Time Extensions for Elections Under Section 217 of ITA(Canada) Are Prohibited

By: Amit Ummat and Alisha Butani

Section 217 of the Income Tax Act R.S.C., 1985, c. 1 (5th Supp.) (the “Act”) Generally

Canadian taxpayers are required to withhold non-resident tax on certain types of Canadian-source income (e.g. most types of registered retirement savings plan income) that is paid or credited to a non-resident of Canada. This withholding tax is typically the non-resident’s final income tax obligation to Canada on this income, and thereby the non-resident does not need to file a Canadian Income Tax and Benefit Return to report it. That said, a non-resident taxpayer may choose to make an election under section 217 of the Act, which will enable them to file a Canadian return to report certain types of Canadian-source income. This may be beneficial to certain non-resident taxpayers because they may pay tax on the Canadian-source income using a different method, resulting in a refund in respect of all or some of the non-resident tax withheld. In essence, the premise of section 217 of the Act is to put certain non-Canadian-resident taxpayers in a position where they would not be in a worse off position had they been a resident of Canada.

For a non-resident taxpayer to make an election under section 217 of the Act, the taxpayer must file a Part I tax return within six months of the end of the year and elect in said return to have section 217 of the Act apply for the tax year.

Triplett v. The King 2024 TCC 23



The Appellant, John H. Triplett, resided in Canada until October 11, 2011, after which he moved to the United States of America and became a non-resident of Canada. In July 2016, the Appellant filed T1 tax returns, in the same manner as if he was still a resident of Canada, for all years in issue, namely 2011 to 2015, inclusive (“Taxation Years”). The Appellant’s income in the Taxation Years included superannuation benefits and some RRSP income in the 2015 taxation year. In March 2017, the Minister of National Revenue (the “Minister”) assessed the Appellant’s taxation years and determined there was no tax owing. In February 2018, the Minister issued the Appellant failure to remit assessments for Part XIII non-resident withholding tax for the Taxation Years. The Appellant objected to those assessments; however, they were all confirmed by the Minister, except for the 2011 taxation year, as the Minister adjusted the computation of the withholding tax from the entire 2011 calendar year to the period between October and December, as that was the time in 2011, he did not reside in Canada.


The issue before the Tax Court of Canada (the “Court”) was whether the Minister erred in issuing non-resident withholding tax assessments for the Taxation Years.

Reasoning and Finding

The Court dismissed the appeal finding that there was no evidence before the Court that demonstrated the Minister erred in its computation of the withholding tax assessments against the Appellant. The Court did not elaborate on the evidence.

The notable part of the judgement was the Court’s assertion that had the Appellant filed a Part I tax return and made an election to have section 217 of the Act apply within the permitted time, the Appellant would have avoided paying the additional withholding amounts levied. In the context of this case, ‘additional withholding amounts’ meant the amounts “computed in each year by determining the applicable non-resident withholding tax on the payments in the year and deducting therefrom the amounts that were withheld at source” (paragraph 11). As such, the Appellant was adversely impacted by losing the ability to make an election under section 217 of the Act. This was acknowledged by the Court, however, they explained that they did not have the discretion to extend the time for a taxpayer to make an election under section 217 of the Act. Indeed, the Court is one of limited jurisdiction and can only determine if an assessment issued by the Minister is correct based on the facts and relevant governing law. It cannot consider the difficulties the Appellant had “obtaining information, that there were delays and that the information was not always helpful” when deciding on the issue in this case (paragraph 23).

The Court did however note that pursuant to subsection 220(3.1) of the Act, the Minister has the right to waive interest and penalties in certain circumstances. The Minister had already proactively waived the interest for a certain period of time because of previous delays. The Court further noted that the Appellant could make a request to the CRA for further relief under that provision, however the Court did not have jurisdiction with respect to those matters.

Why is this case noteworthy?

This case is noteworthy for three primary key reasons. Firstly, because the Court urged Canadian policymakers and Parliament to consider the possibility of amending when elections under section 217 of the Act can be made by a non-Canadian-resident taxpayer. Indeed, the Court explained that considering the objectives of section 217 of the Act it is startling that a non-Canadian resident taxpayer cannot elect under section 217 of the Act at any time later than June 30th of the following calendar year. This short time period is shocking, particularly because generally a taxpayer may file an objection within one year after the filing due date to request available relief. Furthermore, for many different tax matters, a taxpayer has the ability to persuade the Minister to use its discretion to reassess the taxpayer’s filing for a ten-year period, with the taxpayer’s consent.

Secondly, the Court reaffirms that it has a limited jurisdiction, specifically one which is limited to determining whether assessments made by the Minister are correct based on the facts and relevant governing law. As such, the Court does not have the ability to consider other factors such as emotional hardship incurred by a taxpayer due to the (re)assessment by the Minister, or adverse impacts caused by time delays when making its decision to confirm or modify assessments issued by the Minister.

The final reason why this case is noteworthy is because the Court reaffirms that the Taxpayer Bill of Rights (which lays out sixteen rights that describe the treatment a taxpayer is entitled to when dealing with the Canada Revenue Agency) is not law and does not give rise to legal rights. The Taxpayer Bill of Rights is “more in the nature of an aspirational document and it would probably be better if the document were given a different name” to avoid confusing taxpayers with respect to its legal enforceability (paragraph 24).