Income Tax Act — I-3.3 95
 the beginning of the specified taxation year, (A) the affiliate or partnership carried on the business, or the activities so deemed to be a separate business, as the case may be, (B) the business was not, or the activities were not, as the case may be, at any time, part of a taxable Canadian business, and (C) the business was not described in any of subclauses (i)(C)(I), (II) and (IV), or the activities were not described in subclause (i)(C)(III), as the case may be; (k.1) if this paragraph applies, in computing the operator’s income or loss from the investment business, non-qualifying business, separate business or business described in paragraph (l) (each of these businesses being referred to in this paragraph as a “foreign business”), as the case may be, and the operator’s capital gain or capital loss from the disposition of property used or held in the course of carrying on the foreign business, for the specified taxation year and each subsequent taxation year or fiscal period in which the foreign business is carried on by the operator (i) the operator is deemed (A) to begin to carry on the foreign business in Canada at the beginning of the specified taxation year, and (B) to carry on the foreign business in Canada throughout that part of the specified taxation year, and of each of those subsequent taxation years or fiscal periods, in which the foreign business is carried on by the operator, (ii) where, in respect of the foreign business, the operator would, if it were a corporation carrying on the foreign business in Canada, be required by law to report to, and be subject to the supervision of, a regulatory authority that is the Superintendent of Financial Institutions or a similar authority of a province, (A) the operator is deemed to be required by law to report to, and to be subject to the supervision of, the regulatory authority, and (B) if the operator is a life insurer and the foreign business is part of a life insurance business, the life insurance policies issued in the conduct of the foreign business are deemed to be life insurance policies in Canada, and (iii) paragraphs 138(11.91)(c) to (e) apply to the operator for the specified taxation year in respect of the foreign business as if (A) the operator were the insurer referred to in subsection 138(11.91), (B) the specified taxation year of the operator were the particular taxation year of the insurer referred to in that subsection, (C) the foreign business of the operator were the business of the insurer referred to in that subsection, and (D) the reference in paragraph 138(11.91)(e) to “property owned by it at that time that is designated insurance property in respect of the business” were read as a reference to “property owned or held by it at that time that is used or held by it in the particular taxation year in the course of carrying on the insurance business”; (k.2) for the purposes of paragraphs (j.1) to (k.1) and the definition taxable Canadian business in subsection (1), any portion of a business carried on by a person or partnership that is carried on in Canada is deemed to be a business that is separate from any other portion of the business carried on by the person or partnership; (l) in computing the income from property for a taxation year of a foreign affiliate of a taxpayer there shall be included the income of the affiliate for the year from a business (other than an investment business of the affiliate) the principal purpose of which is to derive income from trading or dealing in indebtedness (which for the purpose of this paragraph includes the earning of interest on indebtedness) other than (i) indebtedness owing by persons with whom the affiliate deals at arm’s length who are resident in the country in which the affiliate was formed or continued and exists and is governed and in which the business is principally carried on, or (ii) trade accounts receivable owing by persons with whom the affiliate deals at arm’s length, unless it is establi