Income Tax Act — I-3.3 (a)
the absence of this section, be deductible by the taxpayer in computing its income for the particular year, (iii) is not deductible under any of the provisions listed in paragraph (b), and (iv) is an expense or fee payable under the agreement or arrangement or an expense that is incurred in contemplation of, in the course of entering into or in relation to, the agreement or arrangement, (g) a lease financing amount (other than in respect of an excluded lease for the particular year) that (i) would, in the absence of this section, be deductible by the taxpayer in computing its income for the particular year, and (ii) is not excluded interest for the particular year, (h) in respect of the income or loss of a partnership, for a fiscal period that ends in the particular year, from any source or from sources in a particular place, an amount determined by the formula C × D − E − F where C is the total of all amounts, each of which is an amount that (i) is deductible by the partnership in computing its income or loss from the source, or the source in a particular place, for a fiscal period, and that would be described in any of paragraphs (a) to (g) if the references to the taxpayer were read as references to the partnership, or (ii) would be included under paragraph (j) in determining the interest and financing expenses of the partnership for the purposes of determining its income or loss from the source, or the source in a particular place, for the fiscal period, if the partnership were a taxpayer for the purposes of this section, D is the taxpayer’s specified proportion, if the references in the definition specified proportion in subsection 248(1) to “total income or loss” were read as “income or loss from the source, or the source in a particular place”, E is the amount, if any, included in computing the taxpayer’s income under paragraph 12(1)(l.1) in respect of the amount referred to in the description of C, and F is the portion of an amount determined for C that can reasonably be considered to not be deductible in computing the taxpayer’s income for the particular year, and to not be included in computing the taxpayer’s non-capital loss for the particular year, because of subsection 96(2.1), (i) the portion of an amount that, in the absence of this section, would be deductible in computing the taxpayer’s taxable income for the particular year and is claimed by the taxpayer under paragraph 111(1)(e) in respect of a partnership of which the taxpayer is a member that can reasonably be considered to be attributable to an amount referred to in the description of F in paragraph (h) in respect of a fiscal period of the partnership ending in another taxation year of the taxpayer, or (j) in respect of a corporation that is a controlled foreign affiliate of the taxpayer at the end of an affiliate taxation year ending in the particular year, an amount determined by the formula G × H where G is the affiliate’s relevant affiliate interest and financing expenses for the affiliate taxation year, and H is the taxpayer’s specified participating percentage in respect of the affiliate for the affiliate taxation year; and B is the total of all amounts, each of which is (a) an amount received or receivable (other than as a dividend or in respect of exempt interest and financing expenses) by the taxpayer in a year, or a gain of the taxpayer for a year, as the case may be, under or as a result of an agreement or arrangement to the extent that (i) the amount is included in computing the taxpayer’s income for the particular year, (ii) the agreement or arrangement is entered into (A) as a borrowing or other financing of the taxpayer or of a person or partnership that does not deal at arm’s length with the taxpayer, or (B) in relation to a borrowing or other financing of the taxpayer or of a person or partnership that does not deal at arm’s length with the taxpayer to hedge the cost of funding or the borrowing or other financing, (iii) the amount can rea