Cameco implicitly rejected the OECD cash box notion

Cameco effectively rejected the highly questionable “cash-box” notion of the OECD, which implicitly makes an investment manager the majority partner in the property being managed and reduces the interest of the party whose capital is at risk to a “risk-free” return – and thus ignores the discipline of investment markets reflected in arrangements that see the best private equity managers earning no more than a 20% “carry”.

[T]he issue is squarely dealt with in paragraphs 455 and 456 of the judgment where taxpayer expert witnesses were quoted as saying (in paragraph 455), "Thus to argue, as [the Canada Revenue Agency] does, that the provision of administrative services to investors like CEL who supply risk capital is the equivalent of bearing the risks that capital is subject to is to denigrate the role of risk bearing while putting the engagement in routine functions on a pedestal," and (in paragraph 456), "Even if the CRA's assertion that CCO monitored and managed CEL's price risk is true, this is irrelevant to the question as to who bore the price risk. The CRA confuses risk monitoring with risk-bearing."

Neal Armstrong. Summary of Nathan Boidman, “Cameco and Cash-Boxes,” 19 December 10 2018 letter to Tax Notes International under s. 247(2).