MP Western Properties – Tax Court of Canada states that the Crown must produce all documents “considered by officials involved in or consulted during” a GAAR-related audit

Predecessors of the taxpayers had been acquired for their losses in transactions where less than 50% of their voting shares, but more than 90% of their non-voting participating shares, had been acquired. The Minister had reassessed to deny the acquired losses primarily on the basis that there had been an acquisition of control, but secondarily through applying the general anti-avoidance rule.

In discussing the scope of the obligations of CRA and Finance to provide correspondence relating to loss utilization schemes that had been requested by the taxpayers, V.A. Miller J stated:

… It is my view that in a GAAR appeal, draft documents prepared in the context of a taxpayer’s audit or considered by officials involved in or consulted during the audit and assessment of the taxpayer should be disclosed. They inform the Minister’s mental process leading up to an assessment. They may also inform the Minister’s understanding of the policy at issue.

Neal Armstrong. Summaries of MP Western Properties Inc. v. The Queen, 2017 TCC 82 under Tax Court Rules, Rule 95 and ITA s. 245(4).