In most cases, amendments to the Income Tax Act are presented to the House of Commons as part of a budget. The Department of Finance, under the direction of the Minister of Finance, prepares these amendments. After an amendment becomes law, the Canada Revenue Agency (CRA) administers it.
Over the years, due to the uncertainty in many areas of tax law, the CRA has developed a number of administrative rules in an effort to deal with practical problems that arise. In some cases, the administrative rules may not even agree with the law.
In tax planning, you should know whether your plan complies with the tax law or depends on the agency’s stated policy. The CRA is not bound by its stated policy, and the courts do not necessarily consider this policy in making their decisions.