The following article on resignation as a director of a corporation and directors’ liability under the Income Tax Act (Canada) appeared in the latest edition of the Hamilton Law Association Law Journal.
PC Wind Down
What happens to a professional corporation (a “PC”) when the doctor is no longer in the house?
2.0
Over the last few years, lawyers’ magazines and newspapers have been full of talk about “Web 2.0” and its significance for the legal profession. To some degree, I remain a skeptic, despite that I have been blogging (a quintessential 2.0 activity) since 2005.
Donald Bowman Joins FMC
Donald Bowman, the former Chief Justice of the Tax Court of Canada, has joined Fraser Milner Casgrain LLP as Counsel.
Rectification
Tax practitioners will be familiar with the Juliar case, which allowed the parties to a transaction to amend it with retroactive effect in order to avoid adverse income tax consequences. According to the Ontario Court of Appeal decision in the case, it didn’t matter that the only purpose for the amendment was to avoid or postpone income taxes. What mattered was that the parties had a continuing, common intention to effect the transactions in a tax-deferred manner, which intention was thwarted by the form of the transaction.
The Ontario Superior Court came to a different conclusion in Binder v. Saffron Rouge Inc., 2008 CanLII 1662 because the parties did not have the requisite common intention.
Redeemer Unredeemed
The Supreme Court of Canada today issued its decision in Redeemer Foundation v. Canada (National Revenue), 2008 SCC 46. Four members of a seven-person panel rejected the charity’s appeal from the decision of the Federal Court of Appeal.
New Associate Chief Justice
Most tax practitioners will have heard that a 25-year veteran of the Tax Court was appointed as its new Chief Justice earlier this month. Gerald Rip takes over from Donald Bowman, who turned 75 this month. The Prime Minister also appointed Eugene Rossiter as the new Associate Chief Justice. Justice Rossiter is a relative newcomer to the Court: he was only appointed in 2006. Perhaps he is being groomed for the Chief’s chair.
New legislation
Finance released new draft legislation today.
Canada Approves
According to the Department of Finance website, “Canada Supports U.S. Technical Explanation of the Fifth Protocol to the Canada-United States Income Tax Convention“.
Not-for-profit
BBM Canada v. The Queen, 2008 TCC 341, is a surprise, not because of the result but because of the novel position advanced by the Crown in support of the assessment in question. The organization assessed had taken the position that it was exempt from tax under paragraph 149(1)(l) of the Income Tax Act because it was a not-for-profit. The CRA thought otherwise.