CRA is monitoring PPT compliance on a priority basis and it, Finance and Justice are still considering Alta Energy

Regarding a query as to any applications by CRA of the principal purpose test (“PPT”) under Art. 7(1) of the MLI, CRA stated:

[T]he CRA has started monitoring compliance with the MLI on a priority basis in advance of the normal audit cycles. To date, the CRA has not issued any assessments on the basis of the PPT, although compliance review processes are underway.

CRA further indicated that, other than a pre-ruling consultation received some time ago that was put on hold pending the Supreme Court decision in Alta Energy, to date, no PPT-related ruling or consultation requests have been received.

As for Alta Energy:

The SCC considered a matter central to the CRA’s ongoing efforts to protect Canada’s tax base and the integrity of its tax treaties. The meaning and effect of the decision continues to be analyzed by the CRA, the Department of Finance and the Department of Justice as the processing of the files that were held in abeyance at different audit or litigation stages pending the decision of the Supreme Court in Alta Energy resumes.

Neal Armstrong. Summary of 17 May 2022 IFA Roundtable, Q.12 under Treaties – MLI - Art. 7(1).