NPOs With 'For-Profit' Subsidiaries - When Is This Acceptable?

The Canada Revenue Agency (the "CRA") recently issued a ruling discussing the ability of a paragraph 149(1)(l) not-for-profit organization to invest excess funds in a taxable subsidiary.  Due to various redactions in the ruling, it is unclear what the not-for-profit objectives of the organization were or how the organization at issue was able to accumulate funds.   The facts in the ruling did indicate, however, that the organization was charged a management fee in each year by its parent and there was apparently evidence indicating that the amount of the fee paid to the parent was "unreasonable" in comparison to the work done for the fee.  Without the management fee, it was noted, the organization would have shown a profit in the years under audit.