Canada vs LG Electronics Canada Inc., July 2026, Federal Court, Case No T-2545-25

Case Information

Court: Federal Court

Case number: T-2545-25

Citation: 2026 FC 895

Applicant: LG Electronics Canada Inc.

Respondent: Attorney General of Canada

Jurisdiction: Canada

Judgment date: 2026-07-03

Judgment Summary

This was an application for judicial review of a decision by a delegate of the Minister of National Revenue dated June 23, 2025 [1]. The decision denied the Applicant's request for relief under subsection 220(3.1) of the Income Tax Act, RSC, 1985, c 1 (5th Supp) against interest resulting from an advance pricing arrangement program [1]. The arrangement involved a bilateral APA with tax authorities in Canada and South Korea [1].

The parties agreed that the decision was unreasonable and should be set aside and remitted for redetermination by a different decision-maker with delegated authority [2]. The only issue was the appropriate further relief, if any [2].

The Court granted the application on the parties' consent, set aside the decision, and referred the matter for redetermination to a different delegated decision-maker following an opportunity for the Applicant to make further submissions within thirty days [3]. The Court declined to issue the directions in Schedule A of the Applicant's record and declined to order that the redetermination take place within 30 days of receiving the fresh submissions [3].

Background

The Applicant is LG Electronics Canada, Inc., a corporation resident in Canada [4]. LG is a distributor within a multinational group focused on developing technology and manufacturing consumer electronics and commercial products [4]. Its foreign parent company is resident in Korea [4].

In June 2009, the Applicant applied to the APA program to cover inter-company transactions between LG and its foreign parent company involving the purchase and sale of tangible goods [5]. The application involved an APA with the Minister and a bilateral APA with tax authorities in Canada and South Korea [5].

The bilateral APA was tentatively completed in December 2015 [6]. The APA process was completed in October 2017 [6]. In November 2018, the Minister reassessed the Applicant according to the bilateral APA and APA [7].

The Applicant requested interest and penalty relief related to the APA program on February 6, 2017 [8]. On March 5, 2019, the Applicant requested interest and penalty relief for alleged errors in processing the Applicant's advance payments made to the CRA [8]. On August 13, 2019, the Minister denied both requests for relief, and the Applicant requested a second review [9].

On June 23, 2025, the decision was conveyed to the Applicant [10]. In that decision, the Minister cancelled the arrears interest assessed on the 2012 to 2015 taxation years from December 16, 2016, to June 27, 2018 [10]. The Minister refused further relief because undue delays by the CRA in completing the APA were not identified [10].

Core Dispute

The parties agreed that the decision was unreasonable and should be set aside and remitted to a different delegated decision-maker, and the Respondent conceded that the decision contained inaccurate findings of fact [11]. However, the parties could not agree on the appropriate further relief [11].

The Applicant requested an order setting aside the decision, remitting the matter for reconsideration by a different delegated decision-maker, for the new decision-maker to proceed on the basis of the correct set of facts set out in Schedule A, for the CRA to allow supplementary submissions within 30 days, for redetermination within 30 days of receiving those submissions, and for costs [12].

The Respondent agreed to set aside and remit the decision but contested the issuing of directions, the ordering of fresh submissions, the setting of a deadline for reconsideration, and the awarding of costs [14].

Court Findings

The Court addressed a preliminary matter in which the Respondent argued that the Applicant's notice of application did not include a precise statement of relief sought contrary to Rule 301 of the Federal Courts Rules [15]. The Court concluded that the directions and deadline were included in the notice of application, and that regardless the Judgment would not grant that relief [18]. The Court exercised discretion to consider the request for further submissions, finding it necessarily ancillary to the requested relief and that the Respondent would suffer no prejudice [18].

The Court noted that the sole issue concerned remedies, and that there was no applicable standard of review [19] [20].

The Court set out that under paragraph 18.1(3)(b) of the Federal Courts Act it has discretion to refer a matter back with such directions as it considers appropriate, but that the usual remedy is to set aside the decision and remit it for redetermination because the legislature has made the administrator, not the reviewing court, the merits-decider [21]. The Court noted that remedies on judicial review are discretionary and that a court may occasionally depart from the usual remedy, but that this discretion must be carefully exercised [22].

The Court found no basis to depart from the usual remedy except to allow the Applicant an opportunity to provide further submissions within thirty days, granting that relief based on the passage of time and to address concerns the Applicant became aware of following receipt of the Certified Tribunal Record [26].

The Court found that the circumstances could not be characterised as an endless merry-go-round of judicial reviews and reconsiderations, and that this was not an exceptional situation warranting directions that make determinations of findings of fact or dictate how the decision-maker should deal with evidence [27]. The Court found the Applicant had not submitted clear evidence and jurisprudence supporting the deadline for redetermination [27]. The Court considered that the Applicant's concerns were adequately addressed by allowing fresh submissions and a redetermination with the benefit of the Court's reasons [28].

Outcome

The application for judicial review was granted, the decision was set aside, and the matter was returned to another delegate of the Minister for redetermination [29] [Judgment 1]. The Applicant was to provide further submissions within thirty days, and no later than August 4, 2026 [29] [Judgment 1].

The Court did not issue directions making determinations of fact and did not set a deadline for the redetermination [29]. No costs were awarded [30] [Judgment 2].

Major Issues / Areas of Contention

• Whether the Court should exercise its discretion to grant further relief beyond setting aside and remitting the decision [2] [19].
• Whether the Court should issue directions containing findings of fact for the different delegated decision-maker to adopt [2] [19].
• Whether the Applicant should be allowed to provide further submissions within 30 days [2] [19].
• Whether the Court should order the redetermination to occur within 30 days of receipt of the Applicant's further submissions [2] [19].
• Whether the Applicant's notice of application satisfied Rule 301 of the Federal Courts Rules in stating the relief sought [15] [18].
• Whether costs should be awarded [14] [30].

Download the full judgment (PDF) (Source: TPcases)