Imperial Oil Ltd. v. Canada, 2004 DTC 6702, 2004 FCA 361, rev'd 2006 SCC 46 -- summary under Subsection 248(26)

S.248(26) had no application to the issuance of a U.S.-dollar debenture by the taxpayer because there was no doubt about the date upon which the taxpayer "issued" the debt evidenced by the debenture, or the "principal amount" of the debt at that time. Furthermore, even if s. 248(26) did apply, its effect would simply be to confirm the conclusion that the original principal amount of the debenture was the Canadian-dollar equivalent of its U.S. dollar principal amount at that time. S.248(26) did not say that, for income tax purposes, the principal amount of a debt denominated in a foreign currency was always equal to the principal amount of the debt translated at the date of issuance. Accordingly, s. 248(26) was not inconsistent with the conclusion of the Court that the principal amount of the debentures, in Canadian dollars, increased from the date of issuance, to the date of repayment, due to an appreciation in the U.S. dollar, thereby giving rise to a deduction under s. 20(1)(f)(ii).