The government has said the financial manoeuvre was designed to "circumvent" parts of the Income Tax Act. Crown's 'epic narrative... is without foundation'In its battle with the CRA, Loblaws maintains that its offshore subsidiary Glenhuron Bank, even though it didn't accept deposits from any customers, was a legitimate foreign financial institution. If so, it would be entitled to the Income Tax Act's exception for the investment earnings of Canadian-owned regulated foreign banks. Glenhuron Bank didn't take retail deposits so it's not a real bank,' " said Al Meghji from law firm Oslers, representing Loblaws. "We of course don't for a moment accept the proposition that real banks take deposits and anybody who doesn't is not a real bank.

Source: CBC News April 23, 2018 20:37 UTC