(b) all or substantially all of the corpora tion's gross revenue for the year consists of
	(i) gross revenue from the operation of ships in transporting passengers or goods in that international traffic,
	(ii) dividends from one or more other corporations each of which
	(A) is a subsidiary wholly-owned cor poration of the corporation, as defined by subsection 87(1.4), and
	(B) is deemed by this subsection to be resident in a country other than Canada throughout each of its taxation years that began after February 1991 and before the last time at which it paid any of those dividends, or
	(iii) a combination of amounts described in subparagraph (i) or (ii) ; and
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	152. (1) The portion of paragraph 251(5)(b) of the Act before subparagraph (i) is replaced by the following:
	(b) where at any time a person has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently,
	(2) Paragraph 251(5)(b) of the Act is amended by striking out the word ``or'' at the end of subparagraph (i) and the word ``and'' at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
	(iii) to, or to acquire or control, voting rights in respect of shares of the capital stock of a corporation, the person is, except where the right is not exercisable at that time because its exercise is contingent on the death, bankruptcy or permanent disability of an individual, deemed to have the same position in relation to the control of the corporation as if the person could exercise the voting rights at that time, or
	(iv) to cause the reduction of voting rights in respect of shares, owned by other shareholders, of the capital stock of a corporation, the person is, except where the right is not exercisable at that time because its exercise is contingent on the death, bankruptcy or permanent disabil ity of an individual, deemed to have the same position in relation to the control of the corporation as if the voting rights were so reduced at that time; and
	(3) Subsections (1) and (2) apply after April 26, 1995.
	153. (1) The Act is amended by adding the following after section 251:
Definition of ``affiliated persons''	251.1 (1) For the purposes of this Act, ``affiliated persons'', or persons affiliated with each other, are
	(a) an individual and a spouse of the individual;
	(b) a corporation and
	(i) a person by whom the corporation is controlled,
	(ii) each member of an affiliated group of persons by which the corporation is controlled, and
	(iii) a spouse of a person described in subparagraph (i) or (ii);
	(c) two corporations, if
	(i) each corporation is controlled by a person, and the person by whom one corporation is controlled is affiliated with the person by whom the other corpora tion is controlled,
	(ii) one corporation is controlled by a person, the other corporation is con trolled by a group of persons, and each member of that group is affiliated with that person, or
	(iii) each corporation is controlled by a group of persons, and each member of each group is affiliated with at least one member of the other group;
	(d) a corporation and a partnership, if the corporation is controlled by a particular group of persons each member of which is affiliated with at least one member of a majority-interest group of partners of the partnership, and each member of that majority-interest group is affiliated with at least one member of the particular group;
	(e) a partnership and a majority interest partner of the partnership; and
	(f) two partnerships, if
	(i) the same person is a majority-interest partner of both partnerships,
	(ii) a majority-interest partner of one partnership is affiliated with each mem ber of a majority-interest group of part ners of the other partnership, or
	(iii) each member of a majority-interest group of partners of each partnership is affiliated with at least one member of a majority-interest group of partners of the other partnership.
Affiliation where amalgama- tion or merger	(2) Where at any time 2 or more corpora tions (in this subsection referred to as the ``predecessors'') amalgamate or merge to form a new corporation, the new corporation and any predecessor are deemed to have been affiliated with each other where they would have been affiliated with each other immedi ately before that time if
	(a) the new corporation had existed im mediately before that time; and
	(b) the persons who were the shareholders of the new corporation immediately after that time had been the shareholders of the new corporation immediately before that time.
Definitions	(3) The definitions in this subsection apply in this section.
``affiliated group of persons'' « groupe de personnes affiliées »	``affiliated group of persons'' means a group of persons each member of which is affili ated with every other member.
``controlled'' « contrôlé »	``controlled'' means controlled, directly or in directly in any manner whatever.
``majority- interest group of partners'' « groupe d'associés détenant une participation majoritaire »	``majority-interest group of partners'' of a partnership means a group of persons each of whom has an interest in the partnership such that
	(a) if one person held the interests of all members of the group, that person would be a majority interest partner of the partnership; and
	(b) if any member of the group were not a member, the test described in paragraph (a) would not be met.
Interpreta- tion	(4) For the purposes of this section,
	(a) persons are affiliated with themselves; and
	(b) a person includes a partnership.
	(2) Subsection (1) applies after April 26, 1995.
	154. (1) Subparagraph 252(4)(a)(ii) of the Act is replaced by the following:
	(ii) would be a parent of a child of whom the taxpayer would be a parent, if this Act were read without reference to paragraph (1)(e) and subparagraph (2)(a)(iii)
	(2) Subsection (1) applies after 1992.
	155. (1) The portion of subsection 256(6) of the English version of the Act after paragraph (b) is replaced by the following:
	the controlled corporation is deemed not to have been controlled by the controller at the particular time.
	(2) The portion of subsection 256(7) of the Act before paragraph (a) is replaced by the following:
Acquiring control	(7) For the purposes of subsections 10(10), 13(21.2) and (24), 14(12) and 18(15), section 37, subsection 40(3.4), the definition ``super ficial loss'' in section 54, section 55, subsec tions 66(11), (11.4) and (11.5), 66.5(3) and 66.7(10) and (11), section 80, paragraph 80.04(4)(h), subsections 85(1.2) and 88(1.1) and (1.2), sections 111 and 127, subsection 249(4) and this subsection ,
	(3) Subparagraph 256(7)(a)(ii) of the Act is replaced by the following:
	(ii) the redemption or cancellation at any particular time of, or a change at any particular time in the rights, privileges, restrictions or conditions attaching to, shares of the particular corporation or of a corporation controlling the particular corporation, where each person and each member of each group of persons that controls the particular corporation im mediately after the particular time was related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the corporation
	(A) immediately before the particular time, or
	(B) immediately before the death of a person, where the shares were held immediately before the particular time by an estate that acquired the shares because of the person's death; and
	(4) Subsection 256(7) of the Act is amended by striking out the word ``and'' at the end of paragraph (a) and by replacing paragraph (b) with the following:
	(b) where at any time 2 or more corpora tions (each of which is referred to in this paragraph as a ``predecessor corporation'') have amalgamated to form one corporate entity (in this paragraph referred to as the ``new corporation''),
	(i) control of a corporation is deemed not to have been acquired by any person or group of persons solely because of the amalgamation unless it is deemed by subparagraph (ii) or (iii) to have been so acquired,
	(ii) a person or group of persons that controls the new corporation immediate ly after the amalgamation and did not control a predecessor corporation im mediately before the amalgamation is deemed to have acquired immediately before the amalgamation control of the predecessor corporation and of each corporation it controlled immediately before the amalgamation (unless the person or group of persons would not have acquired control of the predecessor corporation if the person or group of persons had acquired all the shares of the predecessor corporation immediately be fore the amalgamation), and
	(iii) control of a predecessor corporation and of each corporation it controlled immediately before the amalgamation is deemed to have been acquired immedi ately before the amalgamation by a person or group of persons
	(A) unless the predecessor corporation was related (otherwise than because of a right referred to in paragraph 251(5)(b)) immediately before the amalgamation to each other predeces sor corporation,
	(B) unless, if one person had immedi ately after the amalgamation acquired all the shares of the new corporation's capital stock that the shareholders of the predecessor corporation, or of another predecessor corporation that controlled the predecessor corpora tion, acquired on the amalgamation in consideration for their shares of the predecessor corporation or of the other predecessor corporation, as the case may be, the person would have ac quired control of the new corporation as a result of the acquisition of those shares, or
	(C) unless this subparagraph would, but for this clause, deem control of each predecessor corporation to have been acquired on the amalgamation where the amalgamation is an amal gamation of
	(I) two corporations, or
	(II) two corporations (in this sub clause referred to as the ``parents'') and one or more other corporations (each of which is in this subclause referred to as a ``subsidiary'') that would, if all the shares of each subsidiary's capital stock that were held immediately before the amal gamation by the parents had been held by one person, have been controlled by that person;
	(c) where 2 or more persons (in this paragraph referred to as the ``transferors'') dispose of shares of the capital stock of a particular corporation in exchange for shares of the capital stock of another corporation (in this paragraph referred to as the ``acquiring corporation''), control of the acquiring corporation and of each corpora tion controlled by it immediately before the exchange is deemed to have been acquired at the time of the exchange by a person or group of persons unless
	(i) the particular corporation and the acquiring corporation were related (otherwise than because of a right re ferred to in paragraph 251(5)(b)) to each other immediately before the exchange, or
	(ii) if all the shares of the acquiring corporation's capital stock that were acquired by the transferors on the ex change were acquired at the time of the exchange by one person, the person would not control the acquiring corpora tion;
	(d) where at any time shares of the capital stock of a particular corporation are dis posed of to another corporation (in this paragraph referred to as the ``acquiring corporation'') for consideration that in cludes shares of the acquiring corporation's capital stock and, immediately after that time, the acquiring corporation and the particular corporation are controlled by a person or group of persons who
	(i) controlled the particular corporation immediately before that time, and
	(ii) did not, as part of the series of transactions or events that includes the disposition, cease to control the acquir ing corporation,
	control of the particular corporation and of each corporation controlled by it immedi ately before that time is deemed not to have been acquired by the acquiring corporation solely because of the disposition; and
	(e) where at any time all the shares of the capital stock of a particular corporation are disposed of to another corporation (in this paragraph referred to as the ``acquiring corporation'') for consideration that con sists solely of shares of the acquiring corporation's capital stock and, immediate ly after that time,
	(i) the acquiring corporation is not con trolled by any person or group of persons, and
	(ii) the fair market value of the shares of the capital stock of the particular corpo ration is not less than 95% of the fair market value of all the assets of the acquiring corporation,
	control of the particular corporation and of each corporation controlled by it immedi ately before that time is deemed not to have been acquired by the acquiring corporation solely because of the disposition.
	(5) Subsection 256(8) of the Act is re placed by the following:
Deemed exercise of right	(8) Where at any time a taxpayer acquires a right referred to in paragraph 251(5)(b) with respect to shares and it can reasonably be concluded that one of the main purposes of the acquisition is to avoid
	(a) any limitation on the deductibility of any non-capital loss, net capital loss, farm loss, expense or other amount referred to in subsection 66(11), 66.5(3) or 66.7(10) or (11),
	(b) the application of subsections 10(10) or 13(24), paragraph 37(1)(h) or subsection 55(2), 66(11.4) or (11.5), 111(4), (5.1), (5.2) or (5.3), 181.1(7) or 190.1(6) ,
	(c) the application of paragraph (j) or (k) of the definition ``investment tax credit'' in subsection 127(9), or
	(d) the application of section 251.1 ,
	in determining whether control of a corpora tion has been acquired for the purposes of sub sections 10(10) and 13(24), section 37, sub sections 55(2), 66(11), (11.4) and (11.5), 66.5(3), 66.7(10) and (11), section 80, para graph 80.04(4)(h), sections 111 and 127 and subsections 181.1(7), 190.1(6) and 249(4), and in determining for the purpose of section 251.1 whether a corporation is controlled by any person or group of persons, the taxpayer is deemed to be in the same position in relation to the control of the corporation as if the right were immediate and absolute and as if the tax payer had exercised the right at that time.
Corporations without share capital	(8.1) For the purposes of subsections (7) and (8),
	(a) a corporation incorporated without share capital is deemed to have a capital stock of a single class;
	(b) each member, policyholder and other participant in the corporation is deemed to be a shareholder of the corporation; and
	(c) the membership, policy or other interest in the corporation of each of those partici pants is deemed to be the number of shares of the corporation's capital stock that the Minister considers reasonable in the cir cumstances, having regard to the total number of participants in the corporation and the nature of their participation.
	(6) Subsection (1) applies to taxation years that begin after 1988.
	(7) Subsections (2) and (5) apply after April 26, 1995.
	(8) Subsection (3) applies to the 1994 and subsequent taxation years.
	(9) Paragraph 256(7)(b) of the Act, as enacted by subsection (4), applies