The Supreme Court of Canada has dismissed a tax case against Cameco, brought on by the Canada Revenue Agency.
The CRA was disputing the 2003, 2005 and 2006 tax years. “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,” said Cameco President and CEO Tim Gitzel.
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.
In June 2020, the Federal Appeals ruled in favour of Cameco. Cameco said it 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 us by the Tax Court and the Court of Appeal in previous rulings.
“This entire saga has gone on far too long,” Gitzel said. “We will be asking CRA to accept the clear and decisive rulings the courts have delivered and apply them to subsequent tax years so that we can focus on managing our business for the benefit of all our stakeholders. If CRA feels the laws aren’t written the way they want, it’s clear they need to make the case to government to change those laws moving forward rather than unfairly dragging Canadian businesses through long and costly legal processes.”
Cameco said that the CRA is holding 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, tying up a significant portion of the company’s financial capacity. It is asking the federal agency to return the full amount.