7 March 2019 CTF Seminar - Suzanne Saydeh on GAAR Committee

This summarizes one of the comments made by Suzanne Saydeh (Manager, GAAR and Technical Support Section, Aggressive Tax Planning Division, International and Large Business Directorate, CRA) at a seminar of the Canadian Tax Foundation held in Toronto on 7 March 2019 in a segment entitled "How the Government has Dealt with the GAAR.” The moderator was Wayne Adams (CTF) and the other presenters were Natalie Goulard (Justice) and Brian Ernewein (Finance).

GAAR Committee's response to jurisprudence

The GAAR committee adapts its decisions to the current state of the jurisprudence. For example, the approach of the GAAR Committee regarding surplus-stripping has changed significantly. At the 2015 CTF Conference (2015-0610701C6), CRA commented that, having regard to the state of the jurisprudence, it will no longer recommend the application of the GAAR to certain corporate reorganizations by which there is a deliberate triggering of a capital gain in order to distribute a capital dividend to its shareholders.

Conversely, the Committee will now apply the GAAR to a surplus-stripping arrangement involving the transfer of a family business to a related party - this is consistent with the Descarries decision, and more recently with the Pomerleau decision by the Federal Court of Appeal.