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Abstract
On October 19, 2005, the Supreme Court of Canada released its much-anticipated decisions in The Queen v. Canada Trustco Mortgage Co. and Mathew v. The Queen, the first two cases from Canada's highest court addressing the general anti-avoidance rule (GAAR) in section 245 of the federal Income Tax Act. The Faculty of Law at the University of Toronto hosted a symposium on November 18, 2005, which brought together academics, practitioners, representatives of the Canada Revenue Agency, and Chief Justice Donald Bowman of the Tax Court of Canada to discuss the implications of the decisions. This article summarizes the formal presentations and comments of participants in the proceedings.
Introduction
On October 19, 2005, the Supreme Court of Canada released its much-anticipated decisions in The Queen v. Canada Trustco Mortgage Co.[1] and Mathew v. The Queen[2]--the first decisions in which the court has specifically considered the general anti-avoidance rule (GAAR) in section 245 of the federal Income Tax Act.[3] The GAAR was enacted in 1988 in response to the Supreme Court's decision in Stubart Investments Limited v. The Queen,[4] and was intended to reduce what the court had described as "the action and reaction endlessly produced by complex, specific tax measures aimed at sophisticated business practices, and the inevitable, professionally-guided and equally specialized taxpayer reaction."[5] Designed "to distinguish between legitimate tax planning and abusive tax avoidance,"[6] the GAAR operates to deny a "tax benefit" that would otherwise result from an "avoidance transaction" or a "series of transactions" of which the avoidance transaction is a part,[7] provided that the transaction results in a misuse of provisions of the Act, the Income Tax Regulations, the Income Tax Application Rules, a tax treaty, or any other relevant enactment, or is an abuse having regard to those provisions read as a whole.[8]
On November 18, 2005, the Faculty of Law at the University of Toronto hosted a symposium on the Supreme Court of Canada's decisions in Canada Trustco and Mathew, the purpose of which was to review the judgments and consider their implications for tax avoidance in Canada. Participants included academics, practitioners, representatives of the Canada Revenue Agency (CRA), and Chief Justice Donald Bowman of the Tax Court of Canada. The symposium was broadcast live on the Web and...