Sheldon Intewash - A foundation with a sole trustee (which was "not at arm's length from itself") did not qualify as a public foundation

The Federal Court of Appeal found that, although the definition of "public foundation" in s. 149.1(1) does not explicitly require that a charitable  foundation have multiple trustees (or directors or officers, as the case may be), this is implied by the wording - for example a single trustee cannot satisfy the requirement in the definition of dealing  with the "other" trustees at arm's length (and "[m]oreover, a single trustee is not at arm's length from itself.")

This latter statement skirts a dubious proposition appearing in at least one CRA technical interpretation (see 23 May 1996 T.I. 5-960465) that it is possible for a corporation not to deal at arm's length with itself as a factual matter -  so that on a deemed disposition and reacquisition of property by the corporation (in that interpretation, under s. 149(10) on becoming or ceasing to be Crown-exempt), provisions of the Act which apply to transactions between persons not dealing at arm's length, such as the 1/2 step-up rule in s. 13(7)(e), can apply.  (S. 13(7)(e.1) implies, and common sense suggests, that this CRA interpretation is incorrect.)

Neal Armstrong.  Summaries of Sheldon Intewash and Lynn Factor Charitable Foundation v. The Queen, 2012 FCA 136 under ITA s. 149.1, Interpretation Act s. 33(2), and Statutory Interpretation - Ordinary Meaning.