A Canadian holding company will enter into an arrangement for the monetization of some of its shares in a Canadian public company ("ACo") under which it will enter into a forward agreement for the sale of the shares to a financial institution ("IF") and also receive an interest-bearing loan from IF, with the shares being pledged to IF under a hypothec. One of the purposes of the arrangement is to permit Mr. X to maintain control over the voting rights attached to the ACo shares for reasons that are redacted from the published ruling.
CRA ruled inter alia that the arrangements would not cause a disposition of the subject shares of ACo nor would s. 245(2) be applied.