2011 Ruling 2010-0371661R3 - Loss Consolidation

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: Standard loss utilization

Position: Ruling issued.

Reasons: Meets statutory and administrative requirements.

XXXXXXXXXX
									2010-037166
									XXXXXXXXXX
									

XXXXXXXXXX , 2011

Dear XXXXXXXXXX :

Re: XXXXXXXXXX
Advance Income Tax Ruling Request

We are writing in response to your letter of XXXXXXXXXX wherein you requested an advance income tax ruling on behalf of the above-referenced taxpayers. We also acknowledge the information provided in correspondence and telephone conversations (XXXXXXXXXX ) concerning your request. The information contained in documents submitted with your request forms part of this ruling only to the extent it is expressly referred to or described herein.

To the best of your knowledge and that of the above-referenced taxpayers, none of the issues involved in this ruling is:

(i) dealt with in an earlier return of any of the above referenced taxpayers, or a related person,

(ii) being considered by a Tax Services Office or Taxation Centre in connection with a previously filed tax return of any of the above-referenced taxpayers or a related person,

(iii) under objection or appeal by any of the above-referenced taxpayers, or a related person,

(iv) before the courts or, if a judgment has been issued, the time limit for appeal to a higher court has expired, or

(v) the subject of a ruling previously issued by the Income Tax Rulings Directorate.

Further, the above referenced taxpayers have advised that the Subject Transactions and the Proposed Transactions described herein will not result in the taxpayers or any related person herein being unable to pay its outstanding tax liabilities.

Unless otherwise expressly stated, every reference herein to a part, section or subsection, paragraph or subparagraph and clause or subclause is a reference to the relevant provision of the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.) c.1, as amended from time to time and consolidated to the date of this letter (the "Act"), and the Income Tax Regulations thereunder are referred to as the "Regulations".

Unless otherwise noted, all references to currency are to Canadian dollars.

DEFINITIONS

In this letter, the following terms have the meanings specified and where the circumstances so require, words reporting the singular include the plural and vice versa and words reporting any gender or the neuter include all genders and the neuter:

"adjusted cost base" has the meaning assigned by section 54;

"affiliated persons" has the meaning assigned by subsection 251.1(1);

"Agreeing Province" means a province that has entered into an agreement with the Government of Canada under which the Government of Canada will collect taxes payable under the income tax statute of that province and will make payments to that Province in respect of the taxes so collected;

"Amalco" refers to the corporation that was formed on the amalgamation described in Paragraph 33;

"amount" has the meaning assigned by subsection 248(1);

"arm's length" has the meaning assigned by subsection 251(1);

XXXXXXXXXX ;

"CBCA" means the Canada Business Corporations Act R.S., 1985, c. C-44;

"CRA" means the Canada Revenue Agency;

"dividend rental arrangement" has the meaning assigned by subsection 248(1);

"financial intermediary corporation" has the meaning assigned by subsection 191(1);

"forgiven amount" has the meaning assigned by subsection 80(1) or 80.01(1);

"General Anti-avoidance Provision of an Agreeing Province" means:

XXXXXXXXXX

"LP" means XXXXXXXXXX (formerly known as XXXXXXXXXX ), a limited partnership governed by the laws of the Province of XXXXXXXXXX and formed on XXXXXXXXXX ;

"non-capital loss" has the meaning assigned by subsection 111(8);

"Newco" means XXXXXXXXXX , a XXXXXXXXXX unlimited liability company incorporated on XXXXXXXXXX ;

"Newco Additional Preferred Shares" means the additional shares of the capital stock of Newco issued by Newco to Subsidiary as described in Paragraph 27;

"Newco Initial Preferred Shares" means the initial shares of the capital stock of Newco issued by Newco to Subsidiary as described in Paragraph 25;

"Newco Preferred Shares" means the Newco Initial Preferred Shares and the Newco Additional Preferred Shares, the attributes of which are described in Paragraph 26;

"paid up capital" has the meaning assigned by subsection 89(1);

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

"Parent" means XXXXXXXXXX . Parent was incorporated on XXXXXXXXXX under the CBCA;

"Parent Additional Loans" means the additional loans made by Newco to Parent as described in Paragraph 28;

"Parent Initial Loan" means the initial loan made by Newco to Parent as described in Paragraph 28;

"Parent Loans" means the Parent Initial Loan and the Parent Additional Loans;

"Proposed Transaction" means the transaction described in Paragraph 34;

"related persons" has the meaning assigned by subsection 251(2);

"specified financial institution" has the meaning assigned by subsection 248(1);

"SPEs" means special purpose entities as described in Paragraph 3;

"Subco1" means XXXXXXXXXX (a predecessor of, and separate entity from, Subsidiary described below), a XXXXXXXXXX unlimited liability company, incorporated on XXXXXXXXXX ;

"Subco1 Reorganization" means the transactions described in Paragraphs 13 to 19;

"Subco2" means XXXXXXXXXX (a predecessor of, and separate entity from, Subsidiary described below), a XXXXXXXXXX unlimited liability company incorporated on XXXXXXXXXX ;

"Subco3" means XXXXXXXXXX , a XXXXXXXXXX unlimited liability company incorporated on XXXXXXXXXX ;

"Subject Transactions" means the transactions described in Paragraphs 22 to 33.

"Subsidiary" means XXXXXXXXXX (the entity formed as a consequence of the amalgamation of Subco2 and Subco1 described in Paragraph 17 ), a XXXXXXXXXX unlimited liability company;

"Subsidiary Additional Loans" means the additional loans made by Parent to Subsidiary as described in Paragraph 23;

"Subsidiary Initial Loan" means the initial loan made by Parent to Subsidiary, as described in Paragraph 23;

"Subsidiary Loans" means the Subsidiary Initial Loan and the Subsidiary Additional Loans; and

"taxable Canadian corporation" has the meaning assigned by subsection 89(1).

FACTS

1. Parent was a taxable Canadian corporation and was a direct wholly-owned subsidiary of XXXXXXXXXX , a corporation resident in and incorporated under the laws of XXXXXXXXXX . All of the shares of XXXXXXXXXX are owned through one or more subsidiaries of XXXXXXXXXX , a XXXXXXXXXX corporation whose shares are traded on the XXXXXXXXXX Stock Exchange. Parent dealt with the XXXXXXXXXX Tax Services Office and filed its tax return with the XXXXXXXXXX Taxation Centre.

2. Parent carried on a XXXXXXXXXX business throughout Canada. XXXXXXXXXX .

3. XXXXXXXXXX

4. [Reserved].

5. For the taxation year ending XXXXXXXXXX , Parent had permanent establishments in two provinces: XXXXXXXXXX and XXXXXXXXXX . For the purpose of the definition of Parent's "taxable income earned in a province" pursuant to subsection 124(4) and part IV of the Regulations, its provincial allocation is XXXXXXXXXX % between the XXXXXXXXXX provinces, respectively.

6. As at XXXXXXXXXX , Parent had a balance of non-capital loss carryforwards of approximately $XXXXXXXXXX . These losses were incurred in Parent's taxation years ending XXXXXXXXXX to XXXXXXXXXX . XXXXXXXXXX :

XXXXXXXXXX		XXXXXXXXXX		XXXXXXXXXX
$XXXXXXXXXX		XXXXXXXXXX		XXXXXXXXXX
$XXXXXXXXXX		XXXXXXXXXX		XXXXXXXXXX

$XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX 

7. Prior to the amalgamation described in Paragraph 17, Subco1, a taxable Canadian corporation, was a direct wholly-owned subsidiary of Parent.

8. Subco1 was in the business of XXXXXXXXXX .

9. XXXXXXXXXX

10. Subco1 had permanent establishments in two provinces: XXXXXXXXXX and XXXXXXXXXX . For the purpose of the definition of Subco1's "taxable income earned in a province" pursuant to subsection 124(4) and part IV of the Regulations, its provincial allocation is approximately XXXXXXXXXX % between the XXXXXXXXXX provinces, respectively.

11. Subco1 utilized most of its non-capital losses from prior taxation years as at its taxation year ending XXXXXXXXXX .

12. In order to utilize Parent's non-capital losses, as described in Paragraph 6, a reorganization of Subco1's XXXXXXXXXX business was completed as more fully described in Paragraphs 13 to 19 (the "Subco1 Reorganization"). In essence, Subco1's XXXXXXXXXX business was transferred into a newly created partnership ("LP") XXXXXXXXXX . This facilitated the amalgamation of Subsidiary and Parent to form Amalco, as described in Paragraph 33, which owned substantially all of the interest in LP after the amalgamation.

13. On XXXXXXXXXX , Parent formed two direct wholly-owned subsidiaries, Subco2 and Subco3.

14. On XXXXXXXXXX , Subco2, as the limited partner, and Subco3, as the general partner, formed LP, with Subco2 having a XXXXXXXXXX % interest and Subco3 having a XXXXXXXXXX % interest in LP.

XXXXXXXXXX

15. On XXXXXXXXXX , Parent transferred the shares of Subco2 and Subco3 to Subco1.

16. XXXXXXXXXX

17. On XXXXXXXXXX , Subco1 amalgamated with Subco2 to form Subsidiary. Subsidiary was a taxable Canadian corporation which dealt with the XXXXXXXXXX Tax Services Office and filed its tax returns with the XXXXXXXXXX Taxation Centre.

18. Immediately after the amalgamation described in Paragraph 17, Subsidiary, as the limited partner, transferred its assets and business to LP. Elections under subsections 20(24) and 97(2) will be made in prescribed form and manner to complete this transaction on a rollover basis. Subsidiary then transferred XXXXXXXXXX % of its interest in LP to Subco3, its direct wholly-owned subsidiary, in exchange for common shares of Subco3. An election under subsection 85(1) will be filed in prescribed form and manner to complete this transaction on a rollover basis. Following the completion of these two transactions, Subsidiary owned a XXXXXXXXXX % interest and Subco3 owned a XXXXXXXXXX % interest in LP.

19. XXXXXXXXXX

20. Subsequent to the amalgamation of Subco1 and Subco2 to form Subsidiary and the transfer of assets and business by Subsidiary to LP, LP carried on the same business as previously carried on by Subco1, as described in Paragraph 8. LP will adopt a XXXXXXXXXX fiscal period.

21. Newco is a taxable Canadian corporation and is a direct wholly-owned subsidiary of Parent. Upon incorporation, Newco's authorized capital consisted of one class of common shares and Parent owned all the issued and outstanding common shares of Newco. Newco was formed for the purpose of completing the Subject Transactions and the Proposed Transaction. Newco deals with the XXXXXXXXXX Tax Services Office and files its tax returns with the XXXXXXXXXX Taxation Centre.

SUBJECT TRANSACTIONS

22. On XXXXXXXXXX , Newco amended its articles to create a new class of preferred shares as described in Paragraph 26.

23. On XXXXXXXXXX , Parent made a $XXXXXXXXXX loan to Subsidiary (the "Subsidiary Initial Loan"). On subsequent business days, Parent made additional loans to Subsidiary (the "Subsidiary Additional Loans") on the same terms and conditions as the Subsidiary Initial Loan and as part of a master term loan agreement. The aggregate principal amount of the Subsidiary Loans did not exceed $XXXXXXXXXX .

24. The Subsidiary Loans may be repaid at any time at the option of the issuer without penalty. Simple interest accrued on each of the Subsidiary Loans and was calculated daily at a rate equal to XXXXXXXXXX % per annum. The interest on each of the Subsidiary Loans was paid quarterly.

25. Subsidiary used the total proceeds from the Subsidiary Initial Loan to subscribe for preferred shares, as described in Paragraph 27, in the capital of Newco having an aggregate redemption and retraction price equal to the subscription price therefor (the "Newco Initial Preferred Shares").

26. The Newco Initial Preferred Shares have the following attributes:

(a) non-participating,

(b) non-voting,

(c) redeemable at any time by Newco for an amount equal to the amount for which they were issued and any accrued but unpaid dividends which may accumulate prior to their redemption,

(d) retractable at any time by Subsidiary for an amount equal to the amount for which they were issued and any accrued but unpaid dividends which may accumulate prior to their retraction, and

(e) entitled to a cumulative dividend, payable quarterly, at a fixed rate of XXXXXXXXXX % per annum.

27. Subsidiary used the total proceeds received by it on any particular day from the Subsidiary Additional Loans made on that day to subscribe for additional preferred shares in the capital of Newco having an aggregate redemption price equal to the subscription price therefor (the "Newco Additional Preferred Shares"). The Newco Additional Preferred Shares have the same attributes as the Newco Initial Preferred Shares.

28. Newco used the total proceeds received on the issuance of the Newco Initial Preferred Shares to make an interest-free demand loan to Parent (the "Parent Initial Loan"). Newco used the total proceeds from the issuance of the Newco Additional Preferred Shares to make additional interest-free demand loans to Parent (the "Parent Additional Loans").

29. The transactions described in Paragraphs 25 to 28 were undertaken in a manner by which Newco directed Subsidiary to make payment directly to Parent whereby

(a) Newco acknowledged receipt of funds from Subsidiary in and as consideration for the issuance of the Newco Preferred Shares to Subsidiary, and

(b) Parent acknowledged receipt of funds from Newco as consideration for the issuance by Parent of the Parent Loans in favour of Newco.

30. On both XXXXXXXXXX and XXXXXXXXXX , Parent made capital contributions to Newco sufficient to fund the dividends accrued up to those dates on the Newco Preferred Shares held by Subsidiary. No shares were issued by Newco with respect to the contribution of capital and no amount was
added to the paid-up capital of Newco. The amount of each such contribution of capital was recorded as contributed surplus for accounting purposes. The contribution of capital is not income of Newco pursuant to generally accepted accounting principles.

31. On both XXXXXXXXXX and XXXXXXXXXX , Newco, in accordance with the applicable solvency test and liquidity test, paid dividends equal to the amount of the dividends accrued up to those dates on the Newco Preferred Shares held by Subsidiary.

32. On both XXXXXXXXXX and XXXXXXXXXX , Subsidiary used the amounts received as dividends from Newco, as described in Paragraph 31, to pay interest accrued up to those dates to Parent on the Subsidiary Loans made to it.

33. Subsequent to the payments of all accrued dividends on the Newco Preferred Shares described in Paragraph 31, and the payments of all accrued interest on the Subsidiary loans described in Paragraph 32, Parent was continued into a common jurisdiction, from CBCA to XXXXXXXXXX . On XXXXXXXXXX , after the continuance, Parent was amalgamated with Subsidiary to form Amalco. After the amalgamation, Amalco owned and will continue to own, all of the shares of Newco, including the Newco Preferred Shares. On XXXXXXXXXX , Amalco was continued from XXXXXXXXXX to CBCA.

PROPOSED TRANSACTION

34. After the amalgamation of Parent and Subsidiary to form Amalco, described in Paragraph 33, Newco will be wound up and liquidated into Amalco. Amalco will elect, in prescribed form and within the time referred to in paragraph 80.01(4)(c), to have the rules in subsection 80.01(4) apply with respect to the settlement of the Parent Loans owing by Parent to Newco on the winding-up of Newco.

ADDITIONAL INFORMATION

35. The Subsidiary Loans were made pursuant to an amended and restated loan agreement, dated XXXXXXXXXX , between Subsidiary, as borrower, and Parent, as lender. The Subsidiary Loans are legal, valid and binding obligations of Subsidiary enforceable against it in accordance with their terms.

36. The Newco Preferred Shares are duly authorized and have been validly issued by Newco to Subsidiary.

37. The Parent Loans were made pursuant to a revolving loan agreement dated as of XXXXXXXXXX , as amended by a first amendment to revolving loan agreement, dated as of XXXXXXXXXX , between Parent, as borrower, and Newco,
as lender. The Parent Loans are legal, valid and binding obligations of Parent enforceable against it in accordance with their terms.

38. The Newco Preferred Shares were not, and will not be, at any time during the implementation of the Subject Transactions and the Proposed Transaction described in Paragraphs 22 to 34:

(a) the subject of any undertaking that is referred to in subsection 112(2.2) as a "guarantee agreement";

(b) the subject of a dividend rental arrangement;

(c) the subject of any secured undertaking of the type described in paragraph 112(2.4)(a); or

(d) issued for consideration that is or includes:

(i) an obligation of the type described in subparagraph 112(2.4)(b)(i), other than an obligation of a corporation that is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)); or

(ii) any right of the type described in subparagraph 112(2.4)(b)(ii).

39. As of XXXXXXXXXX , Subsidiary had a maximum borrowing capacity of between $XXXXXXXXXX and $XXXXXXXXXX to finance additional investments based on its current net asset value and its existing sources of cash flow at that time, and it could borrow up to such amounts from an arm's length lender at
fair market value interest rates that would be XXXXXXXXXX % per annum. The amount of the Subsidiary Loans did not exceed the Subsidiary's borrowing capacity at the time such loans were made. The interest rate charged on the Subsidiary Loans was XXXXXXXXXX % per annum.

40. Amalco and Newco are affiliated and related persons, and Parent, Newco and Subsidiary were affiliated and related persons at all times for purposes of the Act. Parent and Subco1 were affiliated and related persons during

(a) the taxation years of Parent when the losses described in Paragraph 6 were incurred; and

(b) the taxation years to which a loss incurred by Subsidiary from the Subject Transactions and the Proposed Transaction will be carried back.

41. Immediately prior to the Subject Transactions and the Proposed Transaction, Newco was a single purpose company, had no liabilities and carried on no activity other than as contemplated in the Subject Transactions and the Proposed Transaction.

42. Each of Parent, Subco1, Subco2, Subco3, Subsidiary and Newco was or is a XXXXXXXXXX as that term is defined in subsection 248(1).

43. The Newco Preferred Shares were not acquired by Subsidiary in the ordinary course of its business.

44. Parent had the financial capacity to make the capital contributions to Subsidiary described in Paragraph 30 and Newco had the financial capacity to satisfy the applicable solvency test and liquidity test required to pay the dividends on the Newco Preferred Shares described in Paragraph 31.

45. Parent had a source of income, independent from the XXXXXXXXXX business to fund capital contributions described in Paragraph 30.

46. No amount in respect of any non-capital loss of Subsidiary (or of its successor resulting from the amalgamation described in Paragraph 33) arising from the Subject Transactions or the Proposed Transaction will be deducted by Subsidiary (or its successor) in computing its income for any of its taxation years that end more than XXXXXXXXXX taxation years after the end of Parent's XXXXXXXXXX taxation year (or such other period as may be prescribed from time to time under paragraph 111(1)(a), or any successor provision, for a non-capital loss incurred by a taxpayer in a taxation year ending on XXXXXXXXXX ).

47. Immediately before the amalgamation described in Paragraph 33, the aggregate paid up capital of the Subsidiary shares that Parent owned did not exceed the aggregate adjusted cost base of those shares to Parent.

48. Parent, Subsidiary, Newco, and Amalco were not and are not financial institutions, as defined in subsection 190(1), for purposes of Part VI tax.

PURPOSES OF THE SUBJECT TRANSACTIONS AND THE PROPOSED TRANSACTION

49. The purpose of the Subject Transactions and the Proposed Transaction is to effect a tax consolidation of Parent and Subsidiary by causing Parent to earn interest income on the Subsidiary Loans, thus permitting Parent to utilize its non-capital loss carry-forwards and to have Subsidiary incur interest expense to reduce its taxable income and to create non-capital losses that may be carried back and used to reduce its taxable incomes from prior taxation years and
carried forward and used to reduce its taxable income (and the taxable income of its successor) in subsequent taxation years to the extent permitted by section 111.

50. The purpose of continuing Parent from CBCA into XXXXXXXXXX prior to the amalgamation, followed by a continuance of Amalco from XXXXXXXXXX into CBCA after the amalgamation, as described in Paragraph 33, is to effect the combination of Parent and Subsidiary into one Canadian corporate entity XXXXXXXXXX .

RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all the relevant facts, transactions, and purposes of the Proposed Transaction and the Subject Transactions and provided further that the Proposed Transaction is carried out as described above, we rule as follows:

A. Provided that Subsidiary had a legal obligation to pay interest on the Subsidiary Loans, Subsidiary will, pursuant to paragraph 20(1)(c), be entitled to deduct, in computing its income for a taxation year (depending on the method regularly followed by Subsidiary in computing its income for the purposes of the Act), the lesser of

(a) the interest paid or payable on the Subsidiary loans in respect of that taxation year, and

(b) a reasonable amount in respect thereof.

B. No amount will be included in the income of Newco pursuant to section 9 or paragraph 12(1)(c) or 12(1)(x) in respect of the contributions of capital made by Parent as described in Paragraph 30.

C. The dividends received by Subsidiary on Newco Preferred Shares held by it, as described in Paragraph 31, will be taxable dividends and such dividends will,

(a) pursuant to subsection 112(1), be deductible in computing the taxable income of Subsidiary for the taxation year in which the dividends were received, and for greater certainty, such deductions will not be precluded by any of subsections 112(2.1), 112(2.2), 112(2.3) and 112(2.4);

(b) will not be subject to tax under Part IV.1 and Part VI.1; and

(c) will not be subject to tax under Part IV, except to the extent that paragraph 186(1)(b) applies to impose such tax.

D. Provided that there is no disposition or increase in interest described in any of subparagraphs 55(3)(a)(i) to (v) as part of a series of transactions or events that includes the Subject Transactions or the Proposed Transaction, then by virtue of paragraph 55(3)(a), the provisions of subsection 55(2) will not apply to the taxable dividends described in Ruling C. For greater certainty, the Subject Transactions and the Proposed Transaction described herein, in and by themselves, will not be considered to result in any disposition or increase in interest described in any of subparagraphs 55(3)(a)(i) to (v).

E. Pursuant to the provisions of subsection 80.01(3), the settlement and cancellation of the Subsidiary Loans upon the amalgamation of Parent and Subsidiary, described in Paragraph 33, will result in such indebtedness being deemed to have been settled immediately before the time that is immediately before the amalgamation by the payment, made by Subsidiary and received by Parent, of an amount equal to the amount that would have been Parent's cost of the Subsidiary Loans at that time, such that no forgiven amount will arise.

F. Provided that Amalco elects in prescribed form and within the time referred to in paragraph 80.01(4)(c) to have the provisions of subsection 80.01(4) apply with respect to the settlement of the Parent Loans, as described in Paragraph 34, the provisions of paragraph 80.01(4)(c) will apply to the settlement of the Parent Loans such that the settlement of such loans will not give rise to a forgiven amount.

G. The provisions of subsection 87(2.11) will apply to deem Subsidiary to be the same corporation as, and a continuation of Subco1 for the purposes of applying section 111 and Part IV in respect of Subco1.

H. The provisions of subsection 87(2.1) will apply to deem Amalco, the corporation resulting from the amalgamation described in Paragraph 33, to be the same corporation as, and a continuation of, each of Parent and Subsidiary, for the purposes, and subject to the restrictions, described in subsection 87(2.1).

I. The provisions of subsections 15(1), 56(2), 69(1), 69(11) and 246(1) will not apply as a result of the Subject Transactions and the Proposed Transaction in and by themselves.

J. Subsection 245(2) will not apply to the Subject Transactions and the Proposed Transaction, in and by themselves, to redetermine the tax consequences confirmed in the rulings given above.

K. The General Anti-avoidance Provision of an Agreeing Province will not be applied, as a result of the Subject Transactions and the Proposed Transaction, in and by themselves, to re-determine the tax consequences confirmed in the rulings given above, in respect of a taxation year for which such Province was an Agreeing Province.

The above rulings are subject to the limitations and qualifications set out in Information Circular 70-6R5 dated May 17, 2002 and are binding on the CRA provided that the Proposed Transaction is completed prior to XXXXXXXXXX . The above rulings are based on the law as it presently reads and do not take into account any proposed amendments to the Act and the Regulations which, if enacted into law, could have an effect on the rulings provided herein.

COMMENTS

Unless otherwise confirmed in the above rulings, nothing in this letter should be construed as implying that the CRA has confirmed, reviewed or has made any determination in respect of:

(a) the paid-up capital of any share or the adjusted cost base or fair market value of any property referred to herein;

(b) the amount of any non-capital loss or any other amount of any corporation referred to herein;

(c) the provincial income tax implications relating to the allocation of income and expenses under the Subject Transactions or the Proposed Transaction;

(d) subject to Ruling K, the application or non-application of a general anti-avoidance provision of any province; or

(e) any other tax consequence relating to the facts, Subject Transactions, Proposed Transaction or any transaction or event taking place either prior to the Proposed Transaction or subsequent to the Proposed Transaction, whether described in this letter or not, other than those specifically described in the rulings given above, including the Subco1 Reorganization and whether any of the Subject Transactions or Proposed Transaction would also be included in a series of transactions or events that include other transactions or events that are not described in this letter.

Yours sincerely,

XXXXXXXXXX
for Division Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch