28 February 2011 External T.I. 2010-0377411E5 - Capital Pool Companies

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: Whether a corporation listed on the TSX Venture Exchange (Tier 2) is a public corporation

Position: Yes

Reasons: The TSX Venture Exchange (Tier 2) is a designated stock exchange.

XXXXXXXXXX
									2010-037741
									Katie Campbell
									(613) 957-2126

February 28, 2011

Dear XXXXXXXXXX :

We are writing in response to your email correspondence of August 10, 2010. You have asked whether a Capital Pool Company ("CPC") would become a public corporation, pursuant to subsection 89(1) of the Act, (footnote 1) once the CPC completes an initial public offering and is listed on the TSX Venture Exchange (Tier 2).

Your request appears to relate to a proposed transaction or a completed transaction. Confirmation of the income tax consequences of proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. To make such a request the advance income tax ruling must be submitted in accordance with the guidelines set out in Information Circular 70-6R5 ("IC-70-6R5") dated May 17, 2002. However, if the situation relates to a completed transaction a request for the Canada Revenue Agency's ("CRA's") views must be made to your local Tax Services Office. We can, however, provide the following general comments.

As defined in subsection 89(1), a corporation is a public corporation if it is resident in Canada and has a class of shares listed on a designated stock exchange in Canada. A designated stock exchange in Canada, within the meaning of section 262, includes the TSX Venture Exchange (Tiers 1 and 2). As a result, once a class of shares of a corporation, that was not previously a public corporation, is listed on the TSX Venture Exchange (Tier 2), the corporation will be a public corporation.

Our comments are provided in accordance with the practice outlined in paragraph 22 of Information Circular IC 70-6R5, dated May 17, 2002.

Yours truly,

David Palamar
Section Manager
for Division Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

FOOTNOTES

Note to reader: Because of our system requirements, the footnotes contained in the original document are shown below instead:

1 The Act means the Income Tax Act R.S.C. 1985 (5th Supp.) c.1 as amended from time to time and consolidated to the date of this letter and, unless otherwise expressly stated, every statutory reference herein is a reference to the relevant provision of the Act.