In the United States they have certain entities that can be treated either as a corporation or as a partnership or a disregarded entity. In certain cases it's advantageous to set up one of these entities that is treated as a corporation for Canadian tax purposes but is treated as a disregarded entity or a flow through for U.S. tax purposes. In so doing, basically you could finance this foreign entity with a loan in a Canadian partnership or a U.S. partnership, which gives you a deduction in Canada. That hybrid entity will loan to another U.S. company. That hybrid entity would be a corporation for Canadian purposes, and that would be treated as active business earnings for Canadian purposes. But for the U.S., if you merge the two companies, there's no interest and no expense.
On June 5th, 2007. See this statement in context.