The proposed ETA s. 272.1(8) is not a general partner distribution recharacterization rule

The draft ETA s. 272.1(8) rule merely deems fair market value consideration to have been paid to the general partner of an investment limited partnership for its management and administration services, without regard to the partnership distributions (such as on a “carry”) that in fact are paid.

That said, the new amendments, in conjunction with the existing rules, will likely lead to increased scrutiny of the activities of investment limited partnerships and may provide additional scope for … CRA … to assert on audit that partnership distributions (or portions thereof) should be characterized as taxable fees for services, as well as for disputes regarding the fair market value for such services.

Neal Armstrong. Summary of Allan Gelkopf, Robert Kreklewich and Zvi Halpern-Shavim, "Finance Canada Seeks Comments on New Tax Proposals Regarding Investment Limited Partnership Rules", Canadian Current Tax, Vol. 28, No.1, October 2017 p. 4 under ETA s. 272.1(8).