CRA indicates that it could accept Univar GAAR doctrine of looking at reasonable alternative transactions

Univar found that the result of cross-border surplus-stripping transactions could have been equally accomplished if the non-resident indirect purchaser of Canco had instead been able to access the surplus of Canco by using a subsidiary Buyco with high paid-up capital.

Alexandra MacLean indicated that Univar signifies that, in the context of a consideration of the general anti-avoidance rule, there can be an examination of what the taxpayer could have done versus what the taxpayer did do – but CRA is examining what limitations should be placed on this approach. For example, the mooted alternative must have been commercially reasonable – something that the taxpayer could actually have done.

Neal Armstrong. Summary of Alexandra MacLean, "CRA Audits of Large Corporations - The view from ILBD" under Responses to recent adverse decisions – Univar, 27 November 27 2018 CTF Annual Conference presentation under s. 245(4).