Deeming provisions are a familiar feature of Canadian legislative texts in general, and Canadian tax statutes, regulations, and treaties in particular. This article is divided into two parts. In the first part, the authors undertake a theoretical discussion of the interpretation and application of deeming rules. They discuss the classification of deeming rules, the strength of any presumption they create, their scope of application, and their effect. The second part of the article analyzes from a practical perspective the controversial deemed interest rule in subsection 214(7) of the Income Tax Act. Specifically, the authors consider whether any deemed interest arising on the conversion for shares of a debenture of a Canadian issuer would be participating debt interest, with the result that withholding tax would apply notwithstanding that the non-resident and the Canadian issuer are at arm’s length.