Opco, which is a CCPC that has exceeded the $15 million “taxable capital employed in Canada” threshold such that the small business deduction is unavailable, employs more than 5 full-time employees in its sole business (the “Business”), which is the rental in Canada of real property. CRA stated:
As the Business has more than 5 full-time employees throughout its tax year, it is not a specified investment business and Opco’s income is from an active business. If all of Opco’s property is used for the purpose of gaining or producing income from the active business, no amount is deducted from Opco’s taxable income in respect of [aggregate investment income] AII and all of its taxable income is full rate taxable income subject to federal tax at rate of 15%.