By Michael Collinge, 3L
On Jan. 27, 2011, the Tax Law Society at the Faculty of Law welcomed more than 130 lawyers, accountants and students to Bennett Lecture Hall for "A Panel Discussion on Copthorne Holdings." The event – the first ever held by the Tax Law Society – was organized to discuss the potential impact that Copthorne Holdings will have. Copthorne Holdings is an appeal that was heard on Jan. 21 by the Supreme Court of Canada (“SCC”). It will provide the SCC's fourth-ever interpretation of the “general anti-avoidance rule” ("GAAR"), and is therefore likely to have important implications for Canadian taxpayers.
At 6:00 pm, Prof. Benjamin Alarie, who was the moderator, introduced the panelists and presented the facts of the case. He then turned over the floor to the panelists, who each spoke for ten rigorously-policed minutes. The first speaker was Deen C. Olsen, a lawyer at the Department of Justice, Tax Law Services Branch (Ottawa) and counsel for the government in Copthorne Holdings. She analogized the GAAR to a rule designed to catch a driver who is, stricly speaking, obeying the speed limit while “the doors are open, the dog is hanging out the sun roof and [the driver is] cutting people off”.
The second speaker was Vern Krishna C.M., Q.C., Tax Counsel, Mediator and Arbitrator in the Ottawa office of Borden Ladner Gervais LLP and Professor of Common Law at the University of Ottawa. He spoke about the history of the GAAR, concluding that “substance always prevails over form except in those cases where the Court holds that form prevails over substance”. Later, Mr. Krishna became the only panelist to predict the outcome – he is willing to give even money that the outcome will favour the taxpayer by a margin of 6-3.
The third speaker was Wayne Adams, the Director General, Income Tax Rulings Directorate at the Canada Revenue Agency ("CRA") and chair of the GAAR Committee. He downplayed the fears of taxpayers who “have not slept in 16 years” (since the introduction of the GAAR), and emphasized the reasonableness of the CRA's method of applying the GAAR.
The fourth speaker was Clifford L. Rand, a partner and member of the tax group in the Toronto office of Stikeman Elliott LLP. He spoke about the fact that SCC reduced the scope of the GAAR in Canada Trustco such that the CRA “now has to focus on [the abuse of] a specific provision, and it becomes very difficult in some cases to do that”.
The final speaker was Hon. Donald G.H. Bowman Q.C., Counsel to FMC’s National Tax Group the former Chief Justice of the Tax Court of Canada. He suggested that, at base, “the GAAR is a statutory codification of a smell test”.
Following a thought-provoking Q&A, the panelists and attendees were invited to the Rowell Room to enjoy a cocktail reception. The event was sponsored by the Canadian Tax Foundation, Borden Ladner Gervais LLP, Fraser Milner Casgrain LLP and Stikeman Elliott LLP.
