Edited by Mr Vince F. Imerti
Landmark Decisions in Canadian Tax Law
In 1988 the Canadian Minister of Finance announced a proposal to introduce into Canadian tax law a legislated anti-avoidance rule of general application. This rule has since come to be known as the "general anti-avoidance rule" or "GAAR". GAAR was introduced into the Canadian Income Tax Act (the "Tax Act") after many years of "cat and mouse" games between tax practitioners and tax policy makers, when Canada's tax policy makers seemed to be introducing, on almost a weekly basis, new, specific anti-avoidance rules aimed at the latest tax structure devised by clever Canadian tax practitioners. The need for such a rule of general application, at least from the tax policy makers' perspective, was evidenced by the repeated failure in the Canadian tax courts of the Canada Revenue Agency ("CRA") to apply concepts such as "sham", "substance over form", "economic substance" or "business purpose".
