Whitecap Energy – Alberta Court of King’s Bench finds that the Attorney General could revive a dissolved corporation for the purpose of making a s. 160 assessment of the shareholder

An Alberta corporation (Whitecap) had been wound up into its sole shareholder. The Attorney General sought to revive Whitecap pursuant to s. 208 of the Business Corporations Act (Alberta) in order that Whitecap could be assessed by CRA. That, in turn, would permit an assessment of the shareholder under ITA s. 160. Principally at issue was whether the Attorney General had standing as an “interested party,” which was relevantly defined to “mean … a creditor of a dissolved corporation … or …a person designated as an interested person by an order of the Court.”

In finding that the Attorney General was not a “creditor,” Schlosser J stated:

Taxpayers remain liable for tax when income is earned … . notwithstanding that no return is filed. The liability does not become a debt until the taxes are assessed … .

However, in finding that he should exercise his discretion to designate the Attorney General, he stated:

[T]he Attorney General of Canada has a valid interest in revival and seeks this remedy in furtherance of its valid interest for a legitimate purpose; which is to convert liability for taxes into a debt.

The revival application was granted.

Somewhat in contrast, the CBCA definition of an “interested person” (s. 209(6)) is an “includes” rather than “means” definition that does not explicitly refer to a person designated in the discretion of the court.

Neal Armstrong. Summary of Canada (Attorney General) v 18335898 Alberta Ltd (Whitecap Energy Inc), 2023 ABKB 357 under CBCA s. 209(6).