Imagine this scenario: you have carried-forward capital losses of a sizeable amount and are worried about dying without ever attaining enough capital gains to write off against all those losses.
In a nutshell: should you die with net capital losses carried forward from previous years, you (or rather your surviving representative) may be able to use those losses against your regular income in the year of death, and the year prior to death.
One way this could really matter: should you have an RRSP or RRIF, it may be beneficial to allow the plan to deregister upon death, making it fully taxable, instead of rolling it over tax-free to your spouse. The carried forward capital losses could offset the taxable income from deregistering, possibly resulting in no tax payable. This may be more tax efficient than rolling over the account to your spouse, who would eventually pay tax on the amount when he or she withdraws the funds throughout retirement.
This is a simplified example of a complex topic. We recommend consulting your investment advisor about your specific situation.
See also: Income taxes at death