Digests

Income Tax

Income Calculation

Appeal, cross-appeal from Federal Court decision (2008 FC 1037) granting judgment for amount of alleged underpayment of tax remission for 1997 taxation year resulting from Syncrude Remission Order (SRO)—In 1975, oil companies involved in development of Alberta oil sands working out contractual royalty arrangement with province called Alberta Crown Agreement (ACA)—SRO issued following amendments to ITA in which resource producers required to include resource royalty payable to province in computing income—SRO granting remission of tax payable under Part I of Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1 (ITA)  as result of “Royalty Provisions” (including ITA, s. 12(1)(o); 18(1)(m)) to royalty receivable by Alberta with respect to production from Syncrude Project—ACA amended in 1997 to incite Syncrude Project participants to invest in development of additional leases in Project—As a result, amount of remission reduced accordingly by Crown—Repondents (Imperial) commencing judicial review leading to decision under appeal herein—Legal effects of remission order examined—Federal Court wrong to conclude difference existing between Syncrude royalty receivable by Alberta, royalty receivable by Alberta for purposes of SRO—Amendments made to ACA resulting in reduced royalty payable to Alberta in respect of production from leases at issue—Crown correct in determining amount of remission for 1997 as it did—Appeal allowed, cross-appeal dismissed.

Imperial Oil Resources Ltd. v. Canada (Attorney General) (A-520-08, 2009 FCA 325, Sharlow J.A., judgment dated November 12, 2009, 17 pp.)