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Federal Tax - Assessments (2). Tuna Temple Inc. v. Canada [burden of proof]
In Tuna Temple Inc. v. Canada (Fed CA, 2026) the Federal Court of Appeal considered the income tax test for qualifying as a 'scientific research and experimental development' (SRED) deduction.
Here the court cites the unique evidentiary burden of proof in income tax assessments:[9] In assessing a taxpayer, the Minister relies on assumptions concerning the facts; the taxpayer has the initial onus of "“demolishing”" or refuting those factual assumptions: Hickman Motors Ltd. v. Canada, [1997] 2 S.C.R. 336, 1997 CanLII 357 (SCC) at para. 92, citing Johnston v. Minister of National Revenue, [1948] S.C.R. 486, 1948 CanLII 1 (SCC) and Kennedy v. M.N.R., [1973] F.C. 839 (F.C.A.), 1973 CanLII 2268 (FCTAD) at p. 843; Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54 at para. 63. The appellant can do that by adducing evidence that raises a prima facie case the assumptions are wrong: Hickman Motors at para. 93.
[10] The Minister’s reply to the appellant’s notice of appeal in the Tax Court describes the Minister’s factual assumptions. While we need not address them all, they include assumptions that the appellant did no work to overcome technological uncertainties or to dispel scientific knowledge gaps through systematic investigation. The reply includes additional details regarding these and other assumptions for each of the projects at issue.
[11] Contrary to the appellant’s submission, the Tax Court did not treat the Minister’s assumptions as evidence. Rather, it considered whether the appellant led sufficient evidence to contradict those assumptions and concluded it had not. In these circumstances, it does not matter that the witness was credible: Bykov v. Canada, 2025 FCA 103 at para. 9.
[12] Nor is the Minister required to adduce evidence: Jefferson v. Canada, 2022 FCA 81 at para. 27; Laliberté v. Canada, 2020 FCA 97 at para. 56. The Minister may rely on the taxpayer’s evidence—its documents and the testimony of its witnesses, including on cross-examination: Jefferson at para. 29; Grenon v. Canada, 2025 FCA 129 at para. 262. The Tax Court considers all the evidence to determine whether the assessment is correct, as it did here. . Siam v. Canada
In Siam v. Canada (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, here brought against "a decision of the Tax Court of Canada (2025 TCC 69) that granted the respondent’s motion to quash Mohamed Siam’s appeal of a notice of reassessment".
Here the court considers a service issue, here regarding a notice of assessment:[4] There appears to be no dispute that the Tax Court and Federal Court of Appeal decisions in Mpamugo v. The Queen, 2016 TCC 215, aff’d 2017 FCA 136, provide the proper framework for assessing an allegation that a notice of assessment was not sent. At paragraph 6 of the Tax Court decision in Mpamugo, that Court laid out a multi-step test that begins with an obligation for the taxpayer to assert that the notice of assessment was not mailed. This can be done either (i) by asserting that he or she did not receive the notice and thus believes it was not mailed, or (ii) by asserting that the notice was mailed to the wrong address through no fault of the taxpayer and was thus, in effect, not mailed. At paragraph 12 of its decision affirming the Tax Court decision in Mpamugo, this Court accepted that the Tax Court may initially assess the credibility of a taxpayer who alleges that he or she did not receive a notice of reassessment, provided that such assessment is made after all of the evidence has been heard.
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