CRA stated that para. 1(j) of IT-189R2 ("Corporations Used by Practising Members of Professions") and para. 17 of IC 88-2 ("General Anti-Avoidance Rule) are both correct in context and are not contradictory.
(IT-189R2 provides that, in determining whether a corporation is carrying on a professional practice under s. 125, a relevant factor is whether the corporation pays the professional a reasonable salary in an employment relationship under a written agreement. IC 88-2 provides that it is not an abuse under s. 245(4) for a corporation, for tax reasons, to decline to pay a non-arm's-length employee so as to avoid generating losses.)