1. Mary owns 65% of the common shares of Mary's Flowers Ltd. (MFL). Hannah owns 75% of the common shares of Sunshine Investments Ltd. (SIL). The other 25% of SIL common shares are owned by unrelated persons. SIL owns all of the common shares of Spark Water Ltd. (SWL). SIL also owns the remaining 35% of the common shares of MFL. Mary is married to Hannah's nephew, Jake. The 35% ownership of SIL in MFL was to provide MFL with some needed start-up financing. Hannah has no other involvement with MFL's operations.

Required: explain, in detail, why the corporations involved in the preceding fact situation are associated or not associated. If they can be associated in one or more ways, use the appropriate provisions from Section 256 of the Income Tax Act