Executive Summary: Key Legal and Evidentiary Issues

• Spell Love Road Productions Ltd. lost approximately $750,000 in refundable Film Incentive BC tax credits after filing its completion certificate with the CRA two weeks past the 18-month deadline in s 85(3) of the BC Income Tax Act.
   
• Whether the CRA reasonably refused to waive the completion certificate under s 220(2.1) of the federal Income Tax Act, given that s 47(3) of the BC Income Tax Act prohibits extending the s 85(3) deadline, was the central question on judicial review.
   
• The court found the CRA's decision unreasonable because it did not weigh the remedial purpose of s 220(2.1), the early submission of Spell's application, the quick processing once Spell followed up, or the financial consequences to Spell.
   
• A Minister of Finance email directing Spell back to the CRA under the Tax Collection Agreement was held not to be a decision capable of judicial review.
   
• Late issuance of the completion certificate did not amount to a refusal "to issue a certificate" under s 92(2)(a), so Spell's statutory appeal failed.
   
• Parts of the affidavit of Spell's post-production accountant were excluded from the judicial review, while evidence on Creative BC's processing times was admitted as background.
   

Facts of the case

Spell Love Road Productions Ltd. is a British Columbia company in the film and television production business. The tax credits at issue relate to its 2022-2023 production of the movie Color My World With Love, which Spell released to broadcasters and distributors as a "Movie of the Week" in June 2022. Spell applied for its eligibility certificate on October 17, 2022 and received it from the Provincial Minister of Tourism, Arts, Culture and Sport (the Tourism Minister) on January 31, 2023. On February 29, 2024, it filed its 2023 federal and BC income tax returns claiming the Film Incentive BC (FIBC) credits.

Because the production fell within Spell's 2023 taxation year, which ran from February 1, 2022 to January 31, 2023, the 18-month deadline to file its completion certificate with the CRA expired on July 31, 2024. The CRA reminded Spell of that deadline on March 21, 2024. Spell submitted its completion certificate application on May 10, 2024 to Creative BC, the non-profit that administers FIBC applications on the Tourism Minister's behalf, about 2.5 months before the deadline. Creative BC's website recommends applying at least six months before the tax filing deadline. A CRA request dated June 10, 2024 asked for the certificate and warned that failing to provide it by the deadline could result in denial of the credit. Spell next followed up with Creative BC on August 9, 2024, received the certificate on August 15, 2024, and filed it with the CRA immediately. On October 16, 2024, the CRA denied the credit and the associated refund.

Spell then asked the CRA to waive the completion certificate requirement, which a CRA auditor declined by letter of April 28, 2025 (the CRA Decision). A similar request to the BC Minister of Finance drew a July 21, 2025 email directing Spell back to the CRA (the MoF Response). Spell sought judicial review of both and separately appealed the Tourism Minister's failure to issue the certificate in time for the deadline.

Policy and legislative provisions at issue

Part 5 of the BC Income Tax Act (BCITA) permits tax credits for certain film and television productions. To qualify, a corporation must file with the CRA an eligibility certificate and a completion certificate (s 85(1)(a)(ii)) from the certifying authority. Section 85(3) requires all requisite information and records to be filed within 18 months of the end of the taxation year in which the production was made, and s 47(3) expressly prohibits extending that deadline. Under s 87(1), a corporation intending to apply for a tax credit must apply for a completion certificate "promptly after the completion of the production." The CRA administers the provincial credits on behalf of the BC Minister of Finance through a Tax Collection Agreement.

Spell relied on s 220(2.1) of the federal Income Tax Act (ITA), which allows the Minister to waive a requirement to file a prescribed form, receipt or other document, although the person must still provide it at the Minister's request. For its appeal, Spell invoked BCITA s 92(2)(a), which permits an appeal from a decision of the certifying authority "to refuse to issue a certificate."

Reasoning and analysis

The parties agreed that reasonableness was the standard of review. Drawing on Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 and Mason v. Canada (Citizenship and Immigration), 2023 SCC 21, the court noted that failing to grapple with an applicant's key arguments can make a decision unreasonable, particularly where the consequences for the applicant are high.

On the evidence, the respondents objected to parts of the affidavits of Martha Termuende, Spell's post-production accountant, and Mr. Wong, Vice-President of Creative BC. Ms. Termuende's explanations for not contacting Creative BC sooner and for assuming the certificate would arrive in time were excluded, as they were neither before the CRA nor helpful background. Her understanding that Creative BC internally tracks completion certificate deadlines was admitted as background. Mr. Wong's evidence was also admitted: Creative BC takes 118 days 90% of the time from receiving an application to sending the certificate to the certifying authority for execution, with processing ranging from 63 to 175 days.

According to the respondents, Spell's delay was extreme and caused the missed deadline. Spell applied more than 700 days after the production's release, 465 days after receiving its eligibility certificate, and 50 days after the March 21, 2024 reminder, despite Creative BC publishing a 120-day processing time since 2021. After the June 10, 2024 reminder, Spell took no steps until August 9, 2024. In those circumstances, the respondents said, a waiver would be inconsistent with the s 47(3) prohibition on extending the deadline.

While accepting that the CRA Decision properly identified numerous considerations against a waiver, the court found it unreasonable for failing to weigh them against those in favour. The CRA had dismissed Onex Corporation v Canada (Attorney General), 2024 FC 1247 as irrelevant because it did not involve a deadline that could not be extended. In doing so, it ignored Onex's holdings that s 220(2.1) is remedial, aimed at relieving undue hardship, and that the consequences to the taxpayer without a waiver must be considered. These points needed to be addressed where Spell submitted a complete, satisfactory application 2.5 months before the deadline yet forfeited an approximately $750,000 refundable credit because the application was not processed in time. Nor did the CRA consider whether, despite Spell's undeniable delays, a waiver here would actually be an impermissible extension of the s 85(3) deadline; in the court's view, a waiver could arguably reflect that Spell's application arrived well before the deadline but was not processed in time, along with the harsh consequences of losing the credits.

As for the MoF Response, it was not a decision capable of judicial review. Its central point was that Spell's request belonged with the CRA, which administered the matter under the binding agency relationship created by the Tax Collection Agreement. Citing British Columbia (Director of Civil Forfeiture) v Sanghera, 2017 BCSC 1519, the court noted that such an agreement prevents the provincial government from interfering with the CRA's determinations under the BCITA. References in the email to Creative BC's online service standards and FAQs, read in the context of the response as a whole, did not amount to an independent decision.

On the appeal, governed by the appellate standard of review, Spell argued that the failure to issue the certificate before the deadline, despite a timely application, was an "effective refusal." Nothing in the text, context or purpose of BCITA Part 5 supported that reading. The certificate was issued 97 days after the application was received, within the 120-day service standard. Despite the CRA's warnings, Spell never asked Creative BC to expedite before the deadline expired, and once it did follow up, the application was promptly processed.

Ruling and overall outcome

Spell succeeded on its judicial review of the CRA Decision, and the CRA was ordered to reconsider the waiver request, taking into account that Spell's application was filed more than 2.5 months before the s 85(3) deadline, that it was processed within a few days of prompting, the remedial nature of ITA s 220(2.1), and the harsh consequences to Spell of not waiving the requirement. On the remaining issues the respondents prevailed: the MoF Response was found not reviewable, and Spell's appeal in Action No. S256360 was dismissed. No monetary amount was ordered in either party's favour, as the court did not grant the approximately $750,000 in tax credits and the reasons do not address costs.