Date:
20121015
Docket:
A-286-11
Citation: 2012 FCA 258
CORAM: NOËL
J.A.
SHARLOW
J.A.
MAINVILLE
J.A.
BETWEEN:
TRIAD
GESTCO LTD.
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
REASONS
FOR JUDGMENT
NOËL
J.A.
[1]
This
is an appeal by Triad Gestco Ltd. (the appellant) from a decision rendered by Justice
Favreau of the Tax Court of Canada (the Tax Court judge) dismissing its appeal
from reassessments in respect to its 2001 and 2002 taxation years. In issuing
these reassessments, the Minister of National Revenue (the Minister) relied on
the general anti-avoidance rule (GAAR) set out in section 245 of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act) to disallow the
deduction of a capital loss claimed by the appellant.
[2]
This
appeal raises questions which are common to the appeal in a companion case (1207192
Ontario Ltd. v. The Queen, 2011 TCC 283 (1207192 Ontario Limited))
which was heard together with the present appeal and which decision is also
being released today. The common issue is whether the deduction of a capital
loss which arises from the implementation of a planning technique known in the
tax community as a “value shift” results in a misuse or abuse of the provisions
relied upon within the meaning of subsection 245(4). Both Tax Court judges
answered this question in the affirmative and denied the claimed loss but for
partly diverging reasons.
[3]
For
the reasons that follow, I am of the view that the Tax Court judge came to the
correct conclusion, but I come to that result for reasons that more closely
resemble those given by Justice Paris in the companion appeal.
CONTEXT AND FACTS
[4]
The
provisions of the Act that are relevant to the analysis appear in the annex to
this decision. The facts are fully set out in the decision under appeal and
need not be repeated. It suffices for present purposes to set out the following
brief summary.
[5]
During
its 2001 taxation year (which ends August 31) the appellant realized a capital
gain in the amount of $7,799,545 further to the disposition of a commercial
building in an arm’s length sale for a selling price of $32,650,000.
[6]
Subsequently,
the following transactions were entered in at the instigation of Peter Cohen,
the appellant’s majority shareholder:
- the incorporation on
July 25, 2002 of Rcongold Systems Inc. (Rcongold) whose sole director was Peter
Cohen;
- the settlement on August
20, 2002 of the Peter Cohen Trust for the benefit of Peter Cohen by a person
not related to him;
- the subscription by the
appellant on August 27, 2002 for 8,000 common shares of Rcongold for a
consideration of $8,000,000;
- the declaration of a
stock dividend by Rcongold on August 28, 2002 of $1 payable to the appellant as
the shareholder holding all common shares issued or outstanding by the issuance
of 80,000 preferred shares with a redemption price of $100 each; and
- the sale by the
appellant to the Peter Cohen Trust on August 29, 2002 of the 8,000 common
shares which it held in Rcongold for the amount of $65 thereby resulting in a
capital loss of $7,999,935.
[7]
In
filing its tax return for the 2002 taxation year, the appellant claimed an
allowable capital loss of $3,932,998 which resulted in a net capital loss of
$143,063 that the appellant applied to reduce its tax liability for its 2001
taxation year.
[8]
By
reassessments issued on March 8, 2006, these losses were denied by the Minister
on the basis that no economic loss was incurred and the GAAR applied to deny
the tax benefit claimed by the appellant, i.e. the capital loss and the carry
over to the preceding year.
DECISION OF THE TAX COURT JUDGE
[9]
It
was conceded before the Tax Court judge that the transactions in issue gave
rise to a tax benefit within the meaning of subsection 245(1). At issue was
whether the transactions which led to the claimed loss were “avoidance
transactions” within the meaning of subsection 245(3) and whether there was a
misuse or abuse of the provisions relied upon to achieve the tax benefit.
[10]
The
Tax Court judge held that the transactions in issue were “avoidance
transactions” (reasons, paras. 70 to 83) and that the result achieved defeats
the underlying rationale of the provisions relied upon (reasons, paras. 84 to
102). This last conclusion is the only one being challenged on appeal.
[11]
In
coming to this conclusion, the Tax Court judge reviewed the history of the
legislation beginning with the introduction of the capital gains system back in
1972. He also considered specific anti-avoidance provisions relating to capital
losses, namely former subsection 55(1), paragraph 40(2)(g) and section
54 (reasons, paras. 85 to 94).
[12]
According
to the Tax Court judge, the repeal of former subsection 55(1) in 1988 upon the
introduction of the GAAR “did not signal a policy shift” but “confirmed the
continued intention of Parliament” that capital losses not be deducted where
the loss is created artificially (reasons, para. 89). He relied in particular
on the Technical Notes issued in conjunction with the enactment of the GAAR
back in 1988 which state that “Because the scope of the [GAAR] is broad enough
to cover the transactions to which subsection 55(1) was intended to apply, that
subsection is no longer necessary” (reasons, para. 88).
[13]
The
Tax Court judge further held that a reading of the relevant provisions show
that there is an overarching policy preventing the deduction of artificial
capital losses realized “within the same economic unit”, and that this policy
was being abused by the appellant (reasons, para. 98). According to the Tax
Court judge, the amendment of section 251.1 in 2005 which brought trusts within
the definition of “affiliated persons” is a clear indication that the result
achieved by the appellant was contrary to the object, spirit and purpose of the
Act (reasons, para. 97).
[14]
The
essence of the Tax Court judge’s reasoning for dismissing the appeal is
captured by the following paragraph (reasons, para. 100):
The
transactions undertaken by the appellant amount to abusive tax avoidance
because they defeat the underlying rationale of the capital loss provisions in
the Act. Through the manipulation of the fiscal "amount" of the
Rcongold common shares, the appellant created artificially devalued property
that was transferred to a person within the same economic unit to create an
artificial capital loss without incurring any real economic loss. On August 27,
2002, the appellant owned shares of Rcongold which had a fair market value of
$8 million (the common shares). On August 28, 2002, the appellant continued to
own shares of Rcongold which had a fair market value of $8 million (the Class
"E" shares) and after the disposition of the common shares of Rcongold
to the [Peter Cohen Trust], the appellant continued to own shares in Rcongold
having a fair market value of $8 million.
POSITION OF THE PARTIES ON APPEAL
- The appellant
[15]
The
appellant argues that the relevant provisions of the Act operate in a purely
mechanical fashion (appellant’s memorandum, paras. 19 and 31). It submits that
upon the application of sections 3, 38, 39 and 40 of the Act, there can be no
doubt that the capital loss is deductible. The requirement that this loss be a
“true” or “real” economic loss is nowhere to be found in the Act and cannot be
inferred from the statutory context especially in light of the fact that the
Act itself produces results that can be labeled as “artificial” but which are
nevertheless given effect to (appellant’s memorandum, para. 32). For example,
the appellant points to the rules governing flow-through shares in section 66.3
of the Act.
[16]
The
appellant also contends that the Tax Court judge did not follow the proper
interpretative approach under section 245 of the Act as established in Canada
Trustco Mortgage Co. v. Canada, 2005 SCC 54 (Canada Trustco) and Lipson
v. Canada, 2009 SCC 1. Canada Trustco clearly stands for the
proposition that any overarching policy must be rooted in specific provisions
of the Act. It contends that it is not possible to find such an overarching
policy in the provisions referred to by the Tax Court judge.
[17]
Specifically,
the appellant contends that it was not possible to ground an overarching policy
against “artificial capital loss” on former subsection 55(1), as it was
repealed. It submits that it would be incongruous if Parliament had sought to
retain this concept while repealing the provision providing for it (appellant’s
memorandum, paras. 37 and 38). With regard to the Technical Notes which were
central to the analysis of the Tax Court judge, the appellant submits that the
fact that they were drafted a decade before the transactions in issue took
place and that the relevant provisions have since been the subject of numerous
amendments, diminishes their relevance.
[18]
The
appellant further contends that the Tax Court judge erred in holding that the
Act embodies a general policy against the deduction of capital losses on
dispositions within an “economic unit”. The appellant points out that neither
the stop loss rules in subparagraph 40(2)(g)(i) or subsection 40(3.4)
refer to that concept. Rather, they refer to the term “affiliated persons” as
defined in section 251.1 to suspend, but not deny, capital losses realized
between affiliated persons (appellant’s memorandum, paras. 48 and 49).
[19]
Furthermore,
the definition of “affiliated persons” as introduced in 1985 does not to this
day apply to siblings, or to parents, or their children. According to the
appellant, the reasoning of the Tax Court judge if it goes unchecked would
result in the suspension of capital losses realized between siblings and
between parent and child even though they were deliberately excluded from the
definition of “affiliated persons” (appellant’s memorandum, paras. 50 to 54).
[20]
The
appellant also takes issue with the Tax Court judge’s reliance on the 2005
amendment to the definition of “affiliated persons” at section 251.1 of the
Act. It contends that the fact that trusts were added to the definition in 2005
shows that Parliament had made a deliberate policy decision not to include
trusts in the definition before hand. Had Parliament rather sought to correct
or revise a statutory misstatement, it would have made the 2005 retroactive
(appellant’s memorandum, paras. 56 and 57).
[21]
Finally,
the appellant relies on the decision of the Tax Court in the companion’s case
in which Justice Paris “respectfully disagreed” with the conclusion reached by
the Tax Court judge based on the notion of “economic unit”.
- The respondent
[22]
The
respondent for her part supports the conclusion reached by the Tax Court judge
relying essentially on the reasons that he gave. She rejects the contention
that the computation of capital losses (or gains) under the Act gives rise to a
purely mechanical exercise. According to the respondent, the question whether a
loss has in fact occurred is central to the computation of capital losses under
the Act (respondent’s memorandum, para. 31).
[23]
The
respondent also relies on former subsection 55(1) of the Act and the case law
which interpreted it in a way that disallowed the deduction of losses that were
considered to have been artificially or unduly created by the taxpayer. She
points to the 1988 Technical Notes for the proposition that the repeal of
subsection 55(1) was simply a reflection of the fact that it was no longer
necessary, as the new section 245 of the Act was broad enough to cover the
transactions contemplated by former subsection 55(1). The respondent squarely
challenges the appellant’s argument that the repeal of subsection 55(1)
signaled a change in legislative intent against artificial capital losses
(respondent’s memorandum, paras. 43 to 46).
[24]
The
respondent further submits that the Tax Court judge properly referred to the
stop-loss rules – although she recognizes that the applicable provision was
subsection 40(3.4) rather than subparagraph 40(2)(g)(i) – as evidencing
an overarching policy to deny losses where the economic interest in property
disposed of is not truly relinquished.
[25]
Finally,
the respondent points to the decision of the Supreme Court in Mathew v.
Canada, 2005 SCC 55, which confirmed the abusive nature of a transaction by
reference to its artificial nature. The concept of artificiality as discussed
in Copthorne Holdings Ltd. v. Canada, 2011 SCC 63 (Copthorne Holdings),
is also relied upon.
ANALYSIS AND DECISION
- Statutory context
[26]
Before
embarking on the analysis, it is useful to briefly review the provisions of the
Act which deal with treatment of capital losses.
[27]
Capital
gains and losses are the subject of a lengthy and complex statutory scheme. The
original version of these provisions came into effect in 1972. Before that
time, capital gains were not subject to tax and capital losses were not
recognized for income tax purposes.
[28]
It
has always been the case that capital gains are taxed at a lower rate than
income. That result is achieved by means of a statutory inclusion rate. The
taxable portion of a capital gain (or the deductible portion of a capital loss)
is determined by multiplying the inclusion rate by the amount of the capital
gain (or capital loss). The inclusion rate for the period relevant to this
appeal was 50%. Thus, a taxpayer who realized a $100 capital gain during that
period would include only $50 in income, and a taxpayer who suffered a $100
capital loss during that period would be entitled to tax relief for only $50.
[29]
The
determination for income tax purposes of the capital gain or loss on the
disposition of property is dictated by the interaction of numerous specific
provisions in Part I, Division B, Subdivision c of the Act. Many of those
provisions are definitions that include or consist of a mathematical formula,
which can be difficult to follow. Fortunately, there is in this case no dispute
as to the computation of the capital loss in issue. Therefore, the application
of the Act to the facts can be sufficiently understood by reference to only a
few general provisions.
[30]
Generally,
a capital loss arises for income tax purposes when capital property is sold for
“proceeds of disposition” that are less than the “adjusted cost base” of the
property sold (paragraphs 39(1)(b) and 40(1)(b) of the Act).
[31]
The
terms “proceeds of disposition” and “adjusted cost base” are defined in section
54 of the Act. The definitions are long and complex, but for the purposes of
this appeal only the most general part of each definition is relevant. As
mentioned above, the capital losses in issue in this appeal arose from the sale
of corporate shares. The “proceeds of disposition” of those sales should be
understood to mean the sale price of the shares as determined under the
contract of sale, and the “adjusted cost base” of the shares should be
understood to mean the amount originally laid out by the corporate taxpayer to
acquire the shares that were sold. Section 53 of the Act lists a large number
of potential positive and negative adjustments to that original cost that must
be made in determining “adjusted cost base”, but the record in this case does
not indicate that any such adjustments are required.
[32]
A
capital loss is not, per se, deductible in computing income. Rather,
paragraph 38(b) provides that ½ of capital losses realized in a
particular taxation year (referred to as the “allowable capital loss”) may be
applied to offset taxable capital gains (generally, ½ of capital gains)
realized in the same year, or in a subsequent taxation year or any of the
previous three taxation years (see paragraph 111(1)(b) and the
definition of “net capital loss” in subsection 111(8)).
[33]
Numerous
specific anti-avoidance provisions in the Act preclude a taxpayer from claiming
tax relief for a capital loss. They are referred to colloquially as “stop-loss
rules”. Generally, a stop-loss rule deems a particular loss to be nil. For
example, subparagraph 40(2)(g)(iii) of the Act provides that with
certain exceptions, a loss from the disposition of personal use property is
deemed to be nil.
[34]
Some
stop-loss rules are paired with relieving provisions that, in effect, result
only in the suspension of a capital loss arising on a particular disposition of
property. For example, subsection 40(3.4) of the Act provides (among other
things) that a corporation’s loss on the disposition of capital property is
deemed to be nil if the corporation or an affiliated person acquires the same or
an identical property within 30 days before or after the disposition, and at
the end of that period the corporation or an affiliated person owns the
substituted property. However, the same provision specifies that the loss may
be recognized by the corporation later if, for example, the property ceases to
be owned by the corporation or an affiliated person.
[35]
Similarly,
subparagraph 40(2)(g)(i) of the Act deems a capital loss to be nil if it
meets the statutory definition of “superficial loss” (generally, a loss arising
on the disposition of property where the same taxpayer or an affiliated person
acquires the same or an identical property – the “substituted property” –
within 30 days and the taxpayer or an affiliated person owns the substituted
property at the end of the 30-day period). Subject to certain conditions,
paragraph 53(1)(f) of the Act may apply to add the amount of the
disallowed loss to the adjusted cost base of the substituted property. The
result would be that the previously disallowed loss is recognized in the
computation of any gain or loss on the disposition of the substituted property.
This could be a deferral of a capital loss, or it could be a transfer of a
capital loss from the original transferor of the property to the affiliated
person who acquired it.
[36]
Of
significance for our purpose is the amendment to the definition of “affiliated
persons” in 2005 to include trusts. This amendment, had it been applicable when
the transactions in issue took place, would have resulted in the suspension of
the capital loss claimed by the appellant. It is useful to point out that the
definition of “affiliated persons” to this date does not operate to suspend
losses resulting from transactions between parent and child or between
siblings. It follows that subject to the application of the GAAR, the loss
resulting from a value shift could still be claimed if triggered by a sale
between such persons.
- The GAAR analysis
[37]
As
noted, the appellant conceded before the Tax Court judge that the claimed loss
results in a “tax benefit” within the meaning of subsection 245(1). Before us,
the appellant does not challenge the Tax Court judge’s conclusion that the
transactions, including the payment of the stock dividend, the creation of the
Peter Cohen Trust and the sale of the common shares to this trust, were
“avoidance transactions” within the meaning of subsection 245(3).
[38]
The
remaining issue is whether the avoidance transactions give rise to misuse or
abuse. This in turn depends on whether the transactions, if given effect to,
would defeat the underlying rationale of the provisions relied upon to obtain
the tax benefit (i.e. subparagraph 3(b)(ii), paragraph 38(b),
paragraph 39(1)(b), subparagraph 40(1)(b)(ii) and section 54).
The burden of establishing the existence of this underlying rationale rests on
the respondent.
[39]
It
is common ground that the loss generated by the appellant as a result of the
value shift is a loss on paper only in the sense that no economic loss was
suffered (the term “paper loss” is used in that sense throughout these
reasons). All that happened is that the high inherent value of the common
shares was moved to the preferred shares – because they are paid in priority –
with the result that the common shares were left with a nominal value and a high
cost, thereby allowing for the loss to be realized on the disposition of these
shares to the Peter Cohen Trust. The appellant was neither richer nor poorer
after this disposition.
[40]
According
to the appellant, the loss should be given effect to despite the fact that no
economic loss was suffered. It maintains that the application of the provisions
of the Act on which it relied to trigger this loss gives rise to a mechanical
exercise and that their effect, when so applied, is to recognize the claimed
loss despite the fact that no economic loss was suffered and no dollars were
lost.
[41]
The
result proposed by the appellant is fundamentally counter-intuitive as the
capital gain system is generally understood to apply to real gains and real
losses. In this regard, the comment of the House of Lords in WT Ramsay Ltd.
v. Inland Revenue Commissioners, [1981] 1 All ER 865, although it was made
by reference to capital gain under UK Law, is entirely apposite (p. 873):
The capital gains tax was created
to operate in the real world, not that of make-believe. As I said in Aberdeen
Construction Ltd. v. Inland Revenue Comrs, [1978] 1 All ER 962 at 996,
[1978] AC 885 at 893, [1978] STC 127 at 131, it is a tax on gains (or, I might
have added, gains less losses), it is not a tax on arithmetical differences.
[42]
In
Canada, the capital gain system has been understood, since a time that
pre-dates its creation, to be aimed at taxing increases in “economic power” (Carter
Commission Report, 1966, p. 325) and “economic power” is unaffected by
paper losses.
[43]
Nevertheless,
the appellant submits that the matter is not so simple. It points to the fact
that the Act does contemplate, in some instances, that tax be paid on capital
gains when no economic gain is realized and losses be allowed when no economic
loss is incurred.
[44]
The
most apt illustration is subsection 45(1) of the Act – under Subdivision c
“Taxable Capital Gains and Allowable Capital Losses” – which provides that when
property is acquired for the purpose of earning income, and begins to be used
for some other purpose (or vice versa), it is deemed to be disposed of at that
time for an amount equal to its fair market value, and to be reacquired at a
cost equal to that amount. Subsection 13(2) of the Act operates much the same
way with respect to depreciable property. The effect of these provisions is
that paper gains or losses may be made or incurred, and when that happens, they
are treated to as though they are real.
[45]
The
appellant also points to the flow-through share regime which permits
corporations to renounce “Canadian exploration expense” for the benefit of the
holders of the flow-through shares. The cost to a shareholder of a flow-through
share is deemed to be nil by virtue of subsection 66.3(3) of the Act. On a sale
of the flow-through share, the deemed cost is picked up by the definition of
“adjusted cost base” in section 54 to arrive at the relevant gain or loss. This
again can lead to a capital gain being imposed when no economic gain has been
realized.
[46]
In
weighing the impact of provisions such as subsection 45(1) and section 66.1 –
there are other similar provisions – it is important to understand that they
are policy oriented and that the treatment which they provide is dictated
solely by the policy objective which they seek to achieve.
[47]
The
change of use provisions are intended to facilitate the transition when a
taxpayer ceases to use property for one purpose and begins to use it for
another. They do so by deeming a disposition and an immediate reacquisition at
a price that is tracked until the asset is actually disposed of. In the
meantime, this provides flexibility from a taxpayer perspective while insuring
the integrity of the tax system.
[48]
Flow-through
shares are intended to encourage oil and mineral exploration. The cost of these
shares is fully deducted in computing income while the shares get capital gain
treatment when they are sold. This is a highly advantageous treatment which
explains why the adjusted cost base of these shares is set at 0.
[49]
While
these provisions are of interest, I do not believe that they detract from the
underlying policy preventing the deduction of paper losses if indeed such a
policy can be gleaned from the provisions relied upon by the appellant to
obtain the tax benefit.
[50]
Addressing
this question, Justice Paris in the companion case conducted a textual,
contextual and purposive analysis of the provisions relied upon by the
appellant in order to obtain the tax benefit (1207192 Ontario Limited,
paras. 63 to 68 and 84 to 93). He properly identified each of the relevant
provisions and their reason for being. I agree with his conclusion that these
provisions, in particular paragraph 38(b), provide relief as an offset
against capital gain where a taxpayer has suffered an economic loss on the
disposition of property. I also agree with his further conclusion that
offsetting a capital gain with the paper loss that was claimed results in an
abuse and a misuse of the relevant provisions, specifically paragraphs 38(b),
39(1)(b) and 40(1)(b) (1207192 Ontario Limited, paras. 92
and 93).
[51]
The
appellant correctly points out that the words “economic loss” on which Justice
Paris relied in identifying the underlying rationale do not appear in any of
the relevant provisions. However, there is no objection at this stage of the
analysis to departing from the bare meaning of the words provided that the
reading proposed is supported by a textual, contextual and purposive reading of
the relevant provisions (Copthorne Holdings, para. 70). Given their
purpose – i.e. to tax the net realized increase in the value of capital assets
– it is not possible, in my view, to read the relevant provisions otherwise.
- Former subsection 55(1)
[52]
There
was a lengthy debate before us about whether subsection 55(1) can be relied
upon to establish an overarching policy aimed at defeating “artificial
transactions” despite its removal. As noted earlier the removal of this
provision was accompanied by the publication of Technical Notes indicating that
subsection 55(1) was abrogated because the void created by the removal of that
provision was filled by the implementation of the GAAR.
[53]
For
the reasons already given, it is not necessary to rely on former subsection
55(1) to decipher the existence of a policy which prevents the deduction of the
loss claimed in this case. That said, former subsection 55(1) forms part of the
legislative history and as it is clear that the paper loss that was claimed in
this case would have “artificially” or “unduly” reduced the appellant’s tax
liability under that provision, the fact that Department of Finance officials
believed that the GAAR would fill the void is consistent with the continued
existence of the overarching policy that I have identified.
- Alternative conclusion
[54]
I
now turn to the Tax Court judge’s conclusion in the present case that the
transactions in issue also defeat the object, spirit and purpose of the
anti-avoidance rules in subparagraph 40(2)(g)(i). In his view, this
provision reveals the existence of a policy against the deduction of capital
losses on dispositions “within an economic unit”. Furthermore, the amendment
brought to the definition of “affiliated persons” in 2005 to include trusts is
“a clear indication that the results achieved by the appellant were contrary to
the object, spirit and purpose of the Act when read as a whole” (reasons, para.
97).
[55]
Justice
Paris disagreed with the conclusion reached by the Tax Court judge in this
regard (1207192 Ontario Limited, paras. 73 to 83).
[56]
I
agree with Justice Paris that a reading of the relevant provisions does not
support the existence of the policy identified by the Tax Court judge
essentially for the reasons that he gave. When Parliament introduced the notion
of “affiliated persons” back in 1995, it had to be aware that trusts could be
used to counter the operation of subparagraph 40(2)(g)(i) and subsection
40(3.4). It is therefore reasonable to infer that a deliberate choice was made
not to bring trusts within the definition. The fact that Parliament decided to
alter this policy by including trusts on a prospective basis in 2005 cannot be
relied on to infer that a policy to that effect was in place before the
amendment (compare Water’s Edge Water’s Edge Village Estates (Phase II) Ltd.
v. Canada, 2002 FCA 291, [2003] 2 F.C. 25, para. 47, where in contrast an
amendment was held to be relevant because it had been enacted in order to close
a blatant loophole).
- Novel argument
[57]
The
appellant argued for the first time during the course of the hearing of the
appeal that the disallowance of the claimed loss gives rise to a form of
unfairness given that it remains the holder of the preferred shares. It points
out that since these shares have tax characteristics which inversely mirror
those of the common shares – i.e. a correspondingly high value and low cost –
their disposition would trigger a gain tantamount to the loss claimed.
[58]
I
need only observe that many years have passed since the loss was claimed, and
there is no suggestion that the preferred shares have been sold. This is not
surprising since the purpose of the transactions was to avoid paying taxes on
the gain resulting from the sale of the commercial building back in 2001. I
note in this respect that contrary to individuals, a corporation can maintain
ownership of capital assets without any time limitation.
[59]
That
said, had the appellant been able to put forth a credible scenario indicating
that the preferred shares were to be sold, thereby reducing the extent of the
tax benefit obtained, it would have been open to it to request that the tax
consequences resulting from the application of the GAAR be adjusted pursuant to
subsection 245(5). No such request was made.
[60]
I
would dismiss the appeal with costs.
“Marc
Noël”
“I
agree.
K. Sharlow J.A.”
“I
agree
Robert M. Mainville J.A.”
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