Cameco Pleased as Federal Court of Appeal Unanimously Upholds Tax Court Decision

SASKATOON, Saskatchewan, June 26, 2020 (GLOBE NEWSWIRE) -- Cameco (TSX: CCO; NYSE: CCJ) announced today that the Federal Court of Appeal (Court of Appeal) has upheld the September 26, 2018 decision of the Tax Court of Canada (Tax Court). The 2018 decision, which had been appealed by Canada Revenue Agency (CRA), was unequivocally in Cameco’s favour in its dispute of reassessments issued by CRA for the 2003, 2005 and 2006 tax years.

“We are very pleased that the Court of Appeal has unanimously upheld the Tax Court’s clear and decisive ruling in our favour,” said Cameco president and CEO Tim Gitzel. “Four judges have now found that Cameco complied with both the letter and intent of the law. We followed the rules, yet this 12-year dispute has caused significant uncertainty for our company and our stakeholders at a time when we have been navigating through some of the most challenging global market and economic conditions we have ever faced.”

The September 2018 ruling from the Tax Court found that Cameco’s marketing and trading structure involving foreign subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, are in full compliance with Canadian laws for the tax years in question. CRA appealed this decision to the Court of Appeal on October 26, 2018.

On April 30, 2019, a subsequent decision by the Tax Court resulted in Cameco being awarded $10.25 million in legal fees and up to $17.9 million in disbursements for costs incurred as a result of its dispute with CRA. CRA requested that this cost award be overturned if its appeal of the September 2018 decision was successful.

The Court of Appeal’s ruling upholds both the Tax Court’s original decision on reassessments for the 2003, 2005 and 2006 tax years and its corresponding decision on the cost award. Cameco will also be receiving an additional nominal cost award related to the Court of Appeal hearing.

Under the current rules, CRA has until September 25, 2020 to seek leave to appeal the decision of the Court of Appeal to the Supreme Court of Canada. However, proposed legislation related to COVID-19 pandemic measures is presently under consideration that would extend the deadline to November 12, 2020. If the Supreme Court agrees to hear the appeal, Cameco estimates that a further two years would be required from the date of the Court of Appeal’s ruling to receive a decision.