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Our Comments It is our view that in circumstances in which a taxpayer is required to honour his guarantee of a debt, he is considered to have acquired the debt at the time that the guarantee is honoured and his cost of the debt will be equal to the amount of payment made pursuant to the guarantee. Accordingly, in the case you have described, the taxpayer will be considered to have acquired the debt in the year in which payment is made. ... It should be noted that where a taxpayer has loaned money at less than a reasonable rate of interest to a Canadian corporation of which he is a shareholder or has guaranteed the debts of such a corporation for no consideration, the loan or the guarantee will generally be considered not to have been given for the purpose of gaining or producing income. ...

While a guideline based on distance would be appropriate in most cases, there may be situations where other relevant factors should also be considered in making such a determination. We do not think it is appropriate to use the criteria in place for the Northern Residents Deduction to decide whether or not a taxable benefit should be assessed in respect of the reimbursement of removal expenses. 21(1)(b) While the policy objective of encouraging settlement in remote areas may be served by both the Northern Residents Deduction and the position described in the bulletin, the Task Force pointed out that there is a perceived inequity in the definition of a prescribed area in that some prescribed areas are not considered by neighbouring communities as being remote. ... You may be interested to know,chat we have Hot had any queries on whether specific locations are considered remote other than your referral concerning the 24(1) and 24(1) closures. ...

We advise that while alimony payments made pursuant to a Demand under the Alberta Rules of Court signed by one spouse and consented to in the “notice of writing” by the other spouse would be considered to be a “written agreement”, we are of the view that the agreement would not constitute a “written separation agreement” for the purposes of paragraph 60(b) of the Act. ... An agreement which is lacking in this respect has been considered by the Courts not to be a valid separation agreement. ... Concerning the deductibility of the payments pursuant to paragraph 60(c) of the Act, we are also of the view that the Demand cannot be considered to be an order of a competent tribunal and, as indicated by the taxpayer's solicitor, this position is supported in the Federal Court of Canada case WILLIAM EDWARD HORKINS vs HER MAJESTY THE QUEEN [[1976] C.T.C. 52] 76 CTC 52. ...

Provided the trust is governed by the RCA, it will be considered to be a RCA trust per subsection 207.5(1) of the Act. 2. ... The portion of the premium related to the death benefit and paid directly by the employer will be considered to be employment Income to the employee pursuant to paragraph 6(1)(a) of the Act and deductible to the employer pursuant to 18(1)(a) of the Act. ... Since the total cost of the death benefit will be, in effect, paid by the employee and the benefit is payable directly to the employee's estate or nominee, the death benefit will not be considered to have been received as a distribution from the RCA nor will it be subject to tax in the beneficiary's hands. ...

As a result they may be subject to a withholding tax of 25% by virtue of paragraph 212(1)(d) of the Act and Article 22 of the Treaty unless, of course, they are considered business profits t-o the non-resident and the non-resident does not have a permanent establishment in Canada. ... Instant replay of non-scripted or pre-scripted live programming is considered to be sourced in a videotape which is for use in connection with television broadcasting and is thus subject to withholding tax pursuant to 212(5) of the Act and Article XIII of the Treaty. 4. Whether a particular type of programming will be considered a literary, dramatic, musical or artistic work is a question of fact to be determined from an examination of all the related or associated factors of a particular event. ...

., $.01 per share) so that they are "legal for life" and can be considered as qualified investments for insurance companies, pension funds, etc. ... Pursuant to subparagraph 6204(1)(a)(i) of the ITR, one of the conditions that must be met before a share would be considered as a prescribed share is that under the terms or conditions of the share or any agreement in respect of the share or its issue, the amount of the dividends that the corporation may declare or pay on the share must not be limited to a maximum amount or fixed at a minimum amount by way of a formula or otherwise. ... In the event that the holders of the non-voting shares would be entitled on the dissolution of the company to receive at least the amount of declared but unpaid cumulative dividends on the shares, it is our view that the "liquidation entitlement", as the term is used in subparagraph 6204(1)(a)(ii) of the ITR, would be considered fixed at a minimum amount. ...

Therefore a person employed for less than six months, usually referred to as a casual employee, does not contribute to the Superannuation Plan and such service will, in our opinion, be considered a period while the person was "not a contributor". A person hired for a period of more than 6 months, usually referred to as a term employee, will have to contribute to the Superannuation Plan from one day and the total employment period will be considered a period "while a contributor". Should a person be employed for a period of 6 months (as a casual employee) and then have the contract renewed for another 6 months, the person would then contribute to the Superannuation Plan starting with the second 6 month period and that period will be considered to be a period "while a contributor" while the first 6 month period will be a period "while not a contributor". ...

In this regard you have requested that we confirm your view that "if two spouses had entered into an Agreement before or after marriage but before separation and which contemplated possible separation in the future and provided for mutual rights and obligations to arise should the parties commence to live separate and apart, and if those spouses subsequently commenced to live separate and apart and were complying with the terms of the Agreement relating to separation, then they would be considered to be 'separated pursuant to a written separation agreement' within the meaning of paragraphs 56(1)(b) and 60(b) of the Act. ... It is our opinion that an Agreement, although containing a contingency provision regarding the possibility of a future separation, would not be considered to be a "written separation agreement" as envisioned by paragraph 56(1)(b) and 60(b) of the Act and as interpreted by the courts in the cases cited in your letter. It is our view that an Agreement would require amendment or a covenant executed at the time of, or subsequent to, actual separation of the spouses invoking the separation conditions in the Agreement including an agreement to live separate and apart, before such a document could begin to be considered to be a "written separation agreement" for purposes of paragraphs 56(1)(b) and 60(b) of the Act. ...

Our Opinion In our opinion, based on our understanding of the facts as set out above, the bonus payments can "... reasonably be considered to relate to... an amount that, but for the reduction... ... Accordingly, provided that: (i) the bonus can not be reasonably considered to be made in respect of the substitution or conversion of the debt obligation to another debt obligation or share, so that the payment is not excluded under paragraph 18(9.1)(a); and (ii) the tests in subparagraph 18(9.1)(f)(ii) are met; the bonus would be deductible under subsection 18(9.1). As the bonus is a penalty for redeeming the debentures 24(1) years prior to maturity, it is our view that the bonus can "reasonably be considered to relate to" interest that would have been paid for all those remaining years. ...

If the EBP becomes an SDA, the grandfather treatment applies in respect of a taxpayer to the extent that the deferred amounts relate, or may reasonably be considered to relate, to services rendered by the taxpayer before July, 1986. Also excluded from the rules governing SDAs are amounts under plans or arrangements to the extent that the deferred amounts relate, or may reasonably be considered to relate, to services rendered after June, 1986 where both of the following conditions are met: • the employer is legally obligated to defer payment of these amounts to the employee pursuant to an agreement in writing made with his employee or former employee before February 26, 1986; and • the employee cannot, at any time after June 1986, cancel or otherwise avoid that obligation. ... All contributions made under the EBP after the establishment of the Statutory Arrangement and all property that can reasonably be considered to derive from those contributions are deemed to be property held in connection with the Statutory Arrangement and not in connection with the Existing Arrangement. ...