François Barette

The applicant, the City of Montréal, sought judicial review of annual decisions rendered by the respondent, the Old Port of Montréal Corporation, determining the amount of payments in lieu of taxes (PILTs) owing.

The respondent argued that the Old Port site was a park and therefore excluded from the definition of "federal property" under the Payments in Lieu of Taxes Act.

The Federal Court allowed the application, finding that the respondent's interpretation of the exclusions from the concept of "federal property" was unreasonable.

The Court held that the Old Port site as a whole did not constitute a park within the meaning of the Act.

The Court also found that the respondent's parking lots were subject to the City's Parking Lot By-law and that it was unreasonable for the respondent to effect compensation for an alleged overpayment in 2013.

The matter was remitted to the respondent for redetermination.

The applicants sought judicial review to quash three requests for information sent by the Canada Revenue Agency (CRA) to the Swiss Federal Tax Administration.

The CRA suspected the applicants had unreported foreign assets and issued the requests under the Canada-Switzerland Income Tax Convention.

The applicants argued the CRA acted on illegally obtained confidential information, violated solicitor-client privilege, and failed to exhaust domestic avenues.

The Federal Court applied the reasonableness standard and found the CRA had the authority to issue the requests and complied with statutory requirements.

The Court dismissed the applications with costs.

The taxpayer claimed deductions for interest paid on loans initially contracted to purchase real property and shares in a company.

By the time the deductions were claimed, the property had been sold and the company had gone bankrupt.

The Deputy Minister of Revenue disallowed the deductions.

The Supreme Court of Canada allowed the Deputy Minister's appeal, holding that the deductibility of interest depends on the current use of the borrowed funds and presupposes the existence of a source of income.

Because the properties were sold and the company was bankrupt with no prospect of resuming activities, the sources of income had ceased to exist, and the interest was no longer deductible.

The appellants borrowed money to purchase shares in foreign companies structured to avoid FAPI rules and provide tax advantages.

Over eight years, they received $600,000 in dividends and incurred $6 million in interest charges, which they deducted under s. 20(1)(c)(i) of the Income Tax Act.

The Minister disallowed the deductions, arguing the true purpose was to defer taxes and convert income into capital gains.

The Supreme Court of Canada allowed the appeal, holding that the test for interest deductibility is whether the taxpayer had a reasonable expectation of income at the time the investment was made.

The Court found the appellants had such an expectation, and the interest costs were deductible.