The following are decisions by the SCC as to leave applications:
Her Majesty the Queen in Right of Alberta v. Husky Energy Inc., decision dated 03/07/2013
The taxpayer Husky shifted income among members of a corporate group, with the result that tax liability in one province was lowered (resulting in an overall lower tax liability). The government of Alberta reassessed using provincial GAAR. The Alberta Court of Queen’s Bench held that the actions taken did not technically breach the act, and did not constitute abusive avoidance. Appeal to the Alberta Court of Appeal was dismissed.
The SCC dismissed the application for leave to appeal.
Her Majesty the Queen in Right of Alberta v. Canada Safeway Limited, dated 03/07/2013
From SCC summary
The respondent and related companies carried out a sophisticated plan intended to minimize their taxes. One company replaced its retained earnings with money it borrowed from a related company, enabling the first to claim a deduction for interest paid on the borrowed funds. Ultimately, a related, foreign-incorporated company resident in Ontario obtained legal entitlement to the interest and did not pay provincial tax on it, by virtue of Ontario law. An estimated $6 to $7 million per year of potential provincial taxes was saved. The Ontario resident paid dividends to another related company, which claimed a deduction on the amount of the inter-corporate dividends. The applicant reassessed the respondent and the related companies, denying interest expense deductions or including in income the interest received by the Ontario resident. The companies appealed the reassessments.
The Alberta Court of Queen’s Bench allowed the appeals, vacated the reassessments, and ordered that the respondent and the related company’s income, taxable income and taxable amounts be reduced by the reassessed amounts, with interest payable on their over-payment. The Alberta court of Appeal dismissed the appeal.
The SCC dismissed the application for leave to appeal.
– Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3
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