Courtroom

Rectification is About Intention – Not Interpretation

By Alison J. Gray

The Ontario Superior Court of Justice recently granted rectification in a case in which the CRA and the taxpayer differed in their interpretation and effect of a particular document. In Kaleidescape Canada Inc et al v Computershare Trust Company of Canada et al, 2014 ONSC 4983, the Court was asked to determine whether the parties intended that Kaleidescape Canada Inc. remain a Canadian-controlled private company (CCPC) for the purposes of obtaining certain scientific research and development tax credits under the Income Tax Act (Canada). (more…)

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Canada Invokes Extraterritorial Measures Law Against US Buy America

By Milos Barutciski, Matthew S. Kronby and George W.H. Reid

The Government of Canada today invoked a rarely used law to prohibit compliance with the U.S. Buy America legislation in relation to a proposed ferry terminal to be built by the State of Alaska in Prince Rupert, B.C. In order to qualify for U.S. federal funding, the bidding documents published by the Alaska Department of Transportation require that the steel used in the construction of the terminal (leased to the Alaska Marine Highway System) must be of U.S. origin. Canada has repeatedly objected to the Buy America legislation. (more…)

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Canadian Customs Authority Shifts Gears on Import Duty Refunds

By Darrel H. Pearson and Claire M.C. Kennedy

The CBSA has made a long-sought-for change in its policy to allow duty refunds in the event of qualifying downward transfer price adjustments by importers. The change comes on the heels of victory by Bennett Jones in a test case on behalf of a lead applicant/importer that sought refunds based on downward price adjustments for automotive parts inventory. (more…)

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Keyboard

CASL Software Provisions now in Force

By Martin P.J. Kratz QC, J. Sebastien A. Gittens and Graeme S. Harrison

The provisions of Canada’s Anti-Spam Law (CASL) that regulate the installation of software came into force today, January 15, 2015. These provisions create new compliance burdens for businesses that create, distribute or use computer programs and software in the course of business (i.e., most businesses in Canada). (more…)

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Canada Begins Border Enforcement for Counterfeits

By Jesse I. Goldman and George W.H. Reid

On January 1, 2015, the Government of Canada declared into force new border controls designed to prevent counterfeit and copyright infringing goods from entering and exiting Canada. The new border controls empower officers of the Canada Border Services Agency (CBSA) to detain suspected counterfeit and copyright infringing goods to facilitate a rights-holder’s pursuit of civil remedies. These new amendments provide a powerful tool for rights-holders to prevent the importation and exportation of counterfeit and copyright infringing goods. (more…)

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Shipping Containers

CBSA Shares its 2015 Customs Compliance Verification Targets

By Darrel H. Pearson

On the first business day of the new year, the 6th of January 2015, the Canada Border Services Agency (CBSA) issued its customs compliance verification priorities for 2015. After first noting that trade program verifications of tariff classification, customs valuation and origin are not limited to targets but rather are also initiated randomly to assess risk and revenue, and to promote voluntary compliance, the CBSA shared its priorities for each of its customs compliance programs. In some cases, targets are experiencing a second round of trade verification, and in other cases, the CBSA is either continuing an existing round of verification or is planning a new round. (more…)

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Marathon Runners

Crossing the M&A Finish Line when Selling Your Business

By Bryan C. Haynes

In a trending discussion on Linkedin.com from the Business Succession Canada group shared by R. John Dolbec, Doug Robbins provides an excellent overview on selling a business and aptly likens the process to running a marathon (Selling Your Business is Like Running a Marathon). He describes the long and arduous process of selling a business from creating a team of professionals and preparing the business for sale through to the completion of the transaction. Like in a marathon, there are many milestones to reach and challenges to overcome along the way, each of which requires planning, perseverance and patience. As Mr. Robbins states, “The only sure thing is that selling a business is a long, arduous, and complex process that can never be called simple.” (more…)

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Rescission: Another Remedy to Address Unintended Tax Consequences

By Alison J. Gray

While the equitable remedy of rectification is often sought as a means to address unintended tax consequences, rescission is also an available remedy in the appropriate cases. The British Columbia Supreme Court’s decision in Re 0741508 BC Ltd and 0768723 BC Ltd, 2014 BCSC 1791, is an example of one case in which rescission was used to avoid unintended tax consequences. (more…)

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Canada Imposes New Trade Restrictions on Russia’s Oil Exploration and Extraction Sector

by Jessica B. Horwitz and Matthew Kronby

On Friday, December 19, 2014, the Government of Canada announced amendments to the Special Economic Measures (Russia) Regulations to impose product-specific restrictions on the supply of certain goods to Russia’s oil sector, specifically with respect to deepwater, Arctic, and shale exploration and production. The prohibitions apply to any person or entity in Canada or by any Canadian person or entity outside of Canada. The amendments mark the first product-specific restrictions under Canada’s Russia sanctions regime and are similar to prohibitions being imposed by the United States and the European Union. (more…)

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Property Development

GST/HST Joint-Venture Elections and Nominee Corporations

By John (Jay) A. Winters and Douglas Chen

Joint-ventures (JVs) with nominee corporations or bare trustees that have been elected to account for the GST/HST of the JV should be aware of the period of CRA administrative tolerance expiring on January 1, 2015. This situation is often seen in the context of JVs for the development of real property.

Generally, a person involved in commercial activity will be required to register for GST/HST (i.e., become a registrant), and accordingly will collect GST/HST on its sales and claim input tax credits (ITCs) for GST/HST paid on its expenditures. However, for GST/HST purposes, a JV is not a “person” and cannot itself become a registrant. This means each co-venturer is responsible for becoming a registrant and accounting for its own portion of the GST/HST collected by the JV and for claiming its own portion of ITCs incurred by the JV. This can lead to administrative nightmares for JVs. (more…)

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