Daishowa-Marubeni International Ltd. v. Her Majesty the Queen (February 20, 2013)
Case # 34534
The appellant operated pulp mills in Alberta and British Columbia. Silviculture liabilities associated with its harvesting rights obliged the appellant to reforest lands. The appellant sold its harvesting divisions to purchasers who assumed the reforestation obligations. In its income tax returns, the appellant classified the silviculture liabilities as long-term and current liabilities. The Province of Alberta argues an assignee of timber rights assumes the reforestation liability corresponding to the forest tenure. The appellant didn’t include amounts of the silviculture liabilities in reporting its income for 1999 and 2000. The main issue is the tax treatment of reforestation obligations assumed by purchasers of sawmill operations. The dispute in this case revolves around pulp mills in Alberta and British Columbia.