Mr. Anonby wanted the TCC Judge to order CRA to recognize that his employer had withheld tax and to give him credit for the withholding. But the TCC would not do that, saying:
"[T]he Court’s authority is limited to making certain decisions relating to the appellant’s tax liability, not the collection of that tax." (Para. 9) And both the Federal Court of Appeal and the TCC have "'consistently held that [the TCC] does not have jurisdiction to determine whether tax has been withheld at source.'" (Para. 21)
Since the TCC couldn't order CRA to recognize the withheld taxes, if Justice Miller agreed to Mr. Anonby's request and restored his income assessment to $42,000, the order would have been worse for Mr. Anonby. He would pay tax on $42,000 instead of $29,000 that the CRA reassessed.
The TCC said the only Court that could help a taxpayer whose employer doesn't remit withheld taxes is the Federal Court of Canada: "The law does, however, throw a taxpayer in Mr. Anonby’s position a lifeline by suggesting the Federal Court has authority to deal with collection matters." (Para. 26)
But it isn't clear what the FCC could do. The Rule that the Courts refer to for FCC power is s. 222 of the Income Tax Act. s. 222(2) says that a tax debt "is a debt due to Her Majesty and is recoverable as such in the Federal Court or any other court of competent jurisdiction..." But if the tax debt is due to Her Majesty, what right has an employee to go to the Federal Court to enforce it? The unremitted source deductions belong to The Queen and only she could enforce payment of the debt due to Her.
For Mr. Anonby, the better route may be the BC Superior Court or Small Claims Court, where he could claim the unpaid wages from his employer as an employment debt. (If the provincial courts have any jurisdictional concern, they could refer to the "any other court of competent jurisdiction" wording in s. 222 of the ITA.
Anonby (2013 TCC)