Words and Phrases - "business conducted"

In finding that the business of a Barbados subsidiary of the taxpayer was not a “business conducted principally with persons with whom [it did] not deal at arm’s length” notwithstanding that it raised its capital mostly from the taxpayer, Côté J. stated (at paras. 45-46):

I agree that the definition of “business” in s, 248(1) is broad and not restricted to income‑generating activities. However, we are not concerned with the word “business” alone. In my view, an ordinary and grammatical reading of the words “business conducted” conveys a different meaning than the word “business” alone. The addition of the verb “conducted” emphasizes Parliament’s intent to focus on the active carrying out of the business rather than on the establishment of prerequisite conditions that enable a foreign affiliate to conduct business.

Raising capital is a necessary part of any business, and capital enables business to be conducted. But one would not generally speak of capitalization itself as the conduct of the business. Our Court has repeatedly affirmed that there is a distinction between capitalization and the conduct of a business. As Justice Rand wrote, “[t]he capital machinery within and by means of which the business earning the income is carried on is distinct from that business itself” (Tip Top Tailors …).