Kevin J. Donnelly (613)957-2745
Attention: XXXX
November 17, 1987
Dear Sir:
This is in reply to your letter of September 14, 1987 concerning the application of subsection 191.2(1), as proposed in the June 18, 1987 Notice of Ways and Means Motion, to a corporation that has an authorized class of special shares that may be issued in one or more series having different terms and conditions.
Technically, there may be some uncertainty with making an election with respect to the first series of a class to be issued because of the clear wording in proposed 191.2(1) as well as in subsection 248(6) of the Act which refers to shares of a class issued in two or more series. However, in our opinion the terms and conditions of the first series could provide for an election to be made with respect to that series. As it would be the only series issued the terms and conditions of the first series would be read as those of the class for purposes of proposed 191.2(1). When the second and subsequent series of the class are issued, subsection 248(6) would apply, and proposed 191.2(1) would be read, in retrospect if necessary, on a series by series basis. The election with respect to the first series would not have to apply to the second or subsequent series whose terms and conditions could differ from those of the first series.
The Department of Finance is aware of your concern.
Yours truly,
Chief Leasing & Financing Section Financial Industries Division Rulings Directorate Legislative and Intergovernmental Affairs Branch