Settlement and Compromise in Canadian Income Tax Law Since Carter

Document Type

Book Chapter

Publication Date



Tax Law, Canada, Carter Commission, Income Tax Law, Income Tax Act, Minister of National Revenue, Discretionary Powers


The Quest for Tax Reform Continues: The Royal Commission on Taxation Fifty Years Later presents a collection of papers written by leading tax experts from Canada, the United States, and Australia, edited by Kim Brooks, based on a series of discussions on the evolution of tax policy since Canada's Carter Commission. The Carter Commission report is widely viewed as the most detailed and brilliant analysis of income tax policy produced by a government commission around the world. It was acclaimed by tax experts, and is viewed as a timeless contribution to the literature on taxation.

In this chapter, I present the Royal Commission's recommendations dealing with the settlement and compromise of tax debts. I also discuss how the law in this area has evolved in Canada since the Carter Report. In particular, my focus is on the discretionary power of the Minister of National Revenue (the "Minister") to cancel or waive interest and penalties assessed under the Income Tax Act and the requirement that tax disputes be settled only on a principled legal basis.