IFA Travelling Lectureship
TAKING STOCK OF GAAR: 1987 – 2012
Jim Wilson, Wilson & Partners LLP
Elizabeth Johnson, Wilson & Partners LLP
Ed Kroft, Blake, Cassels & Graydon LLP
Approved for 3.5 CLE credits by
GAAR has been much written about and discussed. Indeed, since its enactment was first proposed in the 1987 tax reform White Paper, GAAR has been a singular pre-occupation of the Canadian tax community. In recent years, the ink on a Supreme Court of Canada GAAR decision has barely dried before the entrails of the decision are being dissected and pored over at special conferences in a search for meaning and guidance. The basic objective of the IFA program is not to cover ground that has been covered. Instead, the general approach is to take stock of GAAR focusing on the common theme of whether GAAR, at this stage in its evolution, has proved workable when viewed from different perspectives.
The program will be divided into two parts.
The first part will begin with a summary introduction to be followed by three lecture presentations. To provide a context for the program, the introduction will include a brief explanation of the role of general anti-avoidance rules in general, and GAAR in particular, as a legislative measure to curb and deter certain types of tax avoidance. The three lectures that follow will each deal with the common theme viewed from three different perspectives—that of a tax planner, a tax litigator and the Canadian fisc.
The first two lectures will focus on the practical aspects and problems experienced in interpreting and applying GAAR (how it works and whether it is effective in balancing the competing objectives of permitting taxpayers to plan their affairs with a reasonable degree of certainty while at the same time curbing “abusive” tax avoidance) from the perspective of a tax planner and a tax litigator. In these first two lectures, the key GAAR principles that can be distilled from the cases, particularly decisions of the Supreme Court of Canada, will be identified and discussed.
The first lecture will consider GAAR from the perspective of a tax planner. It, will address how these principles and judicial guidance respecting GAAR are used in providing opinions and tax advice to clients. This will include specific examples of dealing with the inherent uncertainty of GAAR in particular cases.
The second lecture will deal with GAAR from the perspective of a tax litigator. Its focus will be the construction of a defence against a GAAR challenge. The tax litigation issues considered will include the abusive tax avoidance requirement, onus, penalties, proving a primary non-tax purpose, the nature of a tax benefit, how to determine whether a transaction is an avoidance transaction where it results in several tax benefits, the determination of reasonable consequences where GAAR is held to apply, the standard of review in GAAR cases at the appellate levels and whether taxpayers can self-assess the application of GAAR.
The final lecture will attempt an assessment as to whether GAAR has proven workable from the perspective of the Canadian fisc. In taking stock of GAAR from this perspective, the lecture will compare and contrast GAAR, and its treatment by the Canadian courts to date, to the statutory and judicial experience of general anti-avoidance rules in other countries. The points to be considered include a brief history of GAAR’s enactment and the origin and objective of subsection 245(4), the nature of the role that has been ascribed to that provision by the Canadian courts and the impact of GAAR on specific anti-avoidance rules. In addition, looked at from the Canadian fisc’s perspective, the final lecture will examine whether there are amendments that might be considered to make GAAR more effective as a statutory tool to curb or deter certain types of tax avoidance.
The second part of the program will consist of case studies introduced by a brief lecture on the interaction of GAAR and Canada’s tax treaties. The first case study will involve the application of GAAR in a cross-border context and the second one in a domestic context. The discussion of these case studies will include thoughts on the impact that the recent Copthorne decision may have on the interpretation and application of GAAR.
|8:00-8:30||Registration and Refreshments|
|9:00-10:30||GAAR as a “workable” anti-tax avoidance rule|
|• tax planning perspective
• tax litigation perspective
• Canadian fisc perspective
|11:00-11:30||GAAR and the Tax Treaties|
The General Anti-Avoidance Rule (“GAAR”) is 25 years old. The 2012 IFA Travelling Lectureship will take stock of GAAR from the different perspectives of a tax planner, a tax litigator and the Canadian fisc. The focus will be on the common theme of whether GAAR is “workable”. The program format will combine lecture presentations and interactive case study discussions dealing with the interpretation and application of GAAR in a cross-border and domestic context.
April 3, 2012
Metropolitan Conference Centre
333-4 Avenue Southwest
April 4, 2012
Fairmont Waterfront Hotel
900 Canada Place Way
April 16, 2012
|Meeting Room 205AB, North Building (change)
Metro Toronto Convention Centre
255 Front Street West
April 17, 2012
Fairmont Queen Elizabeth Hotel
900 René-Lévèsque Blvd West
April 18, 2012
Fairmont Chateau Laurier
1 Rideau Street
ACCOMMODATION: Out of town participants should make their own hotel reservations.
Jim Wilson is the founding partner of Wilson & Partners LLP. His practice encompasses all areas of federal taxation with a special emphasis on corporate reorganizations, mergers and acquisitions and financial products and structures. Jim has represented a broad range of corporate clients on large and sophisticated transactions. He is consistently recognized in publications as one of Canada’s leading tax advisers, including the Chambers Global Guide, Canadian Legal Lexpert Directory, Legal Media Group Guide to the World’s Leading Tax Advisers, Expert Guides Best of the Best, Best Lawyers in Canada, and the Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada. Jim regularly participates in training seminars for the Canada Revenue Agency on the taxation of debt financing and foreign affiliates.
Jim was admitted to the Ontario Bar in 1975. Prior to founding Wilson & Partners, Jim was a partner in a major Canadian law firm which he joined in 1975 and in which he became a partner in 1981. Jim served as Director of the Tax Counsel Division at the Department of Finance from 1985-1987 as part of an executive exchange program. He also taught a course in international tax law at the University of Western Ontario Law School from 1988-1991.
Ed Kroft is a Partner in the Tax Group and leader of Blake Cassels & Graydon LLP’s Tax Controversy & Litigation Group. He has appeared on behalf of clients before the Supreme Court of Canada, the Tax Court of Canada, the Federal Court of Canada, the Federal Court of Appeal and the Supreme Court of British Columbia and has represented clients frequently in tax disputes involving Canada Revenue Agency (CRA) and other tax authorities. He is involved in negotiations with “Competent Authority” in major transfer pricing disputes and has been, and continues to be, involved in a number of tax cases for major Canadian and multinational corporations. Ed is a member of the Canadian Bar Association (CBA) (B.C. Tax Section) – CRA Liaison Committee. He is a former member of the Rules Committee of the Tax Court of Canada Rules Committee (1991 to 2011), a former governor of the Canadian Tax Foundation and a former chairperson for the Tax Subsection of the British Columbia Branch of the CBA. He was also a research officer for the House of Commons Standing Committee on Finance and Economic Affairs during the hearings on the income tax portion of the White Paper on Tax Reform in 1987.
Elizabeth Johnson joined Wilson & Partners LLP as a partner in March 2003, and is currently the chair of the firm. Her practice covers a wide range of business income tax matters, including mergers and acquisitions, international tax and capital markets. Elizabeth has been recognized as a leading tax practitioner in the Chambers Global guide, the Legal Media Group Guide to the World’s Leading Tax Advisers, Expert Guides’ Women in Business Law 2010, and the Canadian Legal Lexpert Directory. Elizabeth is a member of the Canadian Tax Foundation, the Canadian Bar Association and the International Fiscal Association and she has served on the CBA-CICA Joint Committee on Taxation. Currently, she is a member of the Board of Governors of the Canadian Tax Foundation.