Although CRA noted that the determination of whether a person is carrying on a single business or multiple separate businesses is a question of fact, it indicated that in the context of Reg. 1101(1):
We do acknowledge that, in the oil and gas industry, it is common for businesses to acquire properties and dispose of non-core properties on a continual basis. Generally, the acquisitions and dispositions during the normal course of business would not be considered acquisitions or dispositions of separate businesses.
Before so concluding, CRA stated:
There are substantial jurisprudence and pronouncements from the CRA (including IT-206R) which would assist in this determination. The case Scales (H.M. Inspector of Taxes) v. George Thompson & Company, Limited (1927), 13 TC 83 (Eng. KB) (“Scales”) sets out the test for the determination of whether certain operations are a separate business. The test in this case has been adopted by the Canadian courts. Also, the Federal Court of Appeal in Du Pont Canada Inc. v. The Queen, 2001 DTC 5269 (FCA) set out a number of additional factors for this determination.
Paragraph 2 of Interpretation Bulletin IT-206R draws from the Scales case and states that sufficient interconnection, interlacing or interdependence between the operations would point to the operations being the same business.