16.16. Where a share of the capital stock of an operator is issued to a person under an agreement in writing entered into between the person and the operator under which the operator has agreed to incur expenses referred to in subparagraph a of subparagraph 1 of the second paragraph of any of sections 16.9, 16.11 and 16.13 and to renounce, under the Taxation Act (chapter I-3) or the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), in favour of that person, an amount that does not exceed the consideration received by the operator for the share, relating to expenses so incurred by the operator, the expenses to which the amount relates are deemed, from the day on which they are incurred, never to have been such expenses incurred by the operator.
The first paragraph does not apply if the share is issued to a legal person that gives an undertaking in writing to the Minister not to renounce, under the Taxation Act or the Income Tax Act, the expenses described in the agreement referred to in the first paragraph and the legal person fulfills that undertaking.