Eastern Daylight Saving Time, June 18, 1987 or a grandfathered share of the capital stock of a corporation, where at the particular time under the terms or conditions of the share or any agreement in respect of the share,
(a)it may reasonably be considered, having regard to all the circumstances, that the amount of the dividends that may be declared or paid on the share (in this definition referred to as the “dividend entitlement”) is, by way of a formula or otherwise
(i)fixed,
(ii)limited to a maximum, or
(iii)established to be not less than a minimum, or
(b)it may reasonably be considered, having regard to all the circumstances, that the amount that the shareholder is entitled to receive in respect of the share on the dissolution, liquidation or winding-up of the corporation (in this definition referred to as the “liquidation entitlement”) is, by way of formula or otherwise
(i)fixed,
(ii)limited to a maximum, or
(iii)established to be not less than a minimum,
but does not include a share that is at the particular time a prescribed share, a term preferred share, a share described in paragraph (e) of the definitionterm preferred sharein this subsection during the applicable time period referred to in that paragraph or a taxable preferred share and, for the purposes of this definition,
(c)the dividend entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all dividends on the share are determined solely by reference to the dividend entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if
(i)the definitiontaxable preferred sharein this subsection were read without reference to paragraph (f) of that definition,
(ii)the other share were issued after June 18, 1987, and
(iii)the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definitionterm preferred sharein this subsection,
(d)the liquidation entitlement of a share of the capital stock of a corporation shall be deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all the liquidation entitlement is determinable solely by reference to the liquidation entitlement of another share of the capital stock of the corporation or of another corporation that controls the corporation that would not be a taxable preferred share if
(i)the definitiontaxable preferred sharein this subsection were read without reference to paragraph (f) of that definition,
(ii)the other share were issued after June 18, 1987, and
(iii)the other share were not a grandfathered share, a prescribed share or a share described in paragraph (e) of the definitionterm preferred sharein this subsection, and
(e)where
(i)it may reasonably be considered that the dividends that may be declared or paid to a shareholder at any time on a share (other than a prescribed share or a share described in paragraph (e) of the definitionterm preferred sharein this subsection during the applicable time period referred to in that paragraph) of the capital stock of a corporation issued after December 15, 1987 or acquired after June 15, 1988 are derived primarily from dividends received on taxable RFI shares of the capital stock of another corporation, and
(ii)it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of Part IV.1,
the share shall be deemed at that time to be a taxable RFI share; (action particulière à une institution financière)
tax-indifferent investor, at any time, means a person or partnership that is at that time
(a)a person exempt from tax under section 149,
(b)a non-resident person, other than a person to which all amounts paid or credited under a derivative forward agreement, a synthetic equity arrangement or a specified synthetic equity arrangement, as the case may be, may reasonably be attributed to the business carried on by the person in Canada through apermanent establishment(as defined in section 8201 of theIncome Tax Regulations) in Canada,
(c)a trust resident in Canada (other than a specified mutual fund trust) if any of the interests as a beneficiary under the trust is not afixed interest(as defined in subsection 251.2(1)) in the trust (in this definition referred to as adiscretionary trust),
(d)a partnership more than 10% of the fair market value of all interests in which can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraphs (a) to (c), or
(e)a trust resident in Canada (other than a specified mutual fund trust or a discretionary trust) if more than 10% of the fair market value of all interests as beneficiaries under the trust can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraph (a) or (c); (investisseur indifférent relativement à l’impôt)
taxpayerincludes any person whether or not liable to pay tax; (contribuables)
tax shelterhas the meaning assigned by subsection 237.1(1); (abri fiscal)
tax treatywith a country at any time means a comprehensive agreement or convention for the elimination of double taxation on income, between the Government of Canada and the government of the country, which has the force of law in Canada at that time; (traité fiscal)
10/8 policymeans a life insurance policy (other than an annuity) where
(a)an amount is or may become
(i)payable, under the terms of a borrowing, to a person or partnership that has been assigned an interest in the policy or in an investment account in respect of the policy, or
(ii)payable (within the meaning assigned by the definitionamount payablein subsection 138(12)) under a policy loan (as defined in subsection 148(9)) made in accordance with the terms and conditions of the policy, and
(b)either
(i)the return credited to an investment account in respect of the policy
(A)is determined by reference to the rate of interest on the borrowing or policy loan, as the case may be, described in paragraph (a), and
(B)would not be credited to the account if the borrowing or policy loan, as the case may be, were not in existence, or
(ii)the maximum amount of an investment account in respect of the policy is determined by reference to the amount of the borrowing or policy loan, as the case may be, described in paragraph (a); (police 10/8)
term preferred shareof a corporation (in this definition referred to as theissuing corporation) means a share of a class of the capital stock of the issuing corporation if the share was issued or acquired after June 28, 1982 and, at the time the share was issued or acquired, the existence of the issuing corporation was, or there was an arrangement under which it could be, limited or, in the case of a share issued after November 16, 1978 if
(a)under the terms or conditions of the share, any agreement relating to the share or any modification of those terms or conditions or that agreement,
(i)the owner thereof may cause the share to be redeemed, acquired or cancelled (unless the owner of the share may cause the share to be redeemed, acquired or cancelled by reason only of a right to convert or exchange the share) or cause its paid-up capital to be reduced,
(ii)the issuing corporation or any other person or partnership is or may be required to redeem, acquire or cancel, in whole or in part, the share (unless the requirement to redeem, acquire or cancel the share arises by reason only of a right to convert or exchange the share) or to reduce its paid-up capital,
(iii)the issuing corporation or any other person or partnership provides or may be required to provide any form of guarantee, security or similar indemnity or covenant (including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the holder thereof or any person related thereto) with respect to the share, or
(iv)the share is convertible or exchangeable unless
(A)it is convertible into or exchangeable for
(I)another share of the issuing corporation or a corporation related to the issuing corporation that, if issued, would not be a term preferred share,
(II)a right or warrant that, if exercised, would allow the person exercising it to acquire only a share of the issuing corporation or a corporation related to the issuing corporation that, if issued, would not be a term preferred share, or
(III)both a share described in subclause (I) and a right or warrant described in subclause (II), and
(B)all the consideration receivable for the share on the conversion or exchange is the share described in subclause (A)(I) or the right or warrant described in subclause (A)(II) or both, as the case may be, and, for the purposes of this clause, where a taxpayer may become entitled on the conversion or exchange of a share to receive any particular consideration (other than consideration described in any of subclauses (A)(I) to (A)(III)) in lieu of a fraction of a share, the particular consideration shall be deemed not to be consideration unless it may reasonably be considered that the particular consideration was receivable as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.1) or 258(3), or
(b)the owner thereof acquired the share after October 23, 1979 and is
(i)a corporation described in any of paragraphs (a) to (e.1) of the definitionspecified financial institution,
(ii)a corporation that is controlled by one or more corporations described in subparagraph (i),
(iii)a corporation that acquired the share after December 11, 1979 and is related to a corporation referred to in subparagraph (i) or (ii), or
(iv)a partnership or trust of which a corporation referred to in subparagraph (i) or (ii) or a person related thereto is a member or a beneficiary,
that (either alone or together with any of such corporations, partnerships or trusts) controls or has an absolute or contingent right to control or to acquire control of the issuing corporation,
but does not include a share of the capital stock of a corporation
(c)that was issued after November 16, 1978 and before 1980 pursuant to an agreement in writing to do so made before November 17, 1978 (in this definition referred to as an “established agreement”),
(d)that was issued as a stock dividend
(i)before April 22, 1980 on a share of the capital stock of a public corporation that was not a term preferred share, or
(ii)after April 21, 1980 on a share that was, at the time the stock dividend was paid, a share prescribed for the purposes of paragraph (f),
(d.1)that is listed on a designated stock exchange in Canada and was issued before April 22, 1980 by
(i)a corporation referred to in any of paragraphs (a) to (d) of the definitionspecified financial institutionin this subsection,
(ii)a corporation whose principal business is the lending of money or the purchasing of debt obligations or a combination thereof, or
(iii)an issuing corporation associated with a corporation described in subparagraph (i) or (ii),
(e)for a period not exceeding ten years and, in the case of a share issued after November 12, 1981, for a period not exceeding five years, from the date of its issuance, which share was issued by a corporation resident in Canada,
(i)as part of a proposal to, or an arrangement with, its creditors that had been approved by a court under theBankruptcy and Insolvency Act,
(ii)at a time when all or substantially all of its assets were under the control of a receiver, receiver-manager, sequestrator or trustee in bankruptcy, or
(iii)at a time when, by reason of financial difficulty, the issuing corporation or another corporation resident in Canada with which it does not deal at arm’s length was in default, or could reasonably be expected to default, on a debt obligation held by a person with whom the issuing corporation or the other corporation was dealing at arm’s length and the share was issued either wholly or in substantial part and either directly or indirectly in exchange or substitution for that obligation or a part thereof,
and, in the case of a share issued after November 12, 1981, the proceeds from the issue may reasonably be regarded as having been used by the issuing corporation or a corporation with which it was not dealing at arm’s length in the financing of its business carried on in Canada immediately before the share was issued,
(f)that is a prescribed share, or
(f.1)that is a taxable preferred share held by a specified financial institution that acquired the share
(i)before December 16, 1987, or
(ii)before 1989 pursuant to an agreement in writing entered into before December 16, 1987,
other than a share deemed by paragraph (c) of the definitionshort-term preferred sharein this subsection or by paragraph (i.2) to have been issued after December 15, 1987 or a share that would be deemed by paragraph (e) of the definitiontaxable preferred sharein this subsection to have been issued after December 15, 1987 if the references therein to “8:00 p.m