I-3 - Taxation Act

Section 796.1 Disposition versions

2021-06-02

796.1. In this Title,

“application for continuance” means the application for continuance referred to in paragraph a of the definition of “Canadian Wheat Board continuance”;

“Canadian Wheat Board” means the corporation referred to in subsection 1 of section 4 of the Canadian Wheat Board (Interim Operations) Act, enacted under section 14 of the Marketing Freedom for Grain Farmers Act (S.C. 2011, c. 25), as that section 4 read before being repealed, that is continued under the Canada Business Corporations Act (R.S.C. 1985, c. 44) pursuant to the application for continuance;

“Canadian Wheat Board continuance” means the series of transactions or events that includes

(a)  the application for continuance under the Canada Business Corporations Act that is

i.  made by the corporation referred to in subsection 1 of section 4 of the Canadian Wheat Board (Interim Operations) Act, as it read before being repealed, and

ii.  approved by the Minister of Agriculture and Agri-Food of Canada under Part 3 of the Marketing Freedom for Grain Farmers Act;

(b)  the issuance of a note or other evidence of indebtedness by the Canadian Wheat Board to the eligible trust; and

(c)  the disposition of the eligible debt by the eligible trust, in the same taxation year of the trust in which the eligible debt is issued to it, in exchange for consideration that includes the issuance of shares by the Canadian Wheat Board that have a total fair market value at the time of their issuance that is equal to the amount by which the principal amount of the eligible debt exceeds $10,000,000;

“eligible debt” means a note or other evidence of indebtedness referred to in paragraph b of the definition of “Canadian Wheat Board continuance”;

“eligible share” means a common share of the capital stock of the Canadian Wheat Board that is issued in exchange for the eligible debt in accordance with paragraph c of the definition of “Canadian Wheat Board continuance”;

“eligible trust”, at a particular time, means a trust that meets the following conditions:

(a)  it was established in connection with the application for continuance;

(b)  it is resident in Canada at the particular time;

(c)  immediately before it acquired the eligible debt, it held only property of nominal value;

(d)  it is not exempt, in accordance with Book VIII, from tax on its taxable income for any period in its taxation year that includes the particular time;

(e)  all of the interests of beneficiaries under the trust at the particular time are described by reference to units that are eligible units in the trust;

(f)  the only persons who have acquired an interest as a beneficiary under the trust before the particular time are persons who were participating farmers at the time they acquired the interest;

(g)  all or substantially all of the fair market value of its property at the particular time is based on the value of property that is

i.  eligible debt,

ii.  shares of the capital stock of the Canadian Wheat Board, or

iii.  property described in paragraph a or b of the definition of “qualified investment” in section 204 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) or a deposit with a savings and credit union;

(h)  the property that it has paid or distributed at or before the particular time to a beneficiary under the trust in satisfaction of the beneficiary’s eligible unit in the trust is

i.  money denominated in Canadian dollars, or

ii.  shares distributed as an eligible wind-up distribution of the trust; and

(i)  at no time in its taxation year that includes the particular time is any other trust an eligible trust;

“eligible unit”, in a trust at a particular time, means a unit that describes all or part of an interest as a beneficiary under the trust, where

(a)  the total of all amounts each of which is the value of a unit at the time it was issued by the trust to a participating farmer does not exceed the amount by which the principal amount of the eligible debt exceeds $10,000,000; and

(b)  all of the interests as a beneficiary under the trust are fixed interests, as defined in section 21.0.5, in the trust;

“eligible wind-up distribution”, of a trust, means a distribution of property by the trust to a person where

(a)  the distribution includes a share of the capital stock of the Canadian Wheat Board that is listed on a designated stock exchange;

(b)  the only property (other than a share described in paragraph a) distributed by the trust on the distribution is money denominated in Canadian dollars;

(c)  the distribution results from the disposition of all of the person’s interests as a beneficiary under the trust; and

(d)  the trust ceases to exist immediately after the distribution or immediately after the last of a series of eligible wind-up distributions (determined without reference to this paragraph) of the trust that includes the distribution;

“participating farmer”, in respect of a trust at a particular time, means a person who

(a)  is eligible to receive units of the trust pursuant to the plan under which the trust directs its trustees to grant units to persons who have delivered grain after 31 July 2013 under a contract with the Canadian Wheat Board; and

(b)  is engaged in the production of grain or is entitled, as lessor, vendor or hypothecary creditor or mortgagee, to grain produced by a person engaged in the production of grain or to any share of that grain;

“person” includes a partnership.

2021, c. 14, s. 101.