The Canada Revenue Agency (CRA) is not entitled to search for some overarching tax policy and then use that policy as a basis to apply Canada’s general anti-abuse rule (GAAR) in s. 245(4): see Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, paragraphs 41 and 42.  This important principle was recently applied by the Tax Court of Canada (TCC) in Oxford Properties Group Inc. v. The Queen, 2016 TCC 204, where the TCC rejected the CRA’s application of the GAAR to a pre-acquisition reorganization and subsequent transactions.  At their core, the impugned transactions involved: (A) the transfer by a corporation of depreciable real estate to a partnership on a rollover basis under s. 97(2), (B) the bump of the tax cost of the partnership interest to fair market value under s. 87(11), s. 88(1)(c)&(d), and s. 98(3) following an arm’s length acquisition of the corporation, and (C) a sale of the partnership interest (years later) to a tax-exempt entity.  The CRA perceived this combination of events to be abusive tax planning under s. 247(4) based on a broad tax policy statement that “indirect bumping of depreciable property” was not permitted under the Act (see paragraphs 203 and 204).  In rejecting this approach, the TCC found that any such broad tax policy was not anchored in a textual, contextual and purposive interpretation of the specific provisions that produced the tax benefit (see paragraphs 213 and 218).  Moreover, a statutory amendment made by Parliament in 2012 – which specifically altered the tax results of this type of planning – represented a substantial change to and not merely a clarification of the existing statutory object and underlying rationale of these provisions (see paragraph 211).  Absent any finding of abuse, it is plain and clear that “Parliament intends taxpayers to take full advantage of the provisions of the Act that confer tax benefits” (see paragraph 219).