Principal Issues: 1. Does subsection 15(1) apply to deem a shareholder benefit to the shareholder that acquired a "control block" of shares on the XXXXXXXXXX continuance transaction that occurred on XXXXXXXXXX? 2. Can certain shareholders of the XXXXXXXXXX, that are XXXXXXXXXX (and TCCs) avail themselves of the 112(1) deduction on dividends received from the XXXXXXXXXX?
Position: 1. No; 2. Yes, with caveats.
Reasons: 1. Subsection 15(1) does not apply because the benefit was realized on a share for share exchange, whereby the corporation that continued as a XXXXXXXXXX acquired and cancelled the shares of the shareholder that acquired the controlling block of shares, simultaneously with the shareholder acquiring the control block (See exception 15(1)(a)(ii)). 2. Yes, it is available, provided that the shares are not term preferred shares acquired in the ordinary course of business XXXXXXXXXX.