Caroline D’Elia

Following an appeal involving a dispute between a corporate appellant and the provincial Minister of Revenue, the court addressed the issue of costs.

The parties agreed on a fixed amount for legal fees and disbursements payable to the respondent.

The court endorsed the agreement and ordered that the respondent recover the agreed costs.

The decision reflects the court’s approval of negotiated costs following the disposition of the appeal.

The appellant corporation appealed Ontario corporate tax assessments arising from interest income earned through refinancing transactions within a corporate group.

The appellant argued the interest constituted income from property and therefore fell outside the scope of Ontario taxation under the pre‑2005 Corporations Tax Act regime applicable to non‑Canadian incorporated corporations.

The court held that the interest income formed part of a business carried on in Canada because the corporation’s core purpose was to facilitate financing transactions within the corporate group and administer the resulting debt instruments in Canada.

As a result, the interest income constituted income from a business carried on in Canada within the meaning of s. 115 of the Income Tax Act and was taxable in Ontario.

The court upheld the Minister’s assessments and found it unnecessary to conduct a full GAAR analysis.