CPA Canada indicates that there is insufficient scope to the s. 15(2.01) exceptions to s. 15(2)

Notwithstanding the expansion in s. 15(2.01) of the August 12, 2024 draft legislation of the exceptions to the application of s. 15(2) to debt, there continues to be uncertainty regarding the potential application of s. 15(2) to commonly encountered situations involving debts owing by a foreign corporation below a partnership given inter alia that the deeming rule in s. 93.1(1) for shares of a foreign corporation held through a partnership does not extend to s. 15(2).

An example would be two non-arm’s length corporations resident in Canada (CRICs) which are the sole members of a partnership (P1) wholly-owning a foreign corporation (Forco1) that in turn wholly-owns each of two foreign corporations (Forco2 and Forco3) that are the sole members of a second partnership (P2). There would be a concern that s. 15(2) could apply to a loan made by one of the CRICs to P2 given inter alia that the two Forco partners are not foreign affiliates.

Neal Armstrong. Summary of CPA Canada, “Submission regarding Technical Amendments Legislation in Budget 2024 included in the August 2024 Draft Legislation,” 11 September 2024 CPA Canada submission under s. 15(2.01).