SCC Update On Tax Rectification

Canada (Attorney General) v. Fairmont Hotels Inc. – SCC Update on Rectification – Canadian Tax Lawyer Analysis - Part III

 Parts I and II of this article provided background on rectification in a Canadian tax context and reviewed the facts and judicial history of Canada (Attorney General) v. Fairmont. Part III of this Toronto tax lawyer tax rectification article discusses the Supreme Court of Canada's decision and its tax planning implications.

Supreme Court of Canada Decision - Canada (Attorney General) v. Fairmont Hotels Inc

The Supreme Court of Canada allowed the CRA appeal and found that Fairmont did not meet the requirements for rectification. Although Fairmont demonstrated a continuing intention to maintain foreign exchange tax neutrality, that intention alone is not sufficient to qualify for rectification. The Supreme Court emphasized that the role of rectification is to correct errors in the recording the terms of an agreement in a written