Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Is a mortgage investment corporation, as defined in subsection 130.1(6), an “investment entity” and a “listed financial institution” for the purposes of Part XVIII and Part XIX?
Position: General comments provided.
Reasons: The determination of whether a mortgage investment corporation, as defined in subsection 130.1(6), is an “investment entity” and a “listed financial institution” for the purposes of Part XVIII and XIX can only be made on a case-by-case basis as it requires an analysis of all of the facts and circumstances relating to a particular situation including, but not limited to, the legal structure, the investment portfolio and activities of the MIC, as well as any fund management services agreements with third parties and related provincial regulation requirements.
Novembre 12, 2025
Isabelle Brulotte Income Tax Rulings Directorate
XXXXXXXXXX International Division
Compliance Program Branch Jean-Bernard Dion
2022-095541
Application of Parts XVIII and XIX to mortgage investment corporations
This is in response to your request for a technical interpretation on the application to a mortgage investment corporation of Parts XVIII (Enhanced International Information Reporting for U.S. FATCA) and XIX (Common Reporting Standard) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c.1, as amended (the “Act”).
Unless otherwise stated, all references to a statute are to the Act, and all terms and conditions used herein that are defined in the Act have the meaning given in such definition unless otherwise indicated. The singular should be read as plural and vice versa, where the circumstances so require.
QUESTIONS
Is a MIC a “listed financial institution” as defined in subsection 263(1) and an “investment entity” as defined for the purposes of Part XVIII and Part XIX, respectively:
- in paragraph 1(j) of Article 1 of the Agreement Between the Government of Canada and the Government of the United States of America to Improve International Tax Compliance Through Enhanced Exchange of Information Under the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital (the “Agreement”), and
- in subsection 270(1)?
Subsection 130.1(6) describes the conditions that must be satisfied for a corporation to qualify as a “mortgage investment corporation” for the purposes of the Act. Paragraph 130.1(6)(a) requires it to be a Canadian corporation and paragraph 130.1(6)(b) requires that its only undertaking be the investing of its funds and that the corporation does not manage or develop any real or immovable property. Paragraph 130.1(6)(f) also provides that at least 50 percent of the aggregate cost amount of all its property must consist of money, debts secured on houses, deposits with a bank, a credit union or a corporation whose deposits are insured by the Canada Deposit Insurance Corporation or the Régie de l’assurance dépôt du Québec.
Parts XVIII and XIX generally apply to, among others, a corporation that is an “investment entity”, as defined in the provisions listed in the questions above.
A corporation could qualify as an “investment entity” under both paragraph 1(j) of the Agreement and subsection 270(1) if, for example, it is managed by an entity that conducts, or carries on, as a business activities or operations for or on behalf of customers that consist in, generally, trading in money market instruments, managing portfolios or otherwise investing funds (under the Agreement) or financial assets (under part XIX) or money on behalf of other persons.
A corporation could qualify as a “listed financial institution”, under paragraph (j) of the definition in subsection 263(1), if it is authorized under provincial legislation:
- to engage in the business of dealing in securities or any other financial instruments; or
- to provide portfolio management, investment advising, fund administration, or fund management, services.
It would also qualify as such if it is managed by an entity referred to in paragraph (j) and if it is represented or promoted to the public:
- as a collective investment vehicle (paragraph (k) of the same definition), among others, or
- similar investment vehicles established to invest in financial assets.
For the purposes of paragraphs (j) and (k) of the “listed financial institution” definition, according to paragraphs 4.12 and 4.13 of the Guidance on the Canada-U.S. Enhanced Tax Information Exchange Agreement, the terms “financial instruments” and “financial assets” are generally understood to mean, among others, a security such as a note, bond, debenture or other evidence of indebtedness or any interest in such security.
Debts secured on houses, such as mortgages, would generally constitute “financial instruments” and “financial assets”.
That being said, the determination of whether a particular MIC qualifies as an “investment entity”, as defined in paragraph 1(j) of the Agreement and subsection 270(1), and as a “listed financial institution”, as defined in subsection 263(1), can only be made on a case-by-case basis as it requires an analysis of all of the facts and circumstances relating to a particular situation. That includes, but is not limited to, the legal structure, the investment portfolio and activities of the MIC, the terms of a fund management services agreements with third parties (if any) and related provincial regulation requirements.
Unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency’s electronic library. After a 90-day waiting period, a severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. You may request an extension of this 90-day period. The severing process removes all content that is not subject to disclosure, including information that could reveal the identity of the taxpayer. The taxpayer may ask for a version that has been severed using the Privacy Act criteria, which does not remove taxpayer identity. You can request this by e-mailing us at: ITRACCESSG@cra-arc.gc.ca. A copy will be sent to you for delivery to the taxpayer.
We hope that the above comments are helpful to you.
Yves Grondin
Section Manager
for Director
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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