Executive Summary: Key Legal and Evidentiary Issues

• PC Bank sought a Rule 58 determination to decide its entitlement to notional input tax credits (NITCs) for 2013-2015 reporting periods before a full trial.

• The Court found Rule 58 is not intended to supplant a full hearing and should not serve as an easily accessible alternative to trial for contentious disputes.

• Material facts remained in dispute, including the quantum of NITCs, whether a certain payment was a taxable supply, and whether agreements effective January 1, 2015 differed from prior agreements.

• Granting the motion would either unfairly circumscribe the Respondent's ability to adduce evidence or result in no cost savings over a trial.

• Each taxation year represents a new cause of action requiring an independent review of facts, regardless of prior litigation on similar issues.

• Fresh evidence submitted after submissions closed was not considered because no motion was made to introduce it.

Background and parties involved

President's Choice Bank ("PC Bank"), a Schedule I chartered bank under the Bank Act registered for goods and services tax ("GST") and harmonized sales tax ("HST") purposes, filed a motion under section 58 of the Tax Court of Canada Rules (General Procedure) seeking a stage-one determination. PC Bank was appealing the Minister of National Revenue's assessments under Part IX of the Excise Tax Act for its reporting periods ending in 2013 to 2015. The sole issue in the appeal concerned whether PC Bank was entitled to notional input tax credits ("NITCs") under subsection 181(5) of the Act for payments made to Loblaws Inc. as part of PC Bank's loyalty points program.

Prior litigation and PC Bank's position

The same NITC issue for PC Bank's 2009 to 2012 reporting periods was previously decided in President's Choice Bank v The Queen, 2024 FCA 135, reversing 2022 TCC 84, where the Federal Court of Appeal held that PC Bank was entitled to NITCs. PC Bank argued that the only difference between that decision and the present appeal is the reporting periods involved, submitting that the parties, issue and facts are all the same. PC Bank contended that President's Choice dealt with the same agreements, which were in force in 2009-2012 and 2013-2014, and that while new agreements became effective January 1, 2015, the relevant aspects remained the same. PC Bank submitted that a Rule 58 hearing would eliminate the need for a trial and any further litigation steps, resulting in substantial cost and time savings.

The Respondent's opposition

His Majesty the King opposed the application. The Respondent argued that a Rule 58 hearing would require the same factual findings as would be required at trial, only without the procedural protections of a trial, and that PC Bank was seeking to deprive the Respondent of its right to conduct examination for discovery, which was scheduled for March 2025. The Respondent maintained that material facts were in dispute, including the quantum of NITCs, whether a certain payment to PC Bank was a taxable supply subject to GST/HST, and whether the agreements that came into effect January 1, 2015 differed from the prior agreements. Additionally, the Respondent submitted that the state of the law was uncertain pending the Federal Court of Appeal's decision in Amex Bank of Canada v The King, 2023 TCC 93 (Federal Court of Appeal File No.: A-225-23), where the Respondent had asked the Federal Court of Appeal to not follow the majority decision in President's Choice.

The Court's analysis on Rule 58 as a substitute for hearing

Justice Edward (Ted) Cook acknowledged that the three mandatory conditions for a Rule 58 stage-one determination had been met: the proposed question was one of mixed law and fact, it was raised in PC Bank's notice of appeal, and the determination could dispose of all or part of the proceeding. However, the Court emphasized that the fact that the mandatory conditions have been met does not compel the Court to grant an order under Rule 58. The Court held that PC Bank was essentially seeking to replace the hearing of the appeal with a Rule 58 determination, which is not a proper use of the rule. Citing Jurchison v The Queen, 2001 FCA 126 and other authorities, the Court reiterated that Rule 58 is intended to enhance litigation efficiency by dealing with one or more issues in advance of a hearing, not to act as an easily accessible alternative to a trial for the disposition of complex and contentious disputes.

Evidentiary concerns and procedural fairness

The Court expressed concern that a Rule 58 hearing in this instance would either unfairly circumscribe the ability of the Respondent to adduce evidence or, alternatively, mean that the Rule 58 hearing would not result in cost savings or greater efficiency than a trial. As of the date of the order, the discovery process had not yet been completed. The Court noted that evidentiary determinations are better made in the context of a full hearing. Citing 632738 Alberta Ltd. v The Queen, 2019 TCC 225, affirmed 2021 FCA 43, the Court emphasized that it would be unfair for the appellant to be permitted to control the way in which the respondent could elicit and adduce evidence by using Rule 58.

Treatment of the Glinnyi Affidavit and fresh evidence

The Court addressed issues regarding the affidavit of Theodore Glinnyi ("Glinnyi Affidavit") submitted by PC Bank, which among other things referred to the procedural history of the parties' joint request to hold this matter in abeyance, PC Bank's view that the Respondent should concede this appeal, and PC Bank's position on costs. The Court agreed that costs and whether the appeal should be conceded are not relevant to the decision. Regarding the letters filed by PC Bank on July 3 and 8, 2025, and the letter filed by the Respondent on July 10, 2025, relating to additional evidence from examination for discovery, the Court did not use these materials in deciding the application because no motion was made to introduce fresh evidence. On September 8, 2025, it was ordered that a chart enclosed with PC Bank's July 3, 2025 letter be expunged from the Court record.

Ruling and outcome

The Court dismissed PC Bank's motion under Rule 58, with costs in the cause. The order was signed on November 13, 2025. The ruling confirmed that different reporting periods are at issue in this appeal and it cannot be assumed for the purposes of this application that the ultimate result would be the same as in President's Choice. The Court emphasized that generally, each taxation year for each taxpayer will represent a new cause of action, and given that these appeals involve separate taxation years, an independent review of the facts and issues is required. No specific monetary amount was determined in this procedural decision, as the motion concerned the appropriateness of the Rule 58 process rather than the substantive merits of the NITC claim.