Saskatoon-based uranium giant Cameco has received notice that the Supreme Court of Canada has dismissed Canada Revenue Agency’s application for leave to appeal last June’s decision of the Federal Court of Appeal. The dismissal means that the dispute for the 2003, 2005 and 2006 tax years is fully resolved in Cameco’s favour.
President and CEO Tim Gitzel says, “We are pleased that the Supreme Court of Canada has rejected CRA’s appeal request. It’s another win for Cameco in this long-running tax dispute,” Gitzel says, “We have consistently followed the rules and complied with both the letter and intent of the law. This was confirmed unequivocally through the court process, and we are happy to have these three tax years concluded in our favour.”
In September 2018, the Tax Court of Canada ruled that Cameco’s marketing and trading structure involving foreign subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, were in full compliance with Canadian law for the tax years in question. CRA appealed the decision to the Federal Court of Appeal, which last June again ruled in Cameco’s favour and upheld the Tax Court’s finding.
CRA sought leave to appeal the Court of Appeal’s decision to the Supreme Court. The Supreme Court has denied that request.
Cameco expects to receive a refund of $5.5 million plus interest for amounts paid on previous reassessments issued by CRA for 2003, 2005 and 2006, as well as the $10.25 million in legal fees and up to $17.9 million in disbursements for costs awarded to the company by the Tax Court and the Court of Appeal in previous rulings.
Cameco says CRA continues to hold approximately $785 million in cash and letters of credit that Cameco has been required to pay or otherwise secure for the 2007 through 2014 reassessments issued. The company says that is tying up a significant portion of the company’s financial capacity. Cameco believes CRA should return the full amount, given the court decisions received to date.
Cameco says they will not be in a position to determine the definitive outcome of this dispute for any tax year other than 2003, 2005 and 2006 until such time as all reassessments have been issued advancing CRA’s arguments and a final resolution is reached for that tax year.
