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Lebouthillier must continue to pursue Cameco’s $2.1 billion+ tax bill

Diane Lebouthillier, the federal Minister of National Revenue

In April 2016, when the Panama Papers were released, The Globe and Mail reported, “The [Canada Revenue Agency] says it wants hundreds of millions of dollars in back taxes from Cameco Corp., Silver Wheaton Corp. and Loblaw Cos. Ltd. because, the CRA says, the companies inappropriately ran international transactions through subsidiary companies in low-tax foreign jurisdictions. The three companies are contesting the allegations, which remain untested in court.”

That Globe and Mail news article provides the background that, “Cameco’s fight with the CRA began in 2008; the tax agency has now reviewed the company’s tax returns from 2003 to 2010 and told Cameco it believes it has $3.4-billion more in Canadian income for those years than the company declared. Cameco says it expects CRA will add another $3.6-billion in taxable income for 2011 through 2015. The total tax bill for the 13 years: $2.1-billion, plus interest and penalties.”

And Reuters has explained, “Cameco’s dispute with tax authorities relates to its offshore marketing structure and transfer pricing. Cameco sells uranium to its marketing subsidiary in Switzerland, which re-sells it to buyers, incurring less tax than the company would through its Canadian office.”

Cameco challenged its tax assessment for the 2003, 2005 and 2006 tax years in the Tax Court of Canada. The company has also filed a Notice of Objection for its 2004 reassessment, but no court appeal has been filed for that given the CRA has not yet responded to that objection. Cameco is also pursuing administrative appeals for taxation years 2007 to 2010. The Tax Court of Canada hearings for the 2003, 2005 and 2006 tax years began in October 2016 and concluded this past September.

This summer, in Trump’s America, there was a setback for fair taxation.

In July, Reuters reported, “Cameco [says] it had settled a U.S. tax dispute for a fraction of the original claim, which may bode well for the company’s multi-billion-dollar battle with the Canada Revenue Agency. Cameco will pay the U.S. Internal Revenue Service US$122,000 for its 2009 through 2012 taxation years, compared with the US$122 million the IRS claimed Cameco underpaid.”

BMO analyst Edward Sterck says, “It is tempting to conclude that this [IRS settlement] weakens the CRA’s position.” As such, there is a concern now that the Canada Revenue Agency could possibly settle with Cameco as the Internal Revenue Service did for much less than what the company owes.

A decision on the Tax Court of Canada hearing is expected to be made at some point between September 2018 and February 2019.

If you are on Twitter, please retweet this message that calls on Diane Lebouthillier, the federal Minister of National Revenue, to publicly commit to continue to pursue the $2.1 billion+ in taxes owed by Cameco to the people of Canada.

Please also consider drawing the attention of your Member of Parliament to this issue so that they might raise it and ask questions about it in the House of Commons.