A definition of “substantive CCPC” will be added to subsection 248(1). A private corporation (other than a CCPC) will be a substantive CCPC if it is controlled, directly or indirectly in any manner whatever, by one or more Canadian resident individuals or a group of such individuals. A substantive CCPC’s investment income will not be eligible for the 13% rate reduction in section 123.4, its after-tax investment income will be added to its LRIP and the corporation will not be entitled to the small business deduction or certain other tax benefits available only to CCPCs.
