Cameco says tax dispute could end up in Supreme Court of Canada

Saskatoon-based Cameco, which is currently involved in a tax dispute with the Canada Revenue Agency, said the mattercould wind up at the Supreme Court of Canada and take years to decide.

The Canada Revenue Agency (CRA) is appealing a Federal Court of Appeal decision, which sided with Cameco in its dispute of reassessments issued by the CRA for the 2003, 2005 and 2006 tax years.

That 2018 ruling upheld a decision of the Tax Court of Canada that focused on the company's use of a subsidiary in Switzerland to sell and trade uranium.

The CRA argued Cameco's use of a subsidiary wasa mechanism to avoid Canadian taxes.

Cameco's president and CEO Tim Gitzel called the CRA's decision unfair to the company's employees, communities and other affected parties.

"After two clear and decisive rulings in our favour from the Tax Court of Canada and the Federal Court of Appeal that confirmed we complied with both the letter and intent of the law it is incredibly disheartening," Gitzel said in a news release.

If appeal proceeds, Cameco estimated it could take until the second half of 2022 before a decision is issued.

If a leave to appeal is not granted, the dispute over the 2003, 2005 and 2006 tax years is resolved in Cameco's favour.

"Based on prior court decisions, Cameco is entitled to a refund of $5.5 million plus interest for instalments the company paid on previous reassessments issued by CRA, for 2003, 2005 and 2006 tax years, costs in the amount of $10.25 million for legal fees incurred and an amount for disbursements of up to $17.9 million," the statement said.

Call to change the laws

Gitzel called on the CRA to change the laws if the agency feels the current rules aren't accomplishing what it wants rather than "pursuing the same arguments over and over."

When asked if the laws in question were under review, a CRA spokesperson said the agency would look into a matter but was unsure if the agency would be able to reply by today.

He said if a leave to appeal is granted, the company remains confident in its legal standing.

The Court of Appeal ruling is not legally binding on the subsequent tax years, 2007-13, that are also in dispute, though the Cameco news release said the company believed the ruling should apply to tax years 2007 through 2019.

The Cameco news release said the government of Canada holds $303 million in cash and $482 million in letters of credit that Cameco was required to pay as instalments related to its disputes with the CRA.