A remission order is extraordinary measure that allows for relief when relief in other tax legislation is unavailable. The chances of a remission order being successful is rather slim, but it may be the only option in some cases. It can be used in circumstances such as when filing deadlines provided for in tax legislation have been missed.

The subsection 23(2) of the Financial Administration Act[1] provides:

(2) The Governor in Council may, on the recommendation of the appropriate Minister, remit any tax or penalty, including any interest paid or payable thereon, where the Governor in Council considers that the collection of the tax or the enforcement of the penalty is unreasonable or unjust or that it is otherwise in the public interest to remit the tax or penalty.

The subsection provides that the appropriate Minister, often the Minister of National Revenue, to recommend to the federal Cabinet that taxes, penalties and interest be forgiven. The Canada Revenue Agency (“CRA”) has procedures in place to review remission requests. The request is reviewed by a local field office, then the Remission Committee in Ottawa, then an Assistant Commissioner, the Commissioner of Revenue and then the Minister, before a recommendation is provided to the Cabinet.

It may be possible for a Minister other than the Minister of National Revenue to review the request for remission. In Collins v. MNR[2], the Federal Court refused a motion to strike an application to request that an application for remission to be considered by the Treasury Board instead of the Minster of National Revenue. The applicant was involved in series of litigation with the CRA and was concerned about the impartiality of Minister of Revenue.

CRA Guidelines

There are no guidelines in the Financial Administration regarding when a Minister will exercise his or her discretion to recommend that taxes, penalties, and interest be forgiven. The Canada Revenue Agency has published “A Guide for the Remission of Income Tax, GST/HST, Excise Tax, Excise Duties or FST under the Financial Administration Act”. In the Guide, the CRA cited four guidelines to determine when remission will be accepted:

        • Extreme hardship;
        • Financial setback coupled with extenuating factors;
        • Incorrect action or advice on the part of CRA officials and
        • Unintended results of the legislation.

The Guide states that there may be other reasons that can support a request for remission.

In extreme hardship cases, the Guide states that the CRA will consider if the requester’s family income is below levels found by Statistics Canada to be low income cut-offs. Financial hardship should exist at the time of the request for remission and will often existed from the when the original tax debt arose.

In financial setback coupled with extenuating factors cases, remission may be recommended if addition tax debt would setback a person’s finances but not to the extent of extreme financial hardship. Financial setback must be coupled with extenuating circumstances events outside the person’s control (e.g. serious illness) or taxpayer error. Regarding taxpayer’s error, misunderstanding legislation or bookkeeping errors do not qualify, but an error would qualify if the CRA should have detected it.

In cases where there was incorrect action or advice by the CRA, the person must have acted in good faith and take reasonable action. The error must be reviewed in the context of when it occurred and not in light of subsequent case law or legislation.

In cases where there was unintended results of legislation, there must have been tax results that were clearly unfair to the person contrary to the intent of tax legislation.

Case Law

The Federal Court has the power to review cases where the Minister of National Revenue refused to exercise his or her discretion and recommend remission. The Court may review the CRA’s decision not to recommend a remission order, but may not review the Cabinet’s decision to not grant remission. In Germain v AGC[3], the Federal Court outlined the remission process and states the challenges facing a taxpayer requesting remission.

Although the Federal Court has the power to review the Minister of National Review and the CRA’s recommendation for remission, the Court will only overturn a decision on this matter if it there was “patent unreasonableness”[4]. To date, no application for review of the Minister’s decision to not recommend remission has been successful.


[1](R.S.C., 1985, c. F-11)
[2] 2014 CarswellNat 3308, [2014] G.S.T.C. 115 (Federal Court)
[3] (2012 FC 768)
[4] Axa Canada Inc. c. Ministre du Revenu national, 2006 CarswellNat 5386 (F.C.)


This article is for informational purposes only and does not constitute legal advice. If you wish to discuss your issue with a lawyer, contact today.  +1 (613) 706-1757