Deemed Director - When A Resignation Is Not Enough

Introduction

A director of a corporation is personally liable under subsection 323(1) of the Excise Tax Act¹ ("ETA") for the failure of the corporation to remit goods and services tax ("GST"). However, subsection 323(5) imposes a time limit on this liability whereby a director will not be held liable for unremitted GST two or more years after ceasing to be a director. Unfortunately, the Tax Court of Canada's ("TCC") decision in Snively v. The Queen² ("Snively") makes it more difficult for an individual to rely on subsection 323(5). Indeed, this decision may have broader ramifications on directors' liability in general, and beyond the ETA. According to the TCC, an individual may still be a deemed director of a corporation even after formally resigning from that position.