The correspondent expressed concern that the Magdalen Islands are part of a prescribed "intermediate zone" and not a prescribed "northern zone," so that the percentage applicable to deductions, in particular the deduction for a residence, is fixed at 50% instead of 100%. CRA confirmed this result, and also stated:
1- As the Magdalen Islands were a "prescribed zone" for the taxation years 1988 to 1994;
2- If the individual met all the conditions for the application of section 110.7; and
3- Since the Magdalen Islands have been an "intermediate zone" since the 1988 taxation year;
the "specified percentage" for deductions for residents of prescribed zones would be:
- 100% for taxation years between 1988 and 1992;
- 66 2/3 % for the 1993 taxation year; and
- 50% for the 1994 and subsequent taxation years.