Dear Sirs:
This is in reply to your letter dated September 23, 199l with respect to the application of Part VI of the Income Tax Act (the "Act") to credit unions and deposit insurance corporations. All further references to statute are references to the Act unless otherwise specified.
Subsection 190(1) defines "financial institution" for the purposes of Part VI. Paragraph (c) of this definition includes as a financial institution "a corporation that is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real estate or investing in mortgages or hypothecs on real estate".
Accordingly, if a credit union or deposit insurance corporation is authorized under the laws of Canada or a province to accept deposits from the public and in fact carries on the types of business described in paragraph (c) of the definition of financial institution, which would generally be the case, it is our view that the credit union or deposit insurance corporation would be subject to Part VI tax.
While we hope our comments are of assistance to you they do not constitute an advance income tax ruling and therefore are not binding on the Department in respect of a specific situation.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate