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Reasons: Under subsection 212(5) withholding tax applies to payments to a non-resident for a "right in or to the use of" a) a motion picture film or b) a film, video tape or other means of reproduction for use in connection with television, that has been or is to be used or reproduced in Canada. ... The fees Canco paid to the non-residents are subject to subsection 212(5) of the Act, which states: 212(5) Motion picture films- Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part I to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, payment for a right in or to the use of (a) a motion picture film, or (b) a film, video tape or other means of reproduction for use in connection with television (other than solely in connection with and as part of a news program produced in Canada), that has been or is to be used or reproduced in Canada. ...

The reference in subsection 402(5) of the Regulations to "that is not used in connection with the principal business operations of the corporation" refers only to "rentals or royalties from property" and not to the other items enumerated therein. 3. ... Interest and dividend income For the purposes of your letter, you have assumed that subsection 402(5) of the Regulations did not apply to exclude from "gross revenue" the interest and dividend income earned by the corporation as it is an investment holding corporation and the property from which the corporation derived its interest and dividend income is used in connection with the principal business operations of the corporation. ... The reference in subsection 402(5) of the Regulations to "that is not used in connection with the principal business operations of the corporation" refers only to "rentals or royalties from property" and not to the other items enumerated therein. ...

However, subparagraph 212(1)(d)(iii) of the Act does not apply to payments that are made for services performed in connection with the sale of property or the negotiation of a contract. ... Given the breadth of the expression "in connection with" and of the term "property", even if the Incentive Payments were payable as consideration for a service described in any of clauses 212(1)(d)(iii)(A) to (C), they should not be subject to Part XIII withholding tax based on the exception in the post amble to subparagraph 212(1)(d)(iii) since they appear to have been made either for services performed in connection with the sale of property or the negotiation of a contract. ...

Where an individual earns income from an office or employment and is required to incur expenses in connection with that office (such as office supplies and the use of a home office), he or she may be entitled to deductions under section 8 of the Act, where certain conditions are met. ... Where an individual earns income from an office or employment and is required to incur expenses in connection with that office or employment, he or she may be entitled to various deductions under section 8 of the Act, provided that certain conditions are met. ... Subject to the conditions discussed above, per diem judges and per diem justices of the peace may be entitled to deduct expenses incurred in connection with that office or employment, under section 8 of the Act. ...

" In this context, the words "in respect of" have been held by the Courts to imply a connection between the loss of employment and the subsequent receipt, where the primary purpose of the receipt was compensation for the loss of employment. Two questions set out by the Courts to determine whether a connection exists for purposes of a retiring allowance are as follows: 1- But for the loss of employment would the amount have been received? ... It is well established that the phrase "in respect of, in the course of, or by virtue of an office or employment" means that there need only be a small connection between a benefit and the employment in order to trigger the operation of paragraph 6(1)(a) of the Act. ...

Your letter references a connection between the bank the employees use to have their pay deposited and the reserve. ... Specifically, Guideline 4 requires that: The employer is resident on a reserve; and The employer is: an Indian band which has a reserve, or a tribal council representing one or more Indian bands which have reserves; or an Indian organization controlled by one or more such bands or tribal councils, if the organization is dedicated exclusively to the social, cultural, educational, or economic development of Indians who for the most part live on reserves; and The duties of employment are in connection with the employer's non-commercial activities carried on exclusively for the benefit of Indians who for the most part live on reserves. ... As the Corporation is not resident on a reserve, is not an Indian band or an Indian organization controlled by one or more bands and the duties of employment are not in connection with the Corporation's non-commercial activities carried on exclusively for the benefit of Indians who for the most part live on reserves, Guideline 4 does not apply. ...

The court was of the view that the burden of demonstrating a sufficient nexus between the taxpayer and the dividend income will be much higher in such situations: “The determination of whether there is sufficient connection between the taxpayer and the income earning potential of the debtor will be decided on a case by case basis depending on the particular circumstances involved.” ... While the Respondent would not have received dividend income directly from the borrower corporation, the court was satisfied that the connection between the loans and the potential dividend income was sufficient in the circumstances of this case to invoke the exclusionary clause in subparagraph 40(2)(g)(ii). ... In other words, there may be a sufficient connection between Mr. A and the income earning potential of Company C to conclude that the exclusionary clause in subparagraph 40(2)(g)(ii) “acquired by the taxpayer for the purpose of gaining or producing income from a business or property” might apply in the situation described. ...

27 January 2016 External T.I. 2015-0599581E5- Taxation of a lump-sum from a former employer CRA Tags 5(1) 6(3.1) 56(1)(a)(ii) Principal Issues: Whether a lump-sum amount provided in connection with a non-competition agreement is taxable? ... In this context, the words “in respect of” have been held by the Courts to imply a connection between the loss of employment and the subsequent receipt, where the primary purpose of the receipt was compensation for the loss of employment. The Courts have set out two questions to determine whether a connection exists for purposes of a retiring allowance: (1) But for the loss of employment would the amount have been received? ...

They import such meanings as “in relation to”, “with reference to” or “in connection with”. As such, the use of these words denotes a connection between the loss of employment and the subsequent receipt of funds. ... The courts have formulated the following two-step test to determine whether the connection between a payment and the loss of employment is sufficient to meet the requirement that an amount be “in respect of” a loss of office or employment: (a) Were it not for the loss of employment, would the employee have received the payment? ...

In this context, the words "in respect of" have been held by the Courts to imply a connection between the loss of employment and the subsequent receipt, where the primary purpose of the receipt was compensation for the loss of employment... Two questions set out by the Courts to determine whether a connection exists for purposes of a retiring allowance are as follows: 1- But for the loss of employment would the amount have been received? ... Damages received in connection with a loss of employment clearly fall within the definition of a retirement allowance. ...