Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Definition of "in Canada" for SR & ED purposes
Position: Canada includes "exclusive economic zone" only for those purposes described in subsection 8(2.1) of Interpretation Act
Reasons: 8(2.1) Interpretation Act; Oceans Act
255 Income Tax Act
July 31, 2000
SR & ED Directorate Partnerships Section
Financial Legislation Application Section Denise Dalphy
Mel Machado, Manager (613) 957-9231
Attention: Pierre-Paul Lauzon
2000-003759
SR & ED Application Policy
Meaning of "in Canada"___
This is in response to your e-mail of July 14, 2000, wherein you inquire whether our September 23, 1998 interpretation (7-980908) on the meaning of "in Canada" remains unchanged.
This issue was reconsidered by our Directorate in March 19,1999. We enclose a copy of this memorandum for your reference.
In 1996, the Territorial Sea and Fishing Zones Act was repealed and has been replaced by the Oceans Act (S.C. 1996, Chapter 31). A number of related amendments were enacted at the same time as the Oceans Act. In particular, section 8 of the Interpretation Act was amended to extend the meaning of Canada to include the "exclusive economic zone" and "continental shelf". Although this definition applies to all enactments (unless the enactment indicates a contrary intention), including the Income Tax Act, its application is limited to enactments relating to "exploring or exploring, conserving or managing natural resources ...". This will not generally be relevant for the SR & ED tax credit.
Subsection 35(1) of the Interpretation Act defines "Canada" (for greater certainty) to include "the inland waters of Canada and the territorial sea of Canada" The Interpretation Act incorporates by reference the definition of "territorial sea" from the Oceans Act [this is essentially the 12-mile limit]. The definition of Canada has not, other than for the purposes described above, been extended. As such, there is no basis for a change in our aforementioned interpretations of the meaning of "Canada" for SR & ED purposes.
Please contact the writer at 957-9231 if we can be of further assistance.
Paul Lynch
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
1
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