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248 (1) In this Act,

amortized cost

amortized cost  of a loan or lending asset at any time to a taxpayer means the amount, if any, by which the total of

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• (g) the total of all amounts that, at or before that time, the taxpayer had received as or on account or in lieu of payment of or in satisfaction of the principal amount of the loan or lending asset,

Canadian field processing

Canadian field processing  means, except as otherwise prescribed,

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• (g) gas is not considered to cease to be raw natural gas solely because of its processing at a field separation and dehydration facility until it is received by a common carrier of natural gas, and

disposition

disposition  of any property, except as expressly otherwise provided, includes

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• (g) [Repealed, 2005, c. 30, s. 17]

employee benefit plan

employee benefit plan  means an arrangement under which contributions are made by an employer or by any person with whom the employer does not deal at arm’s length to another person (in this Act referred to as the “custodian” of an employee benefit plan) and under which one or more payments are to be made to or for the benefit of employees or former employees of the employer or persons who do not deal at arm’s length with any such employee or former employee (other than a payment that, if section 6 were read without reference to subparagraph 6(1)(a)(ii) and paragraph 6(1)(g), would not be required to be included in computing the income of the recipient or of an employee or former employee), but does not include any portion of the arrangement that is

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employee ownership trust

employee ownership trust  means an irrevocable trust that, at all relevant times, satisfies the following conditions:

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• (g) at least one-third of the trustees must be beneficiaries described in clause (b)(i)(A),

foreign resource property

foreign resource property  has the meaning assigned by subsection 66(15), and a foreign resource property in respect of a country means a foreign resource property that is

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• (g) a right to or an interest in — or for civil law a right to or in — any property described in any of paragraphs (a) to (e), other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or

international shipping

international shipping  means the operation of a ship owned or leased by a person or partnership (in this definition referred to as the “operator”) that is used, either directly or as part of a pooling arrangement, primarily in transporting passengers or goods in international traffic — determined as if, except where paragraph (c) of the definition international traffic in this subsection applies, any port or other place on the Great Lakes or St. Lawrence River is in Canada — including the chartering of the ship, provided that one or more persons related to the operator (if the operator and each such person is a corporation), or persons or partnerships affiliated with the operator (in any other case), has complete possession, control and command of the ship, and any activity incident to or pertaining to the operation of the ship, but does not include

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• (g) offshore oil and gas activities (other than the transportation of oil and gas), including exploration and drilling activities,

restricted financial institution

restricted financial institution  means

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• (e.1) a corporation described in paragraph (g) of the definition financial institution in subsection 181(1), or

retirement compensation arrangement

retirement compensation arrangement  means a plan or arrangement under which contributions (other than payments made to acquire an interest in a life insurance policy) are made by an employer or former employer of a taxpayer, or by a person with whom the employer or former employer does not deal at arm’s length, to another person or partnership (in this definition and in Part XI.3 referred to as the “custodian”) in connection with benefits that are to be or may be received or enjoyed by any person on, after or in contemplation of any substantial change in the services rendered by the taxpayer, the retirement of the taxpayer or the loss of an office or employment of the taxpayer, but does not include

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• (g) a group sickness or accident insurance plan,

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salary deferral arrangement

salary deferral arrangement , in respect of a taxpayer, means a plan or arrangement, whether funded or not, under which any person has a right in a taxation year to receive an amount after the year where it is reasonable to consider that one of the main purposes for the creation or existence of the right is to postpone tax payable under this Act by the taxpayer in respect of an amount that is, or is on account or in lieu of, salary or wages of the taxpayer for services rendered by the taxpayer in the year or a preceding taxation year (including such a right that is subject to one or more conditions unless there is a substantial risk that any one of those conditions will not be satisfied), but does not include

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• (g) a supplementary unemployment benefit plan,

scientific research and experimental development

scientific research and experimental development  means systematic investigation or search that is carried out in a field of science or technology by means of experiment or analysis and that is

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• (g) research in the social sciences or the humanities,

short-term preferred share

short-term preferred share  of a corporation at any particular time means a share, other than a grandfathered share, of the capital stock of the corporation issued after December 15, 1987 that at that particular time

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• (g) where a share of the capital stock of a corporation is acquired at any time after December 15, 1987 by the corporation or a specified person in relation to the corporation and the share is at any particular time after that time acquired by a person with whom the corporation or a specified person in relation to the corporation was dealing at arm’s length if this Act were read without reference to paragraph 251(5)(b), from the corporation or a specified person in relation to the corporation, the share shall be deemed after that particular time to have been issued at that particular time,

specified financial institution

specified financial institution , at any time, means

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• (e.1) a corporation described in paragraph (g) of the definition financial institution in subsection 181(1),

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• (g) a corporation that is related to a particular corporation described in any of paragraphs (a) to (f), other than a particular corporation described in paragraph (e) or (e.1) the principal business of which is the factoring of trade accounts receivable that

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taxable Canadian property

taxable Canadian property  of a taxpayer at any time in a taxation year means a property of the taxpayer that is

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• (g) a Canadian resource property,

taxable preferred share

taxable preferred share  at any particular time means

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• (g) where

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term preferred share

term preferred share  of a corporation (in this definition referred to as the issuing corporation) means a share of a class of the capital stock of the issuing corporation if the share was issued or acquired after June 28, 1982 and, at the time the share was issued or acquired, the existence of the issuing corporation was, or there was an arrangement under which it could be, limited or, in the case of a share issued after November 16, 1978 if

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• (g) where the terms or conditions of an established agreement were amended after November 16, 1978, the agreement shall be deemed to have been made after that date,

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Marginal note:Related corporations

(14) For the purpose of paragraph (g) of the definition specified financial institution in subsection 248(1), where in the case of 2 or more corporations it can reasonably be considered, having regard to all the circumstances, that one of the main reasons for the separate existence of those corporations in a taxation year is to limit or avoid the application of subsection 112(2.1) or 112(2.2) or 138(6), the 2 or more corporations shall be deemed to be related to each other and to each other corporation to which any such corporation is related.

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(37) Subsection (35) does not apply to a gift

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• (g) of a property that was acquired in circumstances where subsection 70(6) or (9) or 73(1), (3) or (4) applied, unless subsection (36) would have applied if this subsection were read without reference to this paragraph.

3 (1) Subject to this Act, a person is a citizen if

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• (f) before the coming into force of this paragraph, the person ceased to be a citizen for any reason other than the following reasons and did not subsequently become a citizen:

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  • (ii) the person’s citizenship was revoked for false representation, fraud or concealment of material circumstances under any of the following provisions:

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    • (G) section 10 of this Act;

• (g) the person was born outside Canada before February 15, 1977 to a parent who was a citizen at the time of the birth and the person did not, before the coming into force of this paragraph, become a citizen;

• (h) the person was granted citizenship on or after January 1, 1947 but before April 17, 2009, the person would have, but for that grant, been a citizen under paragraph (g) and, if it was required, the person took the oath of citizenship;

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Marginal note:Citizen despite death of parent

(1.1) A person who would not become a citizen under paragraph (1)(b), (g) or (h) for the sole reason that, on the coming into force of this subsection, his or her parent — referred to in one of those paragraphs — is deceased, is a citizen under paragraph (1)(b), (g) or (h) if that parent, but for his or her death, would have been a citizen under paragraph (1)(f), (i) or (j).

Marginal note:Citizen despite death of parent

(1.2) A person who would not become a citizen under paragraph (1)(b), (g), (h), (o) or (p) for the sole reason that, on the coming into force of this subsection, his or her parent — referred to in one of those paragraphs — is deceased, is a citizen under that paragraph if that parent, but for his or her death, would have been a citizen under any of paragraphs (1)(k) to (n).

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Marginal note:Not applicable — paragraphs (1)(b), (g) and (h)

(2.2) Paragraphs (1)(b), (g) and (h) do not apply to a person — who, but for this subsection, would be a citizen under one of those paragraphs for the sole reason that one or both of their parents are persons referred to in any of paragraphs (1)(k), (m), (o) and (q) — if the person became a citizen by way of grant on or after January 1, 1947 and subsequently renounced their citizenship under any of the provisions referred to in clauses (1)(f)(i)(A) to (F).

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Marginal note:Not applicable — paragraphs (1)(b), (g) and (h)

(2.4) Paragraphs (1)(b), (g) and (h) do not apply to a person — who, but for this subsection, would be a citizen under one of those paragraphs for the sole reason that one or both of their parents are persons referred to in any of paragraphs (1)(l), (n), (p) and (r) — if the person became a citizen by way of grant on or after April 1, 1949 and subsequently renounced their citizenship under any of the provisions referred to in clauses (1)(f)(i)(A) to (F).

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(3) Paragraph (1)(b) does not apply to a person born outside Canada on or after the day on which An Act to amend the Citizenship Act (2025) comes into force

• (a) if

  • (i) at the time of the person’s birth

    • (A) only one of the person’s parents was a citizen and that parent was a citizen under any of paragraphs (1)(b), (c.1), (e), (g) to (j) and (o) to (r) and was born outside Canada,

• (b) if

  • (i) at any time, only one of the person’s parents was a citizen and that parent was a citizen under any of the following provisions or both of the person’s parents were citizens under any of the following provisions:

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    • (G) subsection 39B(1) of the Canadian Citizenship Act, R.S.C. 1952, c. 33, as enacted by S.C. 1967-68, c. 4, s. 10, or

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Marginal note:Citizenship other than by way of grant

(6.2) A person referred to in any of paragraphs (1)(k) to (r) — or a person referred to in paragraph (1)(b) or (g) who is a citizen under that paragraph for the sole reason that one or both of their parents are persons referred to in any of paragraphs (1)(k) to (n) — who became a citizen by way of grant before the coming into force of this subsection is deemed, except for the purposes of paragraph (2.1)(b), subsection (2.2), paragraph (2.3)(b), subsections (2.4) and (2.5) and subparagraphs 27(1)(j.1)(ii) to (iv), never to have been a citizen by way of grant.

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(7) Despite any provision of this Act or any Act respecting naturalization or citizenship that was in force in Canada at any time before the day on which this subsection comes into force

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• (e) a person referred to in paragraph (1)(g) or (h) is deemed to be a citizen from the time that he or she was born;

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• (g) a person referred to in paragraph (1)(j) is deemed to be a citizen under that paragraph from the time that he or she ceased to be a citizen;

95 (1) In this Subdivision,

foreign accrual property income

foreign accrual property income  of a foreign affiliate of a taxpayer, for any taxation year of the affiliate, means the amount determined by the formula

(A + A.1 + A.2 + B + C) – (D + E + F + F.1 + G + H)

where

A.2 

is the amount determined for G in respect of the affiliate for the preceding taxation year,

C 

is, where the affiliate is a controlled foreign affiliate of the taxpayer, the amount that would be required to be included in computing its income for the year if

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• (d) the words “other than a capital gain” in paragraph 94.1(1)(g) were replaced by the words “other than any income that would not be included in the taxpayer’s foreign accrual property income for the year if the value of C in the definition foreign accrual property income in subsection 95(1) were nil and other than a capital gain”,

foreign bank

foreign bank  means an entity that would be a foreign bank within the meaning assigned by the definition of that expression in section 2 of the Bank Act if

• (a) that definition were read without reference to the portion thereof after paragraph (g) thereof, and

investment property

investment property  of a foreign affiliate of a taxpayer includes

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• (g) real property or immovables,

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(2) For the purposes of this Subdivision,

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• (d.1) if there has been a foreign merger of two or more predecessor foreign corporations to form a new foreign corporation that is, immediately after the merger, a foreign affiliate of a taxpayer and one or more of the predecessor foreign corporations (each being referred to in this paragraph as a “foreign affiliate predecessor”) was, immediately before the merger, a foreign affiliate of the taxpayer,

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  • (iii) for the purposes of the description of A.2 in the definition foreign accrual property income in subsection (1), the total of all amounts each of which is the amount determined for G in respect of a foreign affiliate predecessor for its last taxation year that ends on or before the time of the merger is deemed to be the amount determined for G in respect of the new foreign corporation for its taxation year that immediately precedes its first taxation year;

• (e) notwithstanding subsection 69(5), if at any time a foreign affiliate (referred to in this paragraph as the “shareholder affiliate”) of a taxpayer receives a property (referred to in this paragraph as the “distributed property”) from another foreign affiliate (referred to in this paragraph as the “disposing affiliate”) of the taxpayer on a liquidation and dissolution of the disposing affiliate and the distributed property is received in respect of shares of the capital stock of the disposing affiliate that are disposed of on the liquidation and dissolution,

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  • (v) if the liquidation and dissolution is a designated liquidation and dissolution of the disposing affiliate,

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    • (B) for the purposes of the description of A.2 in the definition foreign accrual property income in subsection (1), the amount, if any, determined for G in respect of the disposing affiliate for its first taxation year that ends after the beginning of the liquidation and dissolution is to be added to the amount otherwise determined for G in respect of the shareholder affiliate for its taxation year that immediately precedes its taxation year that includes the time at which the liquidation and dissolution began;

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• (g) income earned, a loss incurred or a capital gain or capital loss realized, as the case may be, in a taxation year by a particular foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout the taxation year or a particular foreign affiliate of a taxpayer that is a controlled foreign affiliate of the taxpayer throughout the taxation year, because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency, is deemed to be nil if it is earned, incurred or realized in reference to any of the following sources:

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• (g.01) any income, loss, capital gain or capital loss, derived by a foreign affiliate of a taxpayer under or as a result of an agreement that provides for the purchase, sale or exchange of currency and that can reasonably be considered to have been made by the foreign affiliate to reduce its risk (with respect to any source, any particular income, gain or loss determined in reference to which is deemed by paragraph (g) to be nil) of fluctuations in the value of currency, is, to the extent of the absolute value of the particular income, gain or loss, deemed to be nil;

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• (g.03) if at any time a particular foreign affiliate referred to in paragraph (g) is a member of a partnership or a qualified foreign affiliate referred to in that paragraph is a member of a partnership,

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  • (iii) in applying paragraph (g) and this paragraph, where a debt obligation is owing at that time by a debtor to the partnership of which the qualified foreign affiliate is a member, the debt obligation is deemed to be owing at that time by the debtor to the qualified foreign affiliate in the proportion that the qualified foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation,

  • (iv) in applying paragraph (g) and this paragraph, where a debt obligation is owing at that time to a creditor by the partnership of which the qualified foreign affiliate is a member, the debt obligation is deemed to be owing at that time to the creditor by the qualified foreign affiliate in the proportion that the qualified foreign affiliate shared in any income earned, loss incurred or capital gain or capital loss realized by the partnership in respect of the debt obligation, and

  • (v) in computing the particular foreign affiliate’s income or loss from a partnership, any income earned, loss incurred or capital gain or capital loss realized, as the case may be, by the partnership — in respect of the portion of a debt obligation owing to or owing by the partnership that is deemed by any of subparagraphs (i) to (iv) to be a debt obligation owing to or owing by the particular foreign affiliate (referred to in this subparagraph as the “allocated debt obligation”) — because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency, that is attributable to the allocated debt obligation is deemed to be nil to the extent that paragraph (g) would, if the rules in subparagraphs (i) to (iv) were applied, have applied to the particular foreign affiliate, to deem to be nil the income earned, loss incurred or capital gain or capital loss realized, as the case may be, by the particular foreign affiliate in respect of the allocated debt obligation, because of a fluctuation in the value of the currency of a country other than Canada relative to the value of Canadian currency;

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• (n) in applying paragraphs (a) and (g), paragraph (b) of the description of A in the formula in the definition foreign accrual property income in subsection (1), subsections (2.2), (2.21) and 93.1(5) and paragraph (d) of the definition exempt earnings , and paragraph (c) of the definition exempt loss , in subsection 5907(1) of the Income Tax Regulations, a non-resident corporation is deemed to be, at any time, a foreign affiliate of a particular corporation resident in Canada, and a foreign affiliate of the particular corporation in respect of which the particular corporation has a qualifying interest, if at that time

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Marginal note:Qualifying interest throughout year

(2.2) For the purposes of paragraphs (2)(a) and (g), a non-resident corporation that is not a foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout a particular taxation year is deemed to be a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout that particular taxation year if

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Marginal note:Controlled foreign affiliate throughout year

(2.201) For the purposes of paragraphs (2)(a) and (g), a non-resident corporation is deemed to be a controlled foreign affiliate of a taxpayer throughout a taxation year of the non-resident corporation if

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(2.3) For the purposes of this subsection and subsections (2.31) and (2.32),

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• (e) if one or more children referred to in

  • (i) subparagraph (2.31)(f)(i) have disposed of, or caused the disposition of, all of the shares in the capital stock of the purchaser corporation, the subject corporation or all relevant group entities to an arm’s length person or group of persons, the conditions set out in paragraphs (2.31)(f) and (g) are deemed to be met as of the time of the disposition, provided that all equity interests in all relevant businesses owned, directly or indirectly, by each child referred to in subparagraph (2.31)(f)(i) are included in the disposition, or

  • (ii) subparagraph (2.32)(g)(i) have disposed of, or caused the disposition of, all of the shares in the capital stock of the purchaser corporation, the subject corporation or all relevant group entities to an arm’s length person or group of persons, the conditions set out in paragraphs (2.32)(g) and (h) are deemed to be met as of the time of the disposition, provided that all equity interests in all relevant businesses owned, directly or indirectly, by each child referred to in subparagraph (2.32)(g)(i) are included in the disposition; and

• (f) if one or more children referred to in

  • (i) subparagraph (2.31)(f)(i) have disposed of, or caused the disposition of, any of the shares in the capital stock of the purchaser corporation, the subject corporation or a relevant group entity to another child or group of children of the taxpayer (in this paragraph referred to as the “new child” or the “new children”), the conditions set out in paragraphs (2.31)(f) and (g) are deemed

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  • (ii) subparagraph (2.32)(g)(i) have disposed of, or caused the disposition of, any of the shares in the capital stock of the purchaser corporation, the subject corporation, or a relevant group entity to another child or group of children of the taxpayer (in this paragraph referred to as the “new child” or the “new children”), the conditions set out in paragraphs (2.32)(g) and (h) are deemed

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• (g) if a child, or each of the children, referred to in

  • (i) subparagraph (2.31)(f)(ii) has died or has, after the disposition of the subject shares, suffered one or more severe and prolonged impairments in physical or mental functions, the conditions set out in paragraphs (2.31)(f) and (g) are deemed to be met as of the time of the death or mental or physical impairment, or

  • (ii) subparagraph (2.32)(g)(ii) has died or has, after the disposition of the subject shares, suffered one or more severe and prolonged impairments in physical or mental functions, the conditions set out in paragraphs (2.32)(g) and (h) are deemed to be met as of the time of the death or mental or physical impairment;

• (h) if a business of a subject corporation or a relevant group entity has ceased to be carried on due to the disposition of all of the assets that were used to carry on the business in order to satisfy debts owed to creditors of the corporation or of the entity, the conditions set out in respect of the business in subparagraphs (2.31)(f)(ii) and (iii) and (2.31)(g)(i) or (2.32)(g)(ii) and (iii) and (2.32)(h)(i), as applicable, are deemed to be met as of the time of the disposition; and

• (i) in applying paragraphs (2.31)(g) and (2.32)(h), management refers to the direction or supervision of business activities but does not include the provision of advice.

(2.31) Paragraph (2)(e) applies at the time of a disposition of subject shares (in this subsection referred to as the “disposition time”) by a taxpayer to a purchaser corporation if the following conditions are met:

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• (g) subject to subsection (2.3), within 36 months after the disposition time or such greater period as is reasonable in the circumstances, the taxpayer and a spouse or common-law partner of the taxpayer take reasonable steps to

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(2.32) Paragraph (2)(e) applies at the time of a disposition of subject shares (referred to in this subsection as the “disposition time”) by a taxpayer to a purchaser corporation if the following conditions are met:

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• (g) subject to subsection (2.3), from the disposition time until the later of 60 months after the disposition time and the final sale time,

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• (h) subject to subsection (2.3), within 60 months of the disposition time or such greater period as is reasonable in the circumstances, the taxpayer and a spouse or common-law partner of the taxpayer take reasonable steps to

  • (i) transfer management of each relevant business of the subject corporation and any relevant group entity to the child or at least one member of the group of children referred to in subparagraph (g)(ii), and