also be possible to impose cost consequences if settlements are concluded close to the trial date, which the CJ notes is an initiative that had been previously considered.
CJ: the topic will be brought forward for further discussion with the judges at the next semi-annual judges’ meeting in June 2023.
E. Mandatory Use of Discovery Plans: A CBA member invites discussion at the Committee of the possibility of making discovery plans and discovery management conferences mandatory in every case where Rule 82 is engaged (experiences to be discussed).
The Committee discusses mixed experiences and examples pertaining to the use of discovery plans, including in other jurisdictions.
CJ: the topic will be brought forward for further discussion with the judges at the next semi-annual judges’ meeting.
VII. Other business
No other business.
VIII. Next meeting
Date and Location: June 20, 2023 at 9:30 am, in Vancouver. (Note: Later changed to June 19, 2023.)