Where a Canadian-resident private corporation owns all the shares of a resident Canadian corporation ("N") which, in turn, owns all the shares of a Canadian corporation ("A"), A will not qualify as a Canadian-controlled private corporation because of the direct de jure control by N. The introduction of the concept of de facto control by the enactment of s. 256(5.1) did not eliminate the relevance of direct de jure control by a non-resident person.
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