http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/73389/index.do 
Imperial Oil Resources Ventures Limited v. Canada (Attorney General) (September 2, 2014 – 2014 FC 839) is another decision involving judicial review applications of the operation of the Syncrude Remission Order. This decision involves the rather novel proposition that the applicant was entitled to interest on the funds remitted by analogy to tax overpayments under the Income Tax Act:
[1] These are two applications for judicial review brought by Imperial Oil Resources Limited (file T-1-05) and Imperial Oil Resources Venture Limited (file T-2155-10) [collectively “Imperial Oil”] against the Minister of National Revenue [Minister] relating to the Syncrude Remission Order, CRC, c 794 [SRO], an initiative undertaken in 1976 by the federal government to provide some federal tax relief to participants in the Syncrude (oil sands) Project in northern Alberta. This tax relief served to counterbalance increased royalty charges by the Albertan government that, as of 1974, had to be included in the participants’ taxable income. In essence, until 2003, the Syncrude participants were entitled to a remission of federal tax paid on the amount they paid Alberta in royalty charges.
[2] These applications were heard concurrently with file T-1382-06. Reasons for that file, dealing with the remission entitlement for the 2001 taxation year, will be addressed in a companion judgment. These three files are test cases; 44 other files are currently in abeyance before this Court.
[3] The common arc for the present applications centres on Imperial Oil’s belief that a remission order is the same as a refund of a tax overpayment under section 164 of the Income Tax Act, RSC 1985, c 1 (5th Supp) [ITA], with the result that the federal government would owe interest on the remission ultimately granted to it for a given year, much like it does in instances of an overpayment to the Canada Revenue Agency [CRA] by a taxpayer.
The court rejected this argument:
[49] It seems to me that Imperial Oil is confusing the nature of the Minister’s obligation with the way it is or it has been carried out.
[50] Under the SRO, the Minister had the power and duty to remit a producer’s tax liability under subsections 12(1)(o) and 18(1)(m) of the ITA, including interests accrued thereon. By definition, in order for a debt or liability to be remitted, it has to be fully assessed and certain. However, depending on the circumstances, the remission could be made by issuing a cheque in reimbursement of tax paid for a given year, by offsetting amounts equally due and payable once the final assessment is made or by releasing the taxpayer’s debt as contemplated in the final assessment. Those are simply different mechanisms through which the Minister can execute his duty under the SRO. Which ever mechanism is chosen, it does not create an obligation on the Minister, when acting pursuant to the SRO, to pay refund interest under the ITA.
[51] The Minister has chosen to apply the remission amount against Imperial Oil’s tax liability as a mean to implement the SRO and more specifically its impact on Imperial Oil’s “instalments and other payment of tax, interests and penalties required under the Income Tax Act of Canada” (see point C of the ATR).
[52] The SRO is closely tied to subsections 12(1)(o) and 18(1)(m) of the ITA as those provisions serve in establishing the quantum of the SRO payments to the producer. However, the substance and nature of the SRO payment are as determined in subsection 23(2) of the FAA [Financial Administration Act].
The court also found that the application in respect of the applicant’s 1996 taxation year was statute-barred:
[62] The time limit for making a judicial review application is set out in subsection 18.1(2) of the FCA [Federal Courts Act]:
An application for judicial review in respect of a decision or an order of a federal board, commission or other tribunal shall be made within 30 days after the time the decision or order was first communicated by the federal board, commission or other tribunal to the office of the Deputy Attorney General of Canada or to the party directly affected by it, or within any further time that a judge of the Federal Court may fix or allow before or after the end of those 30 days. [Emphasis added.]
[63] The words “first communicated” signify that “some positive action was required on the part of the decision maker in order to communicate his decisions to the parties directly affected” (Atlantic Coast Scallop Fishermen’s Association v Canada (Minister of Fisheries and Oceans), 189 NR 220, [1995] FCJ No 1347 at para 6).
[64] As conceded by Imperial Oil, the Minister’s position that it had no entitlement to refund interest with respect to its 1996 taxation year was communicated on the Notice of Reassessment dated June 10, 2003. That communication which was consistent with prior practice was treated as a decision.
[65] The time for filing an application for judicial review is not extended by filing a Notice of Objection under the ITA. Remission is granted by authority of the FAA, which provides no statutory right of appeal. Consequently, the CRA had no authority to reconsider the Minister’s decision under the provisions for an objection to an assessment made under the ITA. Therefore, at best, the Notice of Objection amounts to an improper request that the Minister reconsider his determination, which does not extend the time for filing an application for judicial review.
[66] The oral communication that Imperial Oil relies on is misplaced. The CRA officer advised Imperial Oil that the Minister would not pay refund interest, as its objection could not be considered under the appeal provisions of the ITA. This does not amount to a fresh determination of Imperial Oil’s entitlement to refund interest. A refusal to reconsider an earlier decision does not extend the time for seeking judicial review of the decision as first communicated.
[67] Moreover, this Court finds no reason to grant an extension of time. The test applicable when using this discretionary power is set out in Canada (Ahttp://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/73427/index.do
Imperial Oil Resources Limited v. Canada (Attorney General) (September 2, 2014 – 2014 FC 838) was a judicial review of the amount payable to the applicant under a remission order, more specifically whether the “Disputed Costs” of the Syncrude project acted to reduce the amount remitted:
[1] This is an application for judicial review brought by Imperial Oil Resources Limited [Imperial Oil] against the Attorney General of Canada, representing the Minister of National Revenue [Minister] relating to the Syncrude Remission Order, CRC, c 794 [SRO], an initiative undertaken in 1976 by the federal government to provide some federal tax relief to participants in the Syncrude (oil sands) project in northern Alberta. This tax relief, in the form of a remission paid pursuant to the Financial Administration Act, RSC, 1985, c F-11, served to counterbalance increased royalty charges enacted by the Albertan government that, as of 1994, had to be included in the participants’ taxable income. In essence, until the end of 2003, participants in the Syncrude project were entitled to a remission of federal tax for the amount they paid Alberta in royalty charges.
[2] This application was heard concurrently with files T-1-05 and T-2155-10, which deal with unpaid refund interest allegedly accrued on previously granted remission for the 1996 and 1999 taxation years. In essence, the respondent argues that no interest is owed on remission and that the application relating to the 1996 taxation year is time-barred. Reasons for those files will be addressed in a companion decision.
[3] The present file concerns the computation of the remission entitlement itself, for the 2001 taxation year. While in its Notice of Application, the applicant had also sought the corresponding claim for refund interest allegedly accrued, it desisted from that argument at the hearing.
[4] Imperial Oil submits that its remission entitlement must be imputed with reference to the actual amount of royalties payable to the Province of Alberta. The Syncrude participants (including Imperial Oil) had sought a downward adjustment to their royalties by submitting proposed financial statements to Alberta, which included deductions pertaining to certain pension costs from the 2000 and 2001 taxation years. These proposed financial statements were rejected by Alberta and ultimately by a binding arbitration decision rendered in 2004, as being inconsistent with the royalty agreement governing the computation of royalties. As such, the royalty payable was never actually reduced by Alberta. The respondent limited Imperial Oil’s remission entitlement to an amount of remission computed on the basis that the proposed lower royalties, stating that it was the amount of royalty eligible for remission.
The court agreed with the applicant’s position that the Disputed Costs should not reduce the amount remitted if they were included in the applicant’s 2001 taxable income. Whether they had been so included however was a matter to be determined ultimately by CRA and, eventually, the Tax Court, not the Federal Court:
[37] The Court is asked to review the decision of the Minister concerning the Disputed Costs and is not asked to rule on any other amount that would need to be reassessed by the CRA, so that the amount of Syncrude royalty included in Imperial Oil’s taxable revenue for the 2001 taxation year ($54 million) equates the taxable amount used to calculate the remission for the same year ($41.9 million).
[38] Although the Court has been presented the above general figures, it does not have the benefit of Imperial Oil’s entire tax file and of the documentation supporting these figures. The evidence before the Court is incomplete and contradictory as to whether or not the Disputed Costs were included in Imperial Oil’s revenue.
[39] In any event, I am of the opinion that this question is for the CRA (who has the benefit of Imperial Oil’s tax file), and eventually the Tax Court, to answer.
Conclusion
[40] For these reasons, the Court will grant the application for judicial review, set aside the Minister’s decision and declare that the applicant’s entitlement to relief for the 2001 taxation year pursuant to the SRO, without a deduction related to the Disputed Costs, is contingent upon the Disputed Costs having been included in Imperial Oil’s 2001 taxable income.
Thus the application was granted with costs although at this stage it is essentially impossible to tell whether the applicant will derive any benefit from the decision. It remains to be seen whether there will be subsequent proceedings to determine if the Disputed Costs were included in the applicant’s taxable income in 2001 and what the outcome of such proceedings might be.torney General) v Hennelly, [1999] FCJ No 846 at para 3:
1. a continuing intention to pursue his or her application;
2. that the application has some merit;
3. that no prejudice to the respondent arises from the delay; and
4. that a reasonable explanation for the delay exists.
[68] None of these criteria are satisfied.
In the result the applications were dismissed with costs in favour of the Crown.