Under a restructuring of a Canadian corporate borrower's US$ debt, it may suffer from its forgiven amount exceeding its economic gain

If a Canadian corporate debtor, which borrowed US$100 at par, restructures its debt, at a time that the US dollar is now worth Cdn.$1.50, by settling that debt for a payment of US$20, it will realize an economic gain of Cdn.$70 (Cdn.$100 - Cdn.$30). That gain for tax purposes will consist of a forgiven amount of Cdn.$80 (as per s. 80(2)(k)) and a s. 39(2) FX loss of $10.

[I]f the debtor has non-capital or capital loss carryforwards, undepreciated capital cost, cumulative eligible capital, resource pools, or adjusted cost base in certain capital property, those attributes must be used before the forgiven amount can be applied against the current year foreign exchange loss. Accordingly, planning to utilize or move other more valuable tax attributes prior to the debt forgiveness should be considered.

Neal Armstrong. Summary of Carrie Smit, "Debt Restructuring and the Falling Canadian Dollar," International Tax (Wolters Kluwer CCH), February 2016, No. 86, p. 5 under s. 80(2)(k).