CRA indicated that it has concluded in some cases that using PUC averaging to shift PUC to individual shareholders engages GAAR, and “is currently reviewing additional cases that are similar in their results but have some variations.” In addressing the proposition that the transactions were implemented exclusively for creditor-proofing purposes, CRA stated:
[A]n avoidance transaction is a single transaction carried out primarily for the purpose of obtaining a tax benefit. Where a transaction, which is primarily motivated by tax objectives, is part of a series of transactions that is primarily carried out for non-tax purposes, the single transaction is nevertheless an avoidance transaction. The fact that the series of transactions has bona fide non-tax purposes does not preclude a transaction with a tax purpose that is part of the series from being an avoidance transaction.