The appellant appealed reassessments denying a 50% deduction on employee stock option benefits under paragraph 110(1)(d) of the Income Tax Act.
The Minister denied the deduction on the basis that the appellant and the granting companies were not dealing at arm's length immediately after the options were granted.
The Tax Court of Canada found insufficient evidence to establish de jure control by either the appellant or his family trusts.
However, the Court concluded that the appellant had a factual non-arm's length relationship with the companies under paragraph 251(1)(c) due to his significant control and influence as a director, officer, and indirect shareholder.
The appeals were dismissed.
