Cameco Corporation v. Canada
(June 12, 2015 – 2015 FCA 143, Nöel CJ (author), Trudel, Rennie JJA).
The taxpayer moved unsuccessfully before the Tax Court to strike portions of the Crown’s reply in a uranium transfer pricing case. The Tax Court ordered solicitor-client costs against the taxpayer. The taxpayer appealed to the Federal Court of Appeal. The Court of Appeal allowed the appeal in part and ordered that the Crown must “communicate to Cameco within sixty (60) days from the date of this judgment its position as to the arm’s length price or prices at which Cameco and CEL ought to have purchased/sold uranium transacted between them during the 2003 taxation year or a formula which allows Cameco to identify this price or these prices”.
The Court of Appeal set aside the award of solicitor-client costs in the Tax Court on the basis that both sides had been guilty of delay. No costs were awarded either in the Court of Appeal or the Tax Court.
The Court of Appeal basically held that there was no reason to reverse the Tax Court on the impugned portions of the Crown’s reply.
As to the Crown’s obligation to provide pricing information:
 In response, counsel for the Crown made the point that the arm’s length price between Cameco and CEL is irrelevant to her client’s position which is based on the premise that arm’s length parties would not have entered into these transactions. However, the arm’s length price of uranium is relevant to Cameco’s case and counsel for the Crown did not abandon or in any way resile from her client’s entitlement based on the pleadings to take a distinct position at trial as to the arm’s length price at which Cameco and CEL ought to have purchased/sold uranium transacted between them. To the extent that the Crown contemplates taking such a position at trial, it has the obligation to disclose that distinct arm’s length price before the trial, as has already been held by Chief Justice Rip on two occasions.
 Turning to a concern of a different nature, counsel insisted on the fact that from the Crown’s perspective there is no single arm’s length price for uranium, that such prices can only be arrived at by way of a complex formula which the Canada Revenue Agency has devised (Appeal Book, Vol. II at pp. 502 to 547) and that consultation with experts may be required in order to identify the precise figures.
 Keeping these difficulties in mind, and despite the fact that this information has been the subject of two previous orders, I would grant the Crown a full sixty (60) days to communicate to Cameco its distinct position as to the arm’s length price or prices at which Cameco and CEL ought to have purchased/sold uranium transacted between them during the 2003 taxation year or a formula which allows Cameco to identify this price or these prices.
On the issue of costs:
 The Tax Court judge explains at the end of his reasons why he views Cameco’s behaviour to be objectionable (Reasons at para. 44). In his view, Cameco was solely responsible for delaying the proceedings. As is apparent from the position of the Crown taken on the motion to introduce new evidence, both parties are being strategic in their approach.
 I am aware that cost awards result from an exercise of discretion and should not be overturned lightly. In this case however, I am satisfied that the Crown can equally be blamed for side-stepping the prior order of Chief Justice Rip, and resisting Cameco’s entitlement to have before trial access to the information which these prior orders address.
 Exercising the discretion in light of the parties’ respective behaviour, I would set aside the solicitor-client cost order and provide that the parties should bear their own costs.