In the course of reviewing the meaning of "beneficial owner" under the OECD model convention, Kandev and Peters stated (at p. 28):
The jurisprudential trend in Canada, at least in theory, has been to allow increasing reliance on later commentaries, However, the practical effect of such commentaries remains uncertain. What seems clear is that taxpayers, their advisers, the tax administration, and tax judges will not avert their eyes from OECD materials merely on the theoretical basis that they were issued subsequent to the negotiation of a particular treaty. To the contrary, whatever the relevance and weight to be given to OECD commentaries, they are an important point of reference for treaty interpretations.
Is "beneficial owner" a question of legal or economic substance? (p. 3)
On the one hand, "beneficial owner" may be construed in light of the classical legal ownership notions of possession, use, risk, and control. On the other hand, it may be interpreted on the basis of factual or economic substance considerations. In other words, the differing views seem to stem from stressing either "beneficial" or ownership" in the expression.
The answer in Canada is legal substance
Prévost Car (p. 20-21)
The domestic solution to the meaning of "beneficial owner" described in Prévost Car is the current law in Canada. It has been accepted by the minister and has been applied in subsequent cases, in accordance with the principle of stare decisis.
Recent Canadian jurisprudence has confirmed the general domestic meaning of "beneficial owner" adopted by the Tax Court in Prévost Car and subsequent relied on in Velcro for the purposes of the Act. These cases reiterate that (1) the beneficial owner of property is the person who has possession, use, risk, and control of the property; (2) a person acting as an agent or nominee in respect of the property cannot be the beneficial owner of property; (3) the concept of a "conduit" is layered on top of the general beneficial owner and agent/nominee analysis, although for this purpose the test for a conduit appears practically indistinguishable from the general tests for possession, use, risk, and control and agent/nominee; and (4) underlying the entire beneficial owner analysis is the concept that legal substance prevails over economic substance in the absence of a sham.
1977: Impetus for adding "beneficial owner" to OECD model in 1977 (p. 29)
The recently released minutes of the relevant OECD working party meetings in the period 1969-71 reveal that the concept of beneficial ownership was introduced in the 1977 OECD model because of a concern, voiced by the United Kingdom, that articles 10-12 would otherwise apply to an agent or nominee who had a legal right to the income.
1986: "Beneficial owner" distorted in 1986 to fight perceived abuses (p. 29)
Starting is 1986 with the CFA report, "double Taxation and the Use of Conduit Companies," the OECD effectively sought to give "beneficial owner" a meaning other than its legal meaning in the common-law legal tradition and to shape this term into a weapon the tax administrators could use to fight perceived abusive treaty shopping.
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