The taxpayers each owned 25% of the shares of a Canadian-controlled private corporation ("SRP") that headleased reserve land from an Indian band and subleased lots to members of a retirement community, who had purchased manufactured homes from SRP for occupation on their respective lots. In determining that the business of SRP was a specified investment business, so that a sale of their shares in 1998 was not eligible for the enhanced capital gains exemption, Sharlow, J.A. noted (at paras. 25-26):
The definition of "specified investment business" does not ask about the general nature of the business of a corporation, or the degree of activity or passivity actually required by that business. Rather, it asks about the legal character of the income that the business is intended principally to earn. ... It is not relevant that SRP carried on an active business before that time. The fact is that on December 10, 1998, almost all of the income of SRP was rent, and almost all of the property of SRP was property that generated and could generate only rental income."