The taxpayer lent money on an interest-free basis to a non-resident wholly-owned subsidiary in 1988 and then, in November 1994, transferred the shares of the subsidiary to a sister company so that the borrower ceased to be a subsidiary controlled corporation of the taxpayer. The Minister assessed on the basis that the loan thereupon ceased to qualify for the exemption in former s. 17(3), which was available to a loan that "was made to a subsidiary controlled corporation."
Bowman A.C.J. rejected this position on the basis that it had the effect of adding the words "and throughout the period in which the loan was outstanding the corporation continued to be a subsidiary controlled corporation" to s. 7(3). He stated (at p. 297):
"French and English are linguistic instruments capable of great precision of expression. Parliamentary drafters are presumed to have mastered one or both of those languages and to be able to say what they mean and to mean what they say."