Zhu – Federal Court of Appeal indicates that s. 253(b) should be interpreted restrictively in light of its purpose

S. 253(b) deems a non-resident person who “solicits orders or offers anything for sale in Canada through an agent or servant, whether the contract or transaction is to be completed inside or outside Canada” to thereby be carrying on business in Canada. Dawson JA has found that selling shares on a U.S. exchange through a U.S. broker does not engage s. 253(b) notwithstanding that the purchasers could be Canadian residents, stating that:

The contrary conclusion would be inconsistent with the purpose of section 253…“to subject non-resident persons to Canadian tax provided they carry out a minimum amount of commercial activity within Canada’s borders” (Maya Forestales…).

Neal Armstrong. Summary of Zhu v. The Queen, 2016 FCA 113 under s. 253(b).