| Summary: | This study examines the problem of form and substance in Canadian tax jurisprudence, which
has been characterized by a troubling equivocation between formalistic and substantive
approaches in cases involving tax avoidance transactions with the current period of jurisprudence
dominated by formalism. The vacillation of Canadian jurisprudence contrasts with the
consistently substantive tax jurisprudence of the United States. The latter situation discloses an
unresolved doctrinal tension in Canadian tax jurisprudence between two viable doctrinal
alternatives. This study seeks to resolve the problem of form and substance by finding the right
answer to the problem by examining the tax policy, political, and legal philosophical
implications of formalistic jurisprudence along with the manner in which the legal system as a
whole (i.e. jurisprudence outside of tax law) rationally employs both form and substance for
distinct purposes to solve distinct kinds of legal problems. Using the principles that are implied
in the practices of the legal system as a whole, a right answer to the form and substance problem
— one that is horizontally consistent or integral with the whole — suggest itself, namely that
substantive, judge-made standards are the right solution to the problem of form and substance in
Canadian tax jurisprudence and that formalism in tax jurisprudence is a legal aberration in the
Canadian legal system.
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