Executive Summary: Key Legal and Evidentiary Issues

• Federal Court lacked jurisdiction as the matter falls under the exclusive authority of the Tax Court of Canada.

• Applicant sought a modified T4 slip to reduce taxable income from a harassment settlement.

• The payment was classified by the employer as a taxable retiring allowance, disputed by the applicant.

• Court determined the core issue was a tax reassessment, not an administrative law matter.

• Request for judicial review was struck because it circumvented the statutory tax appeal process.

• No costs or damages were awarded; the application was dismissed without leave to amend.

Facts and outcome of the case

Bruno Makoundi, a former employee of Infrastructure Canada, filed an application for judicial review in the Federal Court challenging a decision dated February 3, 2025, by the Deputy Minister of Housing, Infrastructure and Communities. The decision had rejected two grievances he submitted related to how a monetary settlement—received after a workplace harassment complaint—was classified for tax purposes. Specifically, the sum was reported on his 2015 T4 slip as a "retiring allowance," rendering it taxable income. Makoundi argued it should have been classified as non-taxable damages for harassment.

The applicant attempted to obtain a corrected T4 slip from Infrastructure Canada, asserting that the classification materially affected his 2015 income tax assessment. His initial request was denied by the Director General of Human Resources, prompting him to file two formal grievances. The grievances were ultimately dismissed by the Deputy Minister, who cited lateness in filing and a provision in the settlement agreement that precluded the employer from making representations about the tax treatment of the payment.

Frustrated with the outcome and ongoing administrative inaction, Makoundi turned to the Federal Court, framing his application as a challenge to the Deputy Minister’s decision. However, the respondent—the Attorney General of Canada—argued that the Federal Court had no jurisdiction over the matter. The respondent emphasized that the dispute was fundamentally about a tax reassessment, falling squarely under the exclusive jurisdiction of the Tax Court of Canada under section 12(1) of the Tax Court of Canada Act and section 18.5 of the Federal Courts Act.

The Federal Court agreed with the respondent. Justice Duchesne concluded that the essence of the application was to correct a tax assessment via administrative means, which is not permitted. The Court held that the applicant was attempting to use the judicial review process as a workaround to alter his tax obligations—something that must be addressed through the established tax appeal process.

Ultimately, the Court struck the application without leave to amend, citing a fatal jurisdictional flaw that could not be cured by amending pleadings. The application was dismissed under Rule 168 of the Federal Courts Rules, and no costs or damages were awarded.