The taxpayer had obtained a guarantee by a Canadian bank of the liabilities of a US sister corporation ("Fusion") to a US bank. Fusion then became insolvent and the US bank indicated that it would call on the taxpayer's guarantee. In order to avoid this result (which would have prejudiced its relationship with the Canadian bank), the taxpayer entered into a "Forbearnace Agrement" with the US bank and Fusion pursuant to which it agreed to repay the loan owing by Fusion.
The Forbearance Agreement was found to be a "transaction" (eg, a "piece of ... commercial business") (para. 29) involving Fusion, so that the three-year addition to the normal reassessment period applied to permit the Minister to reassess the taxpayer by disallowing the deduction by the taxpayer of payments made by it to the US bank.