Guindon Case on Section 163.2 Penalties Headed to Supreme Court


By: Alexandra Tzannidakis

 The Supreme Court of Canada has granted Julie Guindon leave to appeal from a Federal Court of Appeal decision that held section 163.2 penalties against tax advisers are not “penal” and therefore do not attract section 11 Charter rights.

Our readers may recall that we have written about this important case in the past.[1]  Ms. Guindon was assessed penalties amounting to $564,747 under section 163.2 of the Income Tax Act on the basis that she knew or would have known but for willful disregard of the Act, that the tax receipts she issued to participants of a charitable donation scheme constituted false statements.

The argument revolves around whether the potentially unlimited scope and size of the “third party civil penalties” that can be levied under this section takes them out of the purview of civil penalties and into the realm of the quasi-criminal, despite their name. The Tax Court decided in favour of Ms. Guindon; the Federal Court of Appeal disagreed.

This case should be of acute interest for all tax planners and raises important questions for lawyers who advise charities.  If the Supreme Court finds these penalties to be penal in nature, they will fall within the ambit of section 11 of the Charter and therefore entitle the accused to procedural protections such as the right to be presumed innocent.

Clearly, by its grant of leave to appeal, the Supreme Court agrees that this is a case of national importance. We speculate it will be heard towards the end of 2014 or in early 2015.

Alexandra Tzannidakis is an associate with Drache Aptowitzer LLP. She would be pleased to hear from you at

[1] See The Canadian Taxpayer, Volume XXXV at page 105 and Volume XXXIV at page 153.

Originally published in “The Canadian Taxpayer”, Volume XXXVI, p. 58-59, April 18, 2014