VIII, s. 157]Marginal note:Repayments of inducements, etc.(hh)an amount repaid by the taxpayer in the year pursuant to a legal obligation to repay all or part of a particular amount(i)included under paragraph 12(1)(x) in computing the taxpayer’s income for the year or a preceding taxation year, or(ii)that is, by reason of subparagraph 12(1)(x)(vi) or subsection 12(2.2), not included under paragraph 12(1)(x) in computing the taxpayer’s income for the year or a preceding taxation year, where the particular amount relates to an outlay or expense (other than an outlay or expense that is in respect of the cost of property of the taxpayer or that is or would be, if amounts deductible by the taxpayer were not limited by reason of paragraph 66(4)(b), subsection 66.1(2), subparagraph 66.2(2)(a)(ii), the words “30% of” in clause 66.21(4)(a)(ii)(B), clause 66.21(4)(a)(ii)(C) or (D) or subparagraph 66.4(2)(a)(ii), deductible under section 66, 66.1, 66.2, 66.21 or 66.4) that would, if the particular amount had not been received, have been deductible in computing the taxpayer’s income for the year or a preceding taxation year;Marginal note:Repayment of obligation(hh.1)3/4 of any amount repaid by the taxpayer in the year (on or after the time the taxpayer ceases to carry on a business) under a legal obligation to repay all or part of an amount the taxpayer received or was entitled to receive that was assistance from a government, municipality or other public authority (whether as a grant, subsidy, forgivable loan, deduction from tax, investment allowance or as any other form of assistance) in respect of, or for the acquisition of, property the cost of which was an eligible capital expenditure of the taxpayer in respect of the business if the amount of the eligible capital expenditure of the taxpayer in respect of the business was reduced by paragraph 14(10)(c) because of the amount of the assistance the taxpayer received or was entitled to receive;Marginal note:Inventory adjustment(ii)the amount required by paragraph 12(1)(r) to be included in computing the taxpayer’s income for the immediately preceding taxation year;(jj)[Repealed, 2013, c. 34, s. 180]Marginal note:Exploration and development grants(kk)the amount of any assistance or benefit received by the taxpayer in the year as a deduction from or reimbursement of an expense that is a tax (other than the goods and services tax) or royalty to the extent that(i)the tax or royalty is, by reason of the receipt of the amount by the taxpayer, not deductible in computing the taxpayer’s income for a taxation year, and(ii)the deduction or reimbursement was included by the taxpayer in the amount determined for J in the definitioncumulative Canadian exploration expensein subsection 66.1(6), for M in the definitioncumulative Canadian development expensein subsection 66.2(5) or for I in the definitioncumulative Canadian oil and gas property expensein subsection 66.4(5);Marginal note:Repayment of interest(ll)such part of any amount payable by the taxpayer because of a provision of this Act, or of an Act of a province that imposes a tax similar to the tax imposed under this Act, as was paid in the year and as can reasonably be considered to be a repayment of interest that was included in computing the taxpayer’s income for the year or a preceding taxation year;Marginal note:Cost of substances injected in reservoir(mm)the portion claimed by the taxpayer of an amount that is an outlay or expense made or incurred by the taxpayer before the end of the year that is a cost to the taxpayer of any substance injected before that time into a natural reservoir to assist in the recovery of petroleum, natural gas or related hydrocarbons to the extent that that portion was not(i)otherwise deducted in computing the taxpayer’s income for the year, or(ii)deducted in computing the taxpayer’s income for any preceding taxation year,except that where the year is less than 51 weeks, the amount that may be claimed under this paragraph by the taxpayer for the year shall not exceed the greater of(iii)that proportion of the maximum amount that may otherwise be claimed under this paragraph by the taxpayer for the year that the number of days in the year is of 365, and(iv)the amount of such outlay or expense that was made or incurred by the taxpayer in the year and not otherwise deducted in computing the taxpayer’s income for the year;Marginal note:Part XII.6 tax(nn)the tax, if any, under Part XII.6 paid in the year or payable in respect of the year by the taxpayer (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income);(nn.1)[Repealed, 2017, c. 20, s. 4]Marginal note:Salary deferral arrangement(oo)any deferred amount under a salary deferral arrangement in respect of another person to the extent that it was(i)included under paragraph 6(1)(a) as a benefit in computing the income of the other person for the taxation year of the other person that ends in the taxpayer’s taxation year, and(ii)in respect of services rendered to the taxpayer;Marginal note:Idem(pp)any amount under a salary deferral arrangement in respect of another person (other than an arrangement established primarily for the benefit of one or more non-resident employees in respect of services to be rendered outside Canada) to the extent that it was(i)included under paragraph 6(1)(i) in computing the income of the other person for the taxation year of the other person that ends in the taxpayer’s taxation year, and(ii)in respect of services rendered to the taxpayer;Marginal note:Disability-related modifications to buildings(qq)an amount paid by the taxpayer in the year for prescribed renovations or alterations to a building used by the taxpayer primarily for the purpose of gaining or producing income from the building or from a business that are made to enable individuals who have a mobility impairment to gain access to the building or to be mobile within it;Marginal note:Disability-related equipment(rr)an amount paid by the taxpayer in the year for any prescribed disability-specific device or equipment;Marginal note:Qualifying environmental trusts(ss)a contribution made in the year by the taxpayer to a qualifying environmental trust under which the taxpayer is a beneficiary;Marginal note:Acquisition of interests in qualifying environmental trusts(tt)the consideration paid by the taxpayer in the year for the acquisition from another person or partnership of all or part of the taxpayer’s interest as a beneficiary under a qualifying environmental trust, other than consideration that is the assumption of a reclamation obligation in respect of the trust;Marginal note:Debt forgiveness(uu)any amount deducted in computing the taxpayer’s income for the year because of paragraph 80(15)(a) or subsection 80.01(10);Marginal note:Countervailing or anti-dumping duty(vv)an amount paid in the year by the taxpayer as or on account of an existing or proposed countervailing or anti-dumping duty in respect of property (other than depreciable property);Marginal note:Split income(ww)where the taxpayer is a specified individual in relation to the year, the individual’s split income for the year; andMarginal note:Derivative forward agreement(xx)in respect of a derivative forward agreement of a taxpayer, the amount determined by the formulaA – BwhereAis the lesser of(i)the total of all amounts each of which is(A)if the taxpayer acquires a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the cost to the taxpayer of the property exceeds the fair market value of the property at the time it is acquired by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in subparagraphs (b)(i) to (iii) of the definitionderivative forward agreementin subsection 248(1), or(B)if the taxpayer disposes of a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the fair market value of the property at the time the agreement is entered into by the taxpayer exceeds theproceeds of disposition(within the meaning assigned by Subdivision C) of the property that is attributable to an underlying interest other than an underlying interest referred to in clauses (c)(i)(A) to (C) of the definitionderivative forward agreementin subsection 248(1), and(ii)the amount that is,(A)if final settlement of the agreement occurs in the year and it cannot reasonably be considered that one of the main reasons for entering into the agreement is to obtain a deduction under this paragraph, the amount determined under subparagraph (i), or(B)in any other case, the total of all amounts included under paragraph 12(1)(z.7) in computing the taxpayer’s income in respect of the agreement for the year or a preceding taxation year, andBis the total of all amounts deducted under this paragraph in respect of the agreement for a preceding taxation year.Marginal note:Application of s. 13(21)(1.1)The definitions in subsection 13(21) apply to any regulations made under paragraph 20(1)(a).Marginal note:Application of s. 12.2(11)(1.2)The definitions in subsection 12.2(11) apply to paragraph 20(1)(c).Marginal note:Borrowed money(2)For the purposes of paragraph 20(1)(c), where a person has borrowed money in consideration of a promise by the person to pay a larger amount and to pay interest on the larger amount,(a)the larger amount shall be deemed to be the amount borrowed; and(b)where the amount actually borrowed has been used in whole or in part for the purpose of earning income from a business or property, the proportion of the larger amount that the amount actually so used is of the amount actually borrowed shall be deemed to be the amount so used.Marginal note:Limitation of expression “interest” — 10/8 policy(2.01)For the purposes of paragraphs (1)(c) and (d), interest does not include an amount if(a)the amount(i)is paid, after March 20, 2013 in respect of a period after 2013, in respect of a life insurance policy that is, at the time of the payment, a 10/8 policy, and(ii)is described in paragraph (a) of the definition10/8 policyin subsection 248(1); or(b)the amount(i)is payable, in respect of a life insurance policy, after March 20, 2013 in respect of a period after 2013 during which the policy is a 10/8 policy, and(ii)is described in paragraph (a) of the definition10/8 policyin subsection 248(1).Marginal note:Limitation of expression “interest”(2.1)For the purposes of paragraphs 20(1)(c) and 20(1)(d), “interest” does not include an amount that is paid after the taxpayer’s 1977 taxation year or payable in respect of a period after the taxpayer’s 1977 taxation year, depending on the method regularly followed by the taxpayer in computing the taxpayer’s income, in respect of interest on a policy loan made by an insurer except to the extent that the amount of that interest is verified by the insurer in prescribed form and within the prescribed time to be(a)interest paid in the year on that loan; and(b)interest (other than interest that would, but for paragraph 20(2.2)(b), be interest on money borrowed before 1978 to acquire a life insurance policy or on an amount payable for property acquired before 1978 that is an interest in a life insurance policy) that is not added to the adjusted cost basis (within the meaning given that expression in subsection 148(9)) to the taxpayer of the taxpayer’s interest in the policy.Marginal note:Limitation of expression “life insurance policy”(2.2)For the purposes of paragraphs 20(1)(c) and 20(1)(d), a “life insurance policy” does not include a policy(a)that is or is issued pursuant to a pooled registered pension plan, a registered pension plan, a registered retirement savings plan, an income-averaging annuity contract or a deferred profit sharing plan;(b)that was an annuity contract issued before 1978 that provided for annuity payments to commence not later than the day on which the policyholder attains 75 years of age; or(c)that is an annuity contract all of the insurer’s reserves for which vary in amount depending on the fair market value of a specified group of properties.Marginal note:Sectoral reserve(2.3)For the purpose of clause 20(1)(l)(ii)(D), a sectoral reserve is a reserve or an allowance for impairment for a loan that is determined on a sector-by-sector basis (including a geographic sector, an industrial sector or a sector of any other nature) and not on a property-by-property basis.Marginal note:Specified Percentage(2.4)For the purpose of clause 20(1)(l)(ii)(D), a taxpayer’s specified percentage for a taxation year is(a)where the taxpayer has a prescribed reserve amount for the year, the percentage that is the percentage of the prescribed reserve amount of the taxpayer for the year claimed by the taxpayer under clause 20(1)(l)(ii)(C) for the year, and(b)in any other case, 100%.Marginal note:Borrowed money(3)For greater certainty, if a taxpayer uses borrowed money to repay money previously borrowed, or to pay an amount payable for property described in subparagraph (1)(c)(ii) previously acquired (which previously borrowed money or amount payable in respect of previously acquired property is, in this subsection, referred to as the “previous indebtedness”), subject to subsection 20.1(6), for the purposes of paragraphs (1)(c), (e) and (e.1), subsections 20.1(1) and (2), section 21 and subparagraph 95(2)(a)(ii), and for the purpose of paragraph 20(1)(k) of theIncome Tax Act, Chapter 148 of the Revised Statutes of Canada, 1952, the borrowed money is deemed to be used for the purpose for which the previous indebtedness was used or incurred, or was deemed by this subsection to have been used or incurred.Marginal note:Bad debts — dispositions of depreciable property(4)If an amount that is owing to a taxpayer as or on account of the proceeds of disposition of depreciable property (other than a timber resource property, a passenger vehicle to which paragraph 13(7)(g) applies or a zero-emission passenger vehicle to which paragraph 13(7)(i) applies) of the taxpayer of a prescribed class is established by the taxpayer to have become a bad debt in a taxation year, there may be deducted in computing the taxpayer’s income for the year the lesser of(a)the amount so owing to the taxpayer, and(b)the amount, if any, by which the capital cost to the taxpayer of that property exceeds the total of the amounts, if any, realized by the taxpayer on account of the proceeds of disposition.Marginal note:Idem(4.1)Where an amount that is owing to a taxpayer as or on account of the proceeds of disposition of a timber resource property of the taxpayer is established by the taxpayer to have become a bad debt in a taxation year, the amount so owing to the taxpayer may be deducted in computing the taxpayer’s income for the year.Marginal note:Bad debts — zero-emission passenger vehicles(4.11)If an amount that is owing to a taxpayer as or on account of the proceeds of disposition of a zero-emission passenger vehicle of the taxpayer to which paragraph 13(7)(i) applies is established by the taxpayer to have become a bad debt in a taxation year, there may be deducted in computing the taxpayer’s income for the year the lesser of(a)the amount that would be determined by the formula in subparagraph 13(7)(i)(ii) in respect of the disposition if the amount determined for A in the formula were the amount owing to the taxpayer, and(b)the amount determined by the formulaA – BwhereAis the capital cost to the taxpayer of the vehicle, andBis the amount that would be determined by the formula in subparagraph 13(7)(i)(ii) in respect of the disposition if the amount determined for A in the formula were the total amount, if any, realized by the taxpayer on account of the proceeds of disposition.Marginal note:Former eligible capital property(4.2)If an amount is deductible under subsection (4) in respect of the disposition of a depreciable property and subsection 13(39) applied to the disposition of the depreciable property, the amount deductible under subsection (4) is equal to 3/4 of the amount that would be deductible without reference to this subsection.(4.3)[Repealed, 2016, c. 12, s. 7]Marginal note:Sale of agreement for sale, mortgage or hypothecary claim included in proceeds of disposition(5)Where depreciable property, other than a timber resource property, of a taxpayer has, in a taxation year, been disposed of to a person with whom the taxpayer was dealing at arm’s length, and the proceeds of disposition include an agreement for the sale of, or a mortgage or hypothecary claim on, land that the taxpayer has, in a subsequent taxation year, sold to a person with whom the taxpayer was dealing at arm’s length, there may be deducted in computing the income of the taxpayer for the subsequent year an amount equal to the lesser of(a)the amount, if any, by which the principal amount of the agreement for sale, mortgage or hypothecary claim outstanding at the time of the sale exceeds the consideration paid by the purchaser to the taxpayer for the agreement for sale, mortgage or hypothecary claim, and(b)the amount determined under paragraph 20(5)(a) less the amount, if any, by which the proceeds of disposition of the depreciable property exceed the capital cost to the taxpayer of that property.Marginal note:Sale of agreement for sale, mortgage or hypothecary claim included in proceeds of disposition(5.1)Where a timber resource property of a taxpayer has, in a taxation year, been disposed of to a person with whom the taxpayer was dealing at arm’s length, and the proceeds of disposition include an agreement for sale of, or a mortgage or hypothecary claim on, land that the taxpayer has, in a subsequent taxation year, sold to a person with whom the taxpayer was dealing at arm’s length, there may be deducted in computing the income of the taxpayer for the subsequent year the amount, if any, by which the principal amount of the agreement for sale, mortgage or hypothecary claim outstanding at the time of the sale exceeds the consideration paid by the purchaser to the taxpayer for the agreement for sale, mortgage or hypothecary claim.Marginal note:Special reserves(6)Where an amount is deductible in computing income for a taxation year under paragraph 20(1)(m) as a reserve in respect of(a)articles of food or drink that it is reasonably anticipated will have to be delivered after the end of the year, or(b)transportation that it is reasonably anticipated will have to be provided after the end of the year,there shall be substituted for the amount determined under that paragraph an amount not exceeding the total of amounts included in computing the taxpayer’s income from the business for the year that were received or receivable (depending on the method regularly followed by the taxpayer in computing the taxpayer’s profit) in the year in respect of(c)articles of food or drink not delivered before the end of the year, or(d)transportation not provided before the end of the year, as the case may be.Marginal note:Where para. (1)(m) does not apply(7)Paragraph 20(1)(m) does not apply to allow a deduction(a)as a reserve in respect of guarantees, indemnities or warranties;(b)in computing the income of a taxpayer for a taxation year from a business in any case where the taxpayer’s income for the year from that business is computed in accordance with the method authorized by subsection 28(1);(c)as a reserve in respect of insurance, except that in computing an insurer’s income for a taxation year from an insurance business, other than a life insurance business, carried on by it, there may be deducted as a policy reserve any amount that the insurer claims not exceeding the amount prescribed in respect of the insurer for the year; or(d)as a reserve in respect of a reclamation obligation.Marginal note:No deduction in respect of property in certain circumstances(8)Paragraph 20(1)(n) does not apply to allow a deduction in computing the income of a taxpayer for a taxation year from a business in respect of a property sold in the course of the business if(a)the taxpayer, at the end of the year or at any time in the immediately following taxation year,(i)was exempt from tax under any provision of this Part, or(ii)was not resident in Canada and did not carry on the business in Canada;(b)the sale occurred more than 36 months before the end of the year;(c)the purchaser of the property sold was a corporation that, immediately after the sale,(i)was controlled, directly or indirectly, in any manner whatever, by the taxpayer,(ii)was controlled, directly or indirectly, in any manner whatever, by a person or group of persons that controlled the taxpayer, directly or indirectly, in any manner whatever, or(iii)controlled the taxpayer, directly or indirectly, in any manner whatever; or(d)the purchaser of the property sold was a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner.Marginal note:Application of para. (1)(cc)(9)In lieu of making any deduction of an amount permitted by paragraph 20(1)(cc) in computing a taxpayer’s income for a taxation year from a business, the taxpayer may, if the taxpayer so elects in prescribed manner, make a deduction of 1/10 of that amount in computing the taxpayer’s income for that taxation year and a like deduction in computing the taxpayer’s income for each of the 9 immediately following taxation years.Marginal note:Convention expenses(10)Notwithstanding paragraph 18(1)(b), there may be deducted in computing a taxpayer’s income for a taxation year from a business an amount paid by the taxpayer in the year as or on account of expenses incurred by the taxpayer in attending, in connection with the business, not more than two conventions held during the year by a business or professional organization at a location that may reasonably be regarded as consistent with the territorial scope of that organization.Marginal note:Foreign taxes on income from property exceeding 15%(11)In computing the income of an individual from a property other than real or immovable property for a taxation year after 1975 that is income from a source outside Canada, there may be deducted the amount, if any, by which,(a)such part of any income or profits tax paid by the taxpayer to the government of a country other than Canada for the year as may reasonably be regarded as having been paid in respect of an amount that has been included in computing the taxpayer’s income for the year from the property,exceeds(b)15% of the amount referred to in paragraph 20(11)(a).Marginal note:Foreign non-business-income tax(12)In computing the income of a taxpayer who is resident in Canada at any time in a taxation year from a business or property for the year, there may be deducted any amount that the taxpayer claims that does not exceed the non-business-income tax paid by the taxpayer for the year to the government of a country other than Canada (within the meaning assigned by subsection 126(7) read without reference to paragraphs (c) and (e) of the definitionnon-business-income taxin that subsection) in respect of that income, other than any of those taxes paid that can, in whole or in part, reasonably be regarded as having been paid by a corporation in respect of income from a share of the capital stock of a foreign affiliate of the corporation.Marginal note:Foreign tax where no economic profit(12.1)In computing a taxpayer’s income for a taxation year from a business, there may be deducted the amount that the taxpayer claims not exceeding the lesser of(a)the amount of foreign tax (within the meaning assigned by subsection 126(4.1)) that(i)is in respect of a property used in the business for a period of ownership by the taxpayer or in respect of a related transaction (as defined in subsection 126(7)),(ii)is paid by the taxpayer for the year,(iii)is, because of subsection 126(4.1), not included in computing the taxpayer’s business-income tax or non-business-income tax, and(iv)where the taxpayer is a corporation, is not an amount that can reasonably be regarded as having been paid in respect of income from a share of the capital stock of a foreign affiliate of the taxpayer, and(b)the portion of the taxpayer’s income for the year from the business that is attributable to the property for the period or to a related transaction (as defined in subsection 126(7)).Marginal note:Deductions under Subdivision I(13)In computing the income for a taxation year of a taxpayer resident in Canada, there may be deducted such amounts as are provided by Subdivision I.Marginal note:Accrued bond interest(14)Where, by virtue of an assignment or other transfer of a debt obligation, other than an income bond, an income debenture, a small business development bond or a small business bond, the transferee has become entitled to an amount of interest that accrued on the debt obligation for a period commencing before the time of transfer and ending at that time that is not payable until after that time, that amount(a)shall be included as interest in computing the transferor’s income for the transferor’s taxation year in which the transfer occurred, except to the extent that it was otherwise included in computing the transferor’s income for the year or a preceding taxation year; and(b)may be deducted in computing the transferee’s income for a taxation year to the extent that the amount was included as interest in computing the transferee’s income for the year.Marginal note:Interest on debt obligation(14.1)Where a person who has issued a debt obligation, other than an income bond, an income debenture, a small business development bond or a small business bond, is obligated to pay an amount that is stipulated to be interest on that debt obligation in respect of a period before its issue (in this subsection referred to as the “unearned interest amount”) and it is reasonable to consider that the person to whom the debt obligation was issued paid to the issuer consideration for the debt obligation that included an amount in respect of the unearned interest amount,(a)for the purposes of subsection 20(14) and section 12, the issue of the debt obligation shall be deemed to be an assignment of the debt obligation from the issuer, as transferor, to the person to whom the obligation was issued, as transferee, and an amount equal to the unearned interest amount shall be deemed to be interest that accrued on the obligation for a period commencing before the issue and ending at the time of issue; and(b)notwithstanding paragraph 20(14.1)(a) or any other provision of this Act, no amount that can reasonably be considered to be an amount in respect of the unearned interest amount shall be deducted or included in computing the income of the issuer.Marginal note:Sales of linked notes(14.2)For the purposes of subsection (14), the amount determined by the following formula is deemed to be interest that accrued on an assigned or otherwise transferred debt obligation — that is, at any time, described in paragraph 7000(1)(d) of theIncome Tax Regulations— to which the transferee has become entitled to for a period commencing before the time of the transfer and ending at that particular time that is not payable until after that particular time:A − BwhereAis the price for which the debt obligation was assigned or otherwise transferred at the particular time; andBis the amount by which the price (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) for which the debt obligation was issued exceeds the portion, if any, of the principal amount of the debt obligation (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) that was repaid by the issuer on or before the particular time.(15)[Repealed, 2003, c. 28, s. 3]Marginal note:Terminal loss(16)Notwithstanding paragraphs 18(1)(a), 18(1)(b) and 18(1)(h), where at the end of a taxation year,(a)the total of all amounts used to determine A to D.1 in the definitionundepreciated capital costin subsection 13(21) in respect of a taxpayer’s depreciable property of a particular class exceeds the total of all amounts used to determine E to K in that definition in respect of that property, and(b)the taxpayer no longer owns any property of that class,in computing the taxpayer’s income for the year(c)there shall be deducted the amount of the excess determined under paragraph 20(16)(a), and(d)no amount shall be deducted for the year under paragraph 20(1)(a) in respect of property of that class.Marginal note:Non-application of subsection (16)(16.1)Subsection (16) does not apply(a)in respect of a passenger vehicle of a taxpayer that has a cost to the taxpayer in excess of $20,000 or any other amount that is prescribed;(b)in respect of a taxation year in respect of a property that was a former property deemed by paragraph 13(4.3)(a) or (b) to be owned by the taxpayer, if(i)within 24 months after the taxpayer last owned the former property, the taxpayer or a person not dealing at arm’s length with the taxpayer acquires a similar property in respect of the same fixed place to which the former property applied, and(ii)at the end of the taxation year, the taxpayer or the person owns the similar property or another similar property in respect of the same fixed place to which the former property applied; and(c)in respect of a taxation year in respect of property included in Class 14.1 of Schedule II to theIncome Tax Regulationsunless the taxpayer has ceased to carry on the business to which the class relates.Marginal note:Reference to “taxation year” and “year” of individual(16.2)Where a taxpayer is an individual and the taxpayer’s income for a taxation year includes income from a business the fiscal period of which does not coincide with the calendar year, if depreciable property acquired for the purpose of gaining or producing income from the business has been disposed of, each reference in subsections 20(16) and 20(16.1) to a “taxation year” and “year” shall, for greater certainty, be read as a reference to a “fiscal period”.Marginal note:Disposition after ceasing business(16.3)Where a taxpayer, after ceasing to carry on a business, has disposed of depreciable property of the taxpayer of a prescribed class that was acquired by the taxpayer for the purpose of gaining or producing income from the business and that was not subsequently used by the taxpayer for some other purpose, in applying subsection 20(16) or 20(16.1), each reference in that subsection to a “taxation year” and “year” shall, notwithstanding anything in subsection 20(16.2), not be read as a reference to a “fiscal period”.(17) and (18)[Repealed, 2013, c. 34, s. 180]Marginal note:Annuity contract(19)Where a taxpayer has in a particular taxation year received a payment under an annuity contract in respect of which an amount was by virtue of subsection 12(3) included in computing the taxpayer’s income for a taxation year commencing before 1983, there may be deducted in computing the taxpayer’s income for the particular year such amount, if any, as is allowed by regulation.Marginal note:Life insurance policy(20)Where in a taxation year a taxpayer disposes of an interest in a life insurance policy that is not an annuity contract (otherwise than as a consequence of a death) or of an interest in an annuity contract (other than a prescribed annuity contract), there may be deducted in computing the taxpayer’s income for the year an amount equal to the lesser of(a)the total of all amounts in respect of the interest in the policy that were included under section 12.2 of this Act or paragraph 56(1)(d.1) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the year or a preceding taxation year, and(b)the amount, if any, by which the adjusted cost basis (within the meaning assigned by section 148) to the taxpayer of that interest immediately before the disposition exceeds the proceeds of the disposition (within the meaning assigned by section 148) of the interest that the policyholder, a beneficiary or an assignee became entitled to receive.Marginal note:Debt obligation(21)If a taxpayer has in a particular taxation year disposed of a property that is an interest in, or for civil law a right in, a debt obligation for consideration equal to its fair market value at the time of disposition, there may be deducted in computing the taxpayer’s income for the particular year the amount, if any, by which(a)the total of all amounts each of which is an amount that was included in computing the taxpayer’s income for the particular year or a preceding taxation year as interest in respect of that propertyexceeds the total of all amounts each of which is(b)the portion of an amount that was received or became receivable by the taxpayer in the particular year or a preceding taxation year that can reasonably be considered to be in respect of an amount described in paragraph 20(21)(a) and that was not repaid by the taxpayer to the issuer of the debt obligation because of an adjustment in respect of interest received before the time of disposition by the taxpayer, or(c)an amount in respect of that property that was deductible by the taxpayer by virtue of paragraph 20(14)(b) in computing the taxpayer’s income for the particular year or a preceding taxation year.Marginal note:Deduction for negative reserves(22)In computing an insurer’s income for a taxation year, there may be deducted the amount included under paragraph 12(1)(e.1) in computing the insurer’s income for the preceding taxation year.Marginal note:Amounts paid for undertaking future obligations(24)Where an amount is included under paragraph 12(1)(a) in computing a taxpayer’s income for a taxation year in respect of an undertaking to which that paragraph applies and the taxpayer paid a reasonable amount in a particular taxation year to another person as consideration for the assumption by that other person of the taxpayer’s obligations in respect of the undertaking, if the taxpayer and the other person jointly so elect,(a)the payment may be deducted in computing the taxpayer’s income for the particular year and no amount is deductible under paragraph 20(1)(m) or 20(1)(m.1) in computing the taxpayer’s income for that or any subsequent taxation year in respect of the undertaking; and(b)where the amount was received by the other person in the course of business, it shall be deemed to be an amount described in paragraph 12(1)(a).Marginal note:Manner of election(25)An election under subsection 20(24) shall be made by notifying the Minister in writing on or before the earlier of the days on or before which either the payer or the recipient is required to file a return of income pursuant to section 150 for the taxation year in which the payment to which the election relates was made.(26)[Repealed, 2013, c. 34, s. 180]Marginal note:Loans, etc., acquired in ordinary course of business(27)For the purposes of computing a deduction under paragraph 20(1)(l), 20(1)(l.1) or 20(1)(p) from the income for a taxation year of a taxpayer who was an insurer or whose ordinary business included the lending of money, a loan or lending asset or an instrument or commitment described in paragraph 20(1)(l.1) acquired from a person with whom the taxpayer did not deal at arm’s length for an amount equal to its fair market value shall be deemed to have been acquired by the taxpayer in the ordinary course of the taxpayer’s business of insurance or the lending of money where(a)the person from whom the loan or lending asset or instrument or commitment was acquired carried on the business of insurance or the lending of money; and(b)the loan or lending asset was made or acquired or the instrument or commitment was issued, made or assumed by the person in the ordinary course of the person’s business of insurance or the lending of money.Marginal note:Application of ss. 13(21) and 138(12)(27.1)The definitions in subsections 13(21) and 138(12) apply to this section.Marginal note:Deduction before available for use(28)In computing a taxpayer’s income from a business or property for a taxation year ending before the time a building or a part thereof acquired after 1989 by the taxpayer becomes available for use by the taxpayer, there may be deducted an amount not exceeding the amount by which the lesser of(a)the amount that would be deductible under paragraph 20(1)(a) for the year in respect of the building if subsection 13(26) did not apply, and(b)the taxpayer’s income for the year from renting the building, computed without reference to this subsection and before deducting any amount in respect of the building under paragraph 20(1)(a)exceeds(c)the amount deductible under paragraph 20(1)(a) for the year in respect of the building, computed without reference to this subsection,and any amount so deducted shall be deemed to be an amount deducted by the taxpayer under paragraph 20(1)(a) in computing the taxpayer’s income for the year.Marginal note:Idem(29)Where, because of subsection 18(3.1), a deduction would, but for this subsection, not be allowed to a taxpayer in respect of an outlay or expense in respect of a building, or part thereof, and the outlay or expense would, but for that subsection and without reference to this subsection, be deductible in computing the taxpayer’s income for a taxation year, there may be deducted in respect of such outlays and expenses in computing the taxpayer’s income for the year an amount equal to the lesser of(a)the total of all such outlays or expenses, and(b)the taxpayer’s income for the year from renting the building or the part thereof computed without reference to subsection 20(28) and this subsection.Marginal note:Specified reserve adjustment(30)For the purpose of the description of N in subclause 20(1)(l)(ii)(D)(II), the specified reserve adjustment for a loan of a taxpayer for a taxation year is the amount determined by the formula0.1(A × B × C/365)whereAis the carrying amount of the impaired loan that is used or would be used in determining the interest income on the loan for the year in accordance with generally accepted accounting principles;Bis the effective interest rate on the loan for the year determined in accordance with generally accepted accounting principles; andCis the number of days in the year on which the loan is impaired.
Marginal note:Capital cost of property(a)such part of the capital cost to the taxpayer of property, or such amount in respect of the capital cost to the taxpayer of property, if any, as is allowed by regulation;Marginal note:Incorporation expenses(b)the lesser of(i)the portion of the amount (that is not otherwise deductible in computing the income of the taxpayer) that is an expense incurred in the year for the incorporation of a corporation, and(ii)$3,000 less the total of all amounts each of which is an amount deducted by another taxpayer in respect of the incorporation of the corporation;Marginal note:Interest(c)an amount paid in the year or payable in respect of the year (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income), pursuant to a legal obligation to pay interest on(i)borrowed money used for the purpose of earning income from a business or property (other than borrowed money used to acquire property the income from which would be exempt or to acquire a life insurance policy),(ii)an amount payable for property acquired for the purpose of gaining or producing income from the property or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy),(iii)an amount paid to the taxpayer under(A)an appropriation Act and on terms and conditions approved by the Treasury Board for the purpose of advancing or sustaining the technological capability of Canadian manufacturing or other industry, or(B)theNorthern Mineral Exploration Assistance Regulationsmade under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, or(iv)borrowed money used to acquire an interest in an annuity contract in respect of which section 12.2 applies (or would apply if the contract had an anniversary day in the year at a time when the taxpayer held the interest) except that, where annuity payments have begun under the contract in a preceding taxation year, the amount of interest paid or payable in the year shall not be deducted to the extent that it exceeds the amount included under section 12.2 in computing the taxpayer’s income for the year in respect of the taxpayer’s interest in the contract,or a reasonable amount in respect thereof, whichever is the lesser;Marginal note:Compound interest(d)an amount paid in the year pursuant to a legal obligation to pay interest on an amount that would be deductible under paragraph 20(1)(c) if it were paid in the year or payable in respect of the year;Marginal note:Expenses re financing(e)such part of an amount (other than an excluded amount) that is not otherwise deductible in computing the income of the taxpayer and that is an expense incurred in the year or a preceding taxation year(i)in the course of an issuance or sale of units of the taxpayer where the taxpayer is a unit trust, of interests in a partnership or syndicate by the partnership or syndicate, as the case may be, or of shares of the capital stock of the taxpayer,(ii)in the course of a borrowing of money used by the taxpayer for the purpose of earning income from a business or property (other than money used by the taxpayer for the purpose of acquiring property the income from which would be exempt),(ii.1)in the course of incurring indebtedness that is an amount payable for property acquired for the purpose of gaining or producing income therefrom or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy), or(ii.2)in the course of a rescheduling or restructuring of a debt obligation of the taxpayer or an assumption of a debt obligation by the taxpayer, where the debt obligation is(A)in respect of a borrowing described in subparagraph 20(1)(e)(ii), or(B)in respect of an amount payable described in subparagraph 20(1)(e)(ii.1),and in the case of a rescheduling or restructuring, the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation,(including a commission, fee, or other amount paid or payable for or on account of services rendered by a person as a salesperson, agent or dealer in securities in the course of the issuance, sale or borrowing) that is the lesser of(iii)that proportion of 20% of the expense that the number of days in the year is of 365 and(iv)the amount, if any, by which the expense exceeds the total of all amounts deductible by the taxpayer in respect of the expense in computing the taxpayer’s income for a preceding taxation year,and for the purposes of this paragraph,(iv.1)excluded amountmeans(A)an amount paid or payable as or on account of the principal amount of a debt obligation or interest in respect of a debt obligation,(B)an amount that is contingent or dependent on the use of, or production from, property, or(C)an amount that is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation,(v)where in a taxation year all debt obligations in respect of a borrowing described in subparagraph 20(1)(e)(ii) or in respect of indebtedness described in subparagraph 20(1)(e)(ii.1) are settled or extinguished (otherwise than in a transaction made as part of a series of borrowings or other transactions and repayments), by the taxpayer for consideration that does not include any unit, interest, share or debt obligation of the taxpayer or any person with whom the taxpayer does not deal at arm’s length or any partnership or trust of which the taxpayer or any person with whom the taxpayer does not deal at arm’s length is a member or beneficiary, this paragraph shall be read without reference to the words “the lesser of” and to subparagraph 20(1)(e)(iii), and(vi)where a partnership has ceased to exist at any particular time in a fiscal period of the partnership,(A)no amount may be deducted by the partnership under this paragraph in computing its income for the period, and(B)there may be deducted for a taxation year ending at or after that time by any person or partnership that was a member of the partnership immediately before that time, that proportion of the amount that would, but for this subparagraph, have been deductible under this paragraph by the partnership in the fiscal period ending in the year had it continued to exist and had the partnership interest not been redeemed, acquired or cancelled, that the fair market value of the member’s interest in the partnership immediately before that time is of the fair market value of all the interests in the partnership immediately before that time;Marginal note:Annual fees, etc.(e.1)an amount payable by the taxpayer (other than a payment that is contingent or dependent on the use of, or production from, property or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation) as a standby charge, guarantee fee, registrar fee, transfer agent fee, filing fee, service fee or any similar fee, that can reasonably be considered to relate solely to the year and that is incurred by the taxpayer(i)for the purpose of borrowing money to be used by the taxpayer for the purpose of earning income from a business or property (other than borrowed money used by the taxpayer for the purpose of acquiring property the income from which would be exempt income),(ii)in the course of incurring indebtedness that is an amount payable for property acquired for the purpose of gaining or producing income therefrom or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt or property that is an interest in a life insurance policy), or(iii)for the purpose of rescheduling or restructuring a debt obligation of the taxpayer or an assumption of a debt obligation by the taxpayer, where the debt obligation is(A)in respect of a borrowing described in subparagraph 20(1)(e.1)(i), or(B)in respect of an amount payable described in subparagraph 20(1)(e.1)(ii),and in the case of a rescheduling or restructuring, the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation.Marginal note:Premiums on life insurance — collateral(e.2)the least of the following amounts in respect of a life insurance policy (other than an annuity contract or LIA policy):(i)the premiums payable by the taxpayer under the policy in respect of the year, if(A)an interest in the policy is assigned to a restricted financial institution in the course of a borrowing from the institution,(B)the interest payable in respect of the borrowing is or would, but for subsections 18(2) and 18(3.1) and sections 21 and 28, be deductible in computing the taxpayer’s income for the year, and(C)the assignment referred to in clause 20(1)(e.2)(i)(A) is required by the institution as collateral for the borrowing(ii)the net cost of pure insurance in respect of the year (other than in respect of a period after 2013 during which the policy is a 10/8 policy), as determined in accordance with the regulations, in respect of the interest in the policy referred to in clause (i)(A), and(iii)the portion, of the lesser of the amounts determined under subparagraphs (i) and (ii) in respect of the policy, that can reasonably be considered to relate to the amount owing from time to time during the year by the taxpayer to the institution under the borrowing;Marginal note:Discount on certain obligations(f)an amount paid in the year in satisfaction of the principal amount of any bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by the taxpayer after June 18, 1971 on which interest was stipulated to be payable, to the extent that the amount so paid does not exceed,(i)in any case where the obligation was issued for an amount not less than 97% of its principal amount, and the yield from the obligation, expressed in terms of an annual rate on the amount for which the obligation was issued (which annual rate shall, if the terms of the obligation or any agreement relating thereto conferred on its holder a right to demand payment of the principal amount of the obligation or the amount outstanding as or on account of its principal amount, as the case may be, before the maturity of the obligation, be calculated on the basis of the yield that produces the highest annual rate obtainable either on the maturity of the obligation or conditional on the exercise of any such right) does not exceed 4/3 of the interest stipulated to be payable on the obligation, expressed in terms of an annual rate on(A)the principal amount of the obligation, if no amount is payable on account of the principal amount before the maturity of the obligation, or(B)the amount outstanding from time to time as or on account of the principal amount of the obligation, in any other case,the amount by which the lesser of the principal amount of the obligation and all amounts paid in the year or in any preceding year in satisfaction of its principal amount exceeds the amount for which the obligation was issued, and(ii)in any other case, 1/2 of the lesser of the amount so paid and the amount by which the lesser of the principal amount of the obligation and all amounts paid in the year or in any preceding taxation year in satisfaction of its principal amount exceeds the amount for which the obligation was issued;Marginal note:Share transfer and other fees(g)where the taxpayer is a corporation,(i)an amount payable in the year as a fee for services rendered by a person as a registrar of or agent for the transfer of shares of the capital stock of the taxpayer or as an agent for the remittance to shareholders of the taxpayer of dividends declared by it,(ii)an amount payable in the year as a fee to a stock exchange for the listing of shares of the capital stock of the taxpayer, and(iii)an expense incurred in the year in the course of printing and issuing a financial report to shareholders of the taxpayer or to any other person entitled by law to receive the report;Marginal note:Repayment of loan by shareholder(j)such part of any loan or indebtedness repaid by the taxpayer in the year as was by virtue of subsection 15(2) included in computing the taxpayer’s income for a preceding taxation year (except to the extent that the amount of the loan or indebtedness was deductible from the taxpayer’s income for the purpose of computing the taxpayer’s taxable income for that preceding taxation year), if it is established by subsequent events or otherwise that the repayment was not made as part of a series of loans or other transactions and repayments;Marginal note:Doubtful or impaired debts(l)a reserve determined as the total of(i)a reasonable amount in respect of doubtful debts (other than a debt to which subparagraph 20(1)(l)(ii) applies) that have been included in computing the taxpayer’s income for the year or a preceding taxation year, and(ii)where the taxpayer is a financial institution (as defined in subsection 142.2(1)) in the year or a taxpayer whose ordinary business includes the lending of money, an amount in respect of properties (other than mark-to-market properties, as defined in that subsection) that are(A)impaired loans or lending assets that are specified debt obligations (as defined in that subsection) of the taxpayer, or(B)impaired loans or lending assets that were made or acquired by the taxpayer in the ordinary course of the taxpayer’s business of insurance or the lending of moneyequal to the total of(C)the percentage (not exceeding 100%) that the taxpayer claims of the prescribed reserve amount for the taxpayer for the year, and(D)in respect of loans, lending assets or specified debt obligations that are impaired and for which an amount is not deductible for the year because of clause 20(1)(l)(ii)(C) (each of which in this clause is referred to as a “loan”), the taxpayer’s specified percentage for the year of the lesser of(I)the total of all amounts each of which is a reasonable amount as a reserve (other than any portion of which is in respect of a sectoral reserve) for a loan in respect of the amortized cost of the loan to the taxpayer at the end of the year, and(II)the amount determined by the formula0.9M - NwhereMis the amount that is the taxpayer’s reserve or allowance for impairment (other than any portion of the amount that is in respect of a sectoral reserve) for all loans that is determined for the year in accordance with generally accepted accounting principles, andNis the total of all amounts each of which is the specified reserve adjustment for a loan (other than an income bond, an income debenture, a small business bond or small business development bond) for the year or a preceding taxation year;Marginal note:Reserve for guarantees, etc.(l.1)a reserve in respect of credit risks under guarantees, indemnities, letters of credit or other credit facilities, bankers’ acceptances, interest rate or currency swaps, foreign exchange or other future or option contracts, interest rate protection agreements, risk participations and other similar instruments or commitments issued, made or assumed by a taxpayer who was an insurer or whose ordinary business included the lending of money in favour of persons with whom the taxpayer deals at arm’s length in the ordinary course of the taxpayer’s business of insurance or the lending of money, equal to the lesser of(i)a reasonable amount as a reserve for credit risk losses of the taxpayer expected to arise after the end of the year under or in respect of those instruments or commitments, and(ii)90% of the reserve for credit risk losses of the taxpayer expected to arise after the end of the year under or in respect of those instruments or commitments determined for the year in accordance with generally accepted accounting principles,or such lesser amount as the taxpayer may claim;Marginal note:Reserve in respect of certain goods and services(m)subject to subsection 20(6), where amounts described in paragraph 12(1)(a) have been included in computing the taxpayer’s income from a business for the year or a previous year, a reasonable amount as a reserve in respect of(i)goods that it is reasonably anticipated will have to be delivered after the end of the year,(ii)services that it is reasonably anticipated will have to be rendered after the end of the year,(iii)periods for which rent or other amounts for the possession or use of land or of chattels or movables have been paid in advance, or(iv)repayments under arrangements or understandings of the class described in subparagraph 12(1)(a)(ii) that it is reasonably anticipated will have to be made after the end of the year on the return or resale to the taxpayer of articles other than bottles;Marginal note:Manufacturer’s warranty reserve(m.1)where an amount described in paragraph 12(1)(a) has been included in computing the taxpayer’s income from a business for the year or a preceding taxation year, a reasonable amount as a reserve in respect of goods or services that it is reasonably anticipated will have to be delivered or rendered after the end of the year pursuant to an agreement for an extended warranty(i)entered into by the taxpayer with a person with whom the taxpayer was dealing at arm’s length, and(ii)under which the only obligation of the taxpayer is to provide those goods or services with respect to property manufactured by the taxpayer or by a corporation related to the taxpayer,not exceeding that portion of the amount paid or payable by the taxpayer to an insurer that carries on an insurance business in Canada to insure the taxpayer’s liability under the agreement in respect of an outlay or expense made or incurred after December 11, 1979 and in respect of the period after the end of the year;Marginal note:Repayment of amount previously included in income(m.2)a repayment in the year by the taxpayer of an amount required by paragraph 12(1)(a) to be included in computing the taxpayer’s income from a business for the year or a preceding taxation year;(m.3)the unamortized amount at the end of the year in respect of the amount that was received in excess of the principal amount of a bond (in this paragraph referred to as the “premium”) received by the issuer in the year, or a previous year, for issuing the bond (in this paragraph referred to as the “new bond”) if(i)the terms of the new bond are identical to the terms of bonds previously issued by the taxpayer (in this paragraph referred to as the “old bonds”), except for the date of issuance and total principal amount of the bonds,(ii)the old bonds were part of an issuance (in this paragraph referred to as the “original issuance”) of bonds by the taxpayer,(iii)the interest rate on the old bonds was reasonable at the time of the original issuance,(iv)the new bond is issued on the re-opening of the original issuance,(v)the amount of the premium at the time of issuance of the new bond is reasonable, and(vi)the amount of the premium has been included in the taxpayer’s income for the year or a previous taxation year;Marginal note:Reserve for unpaid amounts(n)if an amount included in computing the taxpayer’s income from the business for the year or for a preceding taxation year in respect of property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real or immovable property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, a reasonable amount as a reserve in respect of any part of the amount that can reasonably be regarded as a portion of the profit from the sale;Marginal note:Reserve for quadrennial survey(o)such amount as may be prescribed as a reserve for expenses to be incurred by the taxpayer by reason of quadrennial or other special surveys required under theCanada Shipping Act, or the regulations under that Act, or under the rules of any society or association for the classification and registry of shipping approved by the Minister of Transport for the purposes of theCanada Shipping Act;Marginal note:Bad debts(p)the total of(i)all debts owing to the taxpayer that are established by the taxpayer to have become bad debts in the year and that have been included in computing the taxpayer’s income for the year or a preceding taxation year, and(ii)all amounts each of which is that part of the amortized cost to the taxpayer at the end of the year of a loan or lending asset (other than a mark-to-market property, as defined in subsection 142.2(1)) that is established in the year by the taxpayer to have become uncollectible and that,(A)where the taxpayer is an insurer or a taxpayer whose ordinary business includes the lending of money, was made or acquired in the ordinary course of the taxpayer’s business of insurance or the lending of money, or(B)where the taxpayer is a financial institution (as defined in subsection 142.2(1)) in the year, is a specified debt obligation (as defined in that subsection) of the taxpayer;Marginal note:Employer’s contributions to RPP or PRPP(q)such amount in respect of employer contributions to registered pension plans or pooled registered pension plans as is permitted under subsection 147.2(1) or 147.5(10);Marginal note:Employer’s contributions under retirement compensation arrangement(r)amounts paid by the taxpayer in the year as contributions under a retirement compensation arrangement in respect of services rendered by an employee or former employee of the taxpayer, other than where it is established, by subsequent events or otherwise, that the amounts were paid as part of a series of payments and refunds of contributions under the arrangement;Marginal note:Employer’s contributions under employee life and health trust(s)such amount in respect of employer contributions paid to a trustee under an employee life and health trust as is permitted by subsections 144.1(4) to (7);Marginal note:Patronage dividends(u)such amounts in respect of payments made by the taxpayer pursuant to allocations in proportion to patronage as are permitted by section 135;Marginal note:Mining taxes(v)such amount as is allowed by regulation in respect of taxes on income for the year from mining operations;(v.1)[Repealed, 2003, c. 28, s. 3]Marginal note:Employer’s contributions under profit sharing plan(w)an amount paid by the taxpayer to a trustee in trust for employees of the taxpayer or of a corporation with whom the taxpayer does not deal at arm’s length, under an employees profit sharing plan as permitted by section 144;Marginal note:Employer’s contributions under registered supplementary unemployment benefit plan(x)an amount paid by the taxpayer to a trustee under a registered supplementary unemployment benefit plan as permitted by section 145;Marginal note:Employer’s contributions under deferred profit sharing plan(y)an amount paid by the taxpayer to a trustee under a deferred profit sharing plan as permitted by subsection 147(8);Marginal note:Cancellation of lease(z)the proportion of an amount not otherwise deductible that was paid or that became payable by the taxpayer before the end of the year to a person for the cancellation of a lease of property of the taxpayer leased by the taxpayer to that person that(i)the number of days that remained in the term of the lease (including all renewal periods of the lease), not exceeding 40 years, immediately before its cancellation and that were in the yearis of(ii)the number of days that remained in the term of the lease (including all renewal periods of the lease), not exceeding 40 years, immediately before its cancellation,in any case where the property was owned at the end of the year by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length and no part of the amount was deductible by the taxpayer under paragraph 20(1)(z.1) in computing the taxpayer’s income for a preceding taxation year;Marginal note:Idem(z.1)an amount not otherwise deductible that was paid or that became payable by the taxpayer before the end of the year to a person for the cancellation of a lease of property of the taxpayer leased by the taxpayer to that person, in any case where(i)the property was not owned at the end of the year by the taxpayer or by a person with whom the taxpayer was not dealing at arm’s length, and(ii)no part of the amount was deductible by the taxpayer under this paragraph in computing the taxpayer’s income for any preceding taxation year,to the extent of the amount thereof (or in the case of capital property, 1/2 of the amount thereof) that was not deductible by the taxpayer under paragraph 20(1)(z) in computing the taxpayer’s income for any preceding taxation year;Marginal note:Landscaping of grounds(aa)an amount paid by the taxpayer in the year for the landscaping of grounds around a building or other structure of the taxpayer that is used by the taxpayer primarily for the purpose of gaining or producing income therefrom or from a business;Marginal note:Fees paid to investment counsel(bb)an amount, other than a commission, that(i)is paid by the taxpayer in the year to a person or partnership the principal business of which(A)is advising others as to the advisability of purchasing or selling specific shares or securities, or(B)includes the provision of services in respect of the administration or management of shares or securities, and(ii)is paid for(A)advice as to the advisability of purchasing or selling a specific share or security of the taxpayer, or(B)services in respect of the administration or management of shares or securities of the taxpayer;Marginal note:Expenses of representation(cc)an amount paid by the taxpayer in the year as or on account of expenses incurred by the taxpayer in making any representation relating to a business carried on by the taxpayer,(i)to the government of a country, province or state or to a municipal or public body performing a function of government in Canada, or(ii)to an agency of a government or of a municipal or public body referred to in subparagraph 20(1)(cc)(i) that had authority to make rules, regulations or by-laws relating to the business carried on by the taxpayer,including any representation for the purpose of obtaining a licence, permit, franchise or trademark relating to the business carried on by the taxpayer;Marginal note:Investigation of site(dd)an amount paid by the taxpayer in the year for investigating the suitability of a site for a building or other structure planned by the taxpayer for use in connection with a business carried on by the taxpayer;Marginal note:Utilities service connection(ee)an amount paid by the taxpayer in the year to a person (other than a person with whom the taxpayer was not dealing at arm’s length) for the purpose of making a service connection to the taxpayer’s place of business for the supply, by means of wires, pipes or conduits, of electricity, gas, telephone service, water or sewers supplied by that person, to the extent that the amount so paid was not paid(i)to acquire property of the taxpayer, or(ii)as consideration for the goods or services for the supply of which the service connection was undertaken or made;Marginal note:Payments by farmers(ff)an amount paid by the taxpayer in the year as a levy under theWestern Grain Stabilization Act, as a premium in respect of the gross revenue insurance program established under theFarm Income Protection Actor as an administration fee in respect of a net income stabilization account;(gg)[Repealed, 1994, c. 7, Sch