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Feb 18, 2021

Cameco puts 13-year-long CRA dispute to rest

John Zechner discusses Cameco

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Uranium miner Cameco Corp.’s years-long tax dispute with the Canadian Revenue Agency is finally coming to an end.

The Supreme Court of Canada dismissed the case, resolving disputes for the Saskatoon, Saskatchewan-based company’s 2003, 2005 and 2006 tax years, which another court in 2018 had ruled in favor of the producer. The decision comes amid a rally in the uranium market as investors see nuclear power included in clean energy plans.

“This entire saga has gone on far too long,” Chief Executive Officer Tim Gitzel said Thursday in a statement. “It has been incredibly disheartening for us, as a Canadian company, to have an agency of our federal government continue to pursue a flawed argument for 13 years, even after receiving two court decisions completely in our favour during that time.”

Cameco said it expects to receive a $5.5 million (US$4.3 million) refund plus interest for amounts paid on previous reassessments, as well as $10.25 million in legal fees and up to $17.9 million in disbursements for costs awarded to the company in court rulings. The timing of those payments is uncertain, the company said.

Cameco shares fell 3.3 per cent to $20.53 at 11:01 a.m. trading in Toronto. The stock is up about 21 per cent this year, after surging more than 47 per cent in 2020 in its biggest annual gain since 2009.

Canada’s revenue agency continues to hold about $785 million in cash and letters of credit that the company had been required to pay or secure, “tying up a significant portion of the company’s financial capacity,” Cameco said.

“Cameco believes CRA should return the full amount of this cash and security, given the overwhelming clarity of the court decisions received to date,” the company said.