By The Canadian Press

B.C. property firms say $91M tax bill will jeopardize future construction projects

Feb 20, 2026 | 4:50 PM

VANCOUVER — British Columbia property companies controlled by prominent developer Terry Hui are taking the federal government to court, claiming a tax bill of more than $91 million will jeopardize future construction projects if they’re made to pay up after a 12-year audit by the Canada Revenue Agency.

Vancouver-based Adex Securities Ltd., One West Holdings Ltd. and an affiliated numbered B.C. company filed an application in Federal Court earlier this month seeking to halt the minister of national revenue from issuing tax assessments dating from 2007 to 2013.

The application says an audit of the companies began in 2013, examining payments to related corporations based in Luxembourg, looking into potential tax avoidance and so-called “treaty abuse.”

The transactions at issue involve the routing of interest payments to companies in Luxembourg, but the developers claim they weren’t for tax avoidance purposes.

The companies say in the application they will “suffer irreparable harm” if made to pay the $91-million tax debt, plus interest, claiming they couldn’t have “reasonably planned for a debt of this magnitude” without advance notice from the minister.

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The application says one or two construction projects will be halted if the companies lose $91 million of working capital, but a lawyer for the developers, Justin Kutyan with KPMG Law in Toronto, said the projects have not started yet.

“There’s no current projects that could be affected by this. It’s only future projects that we’re anticipating,” he said.

He said there’s been no determination about which future projects could be jeopardized, and said the transactions in the case were similar to a tax structure that’s been upheld by the Supreme Court of Canada.

The high court in 2021 ruled on a case brought by a company called Alta Energy Luxembourg, which had claimed a tax exemption on a capital gain of more than $380 million under Canada’s treaty with the European country, described in the decision as being “well known as an international tax haven.”

The court found in Alta’s favour, ruling that Canadian tax authorities couldn’t use anti-tax avoidance rules to “judicially amend or renegotiate a treaty.”

“Canada effectively agreed to give up its right to tax certain entities incorporated in Luxembourg in exchange for the jobs and economic opportunities that the business property exemption would promote,” the court ruled.

Trying to tax the transaction under what’s known as the general anti-avoidance rule, the court found, wasn’t allowed because federal tax authorities were “seeking to revisit its bargain in order to secure both foreign investments and tax revenues.”

The Alta case was winding its way through the courts as the audit of the B.C. firms was underway, and the application says CRA officials acknowledged that the Alta case had resulted in an “evolution of the law.”

The companies also allege in the application that the CRA acted improperly by trying to maximize the amount recovered near the end of the fiscal year to “improve performance metrics” while under threat of federal job cuts.

The federal government has not filed a response to the application, and court records indicate that a hearing date has yet to be scheduled.

This report by The Canadian Press was first published Feb. 20, 2026.

Darryl Greer, The Canadian Press