University of Toronto Law School Faculty Blog

Copthorne Holdings and the Future of the GAAR: January 6, 2012

On December 16, 2011, the Supreme Court of Canada released its much-anticipated decision in Copthorne Holdings Ltd. v. Canada, in which the Court considered the General Anti-Avoidance Rule (GAAR) for the fourth time.

In contrast to its previous GAAR decision in Lipson, the Court arrived at a unanimous decision in Copthorne, applying the GAAR to a number of transactions designed to preserve paid-up capital and redeem shares on a tax-free basis. In order to review the decision and its implications, the University of British Columbia’s National Centre for Business Law and the University of Toronto Faculty of Law are co-sponsoring a symposium on Copthorne Holdings Ltd. and the Future of the GAAR, which will be held at the University of Toronto Faculty of Law on the afternoon of Friday, January 6, 2012. 

Confirmed speakers include Ben Alarie (U of T Law), Hon. Donald G.H. Bowman (FMC Law and former Chief Justice of the Tax Court of Canada), Mark Brender (Osler), Robert Couzin (Couzin Taylor), David Duff (UBC Law), Tim Edgar (Osgoode Hall Law School), Phil Jolie (Canada Revenue Agency), and Deen Olsen (Department of Justice). Space is quite limited. Please go to http://www.copthorne.ca for registration information.

Selective Use of Data in the Debate about a National Securities Regulator for Canada: A Comment on The Lortie Paper

1.    Introduction

Pierre’s Lortie’s recent paper[1] seeks to discredit federal reform initiatives to create a national securities commission by making the following claims:  Canadian capital markets rank above those in other countries as various international bodies suggest; the empirical evidence does not exist to support such a reform; and, the current passport system that operates in tandem with the Canadian Securities Administrators “constitutes[s] an example of Canadian federalism at its best” and change should not be implemented without compelling reasons.[2] Lortie suggests that Canadian investors, junior issuers, and the fairness and efficiency of Canadian capital markets will not benefit under a national securities regulator. Rather, the status quo is superior as it has allowed Canada’s financial system to outperform those in other countries. Arguing that the proposed model will constitute a “takeover” of securities regulation,[3] Lortie suggests that a national securities commission will be captured by federal interests. An earlier version of his report was filed as evidence by the provinces of Alberta in the Quebec, Alberta and federal constitutional reference cases. 

In this comment, I analyze the evidence on which Lortie bases his argument and argue that: the evidence that he cites does not in fact support his position; his reliance on this evidence to bolster his argument regarding enforcement in Canada is misguided in its selective use of the data; and, his review of costs is superficial.  While Lortie criticizes the federal proposal for a national commission for failing to consider the evidence, his own paper falls victim to this folly.  His argument involves a cursory, selective review of the academic and empirical literature and does not in fact lead, “to the inescapable conclusion that the arguments made to justify the takeover of securities regulation by the federal government lack a solid foundation…”[4]

Mandatory Census Doesn't Raise Privacy Concerns; Abolishing it Does

Trudo Lemmens: Is privacy really at the heart of mandatory census change?

(This commentary first appeared in a slightly different version in the Hill Times on August 23, 2010) 

Big policy decisions are always a balancing act. Nothing unusual thus when the government invokes one interest—privacy--to justify the cancellation of the mandatory long census, which serves another interest--the gathering of reliable information about Canadian citizens for the purpose of good policy making. The increased promotion of privacy could arguably outweigh the negative impact of this decision, which critics say will affect the quality of the data of Statistics Canada.

A crucial claim which has, however, not really been questioned is whether this is indeed about privacy. Invoking privacy in the context of the collection of personal data seems intuitively appealing. Yet, using it to justify the abolishing of a mandatory form reflects a fundamental misunderstanding of the concept. Worse, the proposed changes to the government census do not diminish but rather increase privacy concerns.

The concept of privacy is notoriously difficult to define. It relates among other things to the right to be let alone, the right to make decisions about one's life, the importance of having a private space, and the need to protect confidential personal information. But privacy cannot mean that we are fully free to decide whether we will give personal information to legitimate governmental agencies. Otherwise governments could not work. Our tax system, public health care, land registration, driving licenses, the judicial system, employment benefit plans, and the governmental bureaucracy in general, they all require the collection of highly personal and detailed information, often with criminal sanctions attached. Yet, no reasonable person would argue that these mandatory collections in and of themselves violate privacy.

Prof. Ben Alarie on taxwiki.ca

An important experiment is beginning in documenting the administration and content of Canadian income tax law.  The experiment is called taxwiki.ca.  What is this experiment, and why is it necessary?

The Office of the Auditor General recently pointed out that there is insufficient accurate guidance being provided to Canadian taxpayers by the Canada Revenue Agency (CRA).  To support this claim, the Auditor General's report highlighted that the interpretation bulletins issued by the CRA are accessed frequently by Canadians (1.5 million times from April 2008 to March 2009) and that, “Most tax auditors and many tax practitioners told us that they begin their research into a legislative interpretation question with Income Tax Interpretation Bulletins as their source of guidance.” 

Obviously, then, the bulletins are an important source of tax information for taxpayers and their advisers.

Discussion of Dunsmuir v. New Brunswick

On June 4, 2008, a Roundtable was held at the Faculty of Law, University of Toronto on the Dunsmuir v. New Brunswick decision from the Supreme Court of Canada (handed down in March of 2008).  The aim of the Roundtable was to explore the implications of this decision for the development of Administrative Law, and in particular the Court's wide-ranging discussion of the standard of judicial review of administrative action, deference, and the applicability of procedural fairness to public office holders.

The background material for the Roundtable, including the Dunsmuir case, the facta filed at the Supreme Court, and some early commentaries are available for download at: http://www.law.utoronto.ca/conferences/dunsmuir.html.

Below, we have prepared a summary (in PDF format) of the themes, ideas and arguments raised during the Roundtable in the hopes that it will serve as a catalyst for further discussion and debate.  We invite comments on any aspect of the discussion which might interest readers of this blog.

• Summary of the Roundtable on Dunsmuir (PDF)

Report on "The Future of Administrative Justice" symposium

A symposium on "The Future of Administrative Justice" was hosted by the Faculty of Law in January 2008. It explored the future of administrative justice by bringing together academics, participants in the tribunal sector and government policy makers to dialogue about improvements to administrative tribunals in Ontario and other jurisdictions.

A 28-page report on the symposium has now been released (May 2008), which summarizes the presentations and the roundtable discussion that wrapped up the day.

• Future of Administrative Justice Symposium Report (PDF)

The keynote address was given by Lord Justice Robert Carnwath, Senior President of Tribunals, England and Wales. Read the keynote address (PDF).

The symposium was also recorded on video, and the each session of the symposium can be viewed online from the symposium web page. The web page also includes other useful papers and background material.

• Watch the webcast of the symposium "The Future of Administrative Justice"

Dunsmuir: Can the Standard of Review be Solved?

On Friday, March 7, 2008, the Supreme Court released Dunsmuir v. New Brunswick (2008 SCC 9), a stark reversal of the last decade of administrative law jurisprudence on the issue of the standard of review. This decision seeks to quiet the steady drumbeat of criticism of the Court's Standard of Review jurisprudence while remaining true to the culture of deference. The centrepiece of the judgment is the collapsing of the standard of patent unreasonableness and the standard of reasonableness simpliciter into a single standard of reasonableness. While this move responds to the concern over arcane and artificial distinctions between shades of unreasonableness, it is unlikely to solve the standard of review dilemma, for the reasons explored below [note, a version of this comment was posted under the title "Dunsmuir: Plus ça change" with TheCourt.ca]

Veils, Isotopes and the Meaning of “Independence”

There have been a considerable number of allegations of late that the Federal Government has been improperly interfering with independent Federal Agencies, Board and Commissions (or, for short, Federal ABCs). From a dispute about veiled women voting to a dispute about shutting down a nuclear facility, both the diversity and the importance of independent administrative ABCs has been on display. But just how independent are they? When we refer to a body as at “arm’s length” from the Government, does that imply it still may be within the Government’s grasp. Below I suggest these administrative bodies may not be as independent as we think they are, but that their vulnerability to government interference is precisely what is intensifying public scrutiny of government and enhancing public support for administrative justice.

Tea and oranges that come all the way from China

Had Suzanne heard the news in recent months she'd probably think twice before serving Leonard Cohen tea and oranges that came all the way from China.  With reports about recalled toys, pet food poisoning and the FDA ban on certain imports of seafood from China, there is no exotic romance in such tea and oranges anymore.  No wonder American politicians and government officials step in to protect consumers against such safety dangers.  As Hillary Clinton said "I don't want to eat bad food from China or have my children having toys that are going to get them sick."  Nor do I. 

How the Supreme Court of Canada Missed the Point about Human Rights Jurisdiction…

Administrative law is often obscure but the Supreme Court over the past year or two has been embroiled in a particularly technical administrative law question around which tribunals have jurisdiction over which kinds of disputes and whether more than one tribunal may have jurisdiction over the same dispute. Like many technical questions in administrative law, however, there is a basic question of fairness and justice underlying the debate. The stakes for Canadians who encounter the justice system (and far more of this group do so before administrative tribunals than before courts), could not be higher.