50% of the shares of the taxpayer were acquired by another corporation ("Gestion") following which the two individual shareholders of the taxpayer holding the remaining 50% of the shares continued to make the day-to-day decisions respecting the taxpayer's affairs.
Angers T.C.J. found that Gestion through a wholly-owned subsidiary of Gestion ("Bermex") exercised control over the taxpayer as described in s. 256(5.1). Following the acquisition of the taxpayer by Gestion, the taxpayer became economically dependent on Bermex (its sales increased approximately ten-fold with between 79% and 95% of its sales being to Bermex, and Bermex provided the financing necessary for the taxpayer's operations). Decisions concerning sales and purchases were made by Gestion and the taxpayer was permitted to adjust its billing to Bermex at the end of each fiscal year so as to ensure that it would receive a profit set at 15% of its sales to Bermex.