I-3 - Taxation Act

Section 1049.2.2.5.3 Disposition versions

2017-12-07

1049.2.2.5.3. (Repealed).

1997, c. 85, s. 279; 1999, c. 83, s. 273; 2017, c. 29, s. 201.

2006-03-01

1049.2.2.5.3. Where a particular corporation referred to in section 965.11.7.1 has issued a preferred share meeting the requirements set forth in paragraph b of section 965.9.1.0.4.2 or 965.9.1.0.5 that may be redeemed or repaid by the particular corporation or purchased by anyone in any manner whatever, under the conditions pertaining to its issue, and, at a particular time before the date that is 1,825 days after the date of its issue, the share, referred to in this section as a “reference share”, or a replaced share, is either replaced by a share other than a replaced share, or redeemed or repaid by the particular corporation or, where the replaced share has been issued by another corporation, by the other corporation, or purchased by anyone in any manner whatever, the particular corporation, or the other corporation, as the case may be, incurs, in respect of the reference share or the replaced share, as the case may be, except in the case provided for in the third paragraph, a penalty equal to the amount determined in its respect by the formula

(A × B × C) + (A × B × C × D × E).

For the purposes of the formula in the first paragraph,

(a)  A is 18%;

(b)  B is the fraction represented by the ratio between, on the one hand, the number of preferred shares meeting the requirements set forth in paragraph b of section 965.9.1.0.4.2 or 965.9.1.0.5 issued as part of the public share issue within the framework of which the reference share was issued, the custody of which has been entrusted to a dealer under a stock savings plan, which number must correspond to the fraction indicated to that effect by the particular corporation, in accordance with section 965.24.1.4, at the particular time referred to in that paragraph, and, on the other hand, the total number of such preferred shares issued as part of the issue;

(c)  C is the par value of the reference share or, where this section applies in respect of a replaced share issued as part of an issue of several replaced shares as a replacement for a reference share, the result obtained by dividing that par value by the number of such replaced shares so issued, referred to in this subparagraph as the “new par value”, or, where this section applies in respect of a replaced share issued as part of an issue of several shares in substitution for such a share so issued, the result obtained by dividing the new par value by the number of such replaced shares so issued;

(d)  D is the rate that would be calculated in accordance with section 1129.12.4 in respect of the public share issue as part of which the reference share was issued if the said section were read as though the reference therein to subparagraph d of the second paragraph of section 1129.12.3 were a reference to this subparagraph; and

(e)  E is the number of full calendar years included in the period beginning on 1 January in the year following that in which was granted the receipt for the final prospectus or the exemption from filing a prospectus pertaining to the public share issue as part of which the reference share was issued and ending on the date that includes the particular time referred to in the first paragraph.

The first paragraph does not apply in respect of a reference share or replaced share referred to therein where, under the conditions relating to its issue, the consideration received by its holder at the time of redemption, repayment or replacement consists only in shares identical, as to the number and the terms and conditions, rights or other characteristics attached thereto, to those the holder would have obtained in exercising the conversion right conferred on the holder by the reference share or replaced share, as the case may be.

1997, c. 85, s. 279; 1999, c. 83, s. 273.