Capacity Recalculation

"In particular, CRA confirmed that the corporate group would need to determine any pre-regime excess capacity and any first regime year’s excess capacity twice: once using the 40% ratio of permissible expenses that generally applies for taxation years beginning on or after October 1, 2023 and before January 1, 2024 for purposes of determining the taxpayer’s cumulative unused excess capacity (CUEC) for those years; and a second time using the 30% ratio that applies for subsequent taxation years, for the purpose of determining the taxpayer’s cumulative unused capacity for those subsequent years (relevantly, for taxation years beginning in 2024, 2025 and 2026)."