CRA indicates that income from solar array panel might not be income from property, so that there was no specified investment business

The sole business activity of a Canadian-controlled private corporation was to build a small utility-scale solar array on bare land and sell the electricity that was generated to a local utility service under the terms of a long-term contract. It hired approximately 5 part-time employees to run the solar panel electricity generating business. In suggesting that the revenues generated from the corporation’s business might not be from property, so that it very well might not have a specified investment business notwithstanding having fewer than six full-time employees, CRA stated:

[I]ncome from property would generally mean the production of revenue from the use of such property that generates income without active and extensive business-like intervention. …[I]ncome from a business requires organization, systematic effort, and a certain degree of activity.

If the course of conduct of the Corporation indicates that the income is produced with active and extensive business-like intervention, and the nature or legal character of the business transactions supports that, then the Corporation could be considered to derive income from a business rather than income from property.

Neal Armstrong. Summary of 5 March 2024 External T.I. 2023-0962831E5 under s. 125(7) - specified investment business.