(a) each property of the taxpayer
	(i) that was a capital property (other than a depreciable property) of the taxpayer at the end of the taxpayer's last taxation year that ended before February 23, 1994,
	(ii) that was a mark-to-market property for, or a specified debt obligation in, the taxpayer's first taxation year that begins after that time,
	(iii) that had a fair market value at that time greater than its adjusted cost base to the taxpayer at that time, and
	(iv) that is designated by the taxpayer in the election
	is deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after that time at a cost equal to, the lesser of
	(v) the fair market value of the property at that time, and
	(vi) the greater of the adjusted cost base to the taxpayer of the property immedi ately before that time and the amount designated by the taxpayer in the election in respect of the property; and
	(b) each property of the taxpayer
	(i) that was a capital property (other than a depreciable property) of the taxpayer at the end of the taxpayer's last taxation year that ended before February 23, 1994,
	(ii) that was not a mark-to-market proper ty for, or a specified debt obligation in, the taxpayer's first taxation year that begins after that time,
	(iii) that had an adjusted cost base to the taxpayer at that time greater than its fair market value at that time, and
	(iv) that is designated by the taxpayer in the election
	is deemed to have been disposed of by the taxpayer at that time for proceeds of disposition equal to, and to have been reacquired by the taxpayer immediately after that time at a cost equal to, the greater of
	(v) the fair market value of the property at that time, and
	(vi) the lesser of the adjusted cost base to the taxpayer of the property immediately before that time and the amount desig nated by the taxpayer in the election in respect of the property.
Accrued capital gains election limit	(9) Where a taxpayer has made an election under subsection (8) in which a property was designated under subparagraph (8)(a)(iv), the election is deemed not to have been made where
	(a) the amount that would be the taxpayer's taxable capital gains from dispositions of property for the taxpayer's last taxation year that ended before February 23, 1994 if this subsection and subsection (10) did not apply
	exceeds the total of
	(b) the amount that would be the taxpayer's allowable capital losses for the year from dispositions of property if this subsection and subsection (10) did not apply,
	(c) the maximum amount that would have been deductible in computing the taxpay er's taxable income for the year in respect of the taxpayer's net capital losses for preceding taxation years if there were sufficient taxable capital gains for the year from dispositions of property, and
	(d) the amount, if any, by which
	(i) the amount that would be the taxpay er's taxable capital gains for the taxpay er's last taxation year that ended before February 23, 1994 from dispositions of property if no election were made under subsection (8)
	exceeds the total of
	(ii) the amount that would be the taxpay er's allowable capital losses for the year from dispositions of property if no elec tion were made under subsection (8), and
	(iii) the maximum amount that would have been deductible in computing the taxpayer's taxable income for the year in respect of the taxpayer's net capital losses for preceding taxation years if no election were made under subsection (8).
Accrued capital losses election limit	(10) Where a taxpayer has made an election under subsection (8) in which a property was designated under subparagraph (8)(b)(iv), the election is deemed not to have been made where
	(a) the total of the amounts determined under paragraphs (9)(b) and (c) in respect of the taxpayer exceeds the amount deter mined under paragraph (9)(a) in respect of the taxpayer; or
	(b) the total of all amounts each of which would, if this subsection did not apply, be the taxpayer's allowable capital loss for the taxpayer's last taxation year that ended before February 23, 1994 from the disposi tion of a property deemed to have been disposed of under paragraph (8)(b) exceeds the total of all amounts each of which is the taxpayer's taxable capital gain for the year from the disposition of a property deemed to have been disposed of under paragraph (8)(a).
	(2) Subsection (1) applies to the 1993 and subsequent taxation years.
	94. (1) The Act is amended by adding the following after section 143.1:
	Cost of Tax Shelter Investments
Definitions	143.2 (1) The definitions in this subsection apply in this section.
``expenditure' ' « dépense »	``expenditure'' means an outlay or expense or the cost or capital cost of a property.
``limited partner'' « commandita i- re »	``limited partner'' has the meaning that would be assigned by subsection 96(2.4) if that subsection were read without reference to ``if the member's partnership interest is not an exempt interest (within the meaning as signed by subsection (2.5)) at that time and''.
``limited- recourse amount'' « montant à recours limité »	``limited-recourse amount'' means the unpaid principal amount of any indebtedness for which recourse is limited, either immedi ately or in the future and either absolutely or contingently.
``taxpayer'' « contribua- ble »	``taxpayer'' includes a partnership.
``tax shelter investment'' « abri fiscal déterminé »	``tax shelter investment'' means
	(a) a property that is a tax shelter for the purpose of subsection 237.1(1); or
	(b) a taxpayer's interest in a partnership where
	(i) an interest in the taxpayer
	(A) is a tax shelter investment, and
	(B) the taxpayer's partnership inter est would be a tax shelter investment if
	(I) this Act were read without reference to this paragraph and to the words ``having regard to state ments or representations made or proposed to be made in connec tion with the property'' in the definition ``tax shelter'' in sub section 237.1(1),
	(II) the references in that defini tion to ``represented'' were read as references to ``that can reason ably be expected'', and
	(III) the reference in that defini tion to ``is represented'' were read as a reference to ``can reasonably be expected'',
	(ii) another interest in the partnership is a tax shelter investment, or
	(iii) the taxpayer's interest in the partnership entitles the taxpayer, di rectly or indirectly, to a share of the income or loss of a particular partner ship where
	(A) another taxpayer holding a part nership interest is entitled, directly or indirectly, to a share of the income or loss of the particular partnership, and
	(B) that other taxpayer's partnership interest is a tax shelter investment.
At-risk adjustment	(2) For the purpose of this section, an at-risk adjustment in respect of an expenditure of a particular taxpayer, other than the cost of a partnership interest to which subsection 96(2.2) applies, means any amount or benefit that the particular taxpayer, or another taxpay er not dealing at arm's length with the particular taxpayer, is entitled, either immedi ately or in the future and either absolutely or contingently, to receive or to obtain, whether by way of reimbursement, compensation, revenue guarantee, proceeds of disposition, loan or any other form of indebtedness, or in any other form or manner whatever, granted or to be granted for the purpose of reducing the impact, in whole or in part, of any loss that the particular taxpayer may sustain in respect of the expenditure or, where the expenditure is the cost or capital cost of a property, any loss from the holding or disposition of the proper ty.
Amount or benefit not included	(3) For the purpose of subsection (2), an at-risk adjustment in respect of a taxpayer's expenditure does not include an amount or benefit
	(a) to the extent that it is included in determining the value of J in the definition ``cumulative Canadian exploration ex pense'' in subsection 66.1(6), of M in the definition ``cumulative Canadian develop ment expense'' in subsection 66.2(5) or of I in the definition ``cumulative Canadian oil and gas property expense'' in subsection 66.4(5) in respect of the taxpayer; or
	(b) the entitlement to which arises
	(i) because of a contract of insurance with an insurance corporation dealing at arm's length with the taxpayer (and, where the expenditure is the cost of an interest in a partnership, with each member of the partnership) under which the taxpayer is insured against any claim arising as a result of a liability incurred in the ordinary course of carrying on the busi ness of the taxpayer or the partnership,
	(ii) as a consequence of the death of the taxpayer,
	(iii) in respect of an amount not included in the expenditure, determined without reference to subparagraph (6)(b)(ii), or
	(iv) because of an excluded obligation (as defined in subsection 6202.1(5) of the Income Tax Regulations) in relation to a share issued to the taxpayer or, where the expenditure is the cost of an interest in a partnership, to the partnership.
Amount or benefit	(4) For the purposes of subsections (2) and (3), where the amount or benefit to which a taxpayer is entitled at any time is provided by way of an agreement or other arrangement under which the taxpayer has a right, either immediately or in the future and either absolutely or contingently (otherwise than as a consequence of the death of the taxpayer), to acquire property, for greater certainty the amount or benefit to which the taxpayer is entitled under the agreement or arrangement is considered to be not less than the fair market value of the property at that time.
Amount or benefit	(5) For the purposes of subsections (2) and (3), where the amount or benefit to which a taxpayer is entitled at any time is provided by way of a guarantee, security or similar indem nity or covenant in respect of any loan or other obligation of the taxpayer, for greater certain ty the amount or benefit to which the taxpayer is entitled under the guarantee or indemnity at any particular time is considered to be not less than the total of the unpaid amount of the loan or obligation at that time and all other amounts outstanding in respect of the loan or obligation at that time.
Amount of expenditure	(6) Notwithstanding any other provision of this Act, the amount of any expenditure that is, or is the cost or capital cost of, a taxpayer's tax shelter investment, and the amount of any expenditure of a taxpayer an interest in which is a tax shelter investment, shall be reduced to the amount, if any, by which
	(a) the amount of the taxpayer's expendi ture otherwise determined
	exceeds
	(b) the total of
	(i) the limited-recourse amounts of
	(A) the taxpayer, and
	(B) all other taxpayers not dealing at arm's length with the taxpayer
	that can reasonably be considered to relate to the expenditure,
	(ii) the taxpayer's at-risk adjustment in respect of the expenditure, and
	(iii) each limited-recourse amount and at-risk adjustment, determined under this section when this section is applied to each other taxpayer who deals at arm's length with and holds, directly or indi rectly, an interest in the taxpayer, that can reasonably be considered to relate to the expenditure.
Repayment of indebtedness	(7) For the purpose of this section, the unpaid principal of an indebtedness is deemed to be a limited-recourse amount unless
	(a) bona fide arrangements, evidenced in writing, were made, at the time the in debtedness arose, for repayment by the debtor of the indebtedness and all interest on the indebtedness within a reasonable period not exceeding 10 years; and
	(b) interest is payable at least annually, at a rate equal to or greater than the lesser of
	(i) the prescribed rate of interest in effect at the time the indebtedness arose, and
	(ii) the prescribed rate of interest applica ble from time to time during the term of the indebtedness,
	and is paid in respect of the indebtedness by the debtor no later than 60 days after the end of each taxation year of the debtor that ends in the period.
Limited- recourse amount	(8) For the purpose of this section, the unpaid principal of an indebtedness is deemed to be a limited-recourse amount of a taxpayer where the taxpayer is a partnership and recourse against any member of the partner ship in respect of the indebtedness is limited, either immediately or in the future and either absolutely or contingently.
Timing	(9) Where at any time a taxpayer has paid an amount (in this subsection referred to as the ``repaid amount'') on account of the principal amount of an indebtedness that was, before that time, the unpaid principal amount of a loan or any other form of indebtedness to which subsection (2) applies (in this subsec tion referred to as the ``former amount or benefit'') relating to an expenditure of the taxpayer,
	(a) the former amount or benefit is consid ered to have been an amount or benefit under subsection (2) in respect of the taxpayer at all times before that time; and
	(b) the expenditure is, subject to subsection (6), deemed to have been made or incurred at that time to the extent of, and by the payment of, the repaid amount.
Timing	(10) Where at any time a taxpayer has paid an amount (in this subsection referred to as the ``repaid amount'') on account of the principal amount of an indebtedness which was, before that time, an unpaid principal amount that was a limited-recourse amount (in this subsection referred to as the ``former limited-recourse indebtedness'') relating to an expenditure of the taxpayer,
	(a) the former limited-recourse indebted ness is considered to have been a limited-re course amount at all times before that time; and
	(b) the expenditure is, subject to subsection (6), deemed to have been made or incurred at that time to the extent of, and by the amount of, the repaid amount.
Short-term debt	(11) Where a taxpayer pays all of the principal of an indebtedness no later than 60 days after that indebtedness arose and the indebtedness would otherwise be considered to be a limited-recourse amount solely be cause of the application of subsection (7) or (8), that subsection does not apply to the indebtedness unless
	(a) any portion of the repayment is made with a limited-recourse amount; or
	(b) the repayment can reasonably be con sidered to be part of a series of loans or other indebtedness and repayments that ends more than 60 days after the indebtedness arose.
Series of loans or repayments	(12) For the purpose of paragraph (7)(a), a debtor is considered not to have made arrange ments to repay an indebtedness within 10 years where the debtor's arrangement to repay can reasonably be considered to be part of a series of loans or other indebtedness and repayments that ends more than 10 years after it begins.
Information located outside Canada	(13) For the purpose of this section, where it can reasonably be considered that informa tion relating to indebtedness that relates to a taxpayer's expenditure is available outside Canada and the Minister is not satisfied that the unpaid principal of the indebtedness is not a limited-recourse amount, the unpaid princi pal of the indebtedness relating to the taxpay er's expenditure is deemed to be a limited-re course amount relating to the expenditure unless
	(a) the information is provided to the Minister; or