The Federal Court of Appeal’s decision in Imperial Oil Resources Limited v. Canada (Attorney General)[i] concerns refund interest on amounts relating to remission orders. The specific issue before the Court was whether, in computing the amount required to be paid by Imperial Oil Resources on account of its tax liability pursuant to the Income Tax Act (Canada) (the “ITA”), the Minister of National Revenue was required to credit the amount of a tax debt remitted to it pursuant to the Financial Administration Act[ii] (the FAA) and pay refund interest on the resulting overpayment.
As a bit of background, the ITA requires a taxpayer to include in its income resource royalties receivable by a province and prohibits the deduction of resource royalties payable to a province. The Federal government passed the Syncrude Remission Order[iii] (the SRO), which granted to each participant of the Alberta Syncrude Project remission of any tax payable with respect to related royalties.
