Executive Summary: Key Legal and Evidentiary Issues

• Whether an alleged abeyance agreement between Ingredion Canada Corporation and the Minister of National Revenue to hold tax objections in abeyance until resolution of related appeals was binding and enforceable

• Jurisdictional question under section 18.5 of the Federal Courts Act regarding whether the Federal Court could entertain judicial review once an appeal to the Tax Court of Canada had been filed

• Whether the Minister's statutory duty under subsection 165(3) of the Income Tax Act to consider objections "with all due dispatch" precluded entering into binding abeyance agreements

• Availability of adequate alternative remedies through the Tax Court of Canada appeal process and potential breach of contract action in provincial superior court

• Whether declaratory relief sought would have practical utility given that the 2014 and 2015 tax assessments had been confirmed and appealed to the Tax Court

• Whether procedural fairness concerns in the objection/confirmation process were ancillary to the correctness of the assessments and could be addressed in the Tax Court appeal

Background and procedural history

Ingredion Canada Corporation found itself embroiled in a dispute with the Canada Revenue Agency over tax assessments spanning multiple years. In 2020, the Minister of National Revenue issued notices of assessment under Parts I and XIII of the Income Tax Act for Ingredion's predecessor's 2012 and 2013 taxation years. Ingredion filed notices of objection to these assessments, and after the assessments were confirmed, appealed them to the Tax Court of Canada in 2021. Two years later, in 2022, the Minister issued additional notices of assessment under the same provisions of the Income Tax Act, this time for the 2014 and 2015 taxation years. Ingredion again filed notices of objection under Part I of the Income Tax Act.

The alleged abeyance agreement

Before filing its notices of objection to the 2014 and 2015 assessments under Part XIII of the Income Tax Act, Ingredion took a strategic step. On February 2, 2023, the company wrote to the Minister requesting that its proposed objections to the 2014 and 2015 assessments be held in abeyance until the final adjudication of the pending appeals concerning the 2012 and 2013 assessments. The rationale was clear: if the issues were the same or substantially similar, it would make sense to await the outcome of the earlier years' appeals rather than duplicate effort and expense. Ingredion filed its notices of objection to the 2014 and 2015 assessments under Part XIII on February 14, 2023. Nearly a year later, on January 22, 2024, the CRA responded in writing, confirming its agreement to hold Ingredion's objections to the 2014 and 2015 assessments in abeyance. This written confirmation became the centerpiece of the subsequent legal dispute.

The reversal and confirmation

The abeyance arrangement lasted just over a year. On May 5, 2025, Ingredion was verbally advised by the Minister that the objections would no longer be held in abeyance. Four days later, on May 9, 2025, the CRA sent Ingredion a letter setting out its analysis and basis for dismissing the notices of objection and proposing to confirm the 2014 and 2015 assessments. Ingredion responded by filing an application for judicial review on June 9, 2025, challenging what it characterized as the Minister's "Reversal Decision." On June 12, 2025, Ingredion received a Notice of Confirmation formally dismissing its objections and confirming the 2014 and 2015 assessments.

The competing motions

The Attorney General of Canada filed a motion on July 28, 2025, seeking to strike Ingredion's notice of application without leave to amend. In response, Ingredion brought a motion on August 26, 2025, to amend its notice of application to address the Notice of Confirmation and seek additional relief, including an interim stay. The motion also requested that the Federal Court stay the proceedings before the Tax Court. After Ingredion filed its notice of appeal to the Tax Court on September 8, 2025, it brought a second motion on September 29, 2025, to remove the now-moot request for an interim stay and add additional proposed amendments relating to the appeal. Justice Furlanetto granted this second motion, making the revised motion materials the operative documents before the Court.

The Minister's statutory obligations and abeyance agreements

The Attorney General argued that no binding abeyance agreement could exist because the Minister has a non-discretionary statutory duty under subsection 165(3) of the Income Tax Act to consider objections "with all due dispatch." According to the government, this obligation to assess notices of objection as quickly as possible cannot be set aside by an administrative agreement. However, Justice Furlanetto found this argument insufficient to strike the application at the preliminary stage. The Court noted that subsection 225.1(5) of the Income Tax Act expressly contemplates that abeyance agreements between taxpayers and the Minister may exist and have implications both when a taxpayer has served a notice of objection or appealed to the Tax Court. These agreements are intended to save administrative and litigation costs where the decision in another pending appeal involves the same or substantially the same issues and may be dispositive of the taxpayer's objection or appeal. The Court concluded that the language of subsection 165(3) was not sufficient on its own to determine that there could be no implication on the timing of assessment flowing from the alleged abeyance agreement.

The jurisdictional barrier of section 18.5

The more formidable obstacle for Ingredion proved to be section 18.5 of the Federal Courts Act, which provides that if an Act expressly provides for an appeal to the Tax Court from a decision or order, that decision or order is not subject to review in the Federal Court except in accordance with that Act. Since subsection 169(1) of the Income Tax Act provides for a right of appeal to the Tax Court from a confirmation of assessment, and Ingredion had already filed such an appeal, the question became whether the Federal Court retained any jurisdiction to entertain the judicial review application. Justice Furlanetto carefully analyzed the distinction between the "product" and the "process" of determining a taxpayer's liability. While the Tax Court is the appropriate forum to challenge an assessment itself, judicial review in the Federal Court may be appropriate for challenging the Minister's discretionary decisions, including conduct or process leading to a tax assessment. The Court acknowledged that where there are allegations of improper purpose or reprehensible conduct by the Minister, such as abuse of power or unfairness, this may constitute appropriate subject matter for judicial review, unless an adequate, effective recourse is available elsewhere.

The essential character of Ingredion's application

After examining the application holistically, Justice Furlanetto determined that its essential character was one of contract and timing. It challenged the Minister's determination to move forward with the objections to the 2014 and 2015 assessments despite the alleged abeyance agreement. The relief sought was primarily contractual, relating to enforcement of the alleged agreement, although various declarations were also requested. The Court found this critical: "The proverbial horse has already left the barn." The alleged abeyance agreement arose during the objections stage, before confirmation of the assessments. Once the Notice of Confirmation had been issued, the assessments confirmed, and an appeal filed with the Tax Court, there was no practical purpose for restoring the alleged agreement, and section 18.5 of the Federal Courts Act prohibited any consideration of the confirmation outside the Tax Court.

Alternative remedies available

Justice Furlanetto emphasized that judicial review is a remedy of last resort and identified two adequate alternative remedies available to Ingredion. First, pursuant to subsection 26(d) of the Tax Court of Canada Rules (General Procedure), Ingredion could seek to hold its appeal of the 2014 and 2015 assessments in abeyance in the Tax Court until after determination of the 2012 and 2013 appeal proceedings. This would effectively serve the same downstream purpose as the alleged abeyance agreement. To the extent there is similarity between the assessments for different years, it would inform the correctness of the 2014 and 2015 assessments. The Tax Court, as a specialized court, is well positioned to evaluate whether any such similarity exists. Second, if Ingredion believed the Minister breached a binding agreement, it could move in a Superior Court of the province to seek damages for breach of contract. That court would be the appropriate forum to consider whether a binding agreement existed and, if so, whether it was frustrated.

The declaratory relief question

The Court also addressed Ingredion's request for various declarations, finding they would serve no practical purpose once the assessments had been confirmed and an appeal filed with the Tax Court. A declaration is a discretionary remedy, and one consideration in exercising that discretion is whether the declaration will have any real or practical effect. The Supreme Court of Canada has emphasized that a declaration can only be granted if it will have practical utility—that is, if it will settle a "live controversy" between the parties. Here, issuing declarations that did not quash or vacate the assessments would serve little or no purpose, particularly given the existence of adequate alternative remedies. The declarations requested would not serve to quash or vacate the assessments, which is outside the Federal Court's jurisdiction.

The procedural fairness dimension

Ingredion raised procedural issues, arguing that the Minister denied it procedural fairness by refusing to communicate the reversal decision in writing and its underlying reasons, and by insisting that only the substantive tax aspects could be discussed. However, Justice Furlanetto found that any procedural issues relating to the timing of the assessment could be dealt with by the Tax Court, and any issues relating to the handling of the notices of objection had become ancillary to the correctness of the assessments. The Federal Court of Appeal has previously held that whatever flaws may exist in the objection process, they result in a decision that can be challenged only through an appeal to the Tax Court. If the assessments are incorrect as a matter of law, it will not matter whether the objection process was flawed; if they are correct, they must stand even if the objection process was flawed.

Outcome and costs

Justice Furlanetto granted the Attorney General's motion to strike, dismissed Ingredion's application for judicial review, and consequently dismissed the motion to amend the notice of application. The Court awarded costs to the Attorney General of Canada in the total amount of $5,300, comprising $4,000 for the motion to strike and $1,300 for the motion to amend, both calculated in accordance with Column III of Tariff B. The successful party was the Attorney General of Canada, and the total amount ordered in favor of the Respondent was $5,300 in costs.