Like many Canadian companies, Cameco uses subsidiaries and related companies in known tax-haven countries to lower their taxes in Canada. This often-used strategy by large corporations is costing Canadians over $10 billion per year.
The September 26, 2018 Tax Court of Canada ruling on the Cameco case deals with the company’s practice of selling uranium at a low below-market price to its subsidiary in Switzerland, which in turn sells at a much higher price to their ultimate customers. The company challenged the CRA tax assessments that they owed back taxes.
The Tax Court ruling sided with Cameco. Though the ruling only covers the company’s 2003, 2005 and 2006 tax years including about $11 million in taxes, it will have implications for the approximately $2 billion in taxes plus interest and penalties CRA has assessed as owing in subsequent years.
To add insult to injury, in addition to the millions taxpayers are already out from the suit, Cameco will be making an application to the court to recover their court costs - a total about $57 million.