Cameco: Supreme Court Dismisses CRA Leave Application In Transfer Pricing Case

Yesterday, the Supreme Court of Canada dismissed the Minister of National Revenue's ("the Minister") application for leave to appeal in the matter of Canada v. Cameco Corporation, 2020 FCA 112. This is a case of significant importance as it involved the interpretation of the transfer pricing recharacterization rules in paragraphs 247(2)(b) and (d) of the Income Tax Act (Canada) ("Recharacterization Rules").

Cameco Corporation ("Cameco"), along with its subsidiaries, is one of the world's largest uranium producers and providers of uranium conversion and enrichment services. In 1999, a subsidiary of Cameco that was resident in Luxembourg (the "Lux Subsidiary"), became a party to uranium supply agreements with third parties. In addition, Cameco agreed to sell its uranium inventory and certain future production to the Lux Subsidiary. Later that year, Cameco incorporated a subsidiary that was resident in Switzerland (the "Swiss Subsidiary"). In 2002, the