Sask. uranium miner Cameco celebrates tax court victory

Saskatchewan-based uranium company Cameco says it's very pleased with a decision from the Tax Court of Canada.

On Wednesday, the court ruled in favour of Cameco in a tax dispute with the Canada Revenue Agency that stretches back to 2009 and involved a tax bill of $2.2 billion in total.

The CRA took issue with a Cameco subsidiary that sold uranium in Switzerland, stating that it used the company to avoid paying taxes in Canada. Cameco maintained it was a legal and sound business practice and challenged the revenue agency's findings.

The 300-page 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.

Cameco said it has already paid half of the $11-million bill for the three years in question and is expecting it will be refunded.

"This is a clear and decisive ruling in our favour," said Cameco CEO Tim Gitzel during a conference call.

"We believe the thorough and meticulous analysis of the facts is going to make this difficult to overturn."

Production suspended at 2 operations

In July, slow uranium prices meant the company indefinitely suspended its production at its McArthur River and Key Lake operations. That resulted in the permanent layoff of 550 mine workers and 150 corporate head office employees.

"As a result of this dispute, we have had to fight through a seven-year drop in our industry with what feels like our hands tied behind our backs," said Gitzel.

"We have made very difficult decisions in order to manage the risks we face, which in large part are due to the uncertainty created by this dispute." 

The company said it remains cautious about reopening its mines in northern Saskatchewan, but this recent decision will certainly help matters.

"We're starting to see a recovery in the spot market," said chief financial officer Grant Isaac. "It's begun, but it's not there yet."

To date, the company said it has paid $781 million in taxes and interest for the years between 2003 to 2012. 

The years between 2013 and 2017 still haven't been reassessed, but Cameco hopes this latest decision will apply to those years.

The company is also looking to recoup $45 million in legal costs.

Tax rules need tightening, says activist

Don Kossick says that he and fellow activists with Saskatchewan Citizens for Tax Fairness have pushed for the past three years to see Cameco pay the money they feel is owed to Saskatchewan and Canada.

He was part of an effort to collect 36,000 signatures on a petition calling for Cameco to pay more than $2 billion in back taxes to the government. 

"Those billions could do a lot of good support work in the north, in health and education, so on," he said. "It would be a travesty if that money was allowed to be taken out of the country like that."

The CRA has 30 days to appeal the tax court's decision, and Kossick says he hopes the agency will do just that. But he also says that more needs to be done to tighten tax rules within the country.

"As Canadian citizens, we've got to put a lot of pressure on politicians and on the CRA to stop those loopholes that obviously groups like Cameco can get inside and then be able to argue they don't have to pay the money that is owed Canadians," he said.

With files from The Canadian Press