Mr. Speaker, as a result of the Supreme Court decision, most fines and penalties are deductible as a business expense. However the court also said, and this is extremely important, that where fines or penalties were found to be egregious or repulsive, they could not be claimed as legitimate business expenses. Any change that would disallow fines and penalties, such as parking fines, would require a change in legislation and the Income Tax Act, and that of course is the responsibility of the Minister of Finance.
In the House of Commons on October 23rd, 2002. See this statement in context.