Navigating a complex, evolving landscape
Against a backdrop of amplified public and governmental discourse on tax avoidance, and increasingly complex and ever-changing rules and compliance requirements, corporations face greater scrutiny of their tax planning practices and a growing risk of involvement in tax controversy. As the size and stakes of tax disputes increase, the reputational and financial consequences to businesses also increase, with potential exposure capturing the attention of executive leaders and enterprise risk managers. Access to strategic and experienced tax law counsel is imperative in mitigating the impact of tax disputes and litigation.
Widely acknowledged as having the leading tax litigation practice in Canada, Osler advises Canadian and foreign-based corporations doing business in Canada on all aspects of avoiding, managing and litigating tax disputes. Our advice, which leverages our market-leading tax planning and transfer pricing expertise, is focused on prevention and risk management. We work closely with our clients’ business and legal teams, providing focused and strategic advice to help our clients avoid debilitating tax payments and penalties – especially in “bet the company” controversies.
Our clients benefit from our considerable experience in proactively managing and resolving audit and appeal disputes with the CRA, as well as our in-depth knowledge of the Income Tax Act and the CRA’s decision-making processes. While we work with clients to avoid going to court whenever possible, Osler litigators have successfully represented clients in several of the most significant tax litigation cases in Canada. Osler has acted as counsel on landmark and complex tax cases of national importance affecting large classes of taxpayers, before the Supreme Court of Canada, the Federal Court of Appeal, the Tax Court of Canada and other courts in numerous tax cases that have shaped Canadian tax law. Our work includes acting as counsel on the first GAAR case in which a taxpayer succeeded before the Supreme Court of Canada and the first transfer pricing case in which a taxpayer succeeded before the Supreme Court of Canada. Osler’s strategic focus and the depth and breadth of our experience is invaluable to our clients. Our clients also benefit from the experience and judgment of lawyers in our industry-leading civil litigation group and our sophisticated litigation support team.
Osler is at the leading edge of the market, advising clients on the full range of contentious tax issues including:
- Transfer pricing
- Tax avoidance and the general anti-avoidance rule in the federal and provincial context
- Resources taxation
- Computation of profit
- Goods and services tax
- Interest deductibility
- Scientific Research and Experimental Development (SR&ED) credits
- Treaty interpretation
- Corporate reorganizations
- Corporate control
- Shareholder and employee benefits
- Deductibility of settlement payments and other types of expenses
- Foreign tax credits
- Meaning of inventory
- Residence for tax purposes
- A range of administrative and procedural tax matters (including requirement letters, access to information and privilege related issues)
MAJOR DECIDED CASES
- Canada v. Loblaw Financial Holdings Inc., 2021 SCC 51 - Successful representation of Loblaw Financial Holdings Inc. in its appeal to the Supreme Court of Canada regarding the taxation of foreign accrual property income. The decision provides rare guidance from the court on how to interpret and apply important elements of the foreign affiliate rules in the Income Tax Act (the Tax Act).
- Agence du revenu du Québec v. J.D. Irving Limited, 2022 QCCA 241- Successful representation of J.D. Irving Limited in its appeal of Revenu Québec’s reassessments denying the tax benefits associated with a related group loss consolidation transaction premised on recharacterizing the legal agreements entered into by the taxpayer. The Québec Court of Appeal upheld the Court of Québec’s conclusion that the taxpayer’s transaction constituted legitimate tax planning.
- Canadian Imperial Bank of Commerce v. The Queen, 2021 FCA 10 - Successful representation of CIBC in the Federal Court of Appeal, which overturned the decision of the Tax Court of Canada and found that services provided by credit card networks such as Visa are exempt from GST/HST as financial services. The FCA decision has important implications for what constitutes an exempt financial service under the Excise Tax Act, in particular as applied to credit card issuers.
- Canada v. Cameco Corporation, 2020 FCA 112 – Successful representation of Cameco Corporation in its transfer pricing appeal to the Tax Court of Canada and Federal Court of Appeal relating to Cameco’s international sales structure and product sales. The Supreme Court of Canada declined the CRA’s leave to appeal. The case marked the first opportunity for Canadian courts to interpret the scope of the “recharacterization” branch of Canada’s transfer pricing rules under section 247 of the Income Tax Act.
- Canada (National Revenue) v. Cameco Corporation, 2019 FCA 67 – Representation of Cameco Corporation in its successful defence against a requirement from Canada Revenue Agency attempting to compel oral interviews during a transfer pricing audit.
- Devon Canada Corporation v. The Queen, 2018 TCC 170 – Successful representation of Devon Canada Corporation in its appeal respecting the tax treatment of stock option surrender payments made on an acquisition of control.
- Van Lee v HMQ, 2018 TCC 230 – Successful representation of the taxpayer in having the CRA’s assessment completely vacated, which represented an attempt by the CRA to test the law and expand the legal grounds for ignoring trusts for tax purposes, by attempting to build on principles expressed in recent case law relating to sham and tax avoidance. Osler was successful in having the assessment completely vacated, establishing that the trust was validly constituted under Quebec law and that neither the trust nor the initial transfers of property to the trust constituted shams.
- BP Canada Energy Company v. MNR, 2017 FCA 61 – Successful representation of BP Canada Energy Company in the Federal Court of Appeal in a case dealing with whether the Minister of National Revenue could compel the taxpayer to disclose the uncertain tax positions reflected in its tax accrual working papers.
- Superior Plus Corp. v. The Queen, 2015 TCC 132, & 2015 FCA 241 – Successful representation of Superior Plus Corp in a motion to compel the Crown to answer questions/produce documents on discovery and defending a motion by the Crown to compel production of opinions protected by solicitor-client privilege in the context of a SIFT conversion case.
- Telus Communications Inc. v. Canada (Attorney General), 2015 ONSC 6245 - Rectification of error in an election for the alignment of a multi-tier partnership fiscal year end.
- Inter-Leasing Inc. v. Ontario (Minister of Revenue), 2014 ONCA 575, rev’g 2013 ONSC 2927 – Successful representation of Inter-Leasing Inc. before the Ontario Court of Appeal (which reversed the Ontario Superior Court) that the Ontario GAAR did not apply to a “finco” transaction. The Supreme Court of Canada dismissed the Ontario Minister of Revenue’s application for leave to appeal.
- Daishowa – Marubeni International Ltd. v. Canada, 2013 SCC 29 – Representation of The Canadian Association of Petroleum Producers (CAPP) who intervened in this case dealing with the assumption of reclamation obligations. In overturning the lower courts, the Supreme Court of Canada expressly accepted CAPP’s submission that a statutory interpretation promoting symmetry and fairness is to be preferred over one that promotes neither.
- The Queen v. GlaxoSmithKline Inc., 2012 SCC 52 - Successful representation of GlaxoSmithKline Inc. before the Supreme Court of Canada where, in a unanimous decision, the Court articulated the proper approach to determining appropriate arm’s length prices in Canadian law.
- Husky Energy Inc. et al v. Alberta / The Queen, 2011 ABQB 268, aff’d 2012 ABCA 231 – Successful representation of Husky Energy before the Court of Queen’s Bench of Alberta (upheld by the Alberta Court of Appeal) in connection with the application of the Alberta provincial GAAR regime to interprovincial tax planning.
- CIBC World Markets Inc. v. The Queen, 2011 FCA 270 - Successful representation of CIBC World Markets in a GST appeal dealing with the fundamental principle of claiming input tax credits for purposes of the goods and services tax.
- The Queen v. 3850625 Canada Inc. (Formerly Fording Coal, Ltd.), 2011 FCA 117 – This decision is favourable for many resource businesses seeking a broad interpretation of the resource allowance rules.
- The Queen v. General Electric Capital Canada Inc., 2010 FCA 344 – Successful representation of General Electric Capital Canada in the Federal Court of Appeal on the issue of whether the guarantee fee to the taxpayer’s U.S. parent exceeded an arm’s length price. This was the first transfer pricing case in Canada to apply the modern transfer pricing regime set out in section 247 of the Income Tax Act (Canada), in addition to the regime set out in former subsection 69(2).
- TD Securities (USA) LLC v. The Queen, 2010 TCC 186 - Successful representation of TD Securities (USA) LLC before the Tax Court of Canada where the Court overturned the long-established position of the CRA under which LLCs that are fiscally transparent for U.S. tax purposes were denied eligibility for benefits under the Canada-US treaty.
- Canada Trustco Mortgage Co. v. The Queen, 2005 SCC 54; 2004 DTC 6119 (F.C.A.) – Successful representation of Canada Trust Mortgage Co. in the first GAAR case to be argued before the Supreme Court of Canada and still the only GAAR case in which a taxpayer has been successful before the SCC. It remains the leading decision referred to by all levels of court in interpreting the GAAR.
- Gifford v. The Queen, 2004 SCC 15 – This case confirmed the treatment of interest expense as a current expense to moneylenders.