632738 Alberta: ten years of stays, $920,358 left for the tax authorities

632738 Alberta Ltd. employs no one. Incorporated in 1994 and headquartered in Spruce Grove, it owns no physical assets and exists, in its monitor's words, "to act as a holding company for investments in, or loans to, affiliated and wholly owned companies," per the Monitor's Sixteenth Report, Aug. 24, 2026, para. 1. The businesses that did the work were its affiliates. Its corporate controller described the Thompson Bros. Corporate Group in 2017 as "primarily involved in the earth moving, highway construction and oilsands construction industries," served by a partnership established in part to supply that group with construction workers, administrative personnel and human resources consultants, per the Affidavit of Ian McKinley, Oct. 16, 2017, paras. 1, 7.

On October 13, 2015, the Canada Revenue Agency reassessed the company's return for the year ended December 31, 2011, after an audit that reallocated $77,892,210 of partnership income to 632. The federal reassessment came to $15,440,605.71; Alberta's to $9,267,591.44, per the Affidavit of Ian McKinley, Oct. 16, 2017, paras. 3–4. The company's last balance sheet in the filing record, compiled without audit as at December 31, 2014, showed total assets of $6,187,369, of which $6,180,494 was its investment in a wholly owned subsidiary. The proposed monitor wrote that the reassessments had rendered the company "financially insolvent," and relayed the company's estimate that the tax appeal "may take up to twenty four months before it is resolved," per the Proposed Monitor's Report, Feb. 16, 2016, paras. 11–13 and Ex. 2.

On August 24, 2026, nearly eleven years after the reassessment and more than a year after the monitor first reported the appeal discontinued, Ernst & Young Inc. filed its Sixteenth Report and applied for its discharge. Two creditors had filed claims: CRA for $15,708,715.47 and Alberta Tax and Revenue Administration for $15,093,466.17. The monitor holds $945,358.48 and proposes to pay $469,370.96 to the first and $450,987.52 to the second, per the Monitor's Sixteenth Report, Aug. 24, 2026, paras. 24, 27, 35. The application is set down for August 31, 2026, before Justice Neilson in chambers, per the Application – Discharge of Monitor, Aug. 24, 2026, p. 1.

A stay the tax statutes did not offer

Why a company with no operations needed an insolvency statute is laid out in the bench brief its counsel, Duncan Craig LLP, filed in October 2017. CRA had identified 632 as a large corporation under the Income Tax Act, and up to 50% of tax assessed against a large corporation can be collected while the assessment is in dispute. "Neither the ITA or the ACTA include provisions which afford large corporations the ability to apply to either the Tax Court, or any Court, for a stay of proceedings," the brief continues, and the Tax Court holds exclusive jurisdiction where the validity of a reassessment is questioned, per the Bench Brief, Oct. 16, 2017, paras. 7–12. CRA had taken no collection steps before the company moved, its controller swore, per the Affidavit of Ian McKinley, Oct. 16, 2017, para. 15.

The company filed a notice of intention to make a proposal under the BIA on December 7, 2015, with Ernst & Young as proposal trustee. A proposal proceeding's stay cannot be extended more than five months past its first 30 days, and the appeal might take up to twenty-four months. On February 19, 2016, on an application under s. 11.6(a) of the CCAA, Madam Justice Veit took the proposal proceeding up under that statute, stayed proceedings against the company to March 20, 2016, appointed EY as monitor and granted an administration charge of up to $100,000, per the Initial Order, Feb. 19, 2016, paras. 3, 15, 23, 30 and the Proposed Monitor's Report, Feb. 16, 2016, paras. 1, 13.

The harm the company pleaded lay in the businesses around it. Its assets were money owed by related entities and shares in NBD Investments Ltd. and Thompson Contractors Inc., a partner in the Thompson Contractors Partnership, "the entity created to hold the employees," which then had approximately 700 people providing services to the group. If CRA put 632 into receivership or bankruptcy and went after the shareholder loans, or tried to sell the shares, the controller swore, those entities "may be forced to close," with "a chain reaction on the entirety of the Thompson Bros Corporate Group which is already experiencing some difficulty due to the significant downturn in the Alberta economy," per the Affidavit of Ian McKinley, Oct. 16, 2017, paras. 15(c), 17. On the other side of the balance, the brief argued, CRA "must await collection and, in the interim, interest continues to accrue on the amount it claims," per the Bench Brief, Oct. 16, 2017, para. 24.

The tax question, as the company framed it, was s. 103 of the Income Tax Act, the anti-avoidance provision that lets CRA reallocate partnership income where the principal reason for the partners' agreement on sharing it may reasonably be considered to be reducing or postponing tax. The company said the transaction was undertaken to establish an entity providing labour and management services to the group, "to move the employees from Thompson Bros. Group to the Thompson Contractors Partnership," per the Bench Brief, Oct. 16, 2017, paras. 19–20.

CRA did not oppose the stay. At the second extension, on August 12, 2016, counsel from the Department of Justice Canada appeared for CRA, no one opposed, and Justice J.M. Ross extended the stay to March 31, 2017 on two conditions: the company was to deliver to Justice Canada counsel, by noon on September 2, 2016, a copy of its notice of appeal to the Tax Court of Canada with confirmation of filing, and to file its 2015 corporate return by September 30, per the Order re: Second Stay Extension, Aug. 12, 2016, paras. 2–4. The appeal went in through tax counsel Felesky Flynn LLP within the deadline, and the return was filed as required, per the Affidavit of Ian McKinley (Ninth CCAA Extension), Apr. 20, 2021, para. 19. Recounting the 2018 extension in May 2026, the monitor recorded that "CRA has been in support of the extensions," per the Monitor's Quarterly Report, Jan. 1 to Mar. 31, 2026, May 12, 2026, para. 7.

Twelve extensions and a limitations motion

Examinations for discovery took place on October 11 and 12, 2017, and by Tax Court order of February 14, 2018 the Crown won leave to examine a different corporate nominee. It then amended its pleadings "to abandon their original position upholding the assessment and now pleads on a different basis for upholding the assessment," per the Affidavit of Ian McKinley (Ninth CCAA Extension), Apr. 20, 2021, para. 21. The company asked the Tax Court to decide whether the new position was statute-barred, a procedure requiring two hearings, the first of them on March 7, 2019. The Tax Court dismissed the application on October 19, 2019, and on March 4, 2021 the Federal Court of Appeal dismissed the company's appeal from that ruling, per the same affidavit.

At examinations on September 21, 2021, the company declined to answer certain questions on the ground of solicitor-client privilege; the Crown applied on April 7, 2022 to compel answers, and the Tax Court reserved and told the parties "that due to a significant workload its decision would be delayed," per the Monitor's Fourteenth Report, July 8, 2025, paras. 25–26. It ruled for 632 on August 10, 2023. The Crown appealed on August 25, the company cross-appealed on September 1, and the company filed its materials on March 8, 2024. Each of those waits was the stated reason for one of the stay extensions granted in Edmonton, per the same report, paras. 8–14.