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Alberta clarifies what are reasonable interest rates under provincial balancing pool scheme

Tuesday, May 29, 2018 @ 12:26 PM | By John Carleton & Darren Hueppelsheuser

In the recent decision of Alberta v. ENMAX Energy Corporation 2018 ABCA 147, the Alberta Court of Appeal considered whether interest on certain intercompany debt was reasonable, and therefore deductible in pro forma tax calculations required, under Alberta’s payment in lieu of tax regulation (PILOT).

The purpose of PILOT was to “level the playing field” as between commercial entities and government “tax exempts” competing in Alberta’s wholesale electricity market. In allowing the appeal, the court held that the trial judge had erred in failing to consider...