CRA considers that s. 247(2) generally applies to boost the imputed cross-border interest arising under s. 17

CRA indicated that even though a cross-border loan from Canco to a CFA was subject to s. 17 (so that interest income was imputed at 1%), the total imputed interest inclusion would be 3%, if that were the s. 247(2) arm’s length rate. However, if the loan was of the type described in s. 17(8), but did not (in CRA’s view) technically come within the s. 247(7) safe harbour because it was outstanding for less than a year, CRA would consider that loan to be shielded from the application of s. 247(2).

Neal Armstrong. Summary of 26 April 2017 IFA Roundtable, Q.1 under s. 247(7).