Cameco reimbursed $10M in legal costs after tax court battle

A Saskatchewan-based uranium mining company will recover $10.5 million in legal fees after winning a court case last year.

The Tax Court of Canada ruled in favour of Cameco in a dispute with the Canada Revenue Agency last year over a multi-billion dollar tax bill.

The federal government took issue with a Cameco subsidiary that sold uranium in Switzerland, and believed the company was using it to avoid paying Canadian taxes. The total tax bill added up to $2.2 billion.

The company had initially asked the court to be reimbursed $20.5 million, but said it was pleased with the results.

In the decision, Justice John R. Owen wrote the amount was fair.

"I believe that in the circumstances this award of costs appropriately reflects the success of the Appellant, the amounts in issue and the complexity of the issues and appropriately contributes to the costs incurred by the Appellant for counsel fees," he wrote.

Cameco is asking to be compensated for another $17.9 million in disbursements, although that decision is expected to happen before the end of this year.

The initial ruling from the tax court only covers three disputed years: 2003, 2005 and 2006. The company hopes courts will be persuaded to apply the decision to the entire $2.2 billion tax bill.

Operations at Cameco's McArthur River and Key Lake operations in northern Saskatchewan remain suspended due to low global uranium prices. There were 550 mine workers and 150 corporate head office employees laid off.

The federal government is appealing the initial decision. It's not clear if it will be appealing the decision on costs.