From question 6 of the 2015 APFF Roundtable, it appears that the positive capital dividend account balance created by Subco’s realization of a capital gain could be paid to Parentco and then to Parentco’s shareholders as a capital dividend even though Parentco has capital losses in an amount equal to the gain realized by Subco—see 89(1) “capital dividend account” (a) and (b). The ability to pay such a dividend will be lost, however, if Parentco and Subco amalgamate before the dividends are paid. 87(2)(z.1) would seem to require Amalco to net the Parentco losses and the Subco gain.
