Similarly, a subject to Chibougamau Lumber Ltd. v.M.N.R. entered into several equipment leases with the possibility of acquiring the property for one dollar plus the unpaid sums that remain under the terms of any lease. The judgment did not deal with Wardean Drilling`s judicial review (which was not mentioned by the Tax Review Board), but with the board`s private law finding that the disputed contracts “are not a time lease in the real legal sense of the word” but “are no more than a purchase on a time payment schedule.”  On this basis, as in Lagueux-Freéres, the board did not allow the difference between the deduction of rents claimed by the insured and the capital expense allowance to which it was entitled in due form. Higher response rate. As a general rule, the buyer gets a higher return in a sales credit contract than in the case of a conventional credit agreement. In addition, the buyer may be able to circumvent state laws that limit the interest rate for conventional financing. In addition, at the end of the rental period, the buyer benefits from an increase in the value of the property. Finally, the buyer can use the purchase with mortgage financing; this can further increase the return on the money invested. When the property is transferred under an option-to-purchase lease, the courts of the common law provinces have generally distinguished between “real leases” in which ownership cases are retained by the lessor and “financial leases” or “guarantee leases,” in which the taker acquires the economic beneficiary. , while the lessor retains the legal title as security interests.  Although the distinction between these two types of leases is often difficult to establish in practice, the factors that favour characterization of a financing lease or guarantee are often difficult to establish in practice: (1) automatic retention of the property at the end of the lease agreement or, in the event of payment of an agreed amount. , or the obligation to acquire the property at the end of the lease; (2) a lease term corresponding to the life of the property; (3) rental payments corresponding to or greater than the sum of the capital and financing costs of the property; (4) an option price below the expected value of the property when the option can be exercised; (5) lease conditions that distribute to the purchaser the loss or profit of a subsequent sale of the property; (6) transactions in which the lessor acquires ownership of a supplier chosen by the taker to lease the property to the taker; and (7) contractual remedies characteristic of a financing transaction, such as the acceleration of default payments, for example.B.  Although none of the tax cases in the common provinces relating to leasing option contracts reported one of the common law cases in which these factors were applied, most of them took similar factors into account in determining whether tenants acquired land at tax purposes as part of the agreement.
 These factors may also have influenced the administrative practices of the Canada Revenue Agency, as they correspond to the circumstances in which the Canada Revenue Agency was once willing to characterize leasing contracts as sales and not as leases.  Avoid debt restrictions. Companies that are unable to take on additional debt through previous credit contracts or loans can circumvent these restrictions through a sale and sale.