Holdco holds shares of Opco with a nominal ACB and no safe income. In a corporate reorganization "aimed at protecting the assets of Opco, whose purpose is to reduce the fair market value (FMV) of Holdco’s shares in Opco," Holdco lends money to Opco equal to the accrued gain on the shares (of $1M), and receives that money back as an actual $1M dividend (targeted to be tax-free). It does not matter if this transaction has no capital gains avoidance purpose. CRA accepted that since the purpose of the creditor-proofing is to reduce the fair market value of the Opco shares, the full amount of the dividend is deemed to be a capital gain.
Under a variation of the first alternative, the shares of Opco have full ACB (of $1M) and also safe income on hand of $1M. CRA indicated that this assumption that the safe income attributable to the shares of Opco held by Holdco was equal to the amouont of the dividend received was "surprising," stating "by way of example, the cost could reflect the accumulated safe income before an acquisition of shares by Holdco and, if Opco had not increased in value since that time, the safe income would be nil after such acquisition of shares by Holdco." However, accepting these assumptions, the dividend here as well of $1M would also be a capital gain, so that the ACB could only be utilized on a future disposition of the Opco shares.