Typical commercial arrangements might trigger application of the restrictive covenant rules

Two examples of what arguably are restrictive covenants engaging the s. 56.4 rules:

• A lessor receives an upfront payment under a lease stipulating that it will not unreasonably interfere with the usage of the property (thereby perhaps requiring immediate recognition of this payment rather than permitting its amortization over the lease term).
• A shareholders’ agreement “clause requiring that the parties not carry on any other businesses…could trigger the application of the restrictive covenant regime upon a sale of shares, because any sale would be subject to the terms of the agreement.”

Neal Armstrong. Summary of Sze Yee Ling and Nathan Wright, “Restrictive Covenants: Some Reminders,” Canadian Tax Focus, Vol. 7, No. 1, February 2017, p. 7 under s. 56.4(1) – restrictive covenant.