Section 187

In 2000, the Minister reassessed the taxpayer for 1993 and 1995, substantially increasing its 1993 Part IV taxes but reducing its 1995 Part IV taxes. Several days later, the Minister applied the 1995 "overpayment" to the 1993 taxation year. The Minister calculated the taxpayer's interest on the basis that it began accumulating in 1993 and a portion stopped accumulating in 2000 when the 1995 overpayment was applied.

Pizzitelli J found no merit in the taxpayer's argument that the "day of payment" of the overpayment portion was when the taxpayer paid its taxes for the 1995 year, rather than in 2000 when the Minister applied the overpayment. The taxpayer was effectively asking for a payment made in regard to 1995 to be concurrently treated as a payment in regard to 1993, which had no basis in the Act (para. 18). Moreover, the Minister's right under s. 164(2) to apply the overpayment to the taxpayer's 1993 liability did not exist until the 2000 reassessment (para. 10). A contrary interpretations of s. 187(2) and a host of similar provisions "would all render section 221.1 redundant" (para. 21).