1998 Ruling 973303 - XXXXXXXXXX

Unedited CRA Tags

149(1)(c) 149(1)(d.5) 149(10)

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Text of Severed Letter

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.

I. EXHIBITS

II. DEFINITIONS

III. FACTS

A. The First Nation Political Structure

B. Agreements Negotiated

C. Revenue Sources - Summary

D. Real Property - LAND Base et al.

E. Investment Assets

F. Business Assets

G. Public Service Assets

H. Other Facts

IV. PROPOSED TRANSACTIONS

V. PURPOSE OF THE PROPOSED TRANSACTION

VI. RULINGS

VII. COMMFNTS

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

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Attention: XXXXXXXXXX

XXXXXXXXXX 1998

Dear Sirs:

Re: Advanced Income Tax Ruling
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

This is in reply to your letter of XXXXXXXXXX ("Ruling Request Letter") on behalf of the Applicants for an Advanced Income Tax Ruling in respect of the Proposed Transactions. We acknowledge your subsequent correspondence of XXXXXXXXXX and our related telephone conversations.

For each Applicant, the relevant Taxation Services Office is XXXXXXXXXX and the relevant Taxation Centre is XXXXXXXXXX.

To the best of the knowledge of you and the responsible officers of the Applicants, none of the issues involved in the requested rulings is:

- in an earlier return of the Applicants or related persons;

- being considered by a tax services office or tax centre in connection with a tax return of the Applicants or related persons;

- under objection by the Applicants or related persons;

- before the courts; or

- the subject of a ruling previously issued by this Directorate to the Applicants or related persons.

All statutory references herein are to the provisions of the Act, unless stated otherwise.

I. EXHIBITS

The following exhibits were attached to your Ruling Request Letter.

	Exhibit			Description

1. XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

2. XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

3. XXXXXXXXXX

4. XXXXXXXXXX

5. XXXXXXXXXX
XXXXXXXXXX

1. XXXXXXXXXX

(a) XXXXXXXXXX
(b) XXXXXXXXXX
(C) XXXXXXXXXX
(d) XXXXXXXXXX
(e) XXXXXXXXXX
(f) XXXXXXXXXX
(g) XXXXXXXXXX

7. XXXXXXXXXX

(a) XXXXXXXXXX
(b) XXXXXXXXXX
(c) XXXXXXXXXX
(d) XXXXXXXXXX
(e) XXXXXXXXXX
(f) XXXXXXXXXX
(g) XXXXXXXXXX
(h) XXXXXXXXXX
(i) XXXXXXXXXX

8. XXXXXXXXXX

9. XXXXXXXXXX

10. XXXXXXXXXX

11. XXXXXXXXXX
XXXXXXXXXX

12. XXXXXXXXXX
XXXXXXXXXX

13. XXXXXXXXXX

14. XXXXXXXXXX

15. XXXXXXXXXX
XXXXXXXXXX

16. XXXXXXXXXX

17. XXXXXXXXXX

18. XXXXXXXXXX

19. XXXXXXXXXX

20. XXXXXXXXXX

21. XXXXXXXXXX

22. XXXXXXXXXX

23. XXXXXXXXXX

24. XXXXXXXXXX

25. XXXXXXXXXX

26. XXXXXXXXXX

27. XXXXXXXXXX

28. XXXXXXXXXX

II. DEFINITIONS

The following definitions apply in respect of this letter.

Throughout the letter, the singular should be read as plural and vice versa where circumstances so require.

"Aco" means XXXXXXXXXX.

"A-Trust" means XXXXXXXXXX.

“Act" means the Income Tax Act, R.S.C. 1985, c.1 (5th Supp.), as amended.

"Admin. Complex" is as defined in paragraph 34 of the Facts herein.

"Applicants" means The First Nation, Aco, Housing Society, and XXXXXXXXXX (Exhibit "1").

"Band Identification Number" means number XXXXXXXXXX, being the number assigned to The First Nation by the Department of Indian and Northern Affairs (Exhibit "18a").

"Business Assets" means those assets identified in Exhibit ”25”

"Canadian-controlled private corporation" has the meaning assigned in subsection 125(7).

"Citizen" means a citizen of The First Nation as determined by the Constitution.

"Constitution" means the Constitution of The First Nation in effect on XXXXXXXXXX, as amended from time to time (Exhibit "5").

"XXXXXXXXXX”, means XXXXXXXXXX.

"Effective Date" means the date on which, inter alia, the XXXXXXXXXX is brought into effect by XXXXXXXXXX, which date is XXXXXXXXXX.

"Final Agreement" means the XXXXXXXXXX among The First Nation, the Government of Canada, and XXXXXXXXXX, dated XXXXXXXXXX (Exhibit "10").

"Financial Transfer Agreement" means the XXXXXXXXXX (Exhibit "12").

"FMV" means fair market value.

"Government Revenues" means any money received directly or indirectly from the federal government or the government of a Canadian province or territory.

"Housing Society" means the XXXXXXXXXX.

"Indian Act" means the Indian Act, RSC 1985, c.I-5, as amended.

"Investment Assets" means those assets identified in Exhibit”26”.

"LAND" means Settlement Land.

"LAND Buildings" is as defined in paragraph 32 of the Facts herein.

XXXXXXXXXX

“XXXXXXXXXX" means XXXXXXXXXX., operating under XXXXXXXXXX.

"Non-Settlement Land" means all land and water in XXXXXXXXXX other than LAND.

"Paragraph" refers to a numbered paragraph in this letter.

"Private Corporation" has the meaning assigned in subsection 89(1).

"Property Taxes" means all municipal tax and tax on real property including but not limited to school board levies, service and improvement levies and utility levies, but, for greater certainty, does not include income tax, tax on goods and services, sales tax, or a tax on transfer of real property.

"Proposed Transactions" means the transactions described in Part IV hereof.

"Public Service Assets" means those assets identified in Exhibit "27".

XXXXXXXXXX

"Reserve" means a reserve as defined in the Indian Act, which in The First Nation's case constitutes XXXXXXXXXX (Exhibits "XXXXXXXXXX)").

"Ruling Request" means the advance income tax rulings requested herein.

"XXXXXXXXXX" XXXXXXXXXX (Exhibit "15").

"XXXXXXXXXX" means XXXXXXXXXX (Exhibit "16").

XXXXXXXXXX

"Settlement Land" means XXXXXXXXXX (Exhibit "19"), most of which are itemized in the Final Agreement, plus XXXXXXXXXX, which are itemized in XXXXXXXXXX.

"XXXXXXXXXX" means XXXXXXXXXX (Exhibit "11").

XXXXXXXXXX

"Taxable Canadian corporation" has the meaning assigned in subsection 89(1).

"XXXXXXXXXX" means the lands in the Indian Act reserves, described as XXXXXXXXXX.

"The First Nation" means XXXXXXXXXX.

"Traditional Territory" means the geographic area within XXXXXXXXXX identified as The First Nation traditional territory on maps referred to in XXXXXXXXXX of the Final Agreement (Exhibit "18(b)").

"Transaction Date" means the date on which the Proposed Transactions in Part IV will be implemented.

"TPP" means tangible personal property.

"XXXXXXXXXX" means XXXXXXXXXX.

“XXXXXXXXXX" means the trust described in Proposed Transaction 4 (Exhibit "28").

"XXXXXXXXXX" means XXXXXXXXXX.

XXXXXXXXXX

"XXXXXXXXXX" means XXXXXXXXXX.

XXXXXXXXXX

"XXXXXXXXXX" means a trust in which The First Nation has purchased XXXXXXXXXX trust units. XXXXXXXXXX holds all of the issued and outstanding shares of XXXXXXXXXX, which corporation owns and operates XXXXXXXXXX and owns other real estate situated in XXXXXXXXXX.

III. FACTS

A. The First Nation Political Structure

1. The First Nation is recognized by the Government of Canada as one of the XXXXXXXXXX First Nations.
XXXXXXXXXX

2. The political leadership of The First Nation is as follows:

Office				Name
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

3. The political leadership of The First Nation is constituted from time to time in accordance with, inter alia, clause 9 of The First Nation Constitution (Exhibit "5").

4, The members of XXXXXXXXXX are as follows:

XXXXXXXXXX

6. The governing body that constitutes The First Nation has its books and records situated on land XXXXXXXXXX. Most of the meetings that deal with the governance of The First Nation are conducted on XXXXXXXXXX. Some meetings are held on other LANDs.

7. The First Nation has a number of committees that carry out policy. These committees include the following:

(a) XXXXXXXXXX
(b) XXXXXXXXXX
(c) XXXXXXXXXX
(d) XXXXXXXXXX
(e) XXXXXXXXXX
(f) XXXXXXXXXX
(g) XXXXXXXXXX

8. The First Nation Investment Committee is governed by the objectives and guidelines outlined in the Statement of Investment Policy (Exhibit "6(e)").

9. Members of The First Nation Investment Committee are charged with specific responsibilities, all of which responsibility requires ongoing monitoring efforts.

10. The members of The First Nation Investment Committee are participating in an ongoing training course provided by XXXXXXXXXX (Exhibit "6(e)"). That training course is intended to teach the members of The First Nation Investment Committee certain investment fundamentals so that they can properly carry out their monitoring and analytical functions. Some members of The First Nation Investment Committee are also taking the Canadian Securities course to further improve their technical abilities.

11. Aco is governed by the objectives and guidelines outlined in the XXXXXXXXXX (Exhibit "6(f)").

12. During the last several years, The First Nation has enacted statutes, proposed legislation, and updated policy.

a) XXXXXXXXXX
b) XXXXXXXXXX
c) XXXXXXXXXX

XXXXXXXXXX

13. The "The First Nation Investment Committee" is comprised as follows:

	Member						xxxxxxxxxx
      xxxxxxxxxx

XXXXXXXXXX

14. The Aco board of directors is comprised as follows:

Director

XXXXXXXXXX

XXXXXXXXXX alternate directors also have been appointed. The alternate directors have all powers of ordinary directors in the absence of the ordinary directors.

B. Agreements Negotiated

15. XXXXXXXXXX.

16. XXXXXXXXXX.

17. XXXXXXXXXX.

18. XXXXXXXXXX.

19. XXXXXXXXXX.

20. XXXXXXXXXX.

21. XXXXXXXXXX.

22. XXXXXXXXXX.

23. XXXXXXXXXX.

C. Revenue Sources - Summary

24. The First Nation receives funds and revenues from a variety of sources. The funds and revenues it earns on an annual basis include the following.

Source⁽¹⁾ Description
Amount⁽²⁾

XXXXXXXXXX

D. Real Property - LAND Base et al.

25. The First Nation has asserted claims in, inter alia, the region of XXXXXXXXXX (Exhibit "18(a)").

26. XXXXXXXXXX covers a large portion of, inter alia, XXXXXXXXXX (Exhibit "18(b)").

27. XXXXXXXXXX.

28. XXXXXXXXXX.

29. XXXXXXXXXX

a) XXXXXXXXXX
b) XXXXXXXXXX
c) XXXXXXXXXX
d) XXXXXXXXXX
e) XXXXXXXXXX

30. The LAND forms the real property base for The First Nation. The First Nation has governance powers over the LAND.

31. XXXXXXXXXX.

32. A number of buildings are situated on the LAND (the building component of which is collectively referred to as the "LAND Buildings"). The LAND Buildings include administrative complexes, warehouses, garages and residential complexes (Exhibit "20").

33. The LAND Buildings will be rented or leased to individuals, bodies corporate, and government entities. The individuals generally will be resident on LAND. The bodies corporate may not be resident on LAND. Except for The First Nation, the government entities will not be resident on LAND.

34. The First Nation has a building that is used for administrative purposes (the "Admin. Complex")

35. Portions of the Admin. Complex are leased to arm's length third parties. The allocation of the useable space is as follows:

      	Square Footage			Percentage

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36. XXXXXXXXXX.

XXXXXXXXXX
XXXXXXXXXX

37. In its capacity as lessor, The First Nation is responsible for all "operating costs" as that phrase is defined in XXXXXXXXXX. Operating costs are defined to include costs with respect to

(1) wages paid to employees directly employed in the

(7) light fixture maintenance, including bulb replacement;

(8) wages and salary to operate the heating system in the Admin. Complex;

(9) building security expenses;

(10) property insurance on Admin. Complex, including plate glass replacement, insurance, public liability and casualty insurance;

(11) electricity charges; and

(12) water and sewer charges.

38. The First Nation anticipates that XXXXXXXXXX will renew its lease of the Admin. Complex XXXXXXXXXX.

39. XXXXXXXXXX

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

40. XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

E. Investment Assets

41. The First Nation Investment Committee is responsible for the following investments:

	Description			Cost Amount
      (as at XXXXXXXXXX)

xxxxxxxxxx

42. XXXXXXXXXX

43. XXXXXXXXXX

44. XXXXXXXXXX

XXXXXXXXXX

45. XXXXXXXXXX

46. XXXXXXXXXX

47. XXXXXXXXXX

48. XXXXXXXXXX

F. Business Assets

49. Aco is a. corporation incorporated under the laws of XXXXXXXXXX. All of the issued and outstanding shares of Aco are held by the Chief of The First Nation in trust for the Citizens XXXXXXXXXX. We have construed this arrangement to mean that all such Aco shares are beneficially held by The First Nation.

50. XXXXXXXXXX.

51. XXXXXXXXXX.

52. XXXXXXXXXX.

G. Public Service Assets

53. The First Nation has TPP that is used to carry out the powers of government and to carry out The First Nation's public service obligations (which TTP is collectively defined above as "Public Service Assets"). The Public Service Assets are identified in Exhibit "27".

54. The Public Service Assets are required in order to allow The First Nation to carry out its government functions, including the monitoring and enforcement of, inter alia, its land, water and other natural resources (including wildlife).

H. Other Facts

55. The assets held by the Housing Society are as follows:

Classification of Land

No fees were charged by The First Nation to guarantee the mortgages.

IV. PROPOSED TRANSACTIONS

1. The Applicants propose to enter into the Proposed Transactions in the order of the Paragraphs set forth herein, or as the text of the Paragraphs indicates. The Proposed Transactions are prospective in nature. It is expected that the estimated amounts generally will be indicative of the actual amounts as at that Transaction Date.

2. Each Proposed Transaction will have received whatever approvals are necessary for The First Nation or corporate purposes prior to its implementation. A current organizational chart was attached (XXXXXXXXXX") and a general overview of the Proposed Transactions, including diagrams, was also attached (XXXXXXXXXX") to your Ruling Request Letter.

3. The Chief of The First Nation will settle an irrevocable non-discretionary trust with a cheque in the amount of $XXXXXXXXXX which trust is the A-Trust (XXXXXXXXXX).

4. The Deed of Settlement which will evidence the terms and conditions of the trust relationship will designate The First Nation as the sole beneficiary of the A-Trust. The terms of the A-Trust will stipulate that any income earned by the trust in a particular fiscal period shall be payable to the sole beneficiary no later than the last day of that particular fiscal period.

5. The A-Trust Agreement may appoint the following individuals as the initial trustees for the Trust (collectively the "Trustees")

XXXXXXXXXX

6. The A-Trust Agreement will be amended to include a Trust Protector which will have the ability to appoint and remove Trustees. The initial Trust Protector will be XXXXXXXXXX. The Trust Protector also must consent to any amendments to the A-Trust Agreement.

7. The A-Trust will maintain proper books of account, with a December 31 fiscal year-end.

8. The A-Trust will be resident on LAND at all relevant times. In this regard, a majority of the Trustees shall be resident on LAND, and all of the meetings of the Trustees shall take place on LAND.

9. The A-Trust will file an income tax return (T3) within 90 days of each December 31 (i.e., March 31, and March 30 in leap years).

10. The First Nation will transfer most of its Investments Assets to the A-Trust in consideration for a non-interest bearing demand promissory grid note (Exhibit "4-C."). (That promissory grid note will be secured. The terms of that security will be commensurate with the terms which exist in a non-arm's length relationship.) The only Investment Assets not transferred by The First Nation will be its current investment in XXXXXXXXXX and its proposed investment in U.S. Debt Instruments.

11. The First Nation will transfer all of its Business Assets to the A-Trust, including its shares of Aco, in consideration for a non-interest bearing demand promissory grid note (Exhibit “4-D"). (That promissory grid note shall be secured. The terms of that security will be commensurate with the terms which exist in a non-arm's length relationship.) Coincidental with this conveyance, The First Nation will consider the need to transfer all Business Assets that it holds directly to Aco such that in the future all Business Assets are held through Aco.

12. Subsequent to the transfer of the Investment Assets and Business Assets to the A-Trust, The First Nation will

a) devote all its activities to the exercise of its powers of government;

b) not carry on any business activities, except for businesses carried on by it on LAND, the primary purpose of which is to provide goods and services to Citizens or residents of LAND;

c) not hold an interest in any TPP, except for the Public Service Assets;

d) not hold an interest in any real property, except for its .rights, entitlement and interests in the LAND; and

e) as an incidental matter, continue to hold XXXXXXXXXX as well as the proposed U.S. Debt Instruments.

13. Because of XXXXXXXXXX, some of the Public Service Assets will be on and off LAND on a regular basis.

14. The First Nation expects to receive funds and revenues from a variety of new sources. These additional funds and revenues include the following:

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• xxxxxxxxxx
• xxxxxxxxxx
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• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx
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• xxxxxxxxxx
• xxxxxxxxxx
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• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx
• xxxxxxxxxx

15. Each of the corporations, partnerships, or other commercial entities that The First Nation controls, directly or indirectly, shall be resident on LAND at all relevant times. To bolster this objective, the majority of the directors, partners or other such persons in respect of such business entities shall be resident on LAND and all of the meetings of such persons in respect of such entities shall take place on LAND. In particular, the mind and management of the bodies corporate and other business entities shall be exercised on the LANDs.

16. The First Nation will invest in U.S. Debt Instruments.

17. The First Nation may in the future incorporate and utilize one or more XXXXXXXXXX for purposes of, for example, funding Elders Payments and/or social assistance payments.

V. PURPOSE OF THE PROPOSED TRANSACTION

1. The purpose of the Proposed Transactions can be summarized as follows.

a) The First Nation wants to ensure that the exemption in paragraph 149(1)(c) applies to it when it carries out governmental activities within LANDs.

b) XXXXXXXXXX.

C) The First Nation has segregated the investment function from the business function for internal control and monitoring purposes. To continue this separation of activities, The First Nation proposes to transfer all of its Investment Assets (except for its holdings in XXXXXXXXXX and its proposed investment in U.S. Debt Instruments) to the A-Trust. Similarly, The First Nation proposes to transfer all of the Business Assets to the A-Trust, which Business Assets will continue to be owned and separately administered by Aco.

VI. RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all the relevant facts, proposed transactions and the purpose of the proposed transactions, and provided that the proposed transactions are completed in the manner described above, and further provided that there are no other transactions which may be relevant to the rulings requested, our rulings are as follows:

A. The First Nation qualifies under paragraph 149(1)(c) and, accordingly, any net gains realized by The First Nation on the conveyance of the Investment Assets and the Business Assets to the A-Trust will not result in any income tax payable by The First Nation (without regard to the geographical location of such assets).

B. By virtue of paragraph (g) of the definition of 4'trust" in subsection 108(1), the 21- year deemed disposition rule in subsection 104(4) will not apply to the A-Trust.

C. The A-Trust will be a '4personal trust", as defined in section 248(1).

D. The First Nation will not be a “designated beneficiary" of the A-Trust by virtue of paragraph 210(c). Accordingly, provided that the trust complies with subsection 210.3(1), the A-Trust will not be subject to Part XII.2 tax.

E. The First Nation will be considered to be a Canadian municipality for purposes of paragraph 118.1(1)(d) and subparagraph 110.1(1)(a)(iv), and will therefore be able to issue receipts for charitable gifts.

These rulings are given subject to the limitations and qualifications set out in Information Circular 70-6R3 issued by Revenue Canada on December 30, 1996, and are binding provided that the proposed transactions numbered 3, 4, 5, 6, 10, and 11 are completed by XXXXXXXXXX.

These rulings are based on the Act in its present form and do not take into account any proposed amendments to the Act which, if enacted, could have an effect on the rulings provided herein.

VII. COMMFNTS

You had also requested the following rulings in your Ruling Request Letter:

1. XXXXXXXXXX

Comment:

xxxxxxxxxx

2. That The First Nation will not be a municipality for purposes of paragraph 149(1) (0), thereby avoiding the application of subsection 149(10) with respect to corporations that may be acquired in future.

Comments:

Prior to the Otineka case, it was the Department's view that First Nations could not be considered municipalities (with some limited administrative exceptions) but rather public bodies performing a function of government in Canada. In light of Otineka, the Department now recognizes First Nations that have developed to the extent of the First Nation in the Otineka case as municipalities. It is the Department's view that a First Nation may, depending on the facts, qualify as either a public body performing a function of government. or as a municipality, or it may be found to not be sufficiently developed to be a municipality or a public body performing a function of government.

Even if The First Nation were considered for income tax purposes to be a municipality, a taxable corporation acquired by The First Nation would continue to be taxable in each year in which the corporation derived more than 10% of its income from outside the geographical boundaries of The First Nation, and thus subsection 149(10) might never be applicable.

In addition, even though a corporation might not qualify factually for exemption under paragraphs 149(1)(d.2) to (d.6) (e.g. on the basis that it was owned by a First Nation that did not factually qualify as a municipality), a corporation may become exempt from tax XXXXXXXXXX, in which case subsection 149(10) of the Income Tax Act would apply.

3. That, for the purposes of the various income tax conventions that Canada has negotiated with other jurisdictions, The First Nation is to be considered a political subdivision or local authority of Canada.

Comment:

Since the tax consequences which flow from the requested interpretation affect foreign withholding provisions rather than Canadian taxes, we cannot provide an advance income tax ruling. Generally speaking, though, it is our view that a First Nation that qualifies as a municipality for purposes of the Income Tax Act would be considered a local authority for purposes of international tax conventions, while a First Nation that does not qualify for exemption pursuant to paragraph 149(1)(c) would likely not be so considered. We would point out, however, that the application of particular provisions of specific tax conventions may be determined by the foreign country rather than Canada, in which case you would need to seek the views of the other country.

4. That the acquisition of at least 90% of the shares of a taxable Canadian corporation by The first Nation, the A-Trust, Aco, or a subsidiary of Aco will:

a) not subject the target corporation to the application of the deemed disposition provisions in subsection 149(10); and

b) not, in and of itself, disqualify the target corporation as a "Canadian-controlled private corporation", as provided in subsection 125(7).

Comments:

First, there is no proposed transaction on which an advance ruling can be provided. Second, it will be a question of fact whether paragraphs 149(1)(d) to (d.6) will apply to such corporation. If these paragraphs do not apply (and no other provision applies to cause such corporation to become exempt from Part I tax), subsection 149(10) will not apply.

Third, a corporation will by definition (in subsection 125(7)) be a CCPC if it is a private corporation that is a Canadian corporation other than one that is controlled in any manner by one or more non-resident persons or public corporations. As there is no indication that any of The First Nation, the A-Trust, Aco or a subsidiary of Aco is a non-resident person or a public corporation, it is difficult to appreciate the tax concern.

5. That the transfer of shares of corporations (including Aco) to A-Trust will not result in an acquisition of control of those corporations.

Comment:

Subsection 256(7) provides for control being deemed not to have been acquired where the new shareholder is related to the former shareholder. This deeming provision does not appear to operate in the specific fact scenario, in which case the transfer will result in an acquisition of control.

6. XXXXXXXXXX

XXXXXXXXXX

7. That GAAR will not apply to the Proposed Transactions or to any revenues subsequently earned or received by The First Nation from the A-Trust.

A ruling on the general anti-avoidance rule of section 245 will not be provided since no specific GAAR concern has been brought to our attention.

Yours truly,

Manager
Business and Property Income and
Exempt Organizations Section
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

ENDNOTES

⁽¹⁾ XXXXXXXXXX
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⁽²⁾ These amounts are in respect of the fiscal year-end XXXXXXXXXX, all of which reconcile to the gross revenues reported in the financial statements for that year end (Exhibit "24(a) (ii)").

⁽³⁾ XXXXXXXXXX presently has three money managers. Within each investment portfolio, the equities change on a monthly basis.

⁽⁴⁾ XXXXXXXXXX

⁽⁵⁾XXXXXXXXXX

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1998 Ruling 973303 - XXXXXXXXXX

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I. EXHIBITS

II. DEFINITIONS

III. FACTS

A. The First Nation Political Structure

B. Agreements Negotiated

C. Revenue Sources - Summary

D. Real Property - LAND Base et al.

E. Investment Assets

F. Business Assets

G. Public Service Assets

H. Other Facts

IV. PROPOSED TRANSACTIONS

V. PURPOSE OF THE PROPOSED TRANSACTION

VI. RULINGS

VII. COMMFNTS