Cameco wins $220m tax refund, seeks hundreds of millions more

Staff Writer | March 28, 2023 

A large refund shows light at the end of the tunnel for a tax dispute. Cameco’s Cigar Lake uranium mine, Saskatchewan. Source: Cameco

Cameco (TSX: CCO; NYSE: CCJ) has won C$300 million ($220m) back from Canada’s taxman in a dispute lasting two decades, but it says the full figure should be more than three quarters of a billion Canadian dollars.


Canada’s largest uranium miner says it’s due to receive C$89 million in cash and C$211 million in letters of credit after reassessments by Canada Revenue Agency concerning tax filings for 2007 through 2013. However, the company says it is owed a further C$480 million in cash and credit because of court decisions on the same tax issues in different years.

“The clear and decisive court rulings already rendered in this dispute likewise apply to these amounts,” Cameco said in a statement on Mar. 27. “CRA should fully reverse the remining transfer pricing adjustments for these years, return the full amount of cash and security being held, and bring this matter to an end once and for all.”

The C$480 million, composed of C$206 million in cash and C$274 million in letters of credit held by the CRA, concerns sales of uranium by Swiss subsidiary Cameco Europe and ties up “a significant portion of our financial capacity,” Cameco said.

The Saskatoon-based company has appealed to Canada’s Tax Court to complete the refund for the 2007-13 tax filings, and it has also disputed CRA assessments for 2014-16, it said.

The tax battle centres on how CRA shifted Cameco Europe’s income back to Canada for the years 2003 to 2014 and applied tax rates, interest and penalties, and transfer pricing penalties from 2007 to 2011, Cameco said in February. The company won at the federal Tax Court and federal Appeals Court before the Supreme Court dismissed CRA’s case on the 2003, 2005 and 2006 tax year filings.

“Although not technically binding, there is nothing in the reasoning of the lower court decisions that should result in a different outcome for the 2007 through 2014 tax years, which were reassessed on the same basis,” Cameco said.

The company is benefiting from a resurgence in nuclear energy’s image to fight climate change and fewer uranium supplies in the market because of the war in Ukraine. After 2022 results showed a swing into profit, Cameco is preparing to complete the joint acquisition with Brookfield Renewable Partners (NYSE: BEP) of nuclear plant builder Westinghouse in a $7.9 billion deal.

Cameco’s Cigar Lake mine is at full production while the McArthur River and Key Lake operations are to hit full output next year. The company has signed a record number of contracts to sell about 80 million lb. of uranium, including a multi-year deal with Ukraine.

Shares in Cameco gained 1.2% to C$34.04 each on Tuesday afternoon in Toronto, within a 52-week range of C$25.55 and C$41.05, valuing the company at C$14.7 billion ($10.8bn).

Cameco to receive CAD300 million tax refund

27 March 2023

The Canada Revenue Agency (CRA) has issued revised reassessments that will result in the Canadian company being refunded a total of some CAD300 million (USD219 million) - CAD89 million in cash and CAD211 million in letters of credit - but the company's broader tax dispute with the CRA continues.

Cameco's corporate headquarters in Saskatoon, Saskatchewan (Image: Cameco)

The reassessments are the latest development in a long-standing tax dispute between Cameco and the CRA, and follow an earlier series of court decisions in Cameco's favour for the 2003, 2005 and 2006 tax years which determined that income earned by Cameco’s foreign subsidiary from the sale of non-Canadian produced uranium was not taxable in Canada.

"In accordance with these decisions, CRA has issued reassessments reducing the proposed transfer pricing adjustment from CAD5.12 billion to CAD3.25 billion, resulting in a reduction of CAD1.87 billion in income taxable in Canada compared with the previous reassessments issued to Cameco for the 2007 through 2013 tax years. These revisions to income result in the refund of approximately CAD300 million described above," the company said.

The company noted that its broader tax dispute with the CRA - which continues to hold a further CAD480 million (CAD206 million in cash and CAD274 million in letters of credit) remitted or secured by the company - is still ongoing. This is "tying up a significant portion of our financial capacity", it said.

The company maintains that "clear and decisive court rulings already rendered in this dispute" relating to the sale of Canadian-produced uranium by the company's foreign subsidiary should also apply to the remaining transfer pricing adjustment of CAD3.25 billion for the 2007 to 2013 tax years, and that CRA should "fully reverse" the adjustments for those years, return the cash and security, "and bring this matter to an end once and for all".

Cameco filed appeals with the Canadian tax court in 2021 for the 2007-2013 and in October 2022 for the years 2014 and 2015. It has recently filed a notice of objection for 2016. "The process to resolve these disputes continues," the company said.

The timing of the refund is yet to be determined.

Researched and written by World Nuclear News