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I-3 - Taxation Act

Section 487.3
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487.3. A person, other than a corporation resident in Canada, or a partnership, other than a partnership every member of which is such a corporation, is deemed to receive a benefit in a taxation year equal to the amount computed under section 487.4, where the person or partnership contracts a debt with a corporation by virtue of the fact that the person or partnership is a shareholder of the corporation, is connected with a shareholder of the corporation or is a member of a partnership or a beneficiary of a trust that is such a shareholder.
The same rule applies where the person or partnership contracts a debt with a corporation related to the corporation or with a partnership of which the corporation or a corporation related to it is a member.
For the purposes of this section, a person or a partnership is connected with a shareholder of a corporation if that person or partnership does not deal at arm’s length with, or is affiliated with, the shareholder, unless, in the case of a person, that person is a foreign affiliate of the corporation or of a person resident in Canada with which the corporation does not deal at arm’s length.
1978, c. 26, s. 82; 1983, c. 44, s. 26; 1997, c. 3, s. 71; 2019, c. 14, s. 145.
487.3. A person who is not a corporation resident in Canada or a partnership every member of which is not such a corporation is deemed to receive a benefit in a taxation year equal to the amount computed under section 487.4 when he or it contracts a debt with a corporation by virtue of the fact that he or it is a shareholder thereof, that he or it is connected with such a shareholder or that he or it is a beneficiary or a member of a trust or partnership that is such a shareholder.
The same rule applies where the person or partnership contracts a debt with a corporation related to the corporation or with a partnership of which the corporation or a corporation related to it is a member.
For the purposes of this section, a person is connected with a shareholder of a corporation if he is not dealing at arm’s length with the shareholder and if he is not a foreign affiliate of the corporation or a foreign affiliate of a person resident in Canada who is not dealing at arm’s length with the corporation.
1978, c. 26, s. 82; 1983, c. 44, s. 26; 1997, c. 3, s. 71.
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