Markevich v. Canada

Major J. — The issue in this appeal is narrow and easily stated: that is, whether federal and provincial limitation periods when exceeded apply to the Crown’s ability to exercise its statutory powers to collect tax debts. I have concluded that the limitation period prescribed by s. 32 of the Crown Liability and Proceedings Act , R.S.C. 1985, c. C-50 (“CLPA ”), bars the Crown from collecting the respondent’s federal tax debt, and that s. 3(5) of the British Columbia Limitation Act, R.S.B.C. 1996, c. 266 (“B.C. Limitation Act”) bars the Crown from collecting the respondent’s provincial tax debt.

The respondent was a resident of British Columbia at all times relevant to this appeal. He received a Notice of Assessment from the Minister of National Revenue (the “Minister”) dated June 17, 1986, that indicated a federal and provincial tax liability of $234,136.04 arising from a series of assessments and unpaid taxes in respect of his 1980 to 1985 taxation years. The respondent did not challenge this assessment, and paid nothing on the outstanding amount after 1986. In 1987, while of no consequence to this appeal, the indebtedness was internally written off by Revenue Canada, but was not extinguished or forgiven. From 1987 to 1998, Revenue Canada made no effort to collect the debt, and statements issued to the respondent during that period did not reflect the 1986 balance. However, on January 15, 1998, approximately 12 years after the Notice of Assessment, Revenue Canada, for the first time during this period, sent a statement of account to the respondent that indicated a balance of $770,583.42, which included the amount owing as of June 17, 1986, and accrued interest.

The respondent applied to the Trial Division of the Federal Court for judicial review of the January 15, 1998 claim, and sought a declaration that the Crown was prohibited from taking any steps to collect his tax debts for 1990 and prior years. The motions judge dismissed the application. The Federal Court of Appeal allowed the appeal from that decision, and held that the Crown was statute-barred from collecting the respondent’s tax debt reflected in the 1986 Notice of Assessment. The Crown appeals from that decision.

The following statutory provisions are relevant: