29 November 2016 CTF Roundtable Q. 3, 2016-0670201C6 - Agnico-Eagle Mines Decision -- summary under Paragraph 143.3(3)(b)

CRA rejected the suggestion that Agnico-Eagle could support the realization of a capital loss under s. 39(2) when a U.S.-dollar denominated debenture is converted into shares, stating that a loss from appreciation in the shares of the issuer is not an FX loss described in s. 39(2). CRA went on to indicate that in a similar future case, CRA would rely on s. 143.3(3)(b) and consider that, on conversion of a convertible debenture, the holder had actually exercised an option for the purposes of that provision, so that the amount paid for the shares under the terms of the options would be the cash value paid for the debenture.