Interpreting the Income Tax Act - Part 2: Toward a Pragmatic Approach

Canadian Tax Journal, Vol. 47, No. 4, pp. 741-798, 1999

58 Pages Posted: 11 Jul 2008 Last revised: 23 Sep 2018

See all articles by David G. Duff

David G. Duff

Peter A. Allard School of Law, University of British Columbia

Date Written: June 10, 1999


Part 1 of this two-part article reviewed the four main doctrines to which Canadian courts have referred in interpreting the Income Tax Act (strict construction, purposive interpretation, the plain meaning rule, and the words-in-total-context approach) and examined leading cases in which these doctrines have been defined and applied. Part 2 of the article evaluates each of the interpretive doctrines examined in part 1 and develops, as an alternative, an explicitly "pragmatic" approach. This alternative approach builds on the words-in-total-context doctrine by interpreting the words of the Act "in their entire context," having regard to the scheme of the Act, the purposes of the Act, the intentions of Parliament, and the practical consequences of different interpretations.

Following the analysis of the four doctrines, the article outlines the essential features of an explicitly pragmatic approach to statutory interpretation, explains the relevance of practical consequences to judicial decisions, and considers the manner in which consequential considerations and other relevant factors are properly brought together in the context of a particular interpretive issue. Emphasizing the significance of textual, purposive, and consequential considerations to statutory interpretation, this interpretive approach favours an open and inquiring method of judicial reasoning by which the court should endeavour, where possible, to fashion a mutual harmony among these various interpretive elements. Where this harmony is ultimately unachievable, however, the pragmatic approach advocated here follows the traditional practice of English, US, and Canadian courts by generally weighing textual considerations more heavily than purposive considerations and purposive considerations more heavily than consequential considerations.

To the extent that Supreme Court of Canada decisions interpreting the Income Tax Act already examine textual, purposive, and consequential considerations, the pragmatic approach advocated here is not so much a departure from the court's actual practice of statutory interpretation as a more satisfactory account of that practice than is provided by the various doctrines to which the court now refers. To the extent that these doctrines shape both the process of statutory interpretation and the substance of the decisions themselves, however, the proposed pragmatic approach promises a more open, reasoned, and balanced method of statutory interpretation than each of the alternatives otherwise available.

Reproduced with the permission of the Canadian Tax Foundation

Note: Downloadable eDoc in French.

Suggested Citation

Duff, David G., Interpreting the Income Tax Act - Part 2: Toward a Pragmatic Approach (June 10, 1999). Canadian Tax Journal, Vol. 47, No. 4, pp. 741-798, 1999. Available at SSRN:

David G. Duff (Contact Author)

Peter A. Allard School of Law, University of British Columbia ( email )

1822 East Mall
Vancouver, British Columbia V6T 1Z1
1-604-827-3586 (Phone)
604-833-8108 (Fax)


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