Smith – Tax Court of Canada references the principle that income is to be computed on a “sub-source” basis

Graham J found that a status Indian, who earned exempt income from employment and non-exempt investment income, could only deduct a registered pension plan contribution in computing his employment income (and not from his income generally), so that the deduction effectively was denied. Before so concluding, Graham J referred with approval to the statement in the dissenting reasons of Iacobucci J in Hickman Motors (also picked up in FLSmidth) that there was a “requirement to segregate income according to various sub-sources” (e.g., to distinguish the income arising from each business, property or employment of a taxpayer).

Neal Armstrong. Summaries of Smith v. The Queen, 2018 TCC 61 under s. 147.2(4) and Statutory Interpretation – Headings.