Supreme Court of Canada dismisses Crown Appeal in Loblaw Financial Holdings Case

In a unanimous decision, the Supreme Court of Canada has dismissed the Crown’s appeal in Canada v. Loblaw Financial Holdings Inc. (2021 SCC 51), holding that Loblaw Financial was entitled to rely on the financial institution exception set out in s.95(1) of the Income Tax Act.  In so doing, the SCC concluded that the context of the FAPI regime confirms that a parent corporation does not conduct business with its controlled foreign affiliates when it provides capital and exercises corporate oversight.  Matthew Williams, Robert Carvalho, and Michael Colborne represented the intervener, the Canadian Bankers’ Association.