Principal Issues: Whether the small business deduction may be multiplied where a corporate partnership is introduced to operate a new business using two pre-existing holdcos, as corporate partners, in order to generate active business income in the hands of the holdcos. The holdcos were 50/50 shareholders of an Opco, which already enjoys the benefits of the SBD.
Position: General comments provided.
Reasons: Whether the SBD must be shared amongst the corporations involved rests upon a determination whether or not they are "associated". The association test relies on control that is exercised "directly or indirectly in any manner whatever," which is an expression that encompasses de jure or de facto control. Whether de facto control exists would ultimately have to be decided by the local TSO.