Principal Issues: Where a plan of compromise and arrangement under the CCAA is approved by XXXXXXXXXX in a particular taxation year and, in the same taxation year, interest on a commercial debt is forgiven, will section 80 or section 143.4 apply?
Position: Section 80 will apply.
Reasons: According to the rules that govern the application of a "forgiven amount," such as subsection 80(3), if a commercial debt obligation is forgiven at any time, the forgiven amount is applied to reduce the particular balance "at that time." On the other hand, under subsection 143.4(4), the "subsequent contingent amount" is deemed to be an amount received under subparagraph 12(1)(x)(i) at that time, but under section 12, an amount is included in income "for a taxation year," which is only accounted for at the end of a taxation year. Further, although there is no carve out under section 143.4 for forgiven amounts, section 143.4 would not apply by virtue of the prohibition against double taxation under subsection 248(28) and the rule that a more specific provision takes precedence over a more general provision.