The taxpayer, who became a non-resident when she went on unpaid leave from her Canadian job in 2003, retired in 2007 and thereupon received $2497.44 in unused annual leave credits (treated by CRA as income from her Canadian employment under s. 115(1)(a)(i)) and a retiring allowance of $43,255 (taxable under Part XIII rather than Part I). She contributed $22,384 to a registered pension plan which, by virtue of its deductibility under s. 147.2(4)(a), gave rise to a 2007 loss from employment under s. 5(2). After her return to Canada in 2010, she deducted this amount from her taxable income as a non-capital loss.
CRA disallowed the carry-forward on the basis that s. 147.2(4) does not allow the carry-forward of RPP contributions but rather requires that the deduction be made "in the year" they are contributed - and this limitation's "purpose would be frustrated by the availability of non-capital losses under section 111" (para. 35).
In allowing the taxpayer's appeal, D'Arcy J stated (at para. 48):
[P]ursuant to the definition in subsection 111(8), the Appellant incurred a non-capital loss from employment of $20,302 in her 2007 taxation year. Pursuant to subsection 111(1)(a), such loss may be carried forward and deducted when determining the Appellant's 2010 taxable income.