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Published: March 5, 2021

Last Updated: February 21, 2022

Introduction – Remission Order Application as the Last-Ditch Resort for Tax Relief

The Remissions Order Application by an experienced Canadian tax lawyer under subsection 23(2) of the Financial Administration Act is often taken to be a last-ditch resort at tax relief for Canadian taxpayers when all other tax disputes and tax relief procedures had not produced a satisfactory result. Therefore, it is important for Canadian taxpayers to understand exactly what it means for the Remission Order Application to be the last-ditch resort for tax relief.

The recent Federal Court decision Meleca v AGC was an application for judicial review of a denied Remission Order Application. Meleca illustrates what can happen when the taxpayer fails to fundamentally understand the exact nature of a Remission Order Application. As a result, much time and financial resources were wasted.

Remission Order Application – What It Is and What It Isn’t

A Remission Order Application is not a tax dispute process. That is to say, in a Remission Order Application, the taxpayer cannot apply to have the CRA or the courts review whether the underlying tax assessment or reassessments had been correctly made. However, incorrect action or advice given by CRA officials could be relevant as a part of building the taxpayer’s narrative for why a remission order should be granted. The CRA may grant Remission Order for tax relief on interest and penalties owing, or even the tax amount itself.

Generally speaking, a Remission Order Application can only be granted when tax relief is justified but cannot be granted under existing provisions of the law. This means the taxpayer must demonstrate exceptional circumstances of hardship or inequity connected to the owing of the tax debt. The CRA’s own published guideline for Remission Order Application listed the following four factors:

  • Payment of amounts owing would cause extreme hardship
  • Financial setback coupled with extenuating factors;
  • Amount owing is an unintended result of the legislation; and
  • Amount owing is the result of incorrect action or advice by CRA officials.

These four factors are not exhaustive.

Administrative Judicial Review of Remission Order vs. Judicial Review of CRA Tax Assessments

Since the Remission Order Application is not directly concerned with whether the underlying tax assessments made by the CRA were correct or incorrect, a judicial review of a rejected Remission Order Application would not involve the court reviewing the substantive correctness of the underlying tax assessment.

While a tax appeal to the Tax Court of Canada is governed by specific provisions under the Income Tax Act, an appeal for judicial review must be made to the Federal Court and is governed by the general rules of administrative law. Administrative law is a complex area of law that involves two standards of review, a standard of correctness and a standard of reasonableness. These two standards and their applications are subject to considerable debate, but simply stated the standard of reasonableness grants more leeway and deference to the decision already made by the government’s decision-maker compared to the standard of correctness.

The Meleca Case

The taxpayer, Mr. Meleca, submitted a Remission Order Application on September 9, 2015, for personal income tax debts stemming from 2001, 2002, 2009, 2010, and 2012 tax years and GST/HST debts from reporting periods ranging from 2008-2010 and 2012-2013. The Remission Order Application listed the tragic passing of the taxpayer’s son, the taxpayer’s bad health and old age, as well as the taxpayer’s lack of income as reasons for CRA to grant him the Remission Order. His Remission Order Application also mentioned CRA’s mistakes in a tax audit where insurance cheques for damaged buildings were mistakenly assessed as unreported income.

The CRA rejected Mr. Meleca’s Remission Order Application. He appealed to the Federal Court. Mr. Meleca decided to represent himself in this judicial review application instead of retaining an experienced Canadian tax lawyer.

During the judicial review process, Mr. Meleca asked for the court to order a complete review of CRA’s tax assessment made against him for 2001, 2002, 2009, 2010, and 2012 tax years as well as to grant him relief for interest and penalty payments.

In response, the CRA argued that the court must deny Mr. Meleca’s requests because the Federal Court could not review whether the initial tax assessments were correctly made under administrative law. Unlike an appeal to the Tax Court under the Income Tax Act, Mr. Meleca could only ask for the court to review whether the administrative decision made by the CRA was reasonable or not on a reasonableness standard of review.

Furthermore, despite Mr. Meleca not putting forward any argument regarding the unreasonableness of CRA’s decision, the CRA nevertheless made submissions as to why the decision to reject his Remission Order Application was reasonable.

The court ruled in CRA’s favor in a brief ruling, noting that the Federal Court has no power to order a review of the underlying tax assessments. Furthermore, CRA’s decision to reject Mr. Meleca’s Remission Order Application was reasonable.

Pro Tax Tips – Important to Distinguish Tax Objections from Remission Order Application

The Meleca case is a cautionary tale of what can and often does go wrong when taxpayers choose to represent themselves in court without the requisite legal expertise of a top Canadian tax lawyer. There are several missteps that would have been better handled by an experienced Canadian tax law professional.

If Mr. Meleca’s case for CRA’s mistakes in audit is strong, then he should have made that case in a notice of objection and Tax Court appeal. Even when the conventional 90-day deadline has lapsed, every effort should have been made to have the case reviewed by the Tax Court on the extension of time provisions under subsection 167(5) of the Income Tax Act within one year and 90 days of the conclusion of the notice of objection.

Alternatively, if a judicial review of CRA’s decision to reject Mr. Meleca’s Remission Order Application is genuinely the last resort left, an expert Canadian tax lawyer would look for ways to attack CRA’s substantive and procedural reasonableness in rejecting the application. The knowledgeable Canadian tax lawyer would look to factors such as whether all the arguments in the Remission Order Application were given their proper consideration by the CRA decision-maker, whether the CRA decision-maker used any inappropriate and improper grounds in coming to a decision, as well as any other factors that could indicate that the decision reached by the CRA did not fall in a range of acceptable and rational conclusions given the context of the application.

Our expert Toronto tax lawyers are experienced in providing legal representation at all stages of your tax audit, tax disputes, and tax relief requests. We will advise you whether a Remission Order Application is best suited to you. We can represent you in drafting a Remission Order Application, and we can provide you with expert legal representation in any subsequent judicial reviews related to Remission Order Application.


"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."


Suppose that you disagree with the CRA’s decision, you can request a judicial review of that decision in the federal court. This is a process similar to an appeal. The federal court will analyze the case’s facts and determine if the CRA exercised its discretion properly. If the court’s decision lies in the taxpayer’s favor, the case will be referred back to the CRA for reconsideration.

No. Usually, Remission Orders will only be recommended by the Minister if you have exhausted all options, including objections, appeals, and taxpayer relief requests. The application must also show that a Remission Order is necessary because the taxpayer meets the circumstances recognized by the CRA.

The factors that CRA considers when deciding whether to approve a Remission Order or not are unintended results of the legislation, financial setback coupled with extenuating factors, incorrect action or advice by CRA officials, or extreme hardship.

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