Executive summary: key legal and evidentiary issues

• 941624 Alberta Ltd., a large corporation, filed identical three-sentence Notices of Objection for its 2020, 2021, and 2022 taxation years that merely stated the reassessments erred in fact and law and that the returns were correct as filed.

• Non-compliance with subsection 165(1.11) of the Income Tax Act was at issue, which requires large corporations to reasonably describe each issue, specify relief sought, and provide supporting facts and reasons.

• The Appellant did not provide a written response to the CRA Appeals Officer's November 28, 2024 request for additional information, instead choosing to file a Notice of Appeal directly with the Tax Court.

• Counsel for the Appellant argued the Notice of Appeal constituted a "perfected objection" under subsection 165(1.12), a position the Court rejected as "completely circular."

• Cases relied upon by the Appellant, such as Ford and Royal Bank of Canada, were distinguished by the Court because those decisions involved notices of objection that contained significant information, unlike the bare-bones notices filed here.

• Accepting the deficient notices as compliant would, in the Court's view, render the large corporation rules meaningless and defeat the purpose of their enactment.

The reassessments and the corporation's background

941624 Alberta Ltd. (referred to as "941") is an Alberta corporation that was appealing from reassessments made under the Income Tax Act for its taxation years ending December 31, 2019, 2020, 2021, and 2022. The case concerned unreported income and, as the Court noted, "perhaps more significantly," the denial of several expenses the Appellant claimed in filing its tax returns. It was undisputed that for the 2020, 2021, and 2022 taxation years, 941 was a large corporation as defined in subsection 225.1(8) of the Act. In filing its returns for those years, 941 filed Schedule 33, entitled "Taxable Capital Employed in Canada – Large Corporations," and reported that its taxable capital employed in Canada was in excess of 10 million dollars.

The notices of objection and the notices of reassessment

The Minister issued Notices of Reassessment on April 17, 2024, for each of the relevant taxation years. In response, 941 filed Notices of Objection on June 28, 2024, which were identical for all three years and read as follows: "The taxpayer objects to the Minister's reassessment. The Minister's reassessment errs in fact and law. The taxpayer's return was correct as filed." The Notices of Reassessment, which were attached to the Notices of Objection, indicated the amount of federal tax reassessed and the adjustments to interest and penalties but revealed no information about the items or amounts in dispute. The Notices of Reassessment did, however, state that the corporation was identified as a large corporation.

The large corporation rules under the Income Tax Act

Under subsection 165(1.11) of the Act, a large corporation that objects to an assessment must meet three requirements in its notice of objection: (a) reasonably describe each issue to be decided; (b) specify in respect of each issue the relief sought, expressed as the amount of a change in a balance; and (c) provide facts and reasons relied on by the corporation in respect of each issue. Subsection 169(2.1) further restricts the right of a large corporation to appeal to the Tax Court of Canada, permitting an appeal only with respect to an issue in respect of which it has complied with subsection 165(1.11) in the notice, and only with respect to the relief sought as specified in the notice. Subsection 165(1.12) provides a late compliance mechanism: where a notice of objection does not include the information required by paragraphs 165(1.11)(b) or (c), the Minister may request the information in writing, and the corporation is deemed to have complied if it submits the information in writing to a Chief of Appeals within 60 days of the request.

The CRA's request for information and the Appellant's direct appeal

On November 28, 2024, Appeals Officer Barbara Wamburu wrote to the Appellant stating that Audit had reassessed 941 for amounts for which the Appellant had not provided sufficient information to support its claims. She provided a detailed list of what she required, referring to source documents and explanations. She also wrote: "Identify the specific amount(s) you are objecting to, the specific reasons for your objection to these amounts, as well as source documents and the provisions you are relying on to support your position." The Appellant had 30 days to respond. The Appellant did not provide a written response to the November 28, 2024 letter. However, on December 27, 2024, during a telephone conversation, the Appellant's counsel informed the Appeals Officer that they were going directly to the Tax Court. On December 30, 2024, the Appellant filed its Notice of Appeal with the Court and sent a copy to the CRA.

The Respondent's motion to quash

The Respondent (His Majesty the King) brought a motion seeking an order quashing the appeals for the 2020, 2021, and 2022 taxation years pursuant to subsection 12(1) of the Tax Court of Canada Act and subsection 169(2.1) of the Income Tax Act, as well as costs of the motion. The Respondent argued that 941's Notices of Objection did not meet any of the requirements of subsection 165(1.11). The Respondent submitted that in simply stating "the taxpayer's return is correct as filed," 941 had not reasonably described any issue, and in providing a conclusory assertion that "the Minister's reassessment errs in fact and law," 941 did not provide any facts or reasons relied upon.

The Appellant's arguments

The Appellant's counsel acknowledged that the Notices of Objection were "sparse," explaining this was due to the Appellant's intention to appeal directly to the Court and not engage with the appeals process at all, relying on the right under paragraph 169(1)(b) to appeal after 90 days had elapsed following service of the notice of objection without waiting for the Minister's response. Counsel argued the Court must consider the "entire context," including the underlying audit and the totality of the correspondence. Specifically, counsel submitted that if the Court considered the Notices of Objection (to which the Notices of Reassessment were attached) and the March 28, 2024 final audit letter, it should find that the Minister knew the items and the amounts in dispute. Counsel also argued the facts and reasons were "obvious" for the types of adjustments at issue and that paragraph 165(1.11)(c) should be given less weight because 941 had used the direct appeal process, though the Court noted he "provided no real basis to support this position." The Appellant further argued this was a unique case because 941 was not a large corporation in 2019 and because of its use of the direct appeal process. Additionally, the Appellant characterized the Notice of Appeal as the "perfected objection," contending it satisfied subsection 165(1.12). The Appellant relied on jurisprudence including Ford Motor Company of Canada, Limited v R (2015 TCC 39), Royal Bank of Canada v R (2024 TCC 125), and R v Potash Corporation of Saskatchewan Inc. (2003 FCA 471), submitting that the Respondent's motion was contrary to established jurisprudence and contrary to a textual, contextual, and purposive interpretation of the large corporation rules.

The Court's analysis and reasoning

Chief Justice St-Hilaire found there was "no content in the Notices of Objection that can be the subject of a robust, purposive analysis to determine if the requirements of subsection 165(1.11) of the Act have been met." The Court observed that looking at the Notices of Objection and the Notices of Reassessment alone did not give the Minister, the Court, or anyone "the faintest idea of what is at issue." The Court distinguished the cases relied upon by the Appellant: in Ford, the Court had been considering a notice of objection that contained "a significant amount of information," and Justice Boyle spent a considerable portion of his analysis reviewing its content; in Royal Bank of Canada, the notice of objection similarly contained significant information about the issue of entitlement to ITCs and the appropriate method for determining their amount. The Court rejected the argument that less weight should be placed on the requirement in paragraph 165(1.11)(c) because 941 was bypassing the appeals process, finding nothing in the legislation to support such an interpretation and noting that subsection 169(2.1) restricts the right to appeal, "directly or not," if the requirements of subsection 165(1.11) are not met. The Court also rejected the notion that the Notice of Appeal could serve as a "perfected objection," stating: "I have great difficulty accepting that in determining whether a notice of objection complies with subsection 165(1.11) in a manner that will allow a taxpayer to appeal to this Court, I ought to look at the notice of appeal to this Court, all of which seems completely circular." On the late compliance rule under subsection 165(1.12), the Court noted that while this provision could have allowed 941 to rectify omissions regarding paragraphs 165(1.11)(b) and (c) — but not (a) — 941 never provided a written response to the Chief of Appeals within 60 days as contemplated by the provision.

The ruling and outcome

Chief Justice St-Hilaire granted the Respondent's motion with costs against the Appellant, and the appeals for the 2020, 2021, and 2022 taxation years were quashed. The Court concluded that the Notices of Objection did not meet the requirements of subsection 165(1.11) and that, pursuant to subsection 169(2.1), there were no issues in respect of which 941 could appeal to the Court for those years. The Court found that accepting the impugned Notices of Objection as compliant "would be akin to not imposing any requirements on a large corporation other than to object" and would "render the large corporation rules meaningless, defeating the purpose of their enactment." The parties were given 30 days from the date of the Judgment to agree on costs, failing which the Respondent was to have a further 30 days to serve and file written submissions on costs. The Respondent, His Majesty the King, was the successful party, with costs awarded in its favour. No specific monetary amount was determined, as the appeals were quashed for non-compliance with the large corporation rules rather than decided on their merits. The Judgment was signed on April 14, 2026.