Case Commentary: Onischuk v. The King – Tax Court Rules Cannot Override CRA’s Statutory Requirements

Self-represented Taxpayer Challenges Nil Assessments

In February 2025, the Tax Court of Canada delivered the ruling on Onischuk v. The King, 2025 TCC 17 (Onischuk). Onischuk was assessed for nil tax owing for the 2011-2012 tax years and received a refund of $627 for the 2013 tax year. However, he filed a notice of objection for the 2011-2013 tax years because he wished to dispute the CRA’s denial of his business losses.

Business loss is a type of non-capital loss, that can be applied to offset any source of income and can be carried backward for three taxation years and forward for 20 taxation years. The CRA refused to consider the objection because nil assessments (i.e. nil tax owing, interest, or penalty) are not eligible for objection and invited Onischuk to instead request for a loss determination under subsection 152(1.1) of the Income Tax Act.

A determination of loss is treated as an assessment and thus can be objected to or appealed from. Onischuk refused to take the loss determination route and insisted on challenging the nil assessments. Because he missed the appeal deadline, which is 90 days after the CRA’s decision on the objection, Onischuk applied to the Tax Court for an extension of time to file the appeal to the Tax Court.

Grounds for Granting an Extension of Time to File an Appeal to the TCC

For an application for an extension of time to file an appeal to the Tax Court of Canada (TCC) to be successful, the taxpayer must demonstrate that:

• The taxpayer was unable to act or instruct another to act within the original appeal deadline;
• There was a bona fide intention to appeal;
• Given the reasons in the application, it would be just and equitable to grant the extension of time;
• The application was made as soon as circumstances permitted; and
• There are reasonable grounds for the appeal.

In the Onischuk case, the Tax Court took issue with the grounds for the appeal, which is an appeal of nil assessments.

Nil Assessment Cannot be Objected to or Appealed From

Onischuk, representing himself, relied on subsection 21(3) of the Tax Court of Canada Rules (Informal Procedure), which reads:

“The Court may, where and as necessary in the interests of justice, dispense with compliance with any rule at any time.”

He argued that he was treated unfairly by the CRA because the CRA hid behind the protection of nil assessments in order to avoid being challenged by him and thus that granting the extension of time for the appeal is in the interests of justice. He also relied on sections 6, 7, and 12, and subsection 15(1) of the Charter of Rights and Freedom to support his interpretation of subsection 21(3).

The Tax Court of Canada rejected Onischuk’s argument. Case law has well established that a nil assessment is not an assessment and therefore it cannot be objected to or appealed from.

The Tax Court also reiterated the principle, not limited to tax law, that court rules cannot be used to override statutory requirements. For instance, rules of the Tax Court and of the Federal Court have been found in case law to be ineffective in efforts to extend various deadlines in the Income Tax Act, the Unemployment Insurance Act, and the Customs Act. If otherwise allowed, court rules will step beyond its intended purpose of regulating the practice and procedure of the courts.

Pro Tax Tip – Make Use of the Available Rules and Avoid Novel Approaches

It is quite perplexing for Onischuk, a self-represented litigant, to ignore the readily available option of requesting a loss determination and instead insist on challenging a well-established rule in jurisprudence. He might be overconfident in his understanding of the law or simply wanted to test out his interpretation. Nevertheless, a taxpayer should logically avoid doing this and better consult with experienced Canadian tax litigation lawyers to make proper use of tax challenges and litigation.

FAQ

The CRA issued nil assessment but denied my losses. What should I do?

Normally, you can object to the assessment with the CRA and then appeal to the TCC. However, nil assessment is an exception because it is not an assessment and hence cannot be objected to or appealed from. If you need the CRA to recognize your losses, you should file a request to the CRA for a loss determination. An experienced Canadian tax litigation lawyer will be able to advise you on the right strategy for your situation.

I missed the deadline to file an objection or an appeal. What should I do?

If you miss the deadline to file an objection or an appeal, you should file for an extension of time to the CRA or the TCC, as the case may be, as soon as possible. For the extension-of-time request to be granted, you need to demonstrate a number of grounds. Furthermore, there is a deadline for the filing of the extension-of-time request itself, normally one year after the expiration of the original deadline. Needless to say, for each deadline that you miss, it will become harder to fight your case. Therefore, it is recommended that you retain an experienced Canadian tax litigation lawyer to keep track of all the necessary filings.

DISCLAIMER: This article just provides broad information. It is only up to date as of the posting date. It has not been updated and may be out of date. It does not give legal advice and should not be relied on. Every tax scenario is unique to its circumstances and will differ from the instances described in the article. If you have specific legal questions, you should seek the advice of a Canadian tax lawyer.