15 November 2011 Headquarters Letter Case No. 135608

Where a "capital pool company" raises capital pursuant to a prospectus on a blind pool basis in order to invest in a company or make an asset acquisition, it will not be considered to be engaged in commercial activity (and, therefore, will not be entitled to register) until it has identified a particular asset acquisition. However, once it has identified an acquisition of assets that will be used in a commercial activity, anything done by the CPC (other than the making of a supply) in connection with the acquisition or establishment of that commercial activity shall be deemed to have been done in the course of the commercial activities of the CPC. Where the targeted acquisition instead is of a corporation, an input tax credit generally only will be available to the extent that the requirements of s. 186(2) are satisfied.

Where a "capital pool company" which has raised capital pursuant to a prospectus on a blind pool basis has identified an acquisition of assets that will be used in a commercial activity, anything done by the CPC (other than the making of a supply) in connection with the acquisition or establishment of that commercial activity shall be deemed by s. 141.1(3)(a) to have been done in the course of the commercial activities of the CPC. Once s. 141.1(3)(a) so applies, it may be able to claim ITCs under s. 171(1) on property held by it at that time including expenses previously incurred by it which are considered eligible capital property for income tax purposes, given that eligible capital may be considered property for ETA purposes.

Where a "capital pool company" which has raised capital pursuant to a prospectus on a blind pool basis has identified a corporation to acquire, s. 186(2) may apply to permit it to claim ITCs respecting the related expenses thereafter incurred by it.

Where a "capital pool company" raises capital pursuant to a prospectus on a blind pool basis in order to invest in a company or make an asset acquisition, it will not be considered to be engaged in commercial activity (and, therefore, will not be entitled to register) until it has identified a particular asset acquisition. However, once it has identified an acquisition of assets that will be used in a commercial activity, anything done by the CPC (other than the making of a supply) in connection with the acquisition or establishment of that commercial activity shall be deemed to have been done in the course of the commercial activities of the CPC. Where the targeted acquisition instead is of a corporation, an input tax credit generally only will be available to the extent that the requirements of s. 186(2) are satisfied.