How Much Does a Tax Court of Canada Appeal Cost?

Before you appeal a CRA assessment to the Tax Court of Canada, it is sensible to ask what it will cost you. The answer has several parts: any court filing fee, the cost of preparing your case, and the risk that you could be ordered to pay part of the Crown's legal costs if you lose.

The risk depends heavily on which procedure you use. This article explains how costs work in the informal and general procedures. Current court fee amounts change from time to time, so check the Court's own fee information before you file.

This article covers Canadian federal tax law, which applies in every province.

The kinds of cost to think about

A Tax Court appeal does not have a single price. It helps to separate the costs into groups.

• Court fees: any fee charged to start the appeal. Check the Court's current fee schedule, because amounts can change.
• Your own preparation: gathering records, writing the notice of appeal and, in some cases, paying a lawyer or agent.
• Costs orders: money one side may be ordered to pay toward the other side's legal costs after the case is decided.
• Time: documents, deadlines and hearing dates all take effort even if you represent yourself.

Generally, you appeal after you have served a notice of objection and the Minister has confirmed the assessment or reassessed, or after the waiting period for a decision has passed. A separate route applies to ecological gifts: an appeal of the Minister of the Environment's confirmation or redetermination of fair market value must be made within 90 days after that Minister issues the certificate. The notice of objection itself must be in writing and set out the reasons and all relevant facts.

Costs under the informal procedure

The informal procedure is designed to be simpler and is available where the total amounts in issue are $25,000 or less, or the loss in issue is $50,000 or less, and you choose it. It also applies where the only subject of the appeal is interest. In an interest-only appeal, though, the Attorney General may apply to move the case to the general procedure, and the Court must grant it if the interest in issue exceeds $25,000, not counting interest that accrues after the notice of assessment.

Under this procedure you may appear in person or be represented by a lawyer or an agent, and the Court is not bound by technical rules of evidence. That can reduce what you spend on representation.

On costs, the Court may award costs to you if the judgment reduces the amounts in issue, and it may consider written settlement offers. CRA states that you will not pay the Minister's costs unless you unduly delay the appeal. If the Minister appeals an informal procedure judgment, the Crown pays your reasonable and proper costs of that appeal.

Costs under the general procedure

The general procedure applies to disputes above the informal limits. If the amounts in issue exceed $25,000, or the loss exceeds $50,000, the Court orders the general procedure unless you elect to limit the appeal to those amounts. If you do limit it, the judgment is deemed to say the amounts will not be reduced by more than $25,000 or the loss increased by more than $50,000.

Here the Court can order either party to pay some of the other party's legal costs. When it decides, it considers the result, the amounts in issue, the importance and complexity of the issues, written settlement offers and any conduct that lengthened the proceeding.

The general procedure also has more steps, such as lists of documents and examinations for discovery. More steps usually mean more preparation time, which affects what you spend.

Comparing the two procedures

Settlement offers and what to do next

In the general procedure, a written settlement offer can increase your recovery to substantial indemnity costs, which is 80% of solicitor-and-client costs, for the period after the offer date if the judgment is as favourable. The offer must be served at least 30 days after pleadings close and at least 90 days before the hearing, and it must not be withdrawn. With your written consent the Minister may also reassess to dispose of an appeal, which is how a filed appeal can be settled.

• Work out the amounts in dispute, and ask a lawyer or accountant which procedure may fit.
• Check the Court's current fee schedule before you file.
• Decide whether you will act for yourself or get a lawyer or agent.
• Mark the 90-day appeal deadline in your calendar.
• Ask a lawyer or accountant whether a written settlement offer makes sense in your case.

Frequently asked questions