Quebec

The Quebec taxpayers did not object to ARQ reassessments that denied ½ of their claimed business loss for 2010 – but then successfully appealed to the Tax Court similar federal reassessments of that year. They then requested (years after the period for objecting to the earlier ARQ reassessments had expired) that the ARQ reassess their 2010 taxation years in light of the favourable Tax Court judgment (and CRA assessments to implement it) pursuant to s. 1010.0.2 of the Taxation Act (Quebec). S. 1010.0.2 provides that, notwithstanding the expiration of the period to file objections, the Quebec Minister may, within one year of a federal reassessment “make a reassessment for the sole purpose of taking into account elements that may be considered to relate to that assessment or reassessment.”

The taxpayers applied to the Qubec Superior Court for judicial review of the ARQ’s refusal to reassess. Paradis JCS rejected the ARQ position that the Quebec Superior Court lacked the jurisdiction to entertain the judicial review application because the matter came within the exclusive jurisdiction of the Court of Quebec (to which appeals from ARQ reassessments are made). He indicated inter alia that the effect of the ARQ position was that a taxpayer would be required to resort to the Quebec objection procedures as a prerequisite to any reassessment by the Quebec Minister pursuant to s. 1010.0.2, whereas s, 1010.0.2 contained no such precondition for its application.