Canada v. Lehigh Cement Limited, 2014 DTC 5058 [at at 6849], 2014 FCA 103, aff'g 2013 DTC 1139 [at 740], 2013 TCC 176 -- summary under Consistency

By services, 28 November, 2015

In rejecting the Minister's claim that a specific anti-avoidance provision (s. 95(6)(b), contained in the subdivision i foreign affiliate rules rather than being included with the more general provisions in Part XVI) should be interpreted broadly so that it could be "applied in a variety of circumstances where a taxpayer has engaged in what the Minister considers to be abusive tax planning involving foreign corporations" (para. 62), Stratas JA stated (at para. 64) that this "creates the spectre of similarly-situated taxpayers being treated differently for no objective reason," and (at para. 67):

...I would be loath to interpret paragraph 95(6)(b) in a way that gives the Minister such an unlimited and ill-defined discretion - a standardless sweep - as to whether or not tax is owing, limited only by her view of unacceptability. It would be contrary to fundamental principle. It would also promote inconsistent and arbitrary application, the bane of consistency, predictability and fairness.

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restricting of anti-avoidance rule to avoid arbitrary application
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