Nova Scotia Power Inc. - Supreme Court of Canada Grants Leave to Appeal
HALIFAX, NS - The Supreme Court of Canada has ruled in favor of Nova Scotia Power Inc.'s (NSPI) application for permission to appeal the Federal Court of Canada's ruling that overturned a Tax Court of Canada's decision in the company's favour. The appeal will be heard by the Supreme Court of Canada. Nova Scotia Power is a wholly owned subsidiary of Emera Inc. (TSX:EMA).
The Supreme Court of Canada has ruled in favor of Nova Scotia Power Inc.'s (NSPI) application for permission to appeal the Federal Court of Canada's ruling that overturned a Tax Court of Canada's decision in the company's favour. The appeal will be heard by the Supreme Court of Canada. Nova Scotia Power is a wholly owned subsidiary of Emera Inc. (TSX:EMA). The case arose when NSPI claimed deductions related to capitalized interest on assets constructed by its predecessor, Nova Scotia Power Corporation (NSPC). The assets were purchased by NSPI in the course of privatizing NSPC in 1992. The deductions created substantial tax depreciation that was used to reduce income taxes payable by approximately $130 million through 2002. The Canada Customs and Revenue Agency (CCRA) disallowed the deductions claimed, and NSPI pursued the issue successfully through the Tax Court. CCRA appealed the decision to the Federal Court of Appeal, which overturned the Tax Court ruling in January 2003.
"We are pleased by this development and look forward to the opportunity to present our case to the Supreme Court of Canada," said David Mann, President and Chief Executive Officer of Nova Scotia Power.
The total potential liability is approximately $160 million, including interest charges. The company has deposited the full amount with CCRA to avoid further interest charges. The total payment will be recoverable should the issue be finally resolved in the company's favour. Nova Scotia Power will work with its regulator, the Nova Scotia Utility and Review Board, to determine an appropriate mechanism to recover the costs of these taxes should the appeal process ultimately prove unsuccessful.
About Emera Inc.
Emera Inc. (EMA-TSX) is a diversified energy and services company, with 550,000 customers and $4.0 billion in assets. The company has two wholly-owned regulated electric utility subsidiaries, Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Nova Scotia Power supplies over 95% of the electric generation, transmission and distribution in Nova Scotia. Bangor Hydro provides electricity transmission and distribution service to 107,000 customers in eastern Maine. It is a member of the New England Power Pool, and is interconnected with the other New England utilities to the south and with New Brunswick Power to the north. In addition, Emera Energy incorporates Emera's 12.5% interest in the Maritimes & Northeast Pipeline, which delivers Sable natural gas to markets in Maritime Canada and the northeastern United States; and Emera Energy Services, Emera Fuels, and Emera's business development activities.
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