Carrying on the Tradition: Justice Rothstein's Contribution to Canadian Tax Law

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Justice Rothstein, Canadian Tax Judgements, Supreme Court of Canada, Formalist Judicial Interpretation, Federal Court of Appeal, General Anti-Avoidance Rule (GAAR)


In this article, we review a selection of Justice Rothstein’s tax judgments with the object of making two observations about his contribution to Canadian tax law. First, Justice Rothstein, who was appointed to the Supreme Court two years after Justice Iacobucci retired, and in many ways stepped into his shoes as the Court’s tax judge, continued Justice Iacobucci’s formalist tradition. We provide evidence of Justice Rothstein’s formalist approach by examining one case he rendered while serving on the Federal Court Trial Division, Neuman; and two cases that were decided when he sat on the Federal Court of Appeal, Singleton and Stewart. Each of these cases was appealed to the Supreme Court. We also review one case rendered while he was sitting on the Supreme Court, Craig.

Our second point is that Justice Rothstein’s tax decisions illustrate why he was so widely admired as a judge. They are well written and technically competent. They are always well organized and free of jargon. They often refer to and engage with the relevant academic literature, they are closely reasoned, and they deal straightforwardly with the arguments, as he sees them, on both sides of the issues. He wrote many leading judgments, but in one area in particular, the application of the General Anti-Avoidance Rule (GAAR), he wrote the first appellate court judgment while serving on the Federal Court of Appeal (the provision was enacted in 1988). This decision guided courts for a number of years. While on the Supreme Court he continued his work in this complex area of law and his judgments at the Supreme Court have laid the foundation for the future development of the rule. A review of Justice Rothstein's GAAR decisions supports our second point.