Supreme Court of Canada ends 13-year dispute between CRA, Cameco

The Supreme Court of Canada has ended a long-lasting dispute between Cameco and the Canada Revenue Agency.

In a news release on Thursday, Cameco said the Supreme Court of Canada dismissed the CRA’s application for leave to appeal a lower court decision that sided in the uranium producer’s favour regarding the use of a subsidiary in Switzerland to sell and trade uranium.

“We are pleased that the Supreme Court of Canada has rejected CRA’s appeal request. It’s another win for Cameco in this long-running tax dispute,” Cameco president and CEO Tim Gitzel said in a news release.

The CRA was disputing a 2018 ruling from the Tax Court of Canada which stated Cameco’s uranium sales and trading methods were compliant with Canadian law.

The CRA appealed the decision with the Federal Court of Appeal in June.

With no other courts left to rule, Cameco is considering its 2003, 2005 and 2006 tax years fully resolved.

“We have consistently followed the rules and complied with both the letter and intent of the law. This was confirmed unequivocally through the court process, and we are happy to have these three tax years concluded in our favour,” Gitzel said.

The agency argued the structure in place by Cameco was a strategy to avoid Canadian taxes.

Cameco said it expects to receive a refund of $5.5 million plus interest from previous reassessments for 2003, 2005 and 2006, as well as the $10.25 million in legal fees.

Previous rulings awarded Cameco $17.9 million in disbursements for court costs. When Cameco receives those payments is unclear.

“It has been incredibly disheartening for us, as a Canadian company, to have an agency of our federal government continue to pursue a flawed argument for 13 years, even after receiving two court decisions completely in our favour during that time,” Gitzel said in the release.

“In the meantime, we have had to navigate through a period of challenging global markets and the unprecedented economic upheaval of the COVID-19 pandemic with the uncertainty caused by this tax dispute significantly impeding our ability to maneuver.”

Cameco said the CRA is still holding approximately $785 million in cash and letters of credit for tax years 2007 through 2014.

Cameco is hoping Thursday’s decision provides enough clarity for the CRA to return the full amount back to Cameco.

“To say it has been unfair to our employees and the many other stakeholders who count on our company would be an understatement,” Gitzel said.