Cameco president and CEO Tim Gitzel is calling it another win for the uranium mining company in a saga that “has gone on far too long.”
“We are pleased that the Supreme Court of Canada has rejected CRA’s appeal request,” Gitzel said Thursday in a statement.
The dispute focused on Cameco’s marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium sale and purchase agreements.
The agency contended it was a sham established to avoid Canadian taxes, while Cameco maintained it was for legal and sound business practices.
In June 2020, the Federal Court of Appeal upheld a 2018 ruling from the Tax Court of Canada that centred on Cameco’s use of a subsidiary in Switzerland to sell and trade its uranium.
The ruling covers Cameco’s 2003, 2005 and 2006 tax years.
Gitzel said the Saskatoon-based company has consistently followed the law.
“It has been incredibly disheartening for us, as a Canadian company, to have an agency of our federal government continue to pursue a flawed argument for 13 years, even after receiving two court decisions completely in our favour during that time,” Gitzel said.
“In the meantime, we have had to navigate through a period of challenging global markets and the unprecedented economic upheaval of the COVID-19 pandemic with the uncertainty caused by this tax dispute significantly impeding our ability to maneuver. To say it has been unfair to our employees and the many other stakeholders who count on our company would be an understatement.”
Cameco said it expects to receive a refund of $5.5 million plus interest on previous assessments for those tax years.
The CRA continues to hold $785 million in cash and credit letters from the company for other tax years currently in dispute — 2007 through 2014.
Gitzel said they believe that should be returned to Cameco given the clear rulings from the courts.
“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,” Gitzel said.
“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.”
The tax court has awarded Cameco $10.25 million for legal fees incurred and up to $17.9 million for disbursements.
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