41 (1) If, on or before the filing-due date for a taxation year of a corporation, the corporation has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development, the amount by which the particular amount exceeds all amounts applied for preceding taxation years under this subsection or subsection (2) or (3) in respect of the particular amount shall be applied to reduce the corporation’s eligible expenditures otherwise incurred in the year that can reasonably be considered to be in respect of the scientific research and experimental development.  2007, c. 11, Sched. A, s. 41 (1). Same (2) If, on or before the filing-due date for a taxation year of a corporation, the corporation (in this subsection referred to as the “recipient”) has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and the particular amount exceeds the sum of the following amounts, the particular amount shall be applied to reduce the sum otherwise determined that is referred to in paragraph 3: 1. All amounts applied for preceding taxation years under this subsection or subsection (1) or (3) in respect of the particular amount, determined before the application of subsection (4) in respect of the recipient’s taxation year. 2. The sum of all amounts each of which would be an eligible expenditure that is incurred by the recipient in its taxation year and that can reasonably be considered to be in respect of the scientific research and experimental development if subsection (1) did not apply to the particular amount. 3. The sum of all amounts each of which would, but for the application of this subsection to the particular amount, be an eligible expenditure, i. that was incurred by another corporation in a taxation year of the other corporation that ended in the recipient’s taxation year, and ii. that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the other corporation at a time when the other corporation was not dealing at arm’s length with the recipient.  2007, c. 11, Sched. A, s. 41 (2). Agreement to allocate (3) If a particular amount for a taxation year is determined under subsection 127 (20) of the Federal Act as a consequence of an agreement referred to in that subsection between a corporation (in this subsection referred to as the “transferor”) and another corporation (the “transferee”) and subsection 127 (22) of the Federal Act does not apply to the agreement, the lesser of the following two amounts shall be applied to reduce the eligible expenditures otherwise determined that are described in paragraph 2: 1. The portion, if any, of the amount specified in the agreement that can reasonably be considered to be in respect of the amount described in paragraph 2. 2. The sum of all amounts each of which would, but for the agreement, be an eligible expenditure, i. that was incurred by the transferee in a particular taxation year of the transferee that ended in the transferor’s taxation year, and ii. that can reasonably be considered to be in respect of the scientific research and experimental development to which the particular amount relates to the extent that it was performed by the transferee at a time when the transferee was not dealing at arm’s length with the transferor.  2007, c. 11, Sched. A, s. 41 (3). Failure to allocate (4) If, on or before the filing-due date for a taxation year of a corporation (in this subsection referred to as the “recipient”), the recipient has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and subsection (2) does not apply to the particular amount in respect of the year, the lesser of the following two amounts is deemed for the purposes of this subdivision to be an amount of government assistance received by another corporation in respect of the scientific research and experimental development at the end of a particular taxation year of the other corporation that ends in the recipient’s taxation year: 1. The sum of all amounts each of which is an eligible expenditure, i. that was incurred by the other corporation in the particular taxation year, and ii. that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the other corporation at a time when the other corporation was not dealing at arm’s length with the recipient. 2. The amount, if any, by which the particular amount exceeds the amount that would be the sum of the amounts applied for the year and preceding taxation years under subsection (1), (2) or (3) in respect of the particular amount, if that sum were determined without reference to the application of this subsection for the year.  2007, c. 11, Sched. A, s. 41 (4); 2009, c. 33, Sched. 16, s. 12. Repayment of assistance (5) For the purposes of clause (d) of the definition of “A” in subsection 38 (2), an amount of government assistance, non-government assistance or a contract payment that satisfies all of the following conditions is deemed to be the amount of a repayment by the corporation in a taxation year of the government assistance, non-government assistance or contract payment, as the case may be: 1. The amount was applied under this section to reduce an eligible expenditure that was incurred by the corporation. 2. The amount was not received by the corporation. 3. The amount ceased in the taxation year to be an amount that the corporation can reasonably be expected to receive.  2007, c. 11, Sched. A, s. 41 (5). Section Amendments with date in force (d/m/y) 2009, c. 33, Sched. 16, s. 12 - 15/12/2009