I am curious on whether a specific business structure/transacting is permitted within Canada under the CRA as well as under ASPE accounting standards.

That is, to have two Canadian owned and operated businesses (CCPC's) who have the same 100% owner (also Canadian resident).  

I wanted clarification on how transactions are treated between the two companies since they would be non-arm's length (related party) transactions (common owner).  

Issue 1 - Treatment of RPT under ASPE

Issue of how to treat transactions: (between using carrying amount (bad - i.e. your cost) and exchange amount (good - i.e. the amount you sell from company to company).

http://www.bdo.ca/en/Library/Services/assurance-and-accounting/Documents/ASPE-at-a-Glance/ASPE-at-a-Glance-Section-3840-Related-Party-Transactions.pdf

To be able to use Exchange amount (good) - needs two criteria fulfilled - 1) transaction to be in normal course of business, 2) Transaction to have commercial substance 

I am curious on if anyone has any thoughts of two commonly owned companies transacting between each other to essentially transfer profit from one of the corporations to another? Both from a CRA standpoint (I don't believe they should mind either way since profit is staying within CCPC's) and from an ASPE standpoint (I'm not clear on how to fulfil the commercial substance criteria), thanks and I appreciate any input.

- ALSO - please note, the goods to be sold between companies are specifically zero rated goods and services in Canada so can ignore GST/HST/PST implications. (http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/zrrtd-eng.html )