July 25, 2024

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CEO of company that owns Edmonton Oilers probed over tax payments

CEO of company that owns Edmonton Oilers probed over tax payments

The CRA is probing if Jürgen Schreiber declared all his assets and revenue for four years he said he lived in the Bahamas

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OTTAWA – The Canada Revenue Agency is investigating the CEO of the company that owns the Edmonton Oilers over whether he fully declared Canadian income over several years he claimed to be residing in the Bahamas while working for the Alberta-based firm.

Details of CRA’s audit of Jürgen Schreiber, CEO of OEG Inc. (formerly Oilers Entertainment Group) and the former head of Rexall and Shoppers Drug Mart and chairman of Aldo Group, came to light in a Federal Court ruling ordering him to surrender a trove of documents to the tax authority.

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According to Justice Glennys McVeigh’s ruling published Wednesday, the tax agency launched its audit into Schreiber in 2022 to see if he had reported all of his domestic and offshore holdings and transactions from the end of 2016 to 2019, years he declared he was residing in the Bahamas. However, the CRA has also claimed “that there is no admissible evidence showing that (Schreiber) was legally a resident of the Bahamas,” according to the ruling.

OEG’s website states Schreiber joined the Katz Group in 2016, an Alberta-based entertainment, hospitality and retail cannabis giant that owns the Edmonton Oilers NHL franchise and until that year had owned the Rexall drug store chain.

Between 2017 and 2019, Schreiber only reported to CRA some rental income from Canadian properties he owned and reported employment income for 2018 from an unnamed “Canadian employer,” the ruling said.

But the agency was skeptical of that declaration, noting that despite Schreiber declaring himself a resident of the Bahamas from Dec. 28, 2016 to 2019, he still had many ties to Canada.

Those included ownership of two Canadian properties, “continued” employment with Canadian companies such as OEG Inc, retail giant Aldo Group, and B.C. cannabis producer GTEC Holdings Ltd. (now known as Avant Brands Inc.). McVeigh noted that Schreiber also received multiple electronic money transfers from four offshore corporations.

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The agency also found that he incorporated three Canadian numbered companies in 2018 and 2019.

In order to verify Schreiber’s residency and tax compliance, the CRA in July 2022 demanded that he hand over information about the seven corporate entities he either owned, directed or was a shareholder of.

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The required material included financial statements, copies of foreign tax returns, organizational charts, details of all dividends issued and received as well as documents related to tax planning for all seven organizations, the ruling said.

But Schreiber rejected much of the request. He argued that since he was not a resident of Canada most of those years, the agency could not compel him nor the offshore companies to produce documents. In some cases, he also argued the records did not exist.

Schreiber argued that the CRA “cannot ask for all the details respecting his non-resident related entities (and himself) during his non-resident years,” the judge wrote.

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In April 2023, nine months after it first requested information from Schreiber, the CRA sued the businessmen, claiming that the “majority” of the information the agency requested was still outstanding.

In court, the CRA argued that the Income Tax Act did not allow for an individual to avoid scrutiny by the tax authority as soon as he declared that he was residing abroad.

“Parliament cannot have intended that an individual who has a presence in Canada simply be able to declare themselves non-resident for Canadian tax purposes with the effect of depriving the Minister (of National Revenue) of any ability to verify that declaration,” CRA’s lawyers argued, according to the ruling.

The agency also cast serious doubts on allegations by Schreiber that some corporate records sought by the agency did not exist, calling them “unsubstantiated.”

In her ruling, McVeigh ultimately granted part of CRA’s request and ordered Schreiber respond to some, but not all, of a questionnaire provided by the agency. She also ordered Schreiber to provide much of the information requested of the three Canadian numbered companies he founded in 2018 and 2019.

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She also ordered the businessman to “request” the same information from his four offshore corporations — Hiroko Holdings, D’Banyan, Eight Treasures and Retail Invest — and report back to the agency with their responses.

Finally, McVeigh also criticized Schreiber for not conducting a thorough search for some of the records he claimed did not exist from 2016 and ordered him to conduct a “detailed” search.

“(Schreiber) has not shown that the documents do not exist, nor that the information is unavailable. There is no indication that (Schreiber) made reasonable efforts to obtain this information,” she wrote.

In a statement, Schreiber’s legal team, Ron Choudhury, Molly Luu and Justin Ng of Miller Thomson LLP, said they were pleased with the court proceedings to date.

“We will continue to work collaboratively with the CRA on a resolution to the matter,” they wrote. They did not comment on whether Schreiber intended to appeal the ruling.

CRA spokesperson Sylvie Branch declined to comment on Schreiber’s case, citing confidentiality obligations.

National Post

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