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Day   (613) 957-2136 November 2, 1989 19(1) We are writing in reply to your letter of August 30, 1989, wherein you requested our views as to whether or not a partnership would be considered a person for the purposes of section 54.2 of the Income Tax Act. ... " In view of the above, it is our opinion that a partnership would not be considered a person for purposes of section 54.2. ...

Robb   (613) 957-2744 January 29, 1990 19(1) Re:  Paragraph 84.1(1)(b) and subparagraph 129(1)(a)(i) of the Income Tax Act (the "Act") We are writing in response to your letter of December 15, 1989 in which you requested our views concerning the question of whether a deemed dividend under paragraph 84.1(1)(b) is considered to be a taxable dividend for the purposes of subparagraph 129(1)(a)(i) of the Act. In our view, a deemed dividend under paragraph 84.1(1)(b) would be considered to be a taxable dividend paid for the purposes of subparagraph 129(1)(a)(i) of the Act, provided that subsection 129(1.2) was not applicable. ...

., whether the incorporated employee, XXXXXXXXXX could reasonably considered to be an employee of his present employer, XXXXXXXXXX if the XXXXXXXXXX did not exist. ... Brake Attention: XXXXXXXXXX August 3, 1995 Dear Sirs: Re: XXXXXXXXXX Advance Income Tax Ruling Request This is in reply to your undated letter requesting an advance income tax ruling on behalf of the above-noted taxpayers concerning whether the Corporation will be considered to carry on a personal services business as that term is defined in subsection 125(7) of the Income Tax Act (the "Act"). ... However, the Act provides that a corporation is considered to carry on a personal services business if among other factors an individual performs services on behalf of the corporation (the "incorporated employee") and the incorporated employee or a person related thereto owns 10% or more of the shares of the corporation and the incorporated employee would otherwise, but for the existence of the corporation, reasonably be regarded as an employee or officer of the person who received the services from the corporation. ...

., $.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. ...

Our Comments Whether or not a loan made by a corporation to an individual could be considered to be received by the individual in his/her capacity as an employee or as a shareholder would involve a finding of fact in each particular case.  The Department has taken the position that where a public corporation makes a loan to a shareholder in his/her capacity as an employee rather than as a shareholder, on the same terms and conditions as to other employees who are not shareholders, the loan would be considered to be a loan to an employee rather than a shareholder.  ... This is because the corporate loans merely replace existing loans or debt and cannot be considered to be used for the specific purposes set out in the Act. ...

Whether the Trust Fund would be considered as an employee benefit plan ("EBP") or retirement compensation arrangement ("RCA") as these terms are defined under subsection 248(1) of the Act. ... Alternatively, it is arguable that the surplus received by the Trust Fund from the RPP may be considered as a superannuation or pension benefit and would be included in the income of the Trust Fund under paragraph 56(1)(a) of the Act. ... Consequently, provided that the employer and the RPP deal at arm's length, and provided that the payment by the RPP cannot reasonably be considered to be made on behalf of the employer it is our view that the Trust Fund would not be an EBP or an RCA but would be a trust which is taxable under Part I of the Act. ...

That case involved deposits held in a foreign bank in order to finance operations in a foreign country and whether interest earned on those funds would be considered as `foreign business income' or whether the deposits would be considered as `property used or held by the corporation in the year in the course of carrying on a business'.  ... Our standard position is that short term cash may be considered to be used in the business but excess cash held in deposits on a permanent basis are not. ...

It would provide an incentive for land owners to protect their natural areas if a donation of the restrictive covenant, to Her Majesty or to any registered charity willing to accept the restrictive covenant, could be considered a charitable gift. ... Since a restrictive covenant registered against land is a right it would be considered a property. Consequently a donation of a restrictive covenant registered against the land to Her Majesty or to a registered charity could be considered a gift for purposes of section 118.1 or 110.1 of the Income Tax Act 24(1) (a registered charity) may issue receipts respecting donated restrictive covenants providing the donation qualifies as a gift. ...

Principal Issues: Whether a business to be incorporated would be considered to be a personal services business. ... However, you are concerned that the business might be considered to be a "personal services business", since, initially, you will be providing all of your services to one client. ... Therefore, the question to be determined in the situation you describe is whether you could reasonably be considered to be an employee of the client, were it not for your incorporated business. ...

Principal Issues: Is an amount paid by a farmer to his spouse considered a reasonable retiring allowance given that the spouse worked for XXXXXXXXXX years but was unpaid during XXXXXXXXXX years.? Is an amount paid considered a reasonable bonus? Position: Yes, in both cases. ... The amount of $XXXXXXXXXX will be deductible by the Employer in computing income from the business of farming for the year in which it is paid and will be considered reasonable for the purposes of section 67 of the Act. ...