Superior Plus – Tax Court of Canada finds that a taxpayer which was assessed under GAAR for a loss shifting transaction was entitled to see the correspondence between CRA and Finance on the subsequently-introduced s. 256(7)(c.1)

When the Superior Plus Income Fund was converted into a public corporation, the chosen corporate vehicle was a public corporation ("Old Ballard") with substantial losses. The transactions were engineered so that there was no acquisition of control of Old Ballard by a group of persons (unless the former income fund unitholders were factually regarded as a group) and so that the former Ballard shareholders and the old assets were removed from Old Ballard.

CRA assessed inter alia under GAAR. Hogan J has found that the taxpayer (whose position includes that s. 256(7)(c.1) was originally considered as an "extension" rather than a "clarification" of the loss-streaming rules) is entitled to disclosure of a wide range of documents (and answers to questions) relating to the policy deliberations (not just the final recommendations of the GAAR Committee) that preceded the GAAR assessment of the taxpayer, and respecting CRA cajoling Finance into introducing s. 256(7)(c.1) in response to this transaction. As established in Birchcliff, the taxpayer is entitled to know the specific policies which the Minister considers to have been abused, and all these materials bore on that question.

Neal Armstrong. Summaries of Superior Plus Corp. v. The Queen, 2015 TCC 132 under s. 245(4) and s. 232 – solicitor-client privilege.