Taxpayers Can Sue CRA for Negligence

A recent decision of the British Columbia Supreme Court has held that the Canada Revenue Agency (CRA) owes taxpayers a duty of care; this new finding means that taxpayers can now sue the CRA for negligence. 

Before Leroux v. Canada Revenue Agency, a major barrier to bringing a civil claim against the CRA was the fact that the CRA was held not to owe a duty of care to taxpayers. 

Unfortunately for Leroux, his case was lost, as CRA was found not to be negligent; nonetheless, this finding of the court was very important for future taxpayer grievances. At paragraph 353 the court stated:

“… [the] CRA must live up to their responsibilities to the Minister and to the Canadian public, nearly all of whom are taxpayers, by applying a little common sense when the result is so obviously devastating to the taxpayer. It is a poor response to say “we put together our position without regard to the law; leave it to the taxpayer to appeal to Tax Court because we are immune from accountability.”

The CRA’s civil law duties to taxpayers has been confirmed after Leroux, but the full scope of these duties will have to be fleshed out in more detail in subsequent cases.