Global Communications Ltd. v. Canada
T-165-89
Campbell J.
23/10/98
9 pp.
Whether Global Communications Limited's advances to subsidiary, none of which repaid, "bad debt" under Income Tax Act, s. 20(1)(p), therefore tax deductible-Test to be met by Global found in Discovery Research Systems Ltd. v. Canada (1994), 94 DTC 1510 (T.C.C.)-Global making advances to three categories of recipients: third party production companies, subsidiaries, employees-Purpose of advances to subsidiaries to generate income from interest, to generate demand by subsidiaries for Global's advertising time which would, in turn, generate income for Global-In 1980, on assets of $50 million, 20% of Global's assets tied up in advances-Advances from Global to subsidiary Tee Vee US intended to be interest bearing loans-No evidence to contrary-Part of appellant's ordinary business money landing-Loans made in ordinary course of business-Loan by Global to Tee Vee US bad in 1980-All elements of test in Act, s. 20(1)(p)(ii) met-Appeal allowed-Income Tax Act, S.C. 1970-71-72, c. 63, s. 20(1)(p)(ii).