The description of an intermediary debt has been expanded in the 29 August 2014 back-to-back loan proposals

The proposed back-to-back loan rule would impose withholding tax where a Canadian borrower (say, "Canco") pays loan interest to an arm’s length "intermediary" if there is an "intermediary debt" with specified attributes owing, in turn, by the intermediary to a person who does not deal at arm’s length with Canco. The scope of what constitutes an intermediary debt has been expanded in the latest (29 August 2014) version of this rule. For instance, the second level of debt will be deemed to be intermediary debt if its existence somehow affected the terms of the debt owing by Canco to the intermediary.

A safe harbour introduced in the same revisions, for situations where intermediary debts represent less than 25% of qualifying categories of loans owing by Canco, is quite narrow: to be a qualifying loan, the creditor must be the intermediary itself, the security interests relating to the different qualifying debts must correspond quite closely, and they must arise under the same or a "connected" agreement.

Neal Armstrong. Summaries of Steve Suarez, "An Analysis of Canada's Latest International Tax Proposals", Tax Notes International, September 29, 2014, p. 1131 under s. 212(3.1)(b), s. 212(3.1)(d) and s. 212.3(9).