The provision you refer to, section 18 of the Income Tax Act, is a provision that restricts the deductibility of interest in certain cases for Canadian businesses borrowing to make investments outside of Canada. The provision was put into the law coming out of the 2007 budget, but has not yet had effect. It was, by its terms, set up only to come into effect in 2012.
The Minister of Finance established an expert panel to review the international tax system of Canada to make comparisons between that system and other systems and to obtain information from various parties and persons who were knowledgeable in the area of taxation. The recommendation of the panel was that this provision was onerous for Canadian businesses making investments, and that it was more onerous than similar provisions in many countries where Canadian businesses have to compete. A decision was taken to remove the provision.