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The Canada Revenue Agency headquarters in Ottawa is shown on November 4, 2011.Sean Kilpatrick/The Canadian Press

An Ottawa lawyer who issued false receipts and drafted a "flawed and misleading" legal opinion approving a "sham" tax shelter is not entitled to the criminal-law protections under the Charter of Rights and Freedoms and must pay a $547,000 penalty, the Supreme Court of Canada has ruled.

The court's ruling on Friday upholds the Canada Revenue Agency's powers to penalize promoters and tax planners involved in illegal tax schemes rather than laying charges in a criminal proceeding.

It also stamps a seal of approval on the $137-million in penalties the CRA says it has assessed against other promoters and tax preparers across the country implicated in similar tax-shelter schemes, which usually involve claiming tax deductions for inflated donations to charities.

It is part of a crackdown that has been going on for years: As of 2014, the CRA had audited more than 180,000 taxpayers participating in such schemes and denied nearly $6-billion in bogus donations.

The lawyer at the centre of this case, Julie Guindon, had argued that the penalties she faced were so harsh they qualified as criminal, not civil, law, and should have required investigators and prosecutors to secure search warrants and prove guilt "beyond a reasonable doubt."

In a ruling issued Friday, the country's top court disagreed, saying the penalties in the Income Tax Act were "administrative" in nature and did not amount to "true penal consequences." The tax penalties, the court said, are designed to ensure compliance with tax rules, not to "redress the wrong done to society at large."

Ms. Guindon's lawyer, Adam Aptowitzer, said in an interview that his client was disappointed with the ruling, stressing that she was not the mastermind of the scheme and did not stand to gain financially from it, outside of her $1,000 fee for the legal opinion.

He also said the implications of the ruling extend far beyond tax law. He suggested it would make it easier for the prosecutors to pursue large fines in civil courts in other areas, such as securities, telecommunications or environmental law, without having to prove what might otherwise be considered a criminal case.

"It is unfortunate that Ms. Guindon got caught up in this whole issue," Mr. Aptowitzer said. "But the bigger issue of course is that the case has wider consequences in a variety of fields."

In 2012, Ms. Guindon's lawyers convinced a federal Tax Court judge that the penalty she faced was criminal in nature, and the $547,000 fine was thrown out. Tax experts warned at the time that the ruling would create major new roadblocks for the CRA in its probes into promoters, lawyers, accountants or tax planners who lure clients into unlawful tax-shelter schemes. The Federal Court of Appeal overturned that ruling in 2013.

According to court documents, Ms. Guindon, a family and wills and estates lawyer with no income-tax expertise, became involved in a tax scheme run by her cousin and then financial adviser, Richard St-Denis, in 2001.

The complex scheme revolved around timeshares at a resort in the Turks and Caicos Islands that were essentially to be purchased by participants and then donated at a higher value to a charity, earning an inflated tax deduction. Ms. Guindon was the president of a registered charity, Les Guides Franco-Canadiennes District d'Ottawa, supposed to benefit from the donations.

But the scheme was a "sham," courts have ruled, and the timeshares never existed. Nothing flowed to the charity, but Ms. Guindon signed 135 charitable tax receipts worth almost $4-million. The CRA disallowed the scheme and assessed the penalties against Ms. Guindon in 2008.

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