This report reviews the evolving discussion on implementing a system of Canadian tax loss transfers or tax loss consolidation for closely held corporate groups. Significant commentary is available on this topic because it is an area of widespread debate in the tax community at the present time and has been ongoing since the retraction of a previously existing tax loss regime that existed in Canada in the 1940’s. The aim of this report is to compare and contrast the published opinions of various stakeholders and increase coverage of review where there are deficiencies. Benefits to be gained, potential costs, and regime mechanics are discussed. Existing models are investigated to provide comparatives for Canada’s use in designing an optimal system. Although Canada’s most recent position is that a revised tax loss regime will not be pursued, the reflections contained in this report will be useful when and if the topic is revisited once more.
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