Osler, Hoskin & Harcourt LLP advised Cameco Corporation.
On February 18, 2021, the Supreme Court of Canada declined to hear the CRA’s appeal of previous decisions that had sided with Cameco Corporation. This marks the end of a long running transfer pricing dispute between Cameco Corporation and the CRA. In declining to hear the case, the Supreme Court effectively upheld the Federal Court of Appeal’s June 2020 decision regarding $11 million in tax for the 2003, 2005 and 2006 tax years, therefore forcing the CRA to return $5.5 million to Cameco and up to $28.15 million in costs (in addition to the implications for subsequent years with significantly larger amounts at issue).
The Supreme Court’s denial to hear an appeal ensures Cameco’s success in this precedent setting transfer pricing case surrounding Cameco’s decision two decades ago to set up a Swiss subsidiary to acquire uranium both from Cameco and 3rd parties and sell that uranium around the world. Cameco’s business decision to sell uranium to its subsidiary (and the pricing in those agreements) was challenged by the CRA, that claimed the prices were not true arm’s length prices and deployed the pricing recharacterization rule arguing that the transactions should be disregarded entirely. 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.
The Osler team consisted of Al Meghji (Picture), Andrew Kingissepp, Monica Biringer, Peter Macdonald and Mark Sheeley (Taxation).
Involved fees earner: Monica Biringer – Osler Hoskin & Harcourt; Andrew Kingissepp – Osler Hoskin & Harcourt; Peter Macdonald – Osler Hoskin & Harcourt; Mark Sheeley – Osler Hoskin & Harcourt; Al Meghji – Osler Hoskin & Harcourt;
Law Firms: Osler Hoskin & Harcourt;
Clients: Cameco Corporation;