Supreme Court grants leave in the BNS case

The Supreme Court has agreed to hear the appeal of the Bank of Nova Scotia case.

In 2015, the Bank had requested the carryback of a non-capital loss from its 2008 taxation year to its 2006 taxation year to offset a transfer-pricing adjustment. CRA calculated interest on the increased balance of tax owing for the Bank’s 2006 year (before application of the loss carryback) for the period of approximately eight years ending, pursuant to s. 161(7)(b)(iv), with the date of the Bank’s carryback request, rather than (pursuant to s. 161(7)(b)(ii)) with the return filing date for the loss year. The Bank had unsuccessfully submitted that s. 161(7)(b)(iv) was inapplicable because the reassessment of its 2006 year did not occur “as a consequence of [its carryback] request” as required by s. 161(7)(b)(iv) but “[r]ather, the reassessment was made in order to process the audit adjustment”.

Summary of Bank of Nova Scotia v. Canada, 2024 FCA 192, leave granted 22 May 2025 (41643) under s. 161(7)(b)(iv).