In Dow Chemical Canada ULC v. Canada (2024 SCC 23), the Supreme Court of Canada addressed whether the Tax Court or the Federal Court has jurisdiction to review the Minister of National Revenue’s discretionary decision under section 247(10) of the Income Tax Act (ITA).

Key Points:

• Issue: Dow sought a downward transfer pricing adjustment, which the Minister denied. Dow argued the decision should be reviewed by the Tax Court as part of its tax assessment appeal, asserting the Minister’s decision was integral to determining its tax liability.
• Jurisdictional Question: The central question was whether the Minister’s discretion under section 247(10)—allowing downward income adjustments—is part of the tax assessment or a separate matter subject to judicial review by the Federal Court.

Court Decisions:

• Tax Court: Initially held that the Minister’s discretionary decision was part of the assessment, falling under its jurisdiction.
• Federal Court of Appeal: Reversed this, ruling that the Minister’s decision is distinct from the assessment and falls under the Federal Court’s judicial review jurisdiction.

Supreme Court Ruling:

The Supreme Court upheld the Federal Court of Appeal’s decision. It found that the Minister’s decision under section 247(10) is not part of the tax assessment but a separate discretionary decision. Therefore, challenges must be brought to the Federal Court through judicial review, as only it can provide remedies like quashing a decision.

A dissenting opinion argued that such decisions, directly impacting tax liability, should be reviewed by the Tax Court to ensure efficiency and access to justice.

No monetary award was specified.