Perfect Fry Company Ltd. v. Her Majesty the Queen

Date Closed

June 18, 2008

Lead Office


Under the Income Tax Act, a taxpayer who has made qualifying expenditures on scientific research and experimental development (SR&ED) is entitled to apply certain investment tax credits (ITCs) against tax owing for the year. If no tax is owing for the year, ITCs may be carried forward and back to be applied against tax owing in other years. If the taxpayer is a Canadian-Controlled Private Corporation (CCPC) as defined by the Act, it may be entitled to additional SR&ED ITCs and to refundable SR&ED ITCs. On June 18, 2008, the Federal Court of Appeal (FCA) ruled in the case of Perfect Fry Company Ltd. v. Her Majesty The Queen. The court found that Perfect Fry was a CCPC and therefore entitled, as it had claimed, to refundable SR&ED ITCs for its 1993 to 1995 taxation years and to additional and refundable SR&ED ITCs for its 1996 to 1998 taxation years. The FCA’s decision affirmed the Tax Court of Court of Canada’s earlier decision.

McCarthy Tétrault LLP represented Perfect Fry with a team led by Ed Kroft.