CRA agrees with CAE
CAE indicated that a government loan lacking sufficient "ordinary commercial terms" – including one that was made otherwise than to promote the governmental commercial interests or that has a below-market interest rate – will be considered "government assistance" within the meaning of ss. 12(1)(x) and 127(9). CRA agreed with the CAE analysis, stating:
[I]t should be noted that the rights and obligations of the parties under the financial contribution agreement at issue in CAE Inc. differed substantially from those that normally characterize a lender-borrower relationship, regardless of the specific terms and conditions of repayment of the contributions. In the context of agreements of this nature, it seems to us that it is appropriate to use the "ordinary business arrangement" test developed in the jurisprudence (notably in Immunovaccine Technologies …) to determine whether the amount received constitutes government assistance for purposes of paragraph 12(1)(x).
Whether the amount received constitutes a form of assistance described in paragraph 12(1)(x) is a question of fact that requires an analysis of all the facts and circumstances relating to a particular situation, including the intention of the parties.