Mise à jour trimestrielle :
Le règlement des différends fiscaux
en 2023 | Séance 1 (en anglais)

And welcome to our first session of our tax dispute resolution updates for 2023. These webinars were launched about two years ago to present new CRA policies, legislation, and case law, and help stay up-to-date-- help you stay up-to-date with current developments and tax dispute resolution.

Starting this year, our webinars are being presented on about a quarterly basis. So you can watch for the invitation to our next session to be scheduled for June. Please feel free to submit topics you'd like us to discuss at future webinars, and you can also feel free to submit questions throughout today's session, using the question feature.

And as usual, we're, again, aiming to wrap up today's session by 12:30. However, after formally ending, for those who would like to stay on, we'll continue for up to about another 10 or 15 minutes, depending on how many questions there are, to answer any questions that you have.

So please, as I say, throughout the session, feel free to submit questions through the question feature on Zoom. And if there aren't any questions, if there are any that we don't get to during our Q&A session at the end, we will respond to you directly. Finally, please note by way of introduction, that a copy of today's slides will be available online.

Being lawyers, we, of course, need to start with a disclaimer while you can take a moment to read this. The essential message is that these webinars cover the topics presented only generally and are not intended to provide legal advice since every situation is different, and the law is always changing.

So then, by way of introduction, my name is Steve Novoselac, and I serve as co-leader of Gowling WLG's Tax Dispute Resolution practice in Canada. I'm joined today by three members of our firm's National Tax practice group-- Pierre Alary, Andre Bergeron, and Mark Crandall, and they all practice from our Ottawa office. Pierre specializes in resolving tax disputes, along with transfer pricing issues.

Andre practices in our firm's transfer pricing and competent authority group. And prior to joining us, he was a senior economist for 10 years at the CRA'S Competent Authority Services Division, where he participated in advanced pricing arrangements and mutual agreement procedures with many foreign governments, as well as gaining extensive experience working on international transfer pricing audits.

Finally, Mark practice is intellectual property and tax law. After he started with our firm about eight years ago, he went to the Department of Justice for a little over a year before rejoining the firm at the end of last year. And during his time at Justice, Mark served as tax litigation counsel.

And he now draws on that experience to help taxpayers find practical efficient resolutions to their tax disputes and is going to be sharing some of those insights with us today. So then, in terms of topics today, we have the following three. Number one, transfer pricing adjustments, notice of objection or mutual agreement procedure that Pierre and Andre will be discussing.

Then, secondly, as I mentioned, important considerations in settling tax litigation that Mark will be discussing. And then, third, 10 keys to resolving shred claims which I'll be addressing. So with that, Pierre, please go ahead and tell us about transfer pricing adjustments.

PIERRE ALARY: All right. Thank you, Steven. So Andre and I will be speaking today about how to select the optimal tax dispute resolution route in response to a transfer pricing notice of reassessment. Before we dive into the presentation, we'll start with a quick summary of what is transfer pricing.

Put simply, transfer pricing is a set of rules that applies to transactions between members of a corporate group located in different countries. These transactions could involve the sale of goods, the provision of services, the license of intangibles, or any cross-border intercompany loans.

The rules of transfer pricing provide that when two parties in different countries who are not dealing at arm's length enter into a transaction, the price that is paid for the goods, the services, or the intangibles must be the price that arm's length parties would have agreed to.

Typically, if a taxpayer is a subject of an audit that results in a notice of reassessment, the next step for the taxpayer, if they wish to contest the reassessment, would be to file a notice of objection. However, the dispute resolution process is not this straightforward when we're dealing with transfer pricing.

There are other avenues to dispute the re-assessment, and a taxpayer will want to pick the right approach based on their circumstances. The three main approaches are, first, filing a notice of objection with the CRA appeals directorate. Second, making a request for mutual agreement procedure with a Canadian competent authority.

Or third, filing a notice of appeal to the Tax Court of Canada before the objection is considered by the CRA Appeals Directorate. So let's pretend that a US parent company charges a royalty to its Canadian subsidiary for the right to use its valuable intangibles. And let's say that the royalty is $10 million.

Now, the CRA could audit the transaction and conclude that two parties dealing at arm's length would have agreed to a $1 million royalty, not 10. The CRA would, therefore, be making a transfer pricing adjustment to reduce the Canadian company's royalty expense by $9 million.

Now, this, on its own, is problematic for a taxpayer. But on top of that, in this case, the US parent has already reported $10 million of royalty income in the United States. So the corporate group is now in a position of double taxation. And I will now pass things off to Andre to discuss the taxpayer's options when they find themselves in a position of double taxation.

ANDRE BERGERON: So luckily, Canada's tax treaties contain a mechanism that allows taxpayers to request that the competent authorities of the two countries negotiate amongst themselves to see how the profits should be allocated in order to avoid double taxation.

So this process is called the mutual agreement procedure or the MAP. So in the vast majority of our cases, we recommend to our clients that they file a MAP for competent authority assistance. And the main reason for that is, generally, because the client's primary goal is to resolve double taxation.

So coming back to our royalty example, if the taxpayer files a notice of objection, and the CRA appeals directorate allows the objection in part and concludes that the royalty should have been $6 million, then you still have 4 million that is double taxed.

However, if you pursue the MAP route and the competent authorities agree that the royalties should have been $6 million, then the IRS will provide correlative relief for the $4 million, resolving your double tax. Note that if you're a taxpayer who has received the transfer pricing notice of a reassessment, you cannot pursue both the notice of objection and the MAP route at the same time.

You need to decide which route makes more sense, given your circumstances. That said, a taxpayer should always file a notice of objection within the 90-day period. And if the ultimate decision is to pursue the MAP, then you ask the CRA to hold the notice of objection in abeyance, pending the resolution of the MAP.

So maybe now you're thinking, well, OK, then why would a taxpayer ever choose the notice of objection route when dealing with a transfer pricing adjustment? Well, there are various factors to consider in each case, and the decision to choose one route over the other is not always straightforward.

We'll try to summarize some of the main points that we usually consider as part of our analysis. The first obvious situation is where there is no tax treaty between the two countries. If you don't have a tax treaty, you don't have a MAP article.

So if the CRA issues a reassessment for a transaction between the Canadian company and their affiliate in Bermuda, the only option for the taxpayer is to file a notice of objection. The second situation is where double taxation is not a big concern for the taxpayer.

So that would be the case where the transaction is between a Canadian company and an affiliate in a low tax jurisdiction. If the countries have the same tax rate, then the ultimate goal will likely be to make sure that the same dollar is not taxed twice despite disagreeing with the negotiated settlement.

But if the other entity is resident in a low tax jurisdiction, like Barbados, then you likely won't be OK with Canada reducing the royalty of 10 million to $1 million, even if Barbados agrees to reduce the income reported by the Barbados entity to $1 million.

And while this will relieve double tax, you won't achieve the optimal tax position you were hoping for, as the ultimate global tax being paid by the corporate group will have increased substantially. In this scenario, you would file a notice of objection because you believe that the $10 million is the correct arm's length price for the royalty, and you'd convince CRA appeals of that.

Another important scenario where taxpayers should consider filing a notice of objection is where the non-resident company is in a loss situation, especially if those losses can't be absorbed. Because in that situation, if the CRA makes a transfer pricing adjustment, that increases the taxes payable in Canada.

The fact that the other countries cover authority may reduce the income of the non-resident entity does not reduce your immediate tax liability of the corporate group. Further, a MAP could increase the risk of an audit in the foreign country by informing them of the loss and inciting them to look at the facts and circumstances there.

PIERRE ALARY: All right, thanks, Andre. So those are the big points to remember, but we also want to make a few final comments. If you decide to go the notice of objection route, and the assessment is not completely overturned, you can still make a request to the other country's competent authority to resolve double taxation.

But this would be a very different situation than a MAP process, in which the competent authorities are forced to negotiate with each other. Here, you're completely at the mercy of the other competent authority, which may or may not agree with your request for correlative relief.

The next thing I want to mention is that in the case of transfer pricing assessments, it is not uncommon for taxpayers to bypass the notice of objection stage and proceed directly to the Tax Court of Canada. You must still file the notice of objection, but the Income Tax Act allows you to file a notice of appeal to the tax court, 90 days after you have filed your notice of objection.

A typical case where the taxpayer may choose to go straight to tax court is if there is billion-dollar assessment involving a low tax jurisdiction, like Barbados. The taxpayer may simply assume that they will not get the assessment completely overturned by the CRA Appeals Directorate.

And therefore, it is simply best to save time and money and go straight to tax court. And as you all know, litigation can be a lengthy and costly process for a taxpayer. And when it comes to the MAP process, there can also be lengthy delays in competent authorities reaching map settlements due to the complexity of the cases and these significant dollar amounts under dispute.

However, Canada has introduced the concept of mandatory arbitration in some of its tax treaties. And this was first introduced in the Canada-US treaty. So taking the Canada-US treaty as an example, the mandatory arbitration clause in that treaty provides that after a taxpayer has submitted all the relevant documents and the competent authorities need to negotiate the file under MAP, the competent authorities will only have 24 months to reach a resolution.

After this time expires, either the US or Canadian related party can request that the case be referred to an arbitration board for consideration. Now, this was introduced back in the early 2010s, and it has proven to be a success in motivating the Canadian and US competent authorities to achieve more timely MAP settlements on transfer pricing cases. And that is all the time for Andre and I today. We hope this was informative, even for those of you who do not deal with transfer pricing on a regular basis. And with that, I will throw it over to Mark.

MARK CRANDALL: Good afternoon, everyone. Today, I will be discussing some key considerations when it comes to settling tax litigation before the Tax Court of Canada. If you are appealing an assessment to the tax court, this is likely because you have not been able to resolve your tax dispute during the CRA administrative process at the audit stage or at the objection stage.

This does not mean, however, that the dispute can't be settled once it reaches the tax court. And of course, settling a tax appeal can result in significant savings as litigation can be costly. The first important consideration in settling a tax appeal is that settlements must be principled.

A principled settlement is one, where the result of the settlement is an assessment the minister of national revenue could have reached on the basis of the facts and law. This is in contrast to a compromise settlement, which the crown is not permitted to make.

Compromise settlements are available in some other jurisdictions in the tax context and are common in commercial litigation contexts. For example, in a commercial dispute, parties may consider the amount of the claim, weigh the risk of losing, and make a compromise offer of a percentage of the amount claimed.

This type of negotiation of offering a percentage of the tax assessed is not permitted in a tax appeal. Notwithstanding that compromise settlements are not permitted, most tax litigation in Canada is settled. The Federal Court of Appeal, in 2012 decision in CIBC world markets, explain the reason for this, as follows.

Often, negotiations and discussions bring to light new facts, better characterizations of the overall situation, and richer appreciations of the applicable law. These negotiations and discussions can culminate in a settlement that the minister can implement by reassessing on the basis of defensible views of the facts and the law.

Another important consideration in settling a tax appeal is that settlement can occur at any stage. Just because a tax dispute was not settled with the CRA during the administrative process, it does not mean that a quick settlement of a tax appeal is not possible.

Tax appeals can and are settled at all stages of litigation, including pleadings, discovery, pre-trial, or even during trial. To maximize the chance of settlement, it's important to consider the crown's prospective tax appeal at each of these stages. For example, initially, at the pleading stage, the crown likely only has the same information that was before CRA during audit or CRA appeals.

If a taxpayer has gathered new or additional information, it is often best to share this with the crown attorney handling the appeal early to see if this changes the crown's perspective on a dispute. Similarly, different considerations and discussions can occur after discovery, when the crown has had an opportunity to see and assess the credibility of a taxpayer's position.

The important point is that it's never too early nor too late to keep the door open to settlement discussions with the crown. Another important consideration in settling a tax appeal is how to document the settlement once it is reached. Two things need to occur once a settlement is reached.

The terms of the settlement need to be documented. And the second, there needs to be a mechanism to end the litigation. These two things are generally done in one of three ways-- a consent to judgment, a settlement agreement, often called minutes of settlement, or a hybrid approach of both of these.

A consent of judgment is effectively a draft order that is submitted on consent of both parties to the tax court. As long as there is nothing contrary to the law, the tax court will usually issue the consent judgment on the terms agreed to by the parties.

A consent judgment is a preferred mechanism to end a tax appeal from the crown's perspective, as it is fully transparent and in the public record. However, when there are issues that are settled, which are not before the court, such as tax years that are still under audit or other considerations, such as confidentiality, a settlement agreement is needed.

Settlement agreements or minutes of settlement set out the terms of the settlement, which the CRA uses to reassess and dictate the mechanism to end the litigation. Generally, this is done by filing a discontinuance. Another important consideration in settling the tax appeal are the different settlement processes available to taxpayer.

These are processes that are available in the court rules and offered by the court as services. For example, the tax court offers settlement conferences and a newer fast tracked settlement conference pilot which just released during the pandemic. These provide the litigants in tax appeals a type of mediation service.

Conferences can be beneficial in that they are often-- that they often allow the parties to get feedback from a tax court judge on the strength of their case. The tax court also has a pilot program called the preliminary ruling docket procedure. This is an early non-binding hearing of a tax appeal by a tax court judge.

This has to occur early in the litigation before significant costs and proximity to an actual trial is near. In addition to these mechanisms, other options exist which might assist the settling of a tax appeal or narrowing issues that need to proceed to a trial.

One example is a rule 58 motion, which is a motion to the tax court to make a ruling on a specific question of law or mixed fact and law. The benefit of any of these options is typically very case-specific and should be discussed with your tax lawyer for any given appeal.

Finally, an important consideration in settling a tax appeal is a good understanding of the scope of settlement. I frequently observe that settlement discussions can occur from different perspectives. For example, lawyers representing a taxpayer and the crown's lawyer might be discussing settling a specific tax appeal that deals with one specific tax year, while the taxpayer assumes that any settlement would encompass all issues they're facing with the CRA, such as years with related facts that are still under audit.

It is important in discussion between all parties and their counsel to properly explain the scope of any settlement and the repercussions of any settlement on other issues in years that may not be the subject of a specific tax court appeal. Relatedly, the authority to settle should also be made clear between all parties and their counsel.

The law says that lawyers for both taxpayers and the crown have the authority to bind their clients. This means that if a representative in a tax appeal accepts an offer on behalf of their client, that is a binding settlement. Lawyers and clients should be clear on the scope of any settlement and the authority they are giving to their representative to make or accept a settlement offer.

To summarize, some key takeaways in settling tax appeals are, keep settlement discussions focused on ways the government can settle or is allowed to settle. Consider settlement at all stages of the litigation. Make tapering the settlements easy.

Talk with the government lawyer about possible settlement processes and see if the facts of your particular appeal might benefit from these processes. And finally, be clear on the scope of settlement, what is being settled, and who has the authority to make and accept settlement offers. With that, I will turn it over to Steve.

STEVE NOVOSELAC: Thanks, Mark, for those very helpful insights on how to settle tax litigation. And the third topic also talks about settling tax litigation, but specifically focuses on how to resolve SR&ED claims and provides 10 keys for that. So number one is focus.

It's always best to focus on the substantive issues. It's not uncommon for there to have been some misunderstandings, miscommunications, or, worse, between the taxpayer and the CRA auditor. Taxpayers often complain that the auditor was unfair, arbitrary, or even capricious.

At the same time, CRA auditors often complain that the taxpayer delayed responding or was unresponsive to reasonable requests for information and documents, leaving them in the untenable position of being unable to properly assess the merits of the SR&ED claims.

This can become a futile or even counterproductive finger-pointing exercise and rather than becoming embroiled in that, it's always advisable to try to agree with counsel for the CRA to set aside those issues and free up the parties to concentrate on what really needs to get resolved, what are the merits of the claims. Second, developing a settlement negotiation protocol using sample projects.

In appropriate cases, especially those involving a large and unwieldy number of SR&ED projects, an effective strategy to avoid full blown litigation is to develop an agreed upon settlement negotiation protocol involving sample projects. The basic idea is that an analysis of the representative sample projects can inform settlement negotiations for all of them.

Counsel for the CRA are reasonable and, in the right situation, can be amenable to this approach. Again, the concept is basically to disregard the sometimes contentious reasons why full representations may not have been made to the CRA auditor initially and, instead, allow the taxpayer a new opportunity to try to persuade the CRA based on support provided for the samples that all of the projects are eligible and should be approved.

Third, freeze framing the litigation. Even after a notice of appeal has been filed with the tax court, it can be most efficient for all of the remaining procedural steps in the litigation to be put on hold until the settlement negotiations can get concluded. A request for a deferral like this is ideally made jointly on behalf of both parties.

As long as the court is given sufficient details of a demonstrably robust settlement negotiation protocol, they can often be amenable to this type of a request because, of course, they want to conserve the precious judicial resources. And again, it's important to be able to convince the court that there's a reasonable prospect of achieving a settlement.

Number four, marshaling the supporting facts. An integral element of an effective settlement negotiation protocol is always for the taxpayer to marshal all of the available facts and documents to support the eligibility claim. This often requires a thorough search through old documents, old computer records, drawings, and prototypes.

And this can be painstaking, time-consuming, and expensive. However, once the CRA has agreed to engage in settlement negotiations, it's critical to put your best foot forward. For this approach to be effective, the commonly seen tendency to wait until later stages of the litigation to do the hard work of compiling everything due to cost or other considerations must be avoided.

Number five, contextualize the records retained. It's important to explain why the records that had been retained may be less than complete. This is a common challenge in shred cases.

The apparent shortcoming typically results from the projects having been completed in a floor context, with pressing exigencies around the production scheduling and cost constraints, leaving no available excess capacity or even financial incentive for taking the necessary time to record all of the steps taken and the results observed.

Providing this context can help make the CRA less dogmatic when seeking a detailed record of the hypotheses tested and the results. Number six, retaining an expert. This is critically important, and it needs to be an independent external expert to support meritorious SR&ED claims.

The technical need to actually work on the projects often have impressive credentials. They conducted the experiments and, therefore, have the most intimate familiarity with the projects. This makes them the real subject matter experts, and they're often put forward to explain the technical aspects of the projects and, specifically, why the criteria for determining eligibility have been met.

This includes the presence of technological risk or uncertainty and technological advancement. However, this leaves them, essentially, defending their own work. Given this obvious lack of objectivity, it becomes more difficult to convince the CRA based solely on their statements which can be perceived as merely self-serving.

This difficulty gets compounded by the practical operation of the reverse onus on taxpayers to disprove the assumptions underlying the assessments and typically denied the SR&ED claims. An independent expert, who can't be criticized for lacking objectivity, can help overcome these challenges.

Number seven, win the Battle of the experts. The old saying is that an expert is someone who knows more and more about less and less. To support meritorious shred claims, we always strongly recommend identifying and retaining the leading available relevant subject matter expert who is usually willing to help at a reasonable cost.

The taxpayer is often aware of the leading expert, so this can be a good starting point for the search. The CRA will invariably find well-prepared reports from leading independent subject matter experts to be helpful and compelling. Number eight, don't have the expert purport to opine on the ultimate issue.

The ultimate issue is whether or not the SR&ED expenditure is qualified, and it takes it too far to ask the expert to provide an opinion on that point. Number nine, distinguished scientific research and experimental development. In the right case, an argument may be advanced that a distinction exists between these two, and the two concepts may have been practically conflated, especially in applying the SR&ED eligibility criteria relating to documentary requirements.

Expert opinion evidence can support the proposition that there's a long-established and fundamental difference between scientific research and experimental development, and that these concepts have been effectively merged, which can operate to prejudice taxpayers. Number 10, consider a contingency fee arrangement.

These types of fee arrangements are often seen in other types of litigation, less so in tax litigation, generally. However, since they seek tax credits, SR&ED appeals can be suitable for contingency fee arrangements, with the fee being based on a percentage of the tax credits recovered.

We've seen cases where substantial amounts have been recovered using a contingency fee arrangement, where the taxpayer when considering the prohibitive cost of litigation otherwise thrown up their hands in despair and would have forgone pursuing the claim which turned out to be viable.

This kind of arrangement can make it financially feasible for taxpayers to retain experienced counsel to successfully pursue meritorious SR&ED claims. So those are some keys to resolving SR&ED claims. The next slide that's appearing, it provides a QR code.

And if you could, please, we would be grateful if you would take a moment to scan that QR code to take a short survey and provide us with your feedback on this session and also topics for future sessions. And as I mentioned at the outset, please, as well, look for the invitation for our next webinar in June.

And so, thanks again for joining today, everyone, and have a great afternoon. And finally, it's now 12:30. But as I mentioned at the outset, while today's formal session is now concluded, we're going to continue with those who would like to stay on to answer any questions.

So let's just check to see what questions we have. So there's a question for Pierre and Andre in their topic. In a MAP process, are you always working with the foreign competent authority in negotiating against the CRA? So is it always a foreign competent authority?

PIERRE ALARY: Well, that will depend on which tax authority is raising the assessment. And so, the CRA is known to be a very aggressive tax authority, so most of the cases that we deal with, it will be a CRA-raised assessment. So we will be working with the foreign competent authority.

However, there is a case right now that we're dealing with, where France is tax authority raised an assessment. And therefore, we're working with the CRA to help them in their negotiations with France's competent authority. So both sides can happen, but we definitely do see more CRA-initiated assessments. And I see Andre's is also waiting to say something.

STEVE NOVOSELAC: Yeah, please go ahead.

ANDRE BERGERON: No, I was just going to add, it really does depend on who raises the reassessment. And I've worked on a few negotiations with-- for example, with China, where they were doing the reassessments and had their views and working very closely with the local the parent company in Canada in providing the right arguments to show that the original file approach was the appropriate one and ultimately pulled through in convincing the authorities that was the right approach.

So it really does depend on the circumstances. Sometimes, you'll see some authorities don't want that much of an interaction with the taxpayer, but that hasn't happened too often.

STEVE NOVOSELAC: All right, thanks very much, Pierre and Andre. So next question we have pertains to Mark's presentation. And that is, what options exist for a corporate taxpayer when CRA takes too long (years) to resolve a notice of objection.

MARK CRANDALL: Thanks, Steve. So if you file a notice of objection, and it's taking a very long time for the CRA to respond, there's a couple different considerations. I'll get to the specific options in a second. The first thing to note is that under the Income Tax Act, the CRA or the minister has an obligation to respond to a notice of assessment with all due dispatch.

That's the language of the act. But the tax court has repeatedly said that failing to meet this requirement does not result in vacating an assessment. However, it could mean that interest relief is warranted, and that's something that should be looked at, depending on the facts.

In terms of the specific options available to a taxpayer to move forward, there are two, and they're set out, again. in the Income Tax Act. Option number one would be, of course, to just wait and see if you can resolve it with CRA appeals. That would be continuing the negotiation until you either get a confirmation, or a variation, or a vacating of the assessment.

Or option two, as Pierre mentioned in his presentation, after 90 days have elapsed, and you have not received a response from the CRA after filing notice objection, there's a provision Income Tax Act that allows a taxpayer to go directly to tax court and appeal the assessment that they objected to.

So those are the two of the options. Again, lawyers often say this, but the consideration of which one to go will really be fact-dependent, and it will really depend on where the discussions or the negotiations are with the CRA during the objections or what occurred during audit.

STEVE NOVOSELAC: Thanks very much, Mark. So next question that we have deals with one of the topics that I had discussed. Although, it may be best to focus on the substantive issues rather than what the auditor has done. Is there no possible relief for CRA auditor misconduct.

So I would say, practically speaking, that that's exceedingly difficult to seek that type of relief. Certainly, not uncommon for taxpayers to express concern to counsel that there's been some type of misconduct on the part of an auditor. However, those types of claims are very difficult to successfully advance.

They will be vigorously defended. And so, it's very difficult, as a practical matter. It is technically possible. There would need to be a claim brought, a civil litigation claim in the-- however, as I say, as a practical matter, that's very difficult to achieve.

Now, there's a question that's come in that, I suppose, I could take a run at and then Mark, maybe, may want to add some comments. Is it considered a good strategy to use settlement negotiation protocol in interpreting the final agreement reached with the CRA?

So I take it from this question that there is a situation where there was an ostensibly a final agreement reached with the CRA and that, somehow, it broke down or became, an issue and there was some type of disagreement in terms of how to interpret that or how to apply the agreement that had been reached, which has given rise to a subsequent dispute or a discrete dispute subsequently.

And so, I would say, yes. In a case like that, if you're all the way with dealing with the counsel for the Department of Justice, that you should be able to engage in some type of negotiation because that sounds, to me, the type of situation where an agreement or a settlement should be achievable.

MARK CRANDALL: Yeah, I'd echo that, Steve. I think the tax court has inherent jurisdiction to enforce any settlement agreement to the tax appeal before it. So this would become an exercise, basically, in contract interpretation. And the Supreme Court's told us that the full context matters. So certainly, you could look outside of the specific settlement agreement.

STEVE NOVOSELAC: Thanks, Mark. Next question we have, what happens if no settlement is achieved through the settlement negotiations using sample projects? So again, I take it, this is referring back to the SR&ED presentation. And if there's no settlement achieved, and the taxpayer wants to seek relief, you're going to need to run a hearing, or a trial in the tax court.

And I think this dynamic emphasizes or points up the importance of this type of a protocol. And what I mean by that is that it's an onerous proposition, both from the point of view of the taxpayer and from the point of view of the Department of Justice and the CRA.

If you have a case where there's a very large number, say, 50 or 100 different projects, and you've and you've identified half a dozen or a dozen sample projects to inform settlement negotiations, it turns out that a settlement is not achieved.

As I say, it's quite a daunting proposition for both parties to think about having to marshal all of the facts and go through the evidence for that many projects. It would take weeks or months to do that. And so, that really-- I think, we've had a good experience with that creating a very conducive atmosphere to achieving a settlement before people have to stare down the gun barrel of that process.

So I think we have-- it's been about 10 minutes almost, and I think we have cleared off the questions. I don't see any more questions coming up in the panel. So again, thank you very much for joining today and for your time. Everyone, have a great afternoon, and please do look forward to receiving an invitation for our next session in June. Thank you very much. Have a great day.