The applicant sought an order rectifying a series of corporate transactions carried out in December 2007 to allow it to realize a tax loss of approximately $168 million to offset foreign exchange gains.
The Canada Revenue Agency had reassessed the applicant, disallowing the loss on the basis that the dissolution of a partnership was effected on a tax-deferred rollover basis under s. 98(5) of the Income Tax Act.
The court granted the application, finding that the parties had a continuing specific intention to carry out the transactions to create a tax loss, and that the failure to avoid the application of s. 98(5) was a mistake.
A motion by the applicant to amend its notice of application was dismissed as unnecessary.
