Income Tax Regulations — 8514
8514 (1) For the purposes of subparagraph 8502(h)(i) and subject to subsections (2), (2.1) and (3), a prohibited investment in respect of a registered pension plan is a share of the capital stock of, an interest in, or a debt of (a) an employer who participates in the plan, (b) a person who is connected with an employer who participates in the plan, (c) a member of the plan, (d) a person or partnership that controls, directly or indirectly, in any manner whatever, a person or partnership referred to in paragraph (a) or (b), or (e) a person or partnership that does not deal at arm’s length with a person or partnership referred to in paragraph (a), (b), (c) or (d), or an interest in, or a right to acquire, such a share, interest or debt. (2) A prohibited investment does not include (a) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3) of the Act; (b) a share listed on a designated stock exchange; (c) a bond, debenture, note or similar obligation of a corporation any shares of which are listed on a designated stock exchange; (d) an interest in, or a right to acquire, property referred to in paragraph (b) or (c); (e) a mortgage in respect of real property situated in Canada that (i) where this condition has not been waived by the Minister and the amount paid for the mortgage, together with the amount of any indebtedness outstanding at the time the mortgage was acquired under any mortgage or hypothec that ranks equally with or superior to the mortgage, exceeds 75 per cent of the fair market value, at that time, of the real property that is subject to the mortgage, is insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages, (ii) where the registered pension plan in connection with which the mortgage is held would be a designated plan for the purposes of subsection 8515(5) if subsection 8515(4) were read without reference to paragraph (b) thereof, is administered by an approved lender under the National Housing Act , and (iii) bears a rate of interest that would be reasonable in the circumstances if the mortgagor dealt with the mortgagee at arm’s length; or (f) except in the case of an individual pension plan, a share of the capital stock of, an interest in, or a debt of a person or partnership that does not deal at arm’s length with a participating employer, if the participating employer’s principal activity is to manage the investments of or provide investment advice to (i) one or more registered pension plans, (ii) His Majesty in right of Canada or a province, or (iii) an entity described in paragraph 149(1)(c) to (d.4) of the Act. (2.1) Where a share of the capital stock of, an interest in or a debt of, a person who is connected with a particular employer who participates in a registered pension plan that is a multi-employer plan would, but for this subsection, be a prohibited investment in respect of the plan, the property is not a prohibited investment in respect of the plan if (a) the plan contains no money purchase provision other than a money purchase provision under which each member account is credited, on a reasonable basis and no less frequently than annually, an amount based on the income earned, losses incurred and capital gains and capital losses realized, on all of the property held by the plan; (b) at the time the property is acquired by the plan, there are at least 15 employers who participate in the plan and, for this purpose, (i) all employers who are related to each other are deemed to be a single employer, and (ii) all the structural units of a trade union, including each local, branch, national and international unit, are deemed to be a single employer; (c) at the time the property is acquired by the plan, no more than 10% of the active members of the plan are employed by the particular employer or by any person related to the particular employer; (d) the property would not be