When asked to comment on the McNeeley decision, CRA stated:
When contemplating the establishment of a trust which will acquire securities of an employer to be held for the benefit of employees, consideration of the EBP rules is advised. If the intent is that the trust be governed by section 7 of the Act, so as not to be treated as an EBP, then care must be taken to ensure that the requirements to be a section 7 trust are met. As noted in CRA technical interpretation 2016-0641841I7, a trust arrangement that provides for allocations and distributions of employer shares on a fully discretionary basis would not be governed by section 7.
If the arrangement is found to be an EBP, any distributions of shares to the employee beneficiaries will be included in their income at their fair market value as income from an office or employment pursuant to paragraph 6(1)(g), with no rollover available, and the employee beneficiaries will not be able to claim a capital gains deduction in respect of the growth in the value of the shares up to the time they are received.