ARTICLE · 07 AUGUST 2015

The Last Word: Advisor Penalties Are Not Criminal

Norton Rose Fulbright Canada LLP

On Friday, July 31, 2015 the Supreme Court of Canada sent a clear message to tax advisors: the advisor penalties provided for in section 163.2 of the Income Tax Act ("Advisor Penalties") are administrative in nature, not criminal.

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Riley R. Burr

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On Friday, July 31, 2015 the Supreme Court of Canada sent a clear message to tax advisors: the advisor penalties provided for in section 163.2 of the Income Tax Act ("Advisor Penalties") are administrative in nature, not criminal. Even a penalty of $546,747 to an advisor who made false statements in circumstances amounting to gross negligence will not attract the enhanced procedural safeguards of a criminal process afforded by the Charter.

At the centre of Guindon v. Canada, 2015 SCC 41 is a family law lawyer who signed a legal opinion relating to the tax effects of a leveraged donation program involving the donation of timeshare units. It was an agreed fact that she knew that the opinion would be used as part of the promotional materials for the leveraged donation scheme. Her opinion included a statement that the transactions described in the plan would be implemented based on supporting documents she had seen and reviewed. However, she had not reviewed the

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The Last Word: Advisor Penalties Are Not Criminal

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