2.1
Cases
AAi. Foster Grant of Canada Co. v. CRA, [2004] 3021 ETC, 2004 FCA 259,
The taxpayer, which was a wholly-owned subsidiary of its U.S. parent, and which took title to goods upon their delivery to a warehouse facility owned by its U.S. parent and sold those goods to Canadian retailers, with the goods being delivered directly from the warehouse to those customers, was found to be carrying on business in Canada so that it was a "purchaser in Canada". Sharlow J.A. stated (at para. 20):
"In essence, the CITT adopted the principle that a corporation is not carrying on business if its affairs are subject to significant de facto control by the parent corporation. There is no authority for that proposition ..."
See Also
Pampered Chef, Canada Corp. v. CBSA, [2008] ETC 4514 (CITT)
Individual self-employed sales representatives of the taxpayer secured orders for sales of kitchen products shown at various home parties by them with the products then being imported by the taxpayer from its U.S. parent for shipment directly to the individual customers. The Tribunal found that the sales for export by the U.S. parent were made to the taxpayer rather than to the individual customers. On this basis, the taxpayer satisfied the test of carrying on business in Canada for the purposes of the definition of "permanent establishment" in the Valuation for Duty Regulations.
Ferragamo U.S.A. Inc. v. CBSA, [2007] ETC 4516
The taxpayer imported goods from Italy and sold them to its Canadian subsidiary. In finding that the taxpayer was the "purchaser in Canada" by virtue of s. 2.1(c)(ii), the Tribunal found that the personnel at the Canadian subsidiary had only minor input concerning the merchandise to be purchased and the quantities to be ordered for its operation and that the taxpayer had effective control of expenditures by the Canadian subsidiary except for routine payroll and petty cash expenditures. Accordingly, the Canadian subsidiary was not "resident".