For most taxpayers, CRA has only 3 years to reassess a tax return, after originally processing it. For GST/HST returns, the period is four years after the person was supposed to file the return, whether or not he filed it. (See ITA s. 152(3.1) and ETA s. 298(1)(a).)
As Justice Campbell Miller confirms in this decision, if the CRA has “‘requested additional information from the [taxpayer or registrant] and not having received that information, and having requested a waiver from the appellant which the appellant refused to give, the [CRA] [is] clearly entitled to issue a reassessment to protect [its] rights prior to the expiry of the three-year period.'” (Para. 11, citing the Federal Court of Appeal in Karda v. The Queen, 2006 FCA 238, an appeal of one of C. Miller’s earlier decisions.)
Usually, the taxpayer will prefer to give the waiver and influence the audit process rather than face a less favorable “protective assessment”.