The Supreme Court of Canada released one judgment, and denied leave to appeal in a second case, of interest to Canadian business this week.
In Envision Credit Union v. Canada, 2013 SCC 48, the majority of the Court, per Rothstein J., affirmed the earlier ruling of the Federal Court of Appeal. Two credit unions had effected a complex amalgamation under provincial legislation. The amalgamation was structured in a manner which diverted certain property, belonging to the amalgamating entities, to a special-purpose subsidiary at the moment of amalgamation. The goal was to effect a non-qualifying amalgamation under the ITA, thereby gaining beneficial post-amalgamation tax treatment. The SCC ruled that the structure failed to achieve this end, as the statutory amalgamation mechanism automatically triggered the relevant provisions of the ITA. The SCC went on to reject the tax authority’s alternative position, however, and ruled that the ITA did not create an unlimited tracing or “look through” mechanism which would have attributed the subsidiary’s assets to the amalgamated entity.
In a second ruling, the SCC refused to grant leave to appeal from the class actions ruling in Hawkes v. A.G. (Canada), 2013 PECA 6. The PEI CA had refused to certify, and had granted summary judgment against the representative plaintiff in, a claim arguing that the failure to issue free driver’s licences to low-income citizens breached the Charter.