29 May 2012 CTF Prairie Tax Conference 2012 Roundtable, 2012-0445661C6 - Late Eligible Dividend Designation -- summary under Subsection 89(14.1)

The Minister will generally accept a late designation where, for example:

1. there have been tax consequences not intended by the taxpayers and there is evidence that the taxpayers took reasonable steps to comply with the law;
2. the request for late designation arises from circumstances that were beyond the taxpayers' control; or
3. the taxpayers can demonstrate that they were not aware of the election provision, but took a reasonable amount of care to comply with the law and took remedial action as quickly as possible.

A late designation will not be permitted for retroactive tax planning purposes, nor will a taxpayer be permitted to make late designations deliberately or on a regular basis. For example, relief could be given:

...in a situation where a public corporation receives dividends from its subsidiaries and the subsidiaries do not designate the dividends paid pursuant to subsection 89(14). The absence of timely designations would result in the creation of low rate income pool ("LRIP") balance at the public corporation's level, even though all of the income generated within the corporate group has been taxed at a rate not less than that which applies to full rate taxable income.