CRA indicated that when a consultant receives a stock purchase option as payment for services rendered, the fair market value of the option on the date it was granted (which is a question of fact) less any amount paid to acquire the option is generally added to the consultant's business income under s. 9(1). On exercise,, the consultant realizes a gain generally equalling the excess of the fair market value of the shares acquired over the exercise price.
If the facts show that the gain constitutes a portion of the consideration the consultant received for his or her services, the CRA feels that the gain must be treated as business income ... .