486.1. Sections 486.2 to 486.11 apply if(a) a taxpayer, under a contract, pays to another person (in this subdivision referred to as the “recipient”) an amount (in this subdivision referred to as the “specified amount”), in a taxation year of the taxpayer that ends after 31 December 2006, that may reasonably be considered to be received by the recipient as a reimbursement of, or a contribution or an allowance in respect of, an amount (in this subdivision referred to as the “original amount”) that is described in section 144 and was paid or is payable by the recipient, or that is, in respect of the recipient, an amount described in section 89;
(b) the original amount is paid or became payable or receivable in a taxation year or fiscal period of the recipient that begins before 1 January 2007; and
(c) the taxpayer is resident in Canada or carries on business in Canada when the specified amount is paid.