On the winding-up of its wholly-owned subsidiary, the taxpayer received heavy equipment that had been used in the subsidiary's leasing business. Five days later, the taxpayer transferred these assets to a newly formed subsidiary.
In finding that the taxpayer possessed a source of business income related to the equipment for which capital cost allowance could be claimed, L'Heureux-Dubé J. noted that "where machinery is rented out, the essential core operations may at times be limited to accepting rental revenue and assuming the business risk and other obligations". In addition, given that the taxpayer at all times carried on a car leasing business, the acquired equipment related to a business of the taxpayer of making a profit generally out of machines (be they heavy equipment or automobiles).