Regarding the introduction of Element A.1 in legislative proposals regarding the CEC definition first proposed on December 20, 2002, CRA stated:
[T]he proposed description of A.1 applies in computing "cumulative eligible capital" where the transferor does not deal at arm's length with the taxpayer at the time of the acquisition of the eligible capital by the taxpayer to the extent that the eligible capital was not disposed of before the particular time.