Under the terms of its leases, the Appellant undertook leasehold improvements to the leased premises at a cost of about $2.1 million and received tenant improvement allowances from its landlords of approximately $2.2 million.
The availability of an ITC was governed by s. 169(1)(c) rather than (b) because (under the definition of "improvement" in s. 123(1)), the cost of the improvements was not included in their adjusted cost base for purposes of the Income Tax Act because an election was made under s. 13(7.4) of the Income Tax Act to reduce the capital cost of the improvements by the amounts paid by the landlords.