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Highlights
GENERAL ANTI-AVOIDANCE RULE
Capitalizing on the Demise of the General Anti-avoidance
Rule?
Duane R. Milot
In Imperial Oil v. The Queen, the Federal
Court of Appeal upheld the judgment of the Tax Court of Canada, which
determined that the general anti-avoidance rule did not prohibit the
taxpayer from reducing its liability for large corporations tax
("LCT") under Part 1.3 of the Income Tax Act by taking
advantage of a well-known "loophole" in the statutory scheme.
In the Court's view, the transactions in question were "perfectly
foreseeable" to Parliament and the structure of the LCT
"virtually invited" the use of the strategy employed by the
taxpayer. As Duane Milot explains, the judgment in Imperial Oil
offers a boon to taxpayers and presents a significant challenge to the
Minister of National Revenue in areas where a clear and unambiguous
statutory policy is not readily ascertainable.
GENERAL ANTI-AVOIDANCE RULE
General anti-Avoidance Rule Battle Comes to the Supreme
Court of Canada
David E. Spiro
Since the Tax Court of Canada heard McNichol v.
The Queen in 1997, the courts have been called upon to consider the
general anti-avoidance rule ("GAAR") in numerous cases, but
the Supreme Court of Canada has yet to hear its first GAAR appeal. That
will change with Kaulius et al. v. The Queen and The Queen v.
Canada Trustco Mortgage Company. In Kaulius, the Supreme
Court will focus on issues relating to the identification and assessment
of the relevant "clear and unambiguous" policies in the Income
Tax Act. In Canada Trustco, the Court will consider the Crown's
argument that the GAAR has been misunderstood and misapplied by the
lower courts. David Spiro discusses the Appellants' positions in both
appeals and selected aspects of the case law.
COLLECTIONS
New Limitation Periods Added Post-Markevich
James W. Murdoch
In The Queen v. Markevich, the Supreme Court
of Canada held that the Crown was precluded from collecting a
long-outstanding tax debt by virtue >of the limitation periods contained
in federal and provincial limitation statutes of general application. In
response to Markevich, legislative amendments to section 222 of
the Income Tax Act were tabled, which provide for a ten-year limitation
period for the collection of all tax debts. However, as James Murdoch
observes, the new legislation also appears to have the effect of
reviving any and all tax debts that arose before March 4, 2004. The
author critiques the new legislation and argues that its controversial
retroactive operation goes far beyond what was required to fill in the
gaps in the former statutory collections regime.
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Board
David C. Nathanson, QC
Editor-in-Chief
Lerners LLP
Jacques Bernier
Bennett Jones LLP
Patrick J. Boyle
Fraser Milner Casgrain LLP
William I. Innes
Fraser Milner Casgrain LLP
Edwin G. Kroft
McCarthy Tétrault LLP
Warren J.A. Mitchell, QC
Thorsteinssons
Kenneth S. Skingle
Felesky Flynn LLP
David E. Spiro
Blake, Cassels & Graydon LLP
Joanne E. Swystun
Stikeman Elliott
Roger E. Taylor
Couzin Taylor LLP
Matthew G. Williams
Thorsteinssons
Adrienne K. Woodyard
Lerners LLP |
