The Canadian Taxpayers Federation says it has won the first round of its legal battle to stop the Canada Revenue Agency from enforcing unapproved tax hikes. The CTF says the Federal Court dismissed the Attorney General’s motion to strike the case.

Devin Drover, CTF General Counsel says, “”This case is about a basic constitutional principle: No taxation without representation. Unelected bureaucrats shouldn’t be able to raise taxes without a vote in Parliament.

He also suggests that if the CRA gets away with it once, it can do it again.

In a news release the CTF said the government proposed increasing the capital gains inclusion rate in Budget 2024, but Parliament never enacted the legislation. Despite this, the CRA announced it would enforce the higher tax rate. And in its ruling the Court rejected the federal government’s arguments that the case should be thrown out as premature or outside the Court’s jurisdiction. The Court determined that the case is about a challenge to the CRA’s implementation of an unlegislated tax change and not an appeal of any future tax assessment.

The CTF’s challenge will now proceed toward a full hearing on the merits to set a legal precedent that prevents any government from collecting taxes before they are approved by elected representatives.

The CTF is representing Debbie Vorsteveld, a resident of Mapleton, Ontario, in challenging the CRA’s attempt to administer a capital gains tax increase that was never passed into law.