Canada Trustco Mortgage Co. v. Canada

Holding

The GAAR analysis under Section 245 requires three elements: a tax benefit, an avoidance transaction, and misuse or abuse having regard to the object, spirit, and purpose of the relevant provisions.

Facts

Canada Trustco engaged in a sale-leaseback transaction that produced cost-base benefits questioned by the Minister.

Reasoning

Chief Justice McLachlin's GAAR framework requires a textual, contextual, and purposive analysis of the provisions in question. The case is the leading authority on Canadian GAAR application.