CRA indicates that "an interest … in a corporation other than shares" includes debt

A private foundation that, at the end of a taxation year, holds more than 20% of a class of a corporation’s class of shares (for example, as the result of a bequest) faces a potential penalty under s. 188.1(3.1). Could this excess be resolved by the corporation redeeming the shares for a promissory note? The issue lies in s. 188.1(3.2), which states that if a private foundation enters into a transaction to avoid a “divestment obligation percentage” by substituting shares for "an interest … in a corporation other than shares," then such interest is deemed to have been converted back into shares at their FMV.

When asked about this, the Charities Directorate stated:

[W]e take the said term [“interest”] to include (in a broad, general sense) any right to have the advantage accruing from anything, and any right in the nature of property (such as a right of a creditor for repayment from the debtor's assets, as in the foundation's case), and not limited to stock options or other rights to acquire shares … .

Neal Armstrong. Summary of 12 December 2018 Interpretation Letter of the CRA Charities Directorate to Simon Cheung under s. 188.1(3.2) and summary of Simon Cheung, "Private Foundations: Exceeding the 20 Percent Limit", Canadian Tax Focus, Vol. 9, No. 2, May 2019, p. 5 under s. 188.1(3.1).