Section 255

Table of Contents


Labrador Offshore Shipping Co. Ltd. v. The Queen, 90 DTC 6096 (FCTD)

A diving support vessel which was used by Petro-Canada in its exploring and drilling operations in the seabed areas off the coast and outside of the provinces of Newfoundland and Nova Scotia, thereby was used "in Canada" for purposes of former s. 127(10)(d).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Qualified Property use of leased property was by lessee rather than lessor 123

See Also

Mersey Seafoods Ltd. v. MNR, 85 DTC 731, [1985] 2 CTC 2485 (TCC)

S.255 did not have the effect of deeming a factory trawler, which conducted its operations beyond the 12 nautical mile limit for Canada's territorial seas, but within the 200-mile Exclusive Economic Zone, to be performing those activities "in Canada" for the purposes of the definition of a Class 29 asset and for purposes of the manufacturing and processing deduction under s. 125.1(1). In addition, although principles of international law suggested that "Canada" is composed of the territory over which Canada has sovereignty, the jurisdiction exercised over the Exclusive Economic Zone was of a specific and inherently limited kind.

Reference re Newfoundland Continental Shelf (1984), 5 DLR (4th) 385, [1984] 1 S.C.R. 86

Although "at international law ... the continental shelf off Newfoundland is outside the territory of the nation State of Canada...Canada has legislative jurisdiction in relation to the right to explore and exploit in the continental shelf off Newfoundland ... ."

A.G. (Canada) v. A.G. (B.C.), [1984] 4 WWR 289 (SCC)

The submerged lands between Vancouver Island and the mainland belong to the province rather than Canada since those lands were part of the colony of British Columbia when it entered Confederation.

Administrative Policy

18 July 2013 External T.I. 2013-0493081E5 - Definition of "Outside Canada" - Water Boundaries

The correspondent asked when an individual engaged in offshore oil and gas exploration was "outside Canada" for the purpose of s. 122.3(1).

In general, "Canada" includes the "territorial sea," which comprises all waters and airspace within 12 nautical miles of the coast (Interpretation Act, s. 35(a), Oceans Act, s. 4(a)).

If the employment relates to exploration or exploitation of minerals or hydrocarbons (i.e. oil), as specified in s. 122.1(1)(b)(I)(A), then "Canada" includes anywhere on the "continental shelf" of Canada, which is deemed to extend at least 200 nautical miles from the coast under ss. 17-18 of the Oceans Act. This follows from the expanded definition of Canada for exploration purposes in s. 255 of the ITA, and assumes that the employer has government permission to exercise the offshore activities mentioned in s. 255.

IT-494 "Hire of Ships and Aircraft from Non-Residents"

Canada includes the territorial sea of Canada as defined in the Territorial Seas and Fishing Zones Act, and the overlying airspace.

12 September 89 T.I. (February 1990 Access Letter, ΒΆ1124)

Neither section 255 of the Act, nor section 5 of the Income Tax Conventions Interpretation Act, are relevant to the interpretation of the "in Canada" requirement in s. 127(9).