Aco owned and operated a facility to capture carbon dioxide emissions from its industrial facilities. The captured carbon was then transported through the pipeline of Bco, for delivery to the carbon sequestration hub of Cco. However, significant unanticipated fugitive emissions of the captured carbon occurred on the pipeline, which constituted an “ineligible use” of the captured carbon as defined in s. 127.44(1).

In this context, how was the "actual eligible use percentage" computed under s. 211.92(1) in respect of Aco’s CCUS project? CRA indicated that in its view it was “the end use of captured carbon that should be used in quantifying the amount of captured carbon in both eligible and ineligible use” for purposes of such definition.

As a result, “Aco would be required to use measurements of the end use of its captured carbon” (presumably in the hands of Cco). However, as the unanticipated fugitive emissions occurred within Bco’s pipeline transportation network, “Aco may be able to avail itself of the relief provided in subsections 211.92(6) and (7) … because such emissions would likely be due to extraordinary circumstances outside of the control of Aco.”

Neal Armstrong. Summary of 25 March 2025 External T.I. 2024-1039131E5 under s. 211.92(1) - "actual eligible use percentage".

A non-resident subsidiary of Canco (“CFA”) had used the proceeds of loans received from third-party banks and through bonds issued in its country of residence to make loans under the same terms and conditions (i.e., tenor, interest rate, and currency) as the 3^rd-party bank or bond borrowings, plus cross-charged guarantee fees, directly to Finco 1 and Finco 2, which were non-resident “sisters” of Canco and CFA, i.e., Finco 1 and Finco 2 were “grandchild” or “greatgrandchild” subsidiaries of the non-resident parent of Canco. Thus (before considering s. 90(7)), Finco 1 and Finco 2 were “specified debtors” in respect of Canco. In most cases, each such 3^rd-party was opened on the same day as the subsequent on-loans to the Fincos, although in a few cases, there was a gap of up to 13 days.

Canco will sell all of its shares of CFA to Canco’s foreign parent for cash consideration equal to their fair market value and elect under s. 93(1) to the extent of any capital gain.

CRA effectively ruled that the back-to-back rule in s. 90(7) deemed the actual loans from the third-party lenders to CFA, and by CFA to the Fincos not to exist and deemed those third party lenders to have made their loans directly to the Fincos on the same terms as the (actual) loans to the Fincos by CFA. Accordingly, s. 90(6) would not apply to require any inclusion in Canco’s incomes in respect of CFA’s loans to the Fincos.

Neal Armstrong. Summaries of 2024 Ruling 2024-1027391R3 under s. 90(7) and s. 90(8)(a).

One of the requirements for the purpose-built rental housing (PBRH) rebate is that there be a multiple-use residential complex (MURC) containing a minimum of four “qualifying residential units” (as defined in s. 256.2(1)), each with separate kitchens, baths, and private living areas. CRA considered that this requirement would be satisfied if there were two adjoining duplexes (each with two such units) with a shared wall, because there therefore would be one residential complex. On the other hand, if there were two adjoining duplexes on a single plot of land without much physical interconnection between the two structures, each would constitute a separate building rather than forming a single MURC, so that the 4-units-in-one-residential-complex requirement would not be satisfied.

If CRA had wished to reach the opposite conclusion in the second situation, it perhaps could have applied s. 33(2) of the Interpretation Act (references to the singular include the plural) to find that one plot of land with two buildings on it constituted a residential complex.

Neal Armstrong. Summary of 3 September 2024 GST/HST Interpretation 247914 under Real Property (GST/HST) Regulations, s. 4(2)(a) and summary of 14 August 2024 GST/HST Interpretation 247708 under Real Property (GST/HST) Regulations, s. 4(2)(a).

The Minister issued a requirement to Shopify pursuant to s. 231.2 for information identifying listed particulars for all Canadian-resident merchant customers of Shopify. The requested particulars were more extensive than in the companion 2025 FC 968 case (re a treaty-based request). The Ministers sought judicial authorization of such requirement pursuant to s. 231.2(3).

Régimbald J found that although the target group would have been “ascertainable” if the requirement had been restricted to Canadian "merchants," it was unclear (due to contradictory CRA wording) whether the requirement also extended to persons, whether individual or business entities, associated with Shopify accounts. This had the effect of "rendering the target group unduly vague and diffuse, and leaving Shopify in a conundrum as to what to provide in response to the [requirement]”.

Although the request for authorization thus failed on s. 231.2(3)(a) grounds, for completeness, Régimbald J. went on to consider (i) s. 231.2(3)(b) (re verifying compliance under the ITA) and (ii) whether it would have been appropriate for him to exercise his residual discretion to restrict or deny the request for authorization.

Regarding (i), the potential inclusion in the requirement of persons associated with Shopify accounts (described above) violated s. 231.2(3)(b) because the Minister's evidence did not identify any intent to verify the compliance of those additional individuals and business entities with any duty or obligation under the ITA.

Regarding (ii), Shopify had brought uncontradicted evidence that complying with the requirement would take eight person-years of work. Accordingly, the proposed requirement was "disproportional," and he indicated that he would have been inclined to authorize a more limited requirement in similar terms to what was proposed in the companion case, i.e., limited to the total sales revenues and a limited list of identifying particulars.

Neal Armstrong. Summary of Canada (National Revenue) v. Shopify Inc., 2025 FC 969 under s. 231.2(3).