June 19, 1992, notice of Ways & Means motion ("Income Tax Technical Amendments Bill").

• Position: Canada

On January 26, 1993, Tax Executives Institute submitted the following comments to the Canadian Department of Finance on a pending Income Tax Technical Amendments Bill that was submitted to the Canadian Parliament on June 19, 1992. The comments were prepared under the aegis of the Institute's Canadian Income Tax Committee whose chair is Vincent Alicandri of Xerox Canada Limited.

Tax Executives Institute welcomes the opportunity to provide the Department of Finance with comments on proposed legislation. TEI supports the concept of separating "technical" and "policy" amendments to the Income Tax Act. We recommend that the drafting of an annual technical amendment bill become a fixed part of the tax system, thereby facilitating the timely correction of the anomalies and inequities that inadvertently arise in the Income Tax Act.

Background

Tax Executives Institute is an international organization of approximately 4,700 professionals who are responsible -- in an executive, administrative, or managerial capacity -- for the tax affairs of the corporations and other business by which they are employed. TEI's members represent more than 2,400 of the leading corporations in Canada and the United States. Canadian make up approximately 10 percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver, which together make up one of our nine geographic regions. In addition, a substantial number of our U.S. members work for companies with significant Canadian operations. In sum, TEI's membership includes representatives from most major industries, including manufacturing, distributing, wholesaling, and retailing; real estate; transportation; financial; and resource (including timber and integrated oil companies). The comments set forth in this submission reflect the views of the Institute as a whole but more particularly those of our Canadian constituency.

Subclauses 37 (2) and 37 (9): Losses on Amalgamation with Wholly Owned Corporation

Section 87 treats an amalgamated corporation as a continuation of its predecessor corporation for many purposes. This is necessary to ensure that various provisions of the Act operate properly, consistent with the intent of the provision and the general scheme of the Act. These provisions are generally ones which span more than one taxation year. One of the major existing exceptions to this general scheme is the inability to carryback losses incurred by the...