What does "with costs" mean in the context of an appeal to Canada's Tax Court?

Question

In Howard v. The Queen, the judgement reads:

In accordance with the attached Reasons for Judgment, the appeal from the reassessment made under the Income Tax Act is allowed, with costs, and the reassessment is referred back to the Minister of National Revenue for reconsideration and reassessment...

What exactly does "with costs" mean in this context?

Does "with costs" mean that the losing party is forced to cover the costs of the winning party's legal fees? So if you lose, you have to pay the CRA's lawyer fees? Is this standard practice for all tax dispute cases in Canada? Or is it only for egregious cases that "waste the other party's time"?

Answer 1

The default award of costs in most courts follows a tariff system. The Tax Court of Canada describes its approach here. "Schedule II, Tariff B" describes the extent of the costs that would be typically be awarded. The amounts come far short of covering the winning party's legal fees. For example, even at the highest scale of costs under the tariff, for the most complex matters, preparation for hearing only brings $950.

An order of full indemnification, also called "solicitor and client costs" is only made in extordinary circumstances, in order to signal disapproval of the party's conduct in litigation. This kind of costs order would cover all lawyer fees and disbursements and is extremely rare.

There are other possible costs orders: a lump-sum amount perhaps above the tariff amount in recognition of unique complexity of a file; special costs (also generally higher, and rare); double costs of steps after a rejected settlement; etc.