ACo and BCo, which were co-tenants of a property in construction held through a Nominee made a s. 273 election in year X + 2 designating ACo as the operator, and describing the JV activities as being the development and construction of real property. Their co-tenancy agreement was entered into in Year X and their agency agreement with the Nominee was entered into in Year X + 2. The agency agreement provided that the Nominee was the authorized agent of the co-owners for the claiming of input tax credits, and such claims were made for the period of administrative tolerance described in Notice 284.
CRA addressed whether ACo could account for the real estate sales as the designated operator. After first stating that "The CRA will generally apply the criteria expressed in the decision in Westcan Malting ... which provided several indicia for joint ventures," CRA concluded that “The co-tenancy arrangement was, therefore, eligible to make the section 273 election,” Before so concluding, CRA stated:
For the purposes of this discussion we are considering this co-tenancy agreement to be a joint venture at law.