The Agnico choice of an issuance date FX translation date may be inconsistent with the Mosely v. Koffyfontein finding that the consideration paid for shares on a debenture conversion is to be determined at that conversion time

Agnico convertible debentures, which had been issued for U.S.$1,000 per debenture, were converted into common shares at a time that the U.S. dollar had depreciated in value, thereby in the view of CRA giving rise to a s. 39(2) FX gain. However, Woods J found that the relevant date for translating the amount paid by Agnico on settling the debentures should be viewed as the date when the "true consideration" for the shares (with which Agnico repaid the debentures) had been received, which she found was the date when the U.S.1,000 was received on the prior issuance of each debenture.

Chris Van Loan and Peter Lee suggest that Mosely v. Koffyfontein, [1904] 2 Ch. 108] (CA) arguably casts doubt on the correctness of Agnico given the finding there that the consideration paid for shares on the conversion of debentures usually is to be determined at the time the obligation to repay is extinguished, and not when the debentures are issued.

Neal Armstrong. Summary of Chris Van Loan and Peter Lee, "Agnico Eagle Mines Limited v. The Queen," International Tax, Wolters Kluwer CCH, No. 80, February 2015, p.1 under s. 261(2).