Canada: 2017 Federal Budget – Selected Tax Measures

On March 22, 2017 the Minister of Finance introduced Canada's 2017 Federal Budget (2017 Budget). Despite persistent rumours, no change was proposed to the capital gains inclusion rate. The 2017 Budget does include a mix of targeted anti-avoidance rules, legislative responses to recent jurisprudence, and other narrow changes to address perceived problems in the existing provisions of the Income Tax Act (Act).


Mark-to-Market Election for Derivatives

The recent Federal Court of Appeal decision in Kruger Incorporated v. Canada (Kruger) allowed a taxpayer, under general income computation principles, to apply mark-to-market treatment in determining its income and losses from certain derivative positions acquired as part of a business. While mark-to-market treatment for certain financial instruments has been available to financial institutions under specific rules in the Act, the absence of statutory rules or clear guidance in case law has left other taxpayers who wanted to employ a mark-to-market approach facing a significant degree of uncertainty. In order to provide a "clear framework", and presumably foreclose any further changes due to evolving case-law, the 2017 Budget now proposes to implement a specific regime governing when gains and losses on certain derivatives that are on income account may be computed on a mark-to-market basis.

Under the new rules, taxpayers will be permitted to elect to report all of their "eligible derivatives" on a mark-to-market basis in the year of the election and all subsequent taxation years. Once such an election has been made, it can only be revoked with the concurrence of, and pursuant to terms set by, the Minister of National Revenue.

For the purposes of these rules, an "eligible derivative" will mean a swap agreement, a forward purchase or sale agreement, a forward rate agreement, a futures agreement, an option agreement, or a similar agreement provided that:

  1. The agreement is not a capital property, obligation on capital account, or any of certain other stipulated types of property;
  2. Either the taxpayer has audited financial statements prepared in accordance with GAAP for the taxation year or the derivative otherwise has a readily ascertainable fair market value; and
  3. If the taxpayer is a financial institution, the agreement is not a tracking property, other than an excluded property, each as defined in the existing mark-to-market rules in the Act.

It is worth noting that the budget materials suggests that the derivative must be valued on a mark-to-market basis in the audited financial statements in order to satisfy the requirement in (B), but this is not explicitly required by the draft legislation accompanying the 2017 Budget. We understand that the Department of Finance expects that, in practice, all relevant derivatives would be valued on a mark-to-market basis in any audited financial statements.

Where a taxpayer (other than a financial institution) has made the election, the taxpayer will generally be deemed to have disposed of and re-acquired, at fair market value, each eligible derivative at the end of each taxation year. For taxpayers that are financial institutions, eligible derivatives will, if the election is made, instead be deemed to be mark-to-market property for the purposes of the existing mark-to-market property regime in the Act already applicable to financial institutions. Any accrued gain or loss on the eligible derivative that exists immediately prior to the beginning of the taxpayer's first election year is not required to be immediately realized under the mark-to-market rules, and will instead be deferred and realized in the taxation year in which the taxpayer disposes of the eligible derivative.

Taxpayers (other than financial institutions) that do not make the new derivative mark-to-market election will not be permitted to use any method of profit computation that "produces a substantially similar effect to" the new elective regime for the purposes of computing the taxpayer's income from a business or property in respect of any derivative. Presumably, this prohibition will require such taxpayers to compute their relevant derivative income on a realization basis, though such a requirement has not been made explicit.

These proposals also include rules that would exclude eligible derivatives from being eligible for a tax-free rollover into a Canadian corporation or Canadian partnership under section 85 or subsection 97(2) of the Act where the taxpayer has made the election to report the derivatives on a mark-to-market basis.

The new election will be available for taxation years beginning on or after March 22, 2017.

Investment Fund Mergers

The 2016 Federal Budget (2016 Budget) introduced rules to deny tax-free "switching" among different investment strategies of investment funds structured as separate classes (often referred to as "corporate classes") of shares of a mutual fund corporation (known as a "switch corporation") by means of share for share exchanges. As a result of those rules, the benefits of structuring such investment funds as classes of shares of a switch corporation are significantly diminished. While the Act currently contains mutual fund merger rules to allow the merger of one mutual fund corporation into one mutual fund trust (and the merger of two mutual fund trusts) on a tax-deferred basis, the existing rules do not allow for the tax-deferred reorganization of a single mutual fund corporation into multiple mutual fund trusts. In response to the 2016 Budget change, the investment industry made submissions requesting that the federal government consider introducing new rules to facilitate the tax-deferred reorganization of switch corporations into multiple mutual fund trusts. The 2017 Budget proposes to extend the existing mutual fund merger rules to allow for such a reorganization to occur on a tax-deferred basis.

The 2017 Budget proposals require that the switch corporation transfer all or substantially all of its property to one or more mutual fund trusts and, where the merger is into multiple mutual fund trusts, that all the shares of each class of the switch corporation recognized as an investment fund under securities law be redeemed in consideration solely for units of the particular mutual fund trust that received all or substantially all of the assets that were allocated to that investment fund. Accordingly, the proposed rule effectively requires that a tax-deferred conversion or merger involve all of the classes of shares of a switch corporation. The proposed rule does not allow the tax-deferred conversion of some (but not all) of the classes of shares of the switch corporation into one or more mutual fund trusts while maintaining the remaining classes of shares in the switch corporation structure.

The new rule applies to mergers that occur on or after March 22, 2017.

Segregated Funds

The 2017 Budget proposes to allow tax-deferred mergers of segregated funds (which are life insurance policies with many features similar to mutual fund trusts) in a manner similar to that under the mutual fund merger rules. It is also proposed that segregated funds be allowed to carry over non capital losses that arise in taxation years beginning after 2017, subject to the normal limitations for carryforward and carryback of non-capital losses. These measures will apply to mergers of segregated funds carried out after 2017 and to losses arising in taxation years beginning after 2017.

Anti-Abuse Rules for "Straddle" Transactions

The 2017 Budget proposes a new specific anti-avoidance rule targeting transactions in which a taxpayer enters into economically offsetting positions, but chooses to realize the loss on one of the positions shortly before—but in an earlier taxation year than—realizing the corresponding gain on another position. By engaging in a series of such "straddle transactions" in succeeding years, the 2017 Budget indicates that it may have been possible to defer the realization of income for a considerable period of time.

The Department of Finance's disapproval of straddle transactions is not surprising. The Canada Revenue Agency (CRA) has long taken the position that such arrangements would be considered abusive and challenged under the general anti-avoidance rule in the Act, as well as other applicable provisions. However, this has apparently (in the Department of Finance's view) not had a sufficiently dissuasive effect. The 2017 Budget therefore proposes to enact a specific anti-avoidance regime to address such transactions. As has become typical with new anti-avoidance rules, the budget materials recite that the targeted transactions already constitute an abuse of the scheme of the Act and are being challenged under existing tax rules, but that the proposed amendments will "clarify" this and avoid the time and cost of such challenges in the future.

The new rule generally applies where a taxpayer would otherwise realize a loss on a disposition of a "position" in a taxation year if the taxpayer has an unrecognized gain at the end of the year in respect of one or more "offsetting positions". Generally speaking, where the new rule applies, the recognition of the loss will be deferred for so long as, and to the extent that, the taxpayer has unrealized net gains on offsetting positions. However, the rule's exact consequences are determined by a series of complicated formulas, which may have unexpected consequences in some cases. Additional rules target arrangements aimed at achieving a similar result to a straddle transaction by exploiting different tax year-ends of a taxpayer and a non-arm's length or affiliated person to the taxpayer (referred to in the rules as a "connected person").

However, the new rules will not apply to:

  1. Certain deemed dispositions. Deemed dispositions under certain specific provisions of the Act (such as the deemed dispositions upon death or emigration) will not be subject to the rules, presumably on the theory that taxpayers would not normally trigger such deemed dispositions in order to realize the straddle effect.
  2. Capital property. The new rules will not apply to capital properties or obligations or liabilities on capital account.
  3. Financial institutions and Mutual Funds. The new rules will not apply to financial institutions, mutual fund corporations or mutual fund trusts.

A "position" of a taxpayer is broadly defined to mean a share, partnership or trust interest, commodity, foreign currency, certain types of derivatives (essentially the same as those described in the new elective mark-to-market rules), certain debts owing to or by the taxpayer (in particular, debts denominated in foreign currency, and certain structured and convertible debt obligations), or any right in or obligation to deliver any of the foregoing. Several such properties, obligations and liabilities may also constitute a single position if it is reasonable to conclude that each is held in connection with the others. It is noteworthy that, although the budget materials frame these rules as addressing the taxation of derivatives, they will potentially impact a wider range of instruments and properties and may affect taxpayers with no derivative exposure whatsoever, to the extent that none of the specific exceptions apply.

While the definition of a "position" explicitly includes certain items that would not be considered property of the taxpayer (such as a debt owing by the taxpayer, or certain "out of the money" derivatives), special rules will deem the taxpayer to "hold" the position while it is outstanding and to dispose of the position upon the settlement or extinguishment of the position so that the rules can apply to such items.

An "offsetting position" of a taxpayer with respect to a particular position is defined as another position held by the person if either (i) the other position would have the effect of eliminating "all or substantially all" of the holder's risk of loss and opportunity for gain or profit with respect to the particular provision, or (ii) there is "a high degree of negative correlation between changes in value" of the two positions and it can reasonably be considered that the two positions were held as part of a series of transactions the principal purpose of which was to reduce or defer tax. The concept in (i) echoes the application requirements of the existing synthetic disposition arrangement (SDA) and synthetic equity arrangement (SEA) rules in the Act, and presumably will be interpreted in a similar manner. However, no guidance has been provided regarding what degree of negative correlation will be required to satisfy the test in (ii).

The definition of an offsetting position can also include a position held by a connected person, if the purpose of the connected person holding such offsetting position can reasonably be considered to be to eliminate the taxpayer's exposure to the position in question. This concept is also similar to one present in the existing SDA and SEA rules.

In addition to the broad exemptions described above, the rules include a number of more specific exceptions intended to prevent the application of the rules to ordinary commercial transactions, including the following:

  1. Continued exposure to offsetting position. The new rules will not apply if exposure to the offsetting position is maintained, unchanged, for the 30-day period beginning on the date of disposition of the first position. Care should be exercised in relying on this exception as any change in the offsetting position—possibly even an increase in the offsetting position—would seem to prevent the exception from applying.
  2. Ordinary course hedging. The new rules contain limited exceptions for hedging commercial exposures incurred in the course of business. In particular, generally, where a taxpayer has a position in commodities that are manufactured, produced, grown, extracted or processed in the taxpayer's business, or debts that are incurred by the taxpayer in the course of business, and holds an offsetting position that can reasonably be considered to be held to reduce risks of fluctuations in prices (for commodities), interest rates (for debts), or the value of currency (in either case) with respect to the first position, the new rules will not apply to either of the positions.
  3. Business purpose. The new rules will not apply where it can reasonably be considered that none of the main purposes of the series of transactions is to defer or reduce tax.

These new rules will apply where a position, or an offsetting position to the position, is acquired, entered into, renewed, extended or becomes owing on or after March 22, 2017.

Clarification of De Facto Control

The concept of a corporation being "controlled, directly or indirectly in any manner whatever" (commonly referred to as "de facto" control) is relevant to various rules in the Act, including qualification of a corporation as a Canadian-controlled private corporation. The concept of de facto control involves something less than legal voting control entitling a shareholder to elect a majority of the board of directors, but is not precisely defined in the existing legislation. The recent Federal Court of Appeal decision in McGillivray Restaurant Ltd. v. Canada (McGillivray) suggested that such de facto control could only exist where there was some legally enforceable right over the board or shareholders (in the McGillivray case, the fact that the putative de facto controller served as, among other things, the relevant corporation's director and general manager would apparently not have been sufficient to meet this threshold, but the Federal Court of Appeal did ultimately find a legally enforceable right to exist in an unwritten contract with the majority shareholder that maintained the controller in those positions).

The Budget 2017 proposes to override the McGillivray decision by amending the Act to "clarify" that the determination of de facto control will "take into consideration all factors that are relevant in the circumstances", and that a finding of de facto control will specifically not require the existence of a legally enforceable right over the board of directors or shareholders of the corporation.

This change will apply for taxation years beginning on or after March 22, 2017.

Changes in Natural Resource Taxation

Expense for Development Wells

Current Canadian tax rules for oil and gas exploration and development allow expenses associated with the drilling of "discovery wells", whether or not they result in the discovery of a previously unknown petroleum or natural gas reservoir, to be treated as Canadian exploration expenses (CEE) and be fully deducted in the year incurred. This is in contrast to expenses incurred to drill production wells, which are treated as Canadian development expenses (CDE) and only deductible at a rate of 30 per cent per year on a declining-balance basis.

The 2017 Budget proposes to characterize the costs associated with most discovery wells as CDE. Classification as CEE would still be available where the well is ultimately abandoned (or has not produced within 24 months), or where the Minister of Natural Resources certifies that the well will not produce within 24 months and will cost more than C$5-million to drill (though details have not yet been provided as to what expenses will be included in making this determination). The 2017 Budget suggests that this change will affect the majority of oil and gas costs that currently qualify as CEE. It will also likely impact small to mid-size producers disproportionately.

These changes will apply to expenses incurred after 2018, subject to limited grandfathering where the expenses are incurred pursuant to a written commitment (including a commitment to a government under the terms of a licence or permit) entered into before March 22, 2017.

Reclassification of Flow-Through CDE as CEE

Small oil and gas producers will also be impacted by a change in the treatment of certain expenses renounced under flow-through shares. Flow-through share financings have been and continue to be an important source of funding for oil and gas producers, particularly small to mid-size producers. Under a flow-through share arrangement, a subscriber subscribes for common shares—typically at a premium to non-flow-through offerings—and in exchange, a corporation agrees to renounce CEE or CDE that it incurs after the agreement date to investors who can then deduct the expenses in calculating their own taxable income. Under current rules, certain small oil and gas producers are permitted to treat up to C$1-million of CDE as CEE for the purposes of renunciation, increasing the value of the deduction to shareholders.

The 2017 Budget proposes to no longer permit CDE to be treated as CEE for this purpose.

This change will apply to expenses incurred after 2018, subject to limited grandfathering where the expenses are incurred before April 2019 and renounced under a flow-through share agreement entered into after 2016 and before March 22, 2017.

Mineral Exploration Tax Credit

The 2017 Budget proposes to extend the eligibility for the current mineral exploration tax credit (available to individuals investing in flow-through shares) to flow-through share agreements entered into on or before March 31, 2018.

Geothermal Energy

The 2017 Budget proposes to make changes to the tax rules for geothermal energy used for heating so that such rules align with the (more favourable) rules applicable to certain other green energy sources. In particular, the 2017 Budget generally proposes that:

  1. CCA classes 43.1 and 43.2 be expanded to include eligible geothermal equipment used to provide heat
  2. Geothermal heating be made an eligible energy source for a district energy system (such that certain equipment that is part of the systems may also be included in class 43.1 or 43.2)
  3. Certain expenses related to developing geothermal energy sources will qualify as Canadian renewable and conservation expenses

These changes will apply in respect of property acquired for use on or after March 22, 2017 that has not previously been used or acquired for use before that date.


Captive Insurance – Foreign Branches of Life Insurers

The foreign affiliate rules in the Act contain a number of anti-base erosion provisions designed to prevent Canadian taxpayers from shifting Canadian-source income to other jurisdictions. Under these provisions, income of a foreign affiliate that would otherwise be considered to be active business income is required to be included in foreign accrual property income (FAPI). The taxpayer's proportionate share of FAPI earned by its controlled foreign affiliate is included in the taxpayer's income on a current basis whether or not such income is distributed to the taxpayer. One such base erosion rule would deem income from the insurance of Canadian risks by a foreign affiliate of a Canadian taxpayer to be FAPI.

Currently, there is no analogous anti-base erosion rule relating to the insurance of Canadian risks through a foreign branch of a Canadian life insurer even though the business income of such a foreign branch would generally not be taxable in Canada. While the budget materials indicate that anti-avoidance rules currently in the Act may apply to such transactions, the 2017 Budget proposes to amend the Act to introduce rules applicable to foreign branches of Canadian life insurers similar to the foreign affiliate base erosion regime applicable to the insurance of specified Canadian risks. Where the new rules apply, the insurance of specified Canadian risks by a foreign branch of a Canadian life insurer will be deemed to be part of a business carried on by the Canadian life insurer in Canada and the related insurance policies will be deemed to be life insurance policies in Canada. Complementary anti-avoidance rules, modelled upon the anti-avoidance rules applicable to "insurance swap transactions" contained in the foreign affiliate base erosion regime relating to the insurance of Canadian risks, are also proposed.

In addition, the 2017 Budget proposes a broad anti-avoidance rule for both Canadian life insurers and foreign affiliates. Under this broad anti-avoidance rule, where a foreign branch of a Canadian life insurer or a foreign affiliate has insured foreign risks and it can reasonably be concluded that the foreign risks were insured as part of a transaction or series of transactions one of the purposes of which was to avoid the proposed base erosion rules for Canadian life insurers or the existing foreign affiliate base erosion regime for specified Canadian risks, then the life insurer or the foreign affiliate will be treated as if it had insured Canadian risks.

This measure will apply to taxation years of Canadian taxpayers that begin on or after March 22, 2017.

Base Erosion Profit Shifting Measures

The 2017 Budget reiterates that Canada remains firmly committed to the multilateral efforts of the G20 and the Organisation for Economic Co-operation and Development (OECD) to address base erosion and profit shifting (BEPS). BEPS refers generally to the perceived shifting by multinational enterprises (MNEs) of income from high-tax jurisdictions to low-tax jurisdictions. The Action Plan on BEPS was first released in July 2013, and was followed up with a series of final reports in October 2015. The 2017 Budget indicates that the federal government is in the process of implementing, or has implemented, a number of measures agreed to as BEPS minimum standards, including the enactment of legislation in December 2016 to implement country-by-country reporting, the spontaneous exchange of tax rulings that could otherwise give rise to BEPS concerns by the CRA with other tax administrations, and pursuing the signature of the multilateral instrument to streamline the implementation of tax treaty-related BEPS recommendations.

Multilateral Instrument

As mandated by BEPS Action 15, the OECD released a "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting" (MLI) and detailed explanatory notes on November 24, 2016. The MLI is an instrument that many countries could sign to modify certain existing provisions of bilateral tax treaties to implement various treaty-based BEPS measures without the need for burdensome bilateral renegotiation. In order for the MLI to apply to a tax treaty between Canada and another country, Canada and the other country must first sign the MLI (either at the OECD's planned signing ceremony during the week of June 5, 2017 or at any time after December 31, 2016). Subsequent to such signing, a number of procedures must be followed, including domestic ratification (Parliamentary approval in Canada), and OECD notification. Once in effect, the MLI could have a significant impact on the application of Canada's tax treaties, including the denial of treaty benefits in certain circumstances and the modification of existing dispute resolution procedures.

Under the MLI, signatories must agree to adopt treaty-related minimum standards in the BEPS recommendations. However, the MLI allows countries some flexibility in determining how the minimum standards will be met and what additional provisions a country will opt into. We expect that the most significant decision for Canada in this respect will be whether minimum standards regarding the prevention of treaty abuse are met through the use of a principal purpose test or a comprehensive limitation-on-benefit provision—the latter likely having a much more significant impact on existing practices and arrangements.

Canada participated in the MLI's development. The 2017 Budget indicates that the federal government is pursuing signature of the MLI and undertaking the necessary domestic processes to do so. However, the 2017 Budget does not provide any indication as to which countries it will pursue the signing of the MLI with, or the approach it may take with respect to the different options offered by the MLI for the BEPS minimum standards or which (if any) of the optional provisions it will opt into.

Other BEPS Measures

With respect to other BEPS recommendations (those that do not reflect minimum standards), the federal government indicates that Canada already has robust rules in place (pointing to the FAPI regime) or is already applying the recommendations (pointing, among other things, to the requirements for taxpayers, promoters and advisers to disclose specified tax avoidance transactions to the CRA).


Taxation of Work-In-Progress of Professional Taxpayers

Current rules of the Act allow taxpayers that carry on a business that is the professional practice of an accountant, dentist, lawyer, medical doctor, veterinarian or chiropractor (designated professionals) to elect to exclude the value of work-in-progress in computing their income. This election effectively allows income of such professional taxpayers to be recognized when the work is billed (known as bill-basis accounting), thus allowing deferral of tax because the expenses associated with the work-in-progress are deducted on a current basis while the associated revenues are not included in income until they are billed.

The 2017 Budget proposes to eliminate the ability of designated professionals to elect to use bill-basis accounting for taxation years that begin on or after March 22, 2017. This measure will have significant impact on professional businesses, which may be subject to tax liabilities before cash is received to pay them. To mitigate the measure's impact, a transitional period is proposed to phase in the inclusion of work-in-progress into income. For the first taxation year that begins on or after March 22, 2017, 50 per cent of the lesser of the cost and the fair market value of work-in-progress will be taken into account to determine the value of inventory held by the professional business under the Act. The full amount of the lesser of the cost and the fair market value of work in progress will be taken into account for purposes of valuing inventory of such business for the second and successive taxation years that begins on or after March 22, 2017.

Registered Plans

The 2017 Budget proposes to extend certain anti-avoidance rules that currently apply to registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs) and tax-free savings accounts (TFSAs) to also apply to registered education savings plans (RESPs) and registered disability savings plans (RDSPs). In particular, the current rules regarding non-qualified investments, prohibited investments, and advantages will be extended to RESPs and RDSPs.

The new rules generally apply to investments acquired and transactions occurring after March 22, 2017. The budget materials indicate that the generation of income on previously acquired investments will be considered a "transaction" for these purposes. Limited grandfathering is provided for swap transactions, and registered plan holders will be permitted to make an election, by April 1, 2018, to pay Part I tax on distributions on investment income from an investment held by a registered plan on March 22, 2017 that becomes a prohibited investment as a result of these changes.

Electronic Delivery of T4 Slips

In what will not doubt be a welcome development for payroll departments, the 2017 Budget proposes, subject to certain conditions, to allow the electronic delivery of T4 information slips to employees without obtaining express consent. Employers will be required to comply with criteria to be specified by the Minister of National Revenue, including to safeguard the privacy of employee information, and a paper slip will still be required where requested by the employee.

This change will apply in respect of T4 slips that are required to be filed after 2017.


Review of Private Corporation Tax Planning

The 2017 Budget states that the federal government is currently reviewing tax planning strategies involving private corporations that may, in the federal government's view, inappropriately reduce personal taxes of high-income earners in ways not available to other Canadians. The federal government will release a paper in the coming months describing these issues in more detail and provide proposed policy responses. While no specific measures are proposed in the 2017 Budget, the budget does list several tax planning strategies that the government has identified in its review thus far, including using private corporations to:

  1. "Sprinkle" income on family members as a form of income splitting
  2. Hold portfolios of passive investments
  3. Convert what would otherwise be regular income into capital gains

Enhanced Tax Enforcement

The 2017 Budget also proposes to provide an additional C$523.9-million over the next five years to "prevent tax evasion and improve tax compliance". In particular, the budget identifies four areas of focus:

  1. Increasing verification activities
  2. Hiring additional auditors and specialists with a focus on the underground economy
  3. Improving systems to target high-risk international and abusive tax avoidance cases
  4. Improving the quality of investigative work targeting criminal tax evaders

The budget materials indicate that the government expects this spending to result in approximately C$2.5-billion of additional revenue over the next five years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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