2024 Ruling 2024-1019561R3 - 55(3)(a) reorganization

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether various deemed dividends are exempt from subsection 55(2) by virtue of paragraph 55(3)(a).

Position: Yes. Positive ruling given.

Reasons: Proposed Transactions meet the requirements of paragraph 55(3)(a). Subsection 55(4) does not apply to the Proposed Transactions.

XXXXXXXXXX									2024-101956

Re: Advance Income Tax Ruling – XXXXXXXXXX

This is in reply to your letter dated XXXXXXXXXX, in which you requested an advance income tax ruling (the "Ruling") on behalf of the above-named taxpayer and the other taxpayers listed below (the "Taxpayers"). We understand that to the best of your knowledge and that of the Taxpayers, none of the Proposed Transactions or issues involved in this Ruling are the same as or substantially similar to transactions or issues that are:

i. in a previously filed tax return of the Taxpayers or a related person and:

A. being considered by the CRA in connection with such return;

B. under objection by the Taxpayers or a related person; or

C. the subject of a current or completed court process involving the Taxpayers or a related person; or

ii. the subject of a ruling request previously considered by the Income Tax Rulings Directorate.

The tax account numbers, Tax Services Offices and the Tax Centers of the Taxpayers are:

XXXXXXXXXX

This letter is based solely on the Facts and Proposed Transactions described below. The documentation submitted with the ruling request does not form part of the Facts and Proposed Transactions, and any references thereto are provided solely for the convenience of the reader.

DEFINED TERMS

In this letter, unless otherwise indicated:

i. all references to a statute are to the relevant provisions of the Income Tax Act , R.S.C. 1985 (5th Supp.), c.1, as amended, (the “Act”), or, where appropriate, the Income Tax Regulations, C.R.C., c.945, as amended, (the “Regulations”);

ii. all terms and conditions used in this Ruling request that are defined in the Act (or in the Regulations) have the meaning given in such definition;

iii. all references to monetary amounts are in Canadian dollars; and

iv. the singular should be read as plural and vice versa where the circumstances so require.

The following abbreviations, terms and expressions have the meanings specified, and the relevant parties to the Proposed Transactions (as defined below) will be referred to as follows:

“ACB” means “adjusted cost base” which has the meaning assigned by section 54;

“agreed amount” in respect of a property means the amount that the transferor and transferee of the property have agreed upon in an election under subsection 85(1);

“Amalco” has the meaning assigned by Paragraph 184;

“arm’s length” has the meaning assigned by section 251;

“CCPC” means “Canadian-controlled private corporation” which has the meaning assigned by subsection 125(7);

“Canadian partnership” has the meaning assigned in subsection 102(1);

“capital dividend” has the meaning assigned by subsection 83(2);

“CDA” means “capital dividend account” which has the meaning assigned by subsection 89(1);

“capital gains inclusion rate” means the fraction of the capital gain that is determined to be a taxable capital gain pursuant to paragraph 38(a);

“capital property” has the meaning assigned by section 54;

“Completed Transactions” means the transactions described in Paragraphs 56 to 87(inclusive);

“connected” has the meaning assigned by subsection 186(4);

“Corporations Act” means The Corporations Act of the Province XXXXXXXXXX;

“depreciable property” has the meaning assigned by subsection 13(21);

“dividend refund” has the meaning assigned by subsection 129(1);

“dividend rental arrangement” has the meaning assigned by subsection 248(1);

“eligible dividend” has the meaning assigned by subsection 89(1);

“eligible property” has the meaning assigned by subsection 85(1.1);

“ERDTOH” means “eligible refundable dividend tax on hand” as defined in subsection 129(4);

“fair market value” or “FMV” means the highest price available in an open and unrestricted market between informed prudent parties acting at arm’s length and under no compulsion to act, expressed in terms of money;

“financial institution” has the meaning assigned by subsection 142.2(1);

“financial intermediary corporation” has the meaning assigned by subsection 191(1);

“forgiven amount” has the meaning assigned by subsection 80(1) or 80.01(1), as applicable;

“GRIP” means “general rate income pool” which has the meaning assigned by subsection 89(1);

“guarantee agreement” has the meaning assigned by subsection 112(2.2);

“Holdco” means XXXXXXXXXX. as defined by Paragraph 22;

“Holdco Note” has the meaning assigned by Paragraph 169;

“Insurance Policy” means the policy of insurance which Opco holds covering the lives of Parent, Sibling1, Sibling2, Sibling3 and Sibling4;

“NERDTOH” means “non-eligible refundable dividend tax on hand” as defined in subsection 129(4);

“Newco1” has the meaning assigned by Paragraph 56;

“Newco1 Class A Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class B Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class C Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class D Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class E Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class F Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class G Shares” has the meaning assigned by Paragraph 56;

“Newco1 Class Z Share Redemption Amount” has the meaning assigned by Paragraph 56;

“Newco1 Class Z Shares” has the meaning assigned by Paragraph 56;

“Newco1 Common Shares” has the meaning assigned by Paragraph 56;

“Newco1 Note” has the meaning assigned by Paragraph 170;

“Newco1 Preferred Shares” has the meaning assigned by Paragraph 56;

“Newco1 Special Voting Shares” has the meaning assigned by Paragraph 56;

“Newco2” has the meaning assigned by Paragraph 57;

“Newco2 Class A Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class B Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class C Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class D Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class E Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class F Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class G Shares” has the meaning assigned by Paragraph 57;

“Newco2 Class Z Share Redemption Amount” has the meaning assigned by Paragraph 57;

“Newco2 Class Z Shares” has the meaning assigned by Paragraph 57;

“Newco2 Common Shares” has the meaning assigned by Paragraph 57;

“Newco2 Note” has the meaning assigned by Paragraph 171;

“Newco2 Preferred Shares” has the meaning assigned by Paragraph 57;

“Newco2 Special Voting Shares” has the meaning assigned by Paragraph 57;

“Newco3” has the meaning assigned by Paragraph 58;

“Newco3 Class A Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class B Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class C Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class D Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class E Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class F Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class G Shares” has the meaning assigned by Paragraph 58;

“Newco3 Class Z Share Redemption Amount” has the meaning assigned by Paragraph 58;

“Newco3 Class Z Shares” has the meaning assigned by Paragraph 58;

“Newco3 Common Shares” has the meaning assigned by Paragraph 58;

“Newco3 Note” has the meaning assigned by Paragraph 172;

“Newco3 Preferred Shares” has the meaning assigned by Paragraph 58;

“Newco3 Special Voting Shares” has the meaning assigned by Paragraph 58;

“Newco4” has the meaning assigned by Paragraph 59;

“Newco4 Class A Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class A Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class B Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class B Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class C Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class C Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class D Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class D Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class E Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class E Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class F Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class F Shares” has the meaning assigned by Paragraph 59;

“Newco4 Class G Redemption Amount” means $XXXXXXXXXX per share;

“Newco4 Class G Shares” has the meaning assigned by Paragraph 59;

“Newco4 Common Share Purchase Amount 1” has the meaning assigned by Paragraph 178;

“Newco4 Common Share Purchase Amount 2” has the meaning assigned by Paragraph 180;

“Newco4 Common Share Purchase Amount 3” has the meaning assigned by Paragraph 182;

“Newco4 Common Shares” has the meaning assigned by Paragraph 59;

“Newco4 Note 1A” has the meaning assigned by Paragraph 178;

“Newco4 Note 1B” has the meaning assigned by Paragraph 179;

“Newco4 Note 2A” has the meaning assigned by Paragraph 180;

“Newco4 Note 2B” has the meaning assigned by Paragraph 181;

“Newco4 Note 3A” has the meaning assigned by Paragraph 182;

“Newco4 Note 3B” has the meaning assigned by Paragraph 183;

“Newco4 Preferred Shares” has the meaning assigned by Paragraph 59;

“Newco4 Special Voting Shares” has the meaning assigned by Paragraph 59;

“Newco5” has the meaning assigned by Paragraph 64;

“Newco5 Assumed Liabilities” has the meaning assigned by Paragraph 90;

“Newco5 Common Shares” has the meaning assigned by Paragraph 64;

“Newco6” has the meaning assigned by Paragraph 65;

“Newco6 Common Shares” has the meaning assigned by Paragraph 65;

“Newco7” has the meaning assigned by Paragraph 66;

“Newco7 Assumed Liabilities” has the meaning assigned by Paragraph 93;

“Newco7 Common Shares” has the meaning assigned by Paragraph 66;

“Newco8” has the meaning assigned by Paragraph 67;

“Newco8 Common Shares” has the meaning assigned by Paragraph 67;

“Newco9” has the meaning assigned by Paragraph 68;

“Newco9 Assumed Liabilities” has the meaning assigned by Paragraph 96;

“Newco9 Common Shares” has the meaning assigned by Paragraph 68;

“Newco10” has the meaning assigned by Paragraph 69;

“Newco10 Common Shares” has the meaning assigned by Paragraph 69;

“Newco11” has the meaning assigned by Paragraph 70;

“Newco11 Common Shares” has the meaning assigned by Paragraph 70;

“Newco12” has the meaning assigned by Paragraph 71;

“Newco12 Common Shares” has the meaning assigned by Paragraph 71;

“Newco13” has the meaning assigned by Paragraph 72;

“Newco13 Common Shares” has the meaning assigned by Paragraph 72;

“Opco” means XXXXXXXXXX as defined in Paragraph 29;

“Opco Class A Shares” has the meaning assigned by Paragraph 30;

“Opco Class B Redemption Amount” has the meaning assigned by Paragraph 30;

“Opco Class B Shares” has the meaning assigned by Paragraph 30;

“Opco Class C Shares” has the meaning assigned by Paragraph 30;

“Opco Class D Shares” has the meaning assigned by Paragraph 30;

“Opco Class E Shares” has the meaning assigned by Paragraph 30;

“Opco Class F Shares” has the meaning assigned by Paragraph 30;

“Opco Class G Shares” has the meaning assigned by Paragraph 30;

“Opco Common Shares” has the meaning assigned by Paragraph 30;

“Opco Note 1” has the meaning assigned by Paragraph 174;

“Opco Note 2” has the meaning assigned by Paragraph 175;

“Opco Note 3” has the meaning assigned by Paragraph 176;

“Opco Preferred Shares” means collectively the Opco Class A Shares, Opco Class B Shares, Opco Class C Shares, Opco Class D Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares;

“paid-up capital” or “PUC” has the meaning assigned by subsection 89(1);

“Paragraph” means a numbered paragraph in this document;

“Parent” means XXXXXXXXXX as defined in Paragraph 1;

“Partnership” has the meaning assigned by Paragraph 83;

“Partnership Assumed Liabilities” has the meaning assigned by Paragraph 84;

“principal amount” has the meaning assigned by subsection 248(1);

“proceeds of disposition” has the meaning assigned by section 54;

“Property A” means XXXXXXXXXX;

“Property B” means XXXXXXXXXX;

“Property C” means XXXXXXXXXX;

“Proposed Transactions” means the transactions described in Paragraphs 88 to 188 (inclusive);

“related” means, in relation to a particular person, another person who is related to the particular person by virtue of subsection 251(2), modified for the purposes of section 55 by paragraph 55(5)(e) where applicable;

“Reorganization Agreement” has the meaning assigned by Paragraph 88;

“Sibling1” means XXXXXXXXXX as defined in Paragraph 2;

“Sibling2” means XXXXXXXXXX as defined in Paragraph 2;

“Sibling3” means XXXXXXXXXX as defined in Paragraph 2;

“Sibling4” means XXXXXXXXXX as defined in Paragraph 2;

“specified financial institution” has the meaning assigned by subsection 248(1);

“stated capital account” has the meaning assigned by section 26 of the Corporations Act;

“TCC” means “taxable Canadian corporation” which has the meaning assigned by subsection 89(1);

“taxable dividend” has the meaning assigned by subsection 89(1);

“Trust1” means XXXXXXXXXX Family Trust as defined in Paragraph 6;

“Trust2” means XXXXXXXXXX Family Trust as defined in Paragraph 10;

“Trust3” means XXXXXXXXXX Family Trust as defined in Paragraph 14;

“Trust4” means XXXXXXXXXX Family Trust as defined in Paragraph 18;

“undepreciated capital cost” has the meaning assigned by subsection 13(21); and

“unrelated person” has the meaning assigned by paragraph 55(3.01)(a).

FACTS

A complete description of all the relevant facts is as follows:

Individuals

1. XXXXXXXXXX (“Parent”) is an individual resident in Canada for purposes of the Act and is the father of each of Sibling1, Sibling2, Sibling3, and Sibling4.

2. Each of XXXXXXXXXX(“Sibling1”), XXXXXXXXXX, (“Sibling2”), XXXXXXXXXX(“Sibling3”), and XXXXXXXXXX(“Sibling4”) is an individual resident in Canada for purposes of the Act. Each is a sibling of the other three, and each is the child of Parent.

3. Sibling1 is resident in XXXXXXXXXX.

4. Sibling2 is resident in XXXXXXXXXX.

5. Each of Sibling3 and Sibling4 is resident in XXXXXXXXXX.

Trusts

6. The XXXXXXXXXX Family Trust (“Trust1”) was settled on XXXXXXXXXX. The trustees of Trust1 are Sibling1 and XXXXXXXXXX. The beneficiaries of Trust1 are Sibling1, the issue of Sibling1 (all of whom are related to Sibling1), XXXXXXXXXX (all the shares of the capital stock of which are owned by Sibling1) and any corporation incorporated under the laws of Canada, or the laws of any province or territory of Canada, all of the shares of the capital stock of which are held by Sibling1 and the issue of Sibling1, any of whom is at least 18 years old.

7. The Trust1 agreement provides that the trustees hold the trust’s property and are to keep it invested until the “distribution date” which is defined in paragraph (f) of Article III of the aforementioned agreement.

8. The Trust1 agreement further provides that none, all of or part of the annual net income of Trust1 can be paid to any one or more of the beneficiaries in the absolute discretion of the trustees. On the distribution date, the remaining property of Trust1 is to be paid to any one or more of the beneficiaries in such proportion or proportions as the trustees in their absolute discretion may determine.

9. Trust1 holds XXXXXXXXXX Opco Common Shares.

10. The XXXXXXXXXX Family Trust (“Trust2”) was settled on XXXXXXXXXX. The trustees of Trust2 are Sibling2 and Parent. The beneficiaries of Trust2 are Sibling2, the issue of Sibling2 (all of whom are related to Sibling2), XXXXXXXXXX (all the shares of the capital stock of which are owned by Sibling2), and any corporation incorporated under the laws of Canada, or the laws of any province or territory of Canada, all of the shares of the capital stock of which are held by Sibling2 and the issue of Sibling2, any of whom is at least 18 years old.

11. The Trust2 agreement provides that the trustees hold the trust’s property and are to keep it invested until the “distribution date” which is defined in paragraph (f) of Article III of the aforementioned agreement.

12. The Trust2 agreement further provides that none, all of or part of the annual net income of Trust2 can be paid to any one or more of the beneficiaries in the absolute discretion of the trustees. On the distribution date, the remaining property of Trust2 is to be paid to any one or more of the beneficiaries in such proportion or proportions as the trustees in their absolute discretion may determine.

13. Trust2 holds XXXXXXXXXX Opco Common Shares.

14. The XXXXXXXXXX Family Trust (“Trust3”) was settled on XXXXXXXXXX. The trustees of Trust3 are Sibling3 and Parent. The beneficiaries of Trust3 are Sibling3, the issue of Sibling3 (all of whom are related to Sibling3), XXXXXXXXXX. (all the shares of the capital stock of which are owned by Sibling3), and any corporation incorporated under the laws of Canada, or the laws of any province or territory of Canada, all of the shares of the capital stock of which are held by Sibling3 and the issue of Sibling3, any of whom is at least 18 years old.

15. The Trust3 agreement provides that the trustees hold the trust’s property and are to keep it invested until the “distribution date” which is defined in paragraph (f) of Article III of the aforementioned agreement.

16. The Trust3 agreement further provides that none, all of or part of the annual net income of Trust3 can be paid to any one or more of the beneficiaries in the absolute discretion of the trustees. On the distribution date, the remaining property of Trust3 is to be paid to any one or more of the beneficiaries in such proportion or proportions as the trustees in their absolute discretion may determine.

17. Trust3 holds XXXXXXXXXX Opco Common Shares.

18. The XXXXXXXXXX Family Trust (“Trust4”) was settled on XXXXXXXXXX. The trustees of Trust4 are Sibling4 and XXXXXXXXXX. The beneficiaries of Trust4 are Sibling4, the issue of Sibling4 (all of whom are related to Sibling4), XXXXXXXXXX (all the shares of the capital stock of which are owned by Sibling4), and any corporation incorporated under the laws of Canada, or the laws of any province or territory of Canada, all of the shares of the capital stock of which are held by Sibling4 and the issue of Sibling4, any of whom is at least 18 years old.

19. The Trust4 agreement provides that the trustees hold the trust’s property and are to keep it invested until the “distribution date” which is defined in paragraph (f) of Article III of the aforementioned agreement.

20. The Trust4 agreement further provides that none, all of or part of the annual net income of Trust4 can be paid to any one or more of the beneficiaries in the absolute discretion of the trustees. On the distribution date, the remaining property of Trust4 is to be paid to any one or more of the beneficiaries in such proportion or proportions as the trustees in their absolute discretion may determine.

21. Trust4 holds XXXXXXXXXX Opco Common Shares.

Holdco

22. XXXXXXXXXX (“Holdco”) is a CCPC and TCC and has a taxation year ending on XXXXXXXXXX. Holdco was incorporated under the Corporations Act on XXXXXXXXXX.

23. Holdco’s authorized share capital provides for an unlimited number of common shares, which are voting with one vote per share.

24. The issued and outstanding share capital of Holdco consists of XXXXXXXXXX common shares owned by Parent.

25. Holdco is an investment holding company. Holdco owns, inter alia, XXXXXXXXXX Opco Common Shares and various classes of Opco Preferred Shares, as reflected in the table at Paragraph 31;

26. Reserved.

27. Reserved.

28. Reserved.

Opco

29. XXXXXXXXXX (“Opco”) is a CCPC and TCC and has a taxation year ending on XXXXXXXXXX. Opco was formed under the Corporations Act upon the amalgamation of XXXXXXXXXX.

30. Opco has authorized share capital providing for an unlimited number of shares of the following classes:

• voting common shares (“Opco Common Shares”), voting with XXXXXXXXXX vote per share;

• non-voting common shares, which carry no votes, and of which, none are outstanding;

• Class A shares (“Opco Class A Shares”), voting with XXXXXXXXXX vote per share, non-cumulative dividend entitlement of not greater than XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount of $XXXXXXXXXX per share;

• Class B shares (“Opco Class B Shares”), non-voting, non-cumulative dividend entitlement of not greater than XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share (the “Opco Class B Redemption Amount”);

• Class C shares (“Opco Class C Shares”), non-voting, non-cumulative dividend entitlement of not greater than XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share;

• Class D shares (“Opco Class D Shares”), voting with XXXXXXXXXX vote per share, non-cumulative dividend entitlement XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share;

• Class E shares (“Opco Class E Shares”), voting with XXXXXXXXXX vote per share, non-cumulative dividend entitlement XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share;

• Class F shares (“Opco Class F Shares”), voting with XXXXXXXXXX vote per share, non-cumulative dividend entitlement XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share;

• Class G shares (“Opco Class G Shares”), voting with XXXXXXXXXX vote per share, non-cumulative dividend entitlement XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance which was determined to be $XXXXXXXXXX per share; and

• Class H shares, voting, non-cumulative dividend entitlement XXXXXXXXXX% of the redemption value per share per annum, redeemable and retractable at an amount equal to the aggregate fair market value of the consideration received upon issuance, and of which, none are outstanding.

31. The issued and outstanding share capital of Opco is as follows:

		Shareholder		Number	Class
		Trust 1		XXXXXX	Opco Common Shares
		Trust 2		XXXXXX	Opco Common Shares
		Trust 3		XXXXXX	Opco Common Shares
		Trust 4		XXXXXX	Opco Common Shares
		Holdco		XXXXXX	Opco Common Shares
		Parent		XXXXXX	Opco Class A Shares
		Holdco		XXXXXX	Opco Class A Shares
		Holdco		XXXXXX	Opco Class B Shares
		Sibling1		XXXXXX	Opco Class B Shares
		Sibling2		XXXXXX	Opco Class B Shares
		Sibling3		XXXXXX	Opco Class B Shares
		Sibling4		XXXXXX	Opco Class B Shares
		Holdco		XXXXXX	Opco Class D Shares
		Holdco		XXXXXX	Opco Class E Shares
		Parent		XXXXXX	Opco Class E Shares
		Holdco		XXXXXX	Opco Class F Shares
		Parent		XXXXXX	Opco Class F Shares
		Holdco		XXXXXX	Opco Class G Shares
		Parent		XXXXXX	Opco Class F Shares

32. Parent controls Opco through the holding of the Opco Class A Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares.

33. The Opco Class A Shares were issued to Parent on the amalgamation of XXXXXXXXXX of these Opco Class A Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco.

34. The Opco Common Shares were subscribed for by Holdco (XXXXXXXXXX), and Trust1, Trust2, Trust3, and Trust4 (XXXXXXXXXX) in XXXXXXXXXX.

35. The Opco Class B Shares held by Holdco were issued to Parent on the transfer of assets by Parent to Opco in XXXXXXXXXX. These Opco Class B Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco. The Opco Class B Share held by Sibling1, Sibling2, Sibling3, and Sibling4 were issued in a share exchange transaction in XXXXXXXXXX.

36. The Opco Class C Shares held by Holdco were issued to Parent on the transfer of assets by Parent to Opco in XXXXXXXXXX. These Opco Class C Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco. The Opco Class C Shares held by Sibling1, Sibling2, Sibling3, and Sibling4 were issued as consideration for the transfers of certain partnership interests to Opco in XXXXXXXXXX.

37. The Opco Class D Shares were issued to Holdco on the transfer of partnership interests by Holdco to Opco in XXXXXXXXXX.

38. The Opco Class E Shares were issued to Parent on the transfer of a beneficial interest in a property by Parent to Opco in XXXXXXXXXX of these Opco Class E Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco.

39. The Opco Class F Shares were issued to Parent on the transfer of partnership interests by Parent to Opco in XXXXXXXXXX of these Opco Class F Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco.

39.1 The Opco Class G Shares were issued to Parent in XXXXXXXXXX for a transfer of beneficial interest in real property by Parent to Opco and XXXXXXXXXX of these Opco Class G Shares were sold by Parent to Holdco in XXXXXXXXXX in consideration for common shares of Holdco.

40. Opco operates as a XXXXXXXXXX. Opco owns properties directly, through co-ownerships, and through partnership interests.

41. Opco’s income-producing properties consist of XXXXXXXXXX. All income-producing properties are considered to be capital properties to Opco, and not inventory of its real estate development business.

42. The income-producing properties described in Paragraph 41 include depreciable property in Classes 1, 3, and 6 of Schedule II to the Regulations. Several assets are included in separate classes pursuant to subsection 1101(1ac) of the Regulations. Several assets are included in Class 1b pursuant to subsection 1101(5b.1) of the Regulations. The parking areas are depreciable property included in Class 17 of Schedule II to the Regulations. The furniture and equipment are depreciable property included in Class 8 of Schedule II to the Regulations. The computer equipment is depreciable property included in Class 10 of Schedule II to the Regulations.

43. Opco’s other assets include cash, marketable securities, various accounts receivable, prepaid expenses, land held for development, the Insurance Policy, equipment and leasehold improvements pertaining to the office space Opco leases. Opco is the owner and beneficiary of the Insurance Policy and pays premiums as required.

44. Opco’s assets include other receivables that represent proceeds receivable from the sale of income-producing properties.

45. Opco’s liabilities include accounts payable, income taxes payable, rental deposits, loans payable, and mortgages payable.

46. As of XXXXXXXXXX, Opco had a GRIP balance of approximately $XXXXXXXXXX.

47. Opco paid dividends in prior years including a dividend of $XXXXXXXXXX deemed, pursuant to subsection 84(3), to have been paid in the tax year ended XXXXXXXXXX on the redemption of XXXXXXXXXX Opco Class A Shares held by Parent.

48. On XXXXXXXXXX, Opco redeemed XXXXXXXXXX Opco Class A Shares held by Parent resulting in a deemed dividend of $XXXXXXXXXX to Parent pursuant to subsection 84(3).

49. As of XXXXXXXXXX, Opco had an ERDTOH balance of approximately $XXXXXXXXXX and is expected to receive a dividend refund from ERDTOH of approximately $XXXXXXXXXX as a result of the dividend deemed to have been paid by Opco to Parent on the redemption described in Paragraph 48.

50. As of XXXXXXXXXX, Opco had a NERDTOH balance of approximately $XXXXXXXXXX.

51. As of XXXXXXXXXX, Opco had a capital dividend account balance of $XXXXXXXXXX.

52. In previous years, including XXXXXXXXXX, Opco sold certain properties. Opco intends to divest of other properties.

53. From time to time, Opco renews or refinances mortgages on properties.

53.1 The shares of Opco and Holdco are held as capital property by each of the shareholders.

Nominee Corporations

54. The legal ownership (i.e., legal title) of some income-producing properties owned beneficially by Opco are held in separate nominee corporations, while others are held by Opco. Each nominee corporation is a CCPC, all of the shares of which are owned by Opco. All nominee corporations have XXXXXXXXXX year ends. The only assets held by each nominee corporation are the legal title of a particular income-producing property and a nominal amount of cash.

COMPLETED TRANSACTIONS

The following Completed Transactions occurred on XXXXXXXXXX:

55. Reserved.

Incorporation of Newco1, Newco2, Newco3 and Newco4

Newco1

56. Parent incorporated a corporation (“Newco1”) under the Corporations Act. Newco1 is a TCC and CCPC. The authorized capital of Newco1 includes an unlimited number of shares with the terms and conditions as described below:

i) common shares (“Newco1 Common Shares”), which are voting, participating and entitled to receive dividends if and when declared by the directors of Newco1;

ii) class Z preferred shares (“Newco1 Class Z Shares”), which are non-voting, non-participating, entitled to receive non-cumulative, discretionary dividends not exceeding XXXXXXXXXX% of the redemption amount if and when declared by the directors of Newco1, redeemable and retractable at an amount per share (the “Newco1 Class Z Share Redemption Amount”) equal to the sum of i) the result obtained when the fair market value of the property transferred to Newco1 on the date of first issuance of the Newco1 Class Z Shares less the amount of the non-share consideration, if any, paid, assumed, or delivered by Newco1 for the acquisition of such property is divided by the number of Newco1 Class Z Shares issued as consideration therefor, and ii) any declared and unpaid dividends on the share. The holders of the Newco1 Class Z Shares are entitled to receive, on a liquidation or wind-up, the Newco1 Class Z Share Redemption Amount in priority to the liquidation entitlement of the Newco1 Common Shares;

iii) special voting shares (“Newco1 Special Voting Shares”), which are redeemable and retractable at the subscription price for the shares and are entitled to XXXXXXXXXX votes per share; and

iv) seven separate classes of preferred shares (collectively, the “Newco1 Preferred Shares”), each of which have terms identical to those of the corresponding class of Opco Preferred Shares described in Paragraph 30, being:

(a) class A preferred shares (“Newco1 Class A Shares”);
(b) class B preferred shares (“Newco1 Class B Shares”);
(c) class C preferred shares (“Newco1 Class C Shares”);
(d) class D preferred shares (“Newco1 Class D Shares”);
(e) class E preferred shares (“Newco1 Class E Shares”);
(f) class F preferred shares (“Newco1 Class F Shares”); and
(g) class G preferred shares (“Newco1 Class G Shares”).

For greater certainty, no shares were issued on the incorporation of Newco1.

Newco2

57. Parent incorporated a corporation (“Newco2”) under the Corporations Act. Newco2 is a TCC and CCPC. The authorized capital of Newco2 includes an unlimited number of shares with the terms and conditions as described below:

i) common shares (“Newco2 Common Shares”), which are voting, participating and entitled to receive dividends if and when declared by the directors of Newco2;

ii) class Z preferred shares (“Newco2 Class Z Shares”), which are non-voting, non-participating, entitled to receive non-cumulative, discretionary dividends not exceeding XXXXXXXXXX% of the redemption amount if and when declared by the directors of Newco2, redeemable and retractable at an amount per share (the “Newco2 Class Z Share Redemption Amount”) equal to the sum of i) the result obtained when the fair market value of the property transferred to Newco2 on the date of first issuance of the Newco2 Class Z Shares less the amount of the non-share consideration, if any, paid, assumed, or delivered by Newco2 for the acquisition of such property is divided by the number of Newco2 Class Z Shares issued as consideration therefor, and ii) any declared and unpaid dividends on the share. The holders of the Newco2 Class Z Shares are entitled to receive, on a liquidation or wind-up, the Newco2 Class Z Share Redemption Amount in priority to the liquidation entitlement of the Newco2 Common Shares;

iii) special voting shares (“Newco2 Special Voting Shares”), which are redeemable and retractable at the subscription price for the shares and are entitled to XXXXXXXXXX votes per share; and

iv) seven separate classes of preferred shares (collectively, the “Newco2 Preferred Shares”), each of which have terms identical to those of the corresponding class of Opco Preferred Shares described in Paragraph 30, being:

(a) class A preferred shares (“Newco2 Class A Shares”);
(b) class B preferred shares (“Newco2 Class B Shares”);
(c) Class C preferred shares (“Newco2 Class C Shares”);
(d) class D preferred shares (“Newco2 Class D Shares”);
(e) class E preferred shares (“Newco2 Class E Shares”);
(f) class F preferred shares (“Newco2 Class F Shares”); and
(g) class G preferred shares (“Newco2 Class G Shares”).

For greater certainty, no shares were issued on the incorporation of Newco2.

Newco3

58. Parent incorporated a corporation (“Newco3”) under the Corporations Act. Newco3 is a TCC and CCPC. The authorized capital of Newco3 includes an unlimited number of shares with the terms and conditions as described below:

i) common shares (“Newco3 Common Shares”), which are voting, participating and entitled to receive dividends if and when declared by the directors of Newco3;

ii) class Z preferred shares (“Newco3 Class Z Shares”), which are non-voting, non-participating, entitled to receive non-cumulative, discretionary dividends not exceeding XXXXXXXXXX% of the redemption amount if and when declared by the directors of Newco3, redeemable and retractable at an amount per share (the “Newco3 Class Z Share Redemption Amount”) equal to the sum of i) the result obtained when the fair market value of the property transferred to Newco3 on the date of first issuance of the Newco3 Class Z Shares less the amount of the non-share consideration, if any, paid, assumed, or delivered by Newco3 for the acquisition of such property is divided by the number of Newco3 Class Z Shares issued as consideration therefor, and ii) any declared and unpaid dividends on the share. The holders of the Newco3 Class Z Shares are entitled to receive, on a liquidation or wind-up, the Newco3 Class Z Share Redemption Amount in priority to the liquidation entitlement of the Newco3 Common Shares;

iii) special voting shares (“Newco3 Special Voting Shares”), which are redeemable and retractable at the subscription price for the shares and are entitled to XXXXXXXXXX votes per share; and

iv) seven separate classes of preferred shares (collectively, the “Newco3 Preferred Shares”), each of which have terms identical to those of the corresponding class of Opco Preferred Shares described in Paragraph 30, being:

(a) class A preferred shares (“Newco3 Class A Shares”);
(b) class B preferred shares (“Newco3 Class B Shares”);
(c) class C preferred shares (“Newco3 Class C Shares”);
(d) class D preferred shares (“Newco3 Class D Shares”);
(e) class E preferred shares (“Newco3 Class E Shares”);
(f) class F preferred shares (“Newco3 Class F Shares”); and
(g) class G preferred shares (“Newco3 Class G Shares”).

For greater certainty, no shares were issued on the incorporation of Newco3.

Newco4

59. Parent incorporated a corporation (“Newco4”) under the Corporations Act. Newco4 is a TCC and CCPC. The authorized capital of Newco4 includes an unlimited number of shares with the terms and conditions as described below:

i) common shares (“Newco4 Common Shares”), which are voting, participating and entitled to receive dividends if and when declared by the directors of Newco4;

ii) special voting shares (“Newco4 Special Voting Shares”), which are redeemable and retractable at the subscription price for the shares and are entitled to XXXXXXXXXX votes per share; and

iii) seven separate classes of preferred shares (collectively, the “Newco4 Preferred Shares”), each of which have terms identical to those of the corresponding class of Opco Preferred Shares described in Paragraph 30, being:

(a) class A preferred shares (“Newco4 Class A Shares”);
(b) class B preferred shares (“Newco4 Class B Shares”);
(c) class C preferred shares (“Newco4 Class C Shares”);
(d) class D preferred shares (“Newco4 Class D Shares”);
(e) class E preferred shares (“Newco4 Class E Shares”);
(f) class F preferred shares (“Newco4 Class F Shares”); and
(g) class G preferred shares (“Newco4 Class G Shares”).

For greater certainty, no shares were issued on the incorporation of Newco4.

Share subscriptions in Newco1, Newco2, Newco3 and Newco4

60. Parent subscribed for XXXXXXXXXX Newco1 Special Voting Shares for $XXXXXXXXXX.

61. Parent subscribed for XXXXXXXXXX Newco2 Special Voting Shares for $XXXXXXXXXX.

62. Parent subscribed for XXXXXXXXXX Newco3 Special Voting Shares for $XXXXXXXXXX.

63. Parent subscribed for XXXXXXXXXX Newco4 Special Voting Shares for $XXXXXXXXXX.

Incorporation of Newco5 to Newco13

Newco5

64. Parent incorporated a corporation (“Newco5”) under the Corporations Act. Newco5 is a TCC and CCPC. The authorized capital of Newco5 includes an unlimited number of common shares (“Newco5 Common Shares”). The Newco5 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco5. For greater certainty, no shares were issued on the incorporation of Newco5.

Newco6

65. Parent incorporated a corporation (“Newco6”) under the Corporations Act. Newco6 is a TCC and CCPC. The authorized capital of Newco6 includes an unlimited number of common shares (“Newco6 Common Shares”). The Newco6 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco6. For greater certainty, no shares were issued on the incorporation of Newco6.

Newco7

66. Parent incorporated a new corporation (“Newco7”) under the Corporations Act. Newco7 is a TCC and CCPC. The authorized capital of Newco7 includes an unlimited number of common shares (“Newco7 Common Shares”). The Newco7 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco7. For greater certainty, no shares were issued on the incorporation of Newco7.

Newco8

67. Parent incorporated a new corporation (“Newco8”) under the Corporations Act. Newco8 is a TCC and CCPC. The authorized capital of Newco8 includes an unlimited number of common shares (“Newco8 Common Shares”). The Newco8 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco8. For greater certainty, no shares were issued on the incorporation of Newco8.

Newco9

68. Parent incorporated a corporation (“Newco9”) under the Corporations Act. Newco9 is a TCC and CCPC. The authorized capital of Newco9 includes an unlimited number of common shares (“Newco9 Common Shares”). The Newco9 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco9. For greater certainty, no shares were issued on the incorporation of Newco9.

Newco10

69. Parent incorporated a new corporation (“Newco10”) under the Corporations Act. Newco10 is a TCC and CCPC. The authorized capital of Newco10 includes an unlimited number of common shares (“Newco10 Common Shares”). The Newco10 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco10. For greater certainty, no shares were issued on the incorporation of Newco10.

Newco11

70. Parent incorporated a corporation (“Newco11”) under the Corporations Act. Newco11 is a TCC and CCPC. The authorized capital of Newco11 includes an unlimited number of common shares (“Newco11 Common Shares”). The Newco11 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco11. For greater certainty, no shares were issued on the incorporation of Newco11.

Newco12

71. Parent incorporated a new corporation (“Newco12”) under the Corporations Act. Newco12 is a TCC and CCPC. The authorized capital of Newco12 includes an unlimited number of common shares (“Newco12 Common Shares”). The Newco12 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco12. For greater certainty, no shares were issued on the incorporation of Newco12.

Newco13

72. Parent incorporated a new corporation (“Newco13”) under the Corporations Act. Newco13 is a TCC and CCPC. The authorized capital of Newco13 includes an unlimited number of common shares (“Newco13 Common Shares”). The Newco13 Common Shares are voting, participating and entitled to receive dividends if and when declared by the directors of Newco13. For greater certainty, no shares were issued on the incorporation of Newco13.

Share subscriptions in Newco5 to Newco13

73. Opco subscribed for XXXXXXXXXX Newco5 Common Share for $XXXXXXXXXX.

74. Opco subscribed for XXXXXXXXXX Newco6 Common Share for $XXXXXXXXXX.

75. Opco subscribed for XXXXXXXXXX Newco7 Common Share for $XXXXXXXXXX.

76. Opco subscribed for XXXXXXXXXX Newco8 Common Share for $XXXXXXXXXX.

77. Opco subscribed for XXXXXXXXXX Newco9 Common Share for $XXXXXXXXXX.

78. Opco subscribed for XXXXXXXXXX Newco10 Common Share for $XXXXXXXXXX.

79. Opco subscribed for XXXXXXXXXX Newco11 Common Share for $XXXXXXXXXX.

80. Opco subscribed for XXXXXXXXXX Newco12 Common Share for $XXXXXXXXXX.

81. Opco subscribed for 1 Newco13 Common Share for $XXXXXXXXXX.

82. Reserved.

The following Completed Transactions occurred on XXXXXXXXXX, with the exception of the filing of the applicable election forms, which will be filed within the applicable due dates.

Partnership

83. Opco, Newco5, Newco7 and Newco9 formed a general partnership (the “Partnership”). Opco owns a XXXXXXXXXX% interest in Partnership and each of Newco5, Newco7, and Newco9 owns a XXXXXXXXXX% interest in Partnership.

84. Opco transferred Property A, Property B and Property C, including an interest in other assets relating to these properties, held by it to Partnership. Partnership assumed liabilities of Opco related to these properties (the “Partnership Assumed Liabilities”) and increased the capital account maintained for Opco. Opco, Newco5, Newco7 and Newco9 will jointly elect under subsection 97(2), in prescribed form, in the time and manner required by subsection 96(4). The agreed amount for purposes of the election will be within the limits prescribed by paragraph 97(2)(a), which provides that the provisions of paragraphs 85(1)(a) to (f) are applicable, as modified by paragraph 97(2)(a). It is intended that the agreed amount will be the FMV where a property will be sold by Partnership before or shortly after the completion of the Proposed Transactions. Any sale of Property A, Property B, or Property C by Partnership to an unrelated person will be at FMV. For purposes of each election described in this Paragraph, no portion of the Partnership Assumed Liabilities shall be treated as being assumed in consideration for the transfer of a particular property from Opco to Partnership to the extent that the principal amount of the liabilities exceeds the agreed amount under subsection 85(1) in respect of that transfer and where such excess portion is assumed by Partnership as consideration for the transfer of another property or properties as described in this Paragraph.

85. As described in Paragraph 54, legal title to some real properties owned beneficially by Opco is held in nominee corporations. The nominee agreements have been amended, as necessary, to reflect the Completed Transactions.

Marketable securities

86. Opco transferred marketable securities held by it to Newco6, Newco8 and Newco10 in exchange for XXXXXXXXXX Newco6 Common Shares, XXXXXXXXXX Newco8 Common Shares and XXXXXXXXXX Newco10 Common Shares, respectively. The percentage of the fair market value of marketable securities transferred by Opco to each of Newco6, Newco8 and Newco10 was different. Opco will jointly elect with each of Newco6, Newco8 and Newco10 in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the marketable securities by Opco to each of the transferees and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii); and

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).

The agreed amount may be the FMV where a property will be sold before or shortly after the completion of the Proposed Transactions. Any sale to an unrelated person will be at FMV.

87. Each of Newco6, Newco8, and Newco10 added to the stated capital account maintained for each of the Newco6 Common Shares, Newco8 Common Shares, and Newco10 Common Shares, respectively, issued to Opco on the transfers described in Paragraph 86, an amount not exceeding the sum of the aggregate agreed amount of the eligible property, being the marketable securities, acquired by each of Newco6, Newco8, and Newco10.

PROPOSED TRANSACTIONS

The following transactions will generally be implemented in the order presented below unless otherwise indicated, subject to the following exceptions:

(a) the Reorganization Agreement described in Paragraph 88 will be entered into before the other Proposed Transactions (subject to (b) and (c), below);

(b) the amendments, if necessary, to any nominee agreements described in Paragraph 98.1 will occur in no particular order;

(c) the division of the Insurance Policy described in Paragraph 99 will occur in no particular order but before the transfers described in Paragraphs 100 to 102; and

(d) the applicable election forms and tax returns will be filed within the applicable due dates following the completion of the Proposed Transactions.

PRELIMINARY TRANSACTIONS

Reorganization Agreement

88. Sibling1, Sibling2, Sibling3, Sibling4 and Parent will enter into a reorganization agreement (the “Reorganization Agreement”) to govern certain matters relating to the Proposed Transactions. Under the Reorganization Agreement, the parties will, inter alia:

(a) covenant and agree that prior to and for a period of time after the completion of the Proposed Transactions, the parties will not take any action or enter into any transaction that could cause the Proposed Transactions to be taxed in a manner that is inconsistent with the intentions of this advance income tax ruling; and

(b) agree to indemnify each other for losses suffered or incurred as a result of or in connection with a breach or non-compliance with the covenant described in item (a) above.

Capital Dividend Payments

89. Opco will resolve to increase the stated capital account of its Opco Common Shares in an amount not exceeding the amount of Opco’s capital dividend account. Opco will elect, pursuant to subsection 83(2), in prescribed manner and prescribed form that the full amount of the deemed dividend resulting under subsection 84(1) be deemed to be a capital dividend.

OPCO REORGANIZATION

Transfer of Property to Newco5, Newco7 and Newco9

Opco Property Transfer to Newco5

90. Opco will transfer property to Newco5 including:

• an interest in certain real properties and other assets relating to such properties
• an interest in Partnership
• other assets as determined, if any (such as office equipment and other equipment)

for a purchase price equal to the aggregate fair market value of the properties so transferred.

In connection with the property transfers:

(a) the parties will make the elections described in Paragraphs 91 and 92;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco5 will:

(i) assume certain liabilities of Opco (“Newco5 Assumed Liabilities”); and

(ii) issue XXXXXXXXXX Newco5 Common Shares having a fair market value equal to the purchase price of the properties, less the amount of the Newco5 Assumed Liabilities;

(c) Newco5 will resolve to add to the stated capital account maintained for the Newco5 Common Shares an amount not exceeding the sum of

(i) the aggregate agreed amount of the eligible property acquired by Newco5 less the portion of Newco5 Assumed Liabilities in respect of any eligible property so acquired; and

(ii) the aggregate fair market value of all property, other than eligible property, acquired by Newco5 less the portion of Newco5 Assumed Liabilities in respect of any particular property other than eligible property so acquired.

91. With respect to the assumption of the undertakings of Opco, if any, to which amounts referred to in paragraph 12(1)(a) apply and are included in the Newco5 Assumed Liabilities, and where Opco makes payments to Newco5 with regard to Newco5’s assumption of those undertakings, Opco will jointly elect with Newco5 under subsection 20(24), in the manner and within the time referred to in subsection 20(25).

92. Opco will jointly elect with Newco5, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco5 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of:

(i) the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii), in the case of depreciable property of a prescribed class; and

(ii) the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii), in the case of property described in paragraph 85(1)(c.1);

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b); and

for purposes of each election described in this Paragraph, no portion of Newco5 Assumed Liabilities shall be treated as being assumed in consideration for the transfer of a particular property from Opco to Newco5 to the extent that the principal amount of the liabilities exceeds the agreed amount under subsection 85(1) in respect of that property transfer and where such excess portion is assumed by Newco5 as consideration for the transfer of another property or properties as described in Paragraph 90.

Opco Property Transfer to Newco7

93. Opco will transfer property to Newco7 including:

• an interest in certain real properties and other assets relating to such properties
• an interest in Partnership
• other assets as determined, if any (such as office equipment and other equipment)

for a purchase price equal to the aggregate fair market value of the properties so transferred.

In connection with the property transfers:

(a) the parties will make the elections described in Paragraphs 94 and 95;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco7 will:

(i) assume certain liabilities of Opco (“Newco7 Assumed Liabilities”); and

(ii) issue XXXXXXXXXX Newco7 Common Shares having a fair market value equal to the purchase price of the properties, less the amount of the Newco7 Assumed Liabilities;

(c) Newco7 will resolve to add to the stated capital account maintained for the Newco7 Common Shares an amount not exceeding the sum of

(i) the aggregate agreed amount of the eligible property acquired by Newco7 less the portion of Newco7 Assumed Liabilities in respect of any eligible property so acquired; and

(ii) the aggregate fair market value of all property, other than eligible property, acquired by Newco7 less the portion of Newco7 Assumed Liabilities in respect of any particular property other than eligible property so acquired.

94. With respect to the assumption of the undertakings of Opco, if any, to which amounts referred to in paragraph 12(1)(a) apply and are included in the Newco7 Assumed Liabilities, and where Opco makes payments to Newco7 with regard to Newco7’s assumption of those undertakings, Opco will jointly elect with Newco7 under subsection 20(24), in the manner and within the time referred to in subsection 20(25).

95. Opco will jointly elect with Newco7, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco7 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of:

(i) the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii), in the case of depreciable property of a prescribed class; and

(ii) the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii), in the case of property described in paragraph 85(1)(c.1);

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b); and

for purposes of each election described in this Paragraph, no portion of Newco7 Assumed Liabilities shall be treated as being assumed in consideration for the transfer of a particular property from Opco to Newco7 to the extent that the principal amount of the liabilities exceeds the agreed amount under subsection 85(1) in respect of that property transfer and where such excess portion is assumed by Newco7 as consideration for the transfer of another property or properties as described in Paragraph 93.

Opco Property Transfer to Newco9

96. Opco will transfer the following properties to Newco9:

• an interest in certain real properties and other assets relating to such properties
• an interest in Partnership
• other assets as determined, if any (such as office equipment and other equipment)

for a purchase price equal to the aggregate fair market value of the properties so transferred. In connection with the property transfers:

(a) the parties will make the elections described in Paragraphs 97 and 98;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco9 will:

(i) assume certain liabilities of Opco (“Newco9 Assumed Liabilities”); and

(ii) issue XXXXXXXXXX Newco9 Common Shares having a fair market value equal to the purchase price of the properties, less the amount of the Newco9 Assumed Liabilities;

(c) Newco9 will resolve to add to the stated capital account maintained for the Newco9 Common Shares an amount not exceeding the sum of

(i) the aggregate agreed amount of the eligible property acquired by Newco9 less the portion of Newco9 Assumed Liabilities in respect of any eligible property so acquired; and

(ii) the aggregate fair market value of all property, other than eligible property, acquired by Newco9 less the portion of Newco9 Assumed Liabilities in respect of any particular property other than eligible property so acquired.

97. With respect to the assumption of the undertakings of Opco, if any, to which amounts referred to in paragraph 12(1)(a) apply and are included in the Newco9 Assumed Liabilities, and where Opco makes payments to Newco9 with regard to Newco9’s assumption of those undertakings, Opco will jointly elect with Newco9 under subsection 20(24), in the manner and within the time referred to in subsection 20(25).

98. Opco will jointly elect with Newco9, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco9 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of:

(i) the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii), in the case of depreciable property of a prescribed class; and

(ii) the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii), in the case of property described in paragraph 85(1)(c.1);

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b); and

for purposes of each election described in this Paragraph, no portion of Newco9 Assumed Liabilities shall be treated as being assumed in consideration for the transfer of a particular property from Opco to Newco9 to the extent that the principal amount of the liabilities exceeds the agreed amount under subsection 85(1) in respect of that property transfer and where such excess portion is assumed by Newco9 as consideration for the transfer of another property or properties as described in Paragraph 96.

Registered Title

98.1 As described in Paragraph 54, legal title to some real properties owned beneficially by Opco is held in nominee corporations. The nominee agreements will be amended, as necessary, to reflect the Proposed Transactions.

Transfer of Insurance Policies to Newco11, Newco12 and Newco13

99. The Insurance Policy will be divided into 5 separate policies, such that the life of each of Parent, Sibling1, Sibling2, Sibling3 and Sibling4 will be covered by a separate policy.

100. Opco will transfer the insurance policy relating to Sibling1 to Newco11 as a capital contribution on the Newco11 Common Shares. The proceeds of disposition of the Insurance Policy will be determined in accordance with subsections 148(7) and (9). Newco11 will be the owner and beneficiary of the policy and will pay premiums as required.

101. Opco will transfer the insurance policy relating to Sibling2 to Newco12 as a capital contribution on the Newco12 Common Shares. The proceeds of disposition of the Insurance Policy will be determined in accordance with subsections 148(7) and (9). Newco12 will be the owner and beneficiary of the policy and will pay premiums as required.

102. Opco will transfer the insurance policy relating to Sibling3 to Newco13 as a capital contribution on the Newco13 Common Shares. The proceeds of disposition of the Insurance Policy will be determined in accordance with subsections 148(7) and (9). Newco13 will be the owner and beneficiary of the policy and will pay premiums as required.

Parent Transfers Opco Preferred Shares to Newco1, Newco2 and Newco3

103. Parent will transfer XXXXXXXXXX% of the Opco Class A Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares owned by him to Newco1 in consideration for the same number of Newco1 Class A Shares, Newco1 Class E Shares, Newco1 Class F Shares and Newco1 Class G Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

104. Newco1 will resolve to add to the stated capital account maintained for the particular class of Newco1 Preferred Shares issued to Parent an amount equal to the greater of i) the paid-up capital of the Opco Preferred Shares of the particular class transferred in exchange therefor and ii) the ACB to Parent, as modified by paragraphs 84.1(2)(a) and (a.1), of the particular Opco Preferred Shares transferred in exchange therefor.

105. Parent and Newco1 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Preferred Shares to Newco1. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco1.

106. Parent will transfer XXXXXXXXXX% of the Opco Class A Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares owned by him to Newco2 in consideration for the same number of Newco2 Class A Shares, Newco2 Class E Shares, Newco2 Class F Shares and Newco2 Class G Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

107. Newco2 will resolve to add to the stated capital account maintained for the particular class of Newco2 Preferred Shares issued to Parent an amount equal to the greater of i) the paid-up capital of the Opco Preferred Shares of the particular class transferred in exchange therefor and ii) the ACB to Parent, as modified by paragraphs 84.1(2)(a) and (a.1), of the particular Opco Preferred Shares transferred in exchange therefor.

108. Parent and Newco2 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Preferred Shares to Newco2. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco2.

109. Parent will transfer XXXXXXXXXX% of the Opco Class A Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares owned by him to Newco3 in consideration for the same number of Newco3 Class A Shares, Newco3 Class E Shares, Newco3 Class F Shares and Newco3 Class G Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

110. Newco3 will resolve to add to the stated capital account maintained for the particular class of Newco3 Preferred Shares issued to Parent an amount equal to the greater of i) the paid-up capital of the Opco Preferred Shares of the particular class transferred in exchange therefor and ii) the ACB to Parent, as modified by paragraphs 84.1(2)(a) and (a.1), of the particular Opco Preferred Shares transferred in exchange therefor.

111. Parent and Newco3 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Preferred Shares to Newco3. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco3.

Siblings Transfer Opco Preferred Shares to Newco1, Newco2 or Newco3

112. Sibling1 will transfer all XXXXXXXXXX Opco Class B Shares and Opco Class C Shares to Newco1 in consideration for the same number of Newco1 Class B Shares and Newco1 Class C Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

113. Newco1 will resolve to add to the stated capital account maintained for the Newco1 Class B Shares issued to Sibling1 an amount equal to the greater of i) the paid-up capital of the Opco Class B Shares transferred in exchange therefor and ii) the ACB to Sibling1, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class B Shares transferred in exchange therefor and, as regards the stated capital amount maintained for the Newco1 Class C shares issued to Sibling1, the greater of i) the paid-up capital of the Opco Class C shares transferred in exchange therefor and ii) the ACB to Sibling1, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class C Shares transferred in exchange therefor.

114. Sibling1 and Newco1 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Class B Shares and Opco Class C Shares to Newco1. The agreed amount in respect of the election will, in each case, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, with respect to each such share exchange, not exceed the fair market value of the shares transferred to Newco1.

115. Sibling2 will transfer all XXXXXXXXXX Opco Class B Shares and Opco Class C Shares to Newco2 in consideration for the same number of Newco2 Class B Shares and Newco2 Class C Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

116. Newco2 will resolve to add to the stated capital account maintained for the Newco2 Class B Shares issued to Sibling2 an amount equal to the greater of i) the paid-up capital of the Opco Class B Shares transferred in exchange therefor and ii) the ACB to Sibling2, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class B Shares transferred in exchange therefor and, as regards the stated capital account maintained for the Newco2 Class C shares issued to Sibling2, the greater of i) the paid-up capital of the Opco Class C shares transferred in exchange therefor and ii) the ACB to Sibling2, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class C Shares transferred in exchange therefor.

117. Sibling2 and Newco2 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Class B Shares and Opco Class C Shares to Newco2. The agreed amount in respect of the election will, in each case, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, with respect to each such share exchange, not exceed the fair market value of the shares transferred to Newco2.

118. Sibling3 will transfer all XXXXXXXXXX Opco Class B Shares and Opco Class C Shares to Newco3 in consideration for the same number of Newco3 Class B Shares and Newco3 Class C Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

119. Newco3 will resolve to add to the stated capital account maintained for the Newco3 Class B Shares issued to Sibling3 an amount equal to the greater of i) the paid-up capital of the Opco Class B Shares transferred in exchange therefor and ii) the ACB to Sibling3, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class B Shares transferred in exchange therefor and, as regards the stated capital account maintained for the Newco3 Class C shares issued to Sibling3, the greater of i) the paid-up capital of the Opco Class C shares transferred in exchange therefor and ii) the ACB to Sibling3, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Class C Shares transferred in exchange therefor.

120. Sibling3 and Newco3 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Class B Shares and Opco Class C Shares to Newco3. The agreed amount in respect of the election will, in each case, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, with respect to each such share exchange, not exceed the fair market value of the shares transferred to Newco3.

Trusts Transfer Opco Common Shares to Newco1, Newco2 or Newco3

121. Trust1 will transfer all of its Opco Common Shares (XXXXXXXXXX) to Newco1 in consideration for XXXXXXXXXX Newco1 Common Shares.

122. Newco1 will resolve to add to the stated capital account maintained for the Newco1 Common Shares issued to Trust1 an amount equal to the greater of i) the paid-up capital of the Opco Common Shares transferred in exchange therefor and ii) the ACB to Trust1, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Common Shares so transferred.

123. Trust1 and Newco1 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco1. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco1.

124. Trust2 will transfer all of its Opco Common Shares (XXXXXXXXXX) to Newco2 in consideration for XXXXXXXXXX Newco2 Common Shares.

125. Newco2 will resolve to add to the stated capital account maintained for the Newco2 Common Shares issued to Trust2 an amount equal to the greater of i) the paid-up capital of the Opco Common Shares transferred in exchange therefor and ii) the ACB to Trust2, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Common Shares so transferred.

126. Trust2 and Newco2 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco2. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco2.

127. Trust3 will transfer all of its Opco Common Shares (XXXXXXXXXX) to Newco3 in consideration for XXXXXXXXXX Newco3 Common Shares.

128. Newco3 will resolve to add to the stated capital account maintained for the Newco3 Common Shares issued to Trust3 an amount equal to the greater of i) the paid-up capital of the Opco Common Shares transferred in exchange therefor and ii) the ACB to Trust3, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Common Shares so transferred.

129. Trust3 and Newco3 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco3. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco3.

Transfers of Opco Common Shares and Opco Preferred Shares to Newco4

130. Parent will transfer to Newco4 the Opco Class A Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares that he owns (being the remaining XXXXXXXXXX% of such shares owned by Parent after the transfers described in Paragraphs 103, 106, and 109) in consideration for the same number of Newco4 Class A Shares, Newco4 Class E Shares, Newco4 Class F Shares and Newco4 Class G Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

131. Newco4 will resolve to add to the stated capital account maintained for the particular class of Newco4 Preferred Shares issued to Parent, an amount equal to the greater of i) the paid-up capital of the Opco Preferred Shares of the particular class transferred in exchange therefor and ii) the ACB to Parent, as modified by paragraphs 84.1(2)(a) and (a.1), of the particular Opco Preferred Shares transferred in exchange therefor.

132. Parent and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Preferred Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

133. Sibling4 will transfer the Opco Class B Shares and Opco Class C Shares that XXXXXXXXXX owns to Newco4 in consideration for the same number of Newco4 Class B Shares and Newco4 Class C Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

134. Newco4 will resolve to add to the stated capital account maintained for each of the Newco4 Class B Shares and Newco4 Class C Shares issued to Sibling4, an amount equal to the greater of i) the paid-up capital of the Opco Preferred Shares of the particular class transferred in exchange therefor and ii) the ACB to Sibling4, as modified by paragraphs 84.1(2)(a) and (a.1), of the particular Opco Preferred Shares transferred in exchange therefor.

135. Sibling4 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Class B Shares and Opco Class C Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

136. Holdco will transfer to Newco4 the Opco Class A Shares, Opco Class B Shares, Opco Class C Shares, Opco Class D Shares, Opco Class E Shares, Opco Class F Shares and Opco Class G Shares that Holdco owns in consideration for the same number of Newco4 Class A Shares, Newco4 Class B Shares, Newco4 Class C Shares, Newco4 Class D Shares, Newco4 Class E Shares, Newco4 Class F Shares and Newco4 Class G Shares, respectively, as the particular Opco Preferred Shares transferred in exchange therefor.

137. Newco4 will resolve to add to the stated capital account maintained for the particular class of Newco4 Preferred Shares issued to Holdco an amount not exceeding the cost to Newco4 of the Opco Preferred Shares of the particular class transferred in exchange therefor.

138. Holdco and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Preferred Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

139. Holdco will transfer to Newco4 the XXXXXXXXXX Opco Common Shares that it owns in consideration for XXXXXXXXXX Newco4 Common Shares.

140. Newco4 will resolve to add to the stated capital account maintained for the Newco4 Common Shares issued to Holdco an amount not exceeding the cost to Newco4 of the Opco Common Shares transferred in exchange therefor.

141. Holdco and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco4. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco4.

142. Newco1 will transfer to Newco4 the XXXXXXXXXX Opco Common Shares that it owns in consideration for XXXXXXXXXX Newco4 Common Shares.

143. Newco4 will resolve to add to the stated capital account maintained for the Newco4 Common Shares issued to Newco1 an amount not exceeding the cost to Newco4 of the Opco Common Shares transferred in exchange therefor.

144. Newco1 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco4. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco4.

145. Newco2 will transfer to Newco4 the XXXXXXXXXX Opco Common Shares that it owns in consideration for XXXXXXXXXX Newco4 Common Shares.

146. Newco4 will resolve to add to the stated capital account maintained for the Newco4 Common Shares issued to Newco2 an amount not exceeding the cost to Newco4 of the Opco Common Shares transferred in exchange therefor.

147. Newco2 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco4. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco4.

148. Newco3 will transfer to Newco4 the XXXXXXXXXX Opco Common Shares that it owns in consideration for XXXXXXXXXX Newco4 Common Shares.

149. Newco4 will resolve to add to the stated capital account maintained for the Newco4 Common Shares issued to Newco3 an amount not exceeding the cost to Newco4 of the Opco Common Shares transferred in exchange therefor.

150. Newco3 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco4. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco4.

151. Trust4 will transfer all of its Opco Common Shares (XXXXXXXXXX) to Newco4 in consideration for XXXXXXXXXX Newco4 Common Shares.

152. Newco4 will resolve to add to the stated capital account maintained for the Newco4 Common Shares issued to Trust4 an amount equal to the greater of i) the paid-up capital of the Opco Common Shares transferred in exchange therefor and ii) the ACB to Trust4, as modified by paragraphs 84.1(2)(a) and (a.1), of the Opco Common Shares transferred in exchange therefor.

153. Trust4 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the Opco Common Shares to Newco4. The agreed amount in respect of the election will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the fair market value of the Opco Common Shares transferred to Newco4.

154. Newco1 will transfer to Newco4 a portion of its Opco Class B Shares and all of its Opco Class A Shares, Opco Class C Shares, Opco Class E Shares, Opco Class F Shares, and Opco Class G Shares in consideration for the same class and number of Newco4 Preferred Shares.

More specifically, Newco1 will retain such number of the Opco Class B Shares as:

(i) will cause Newco1 to have a Part IV tax liability equal to XXXXXXXXXX% of Opco’s NERDTOH balance (computed as if Opco were to have a year-end immediately before the transfer); and

(ii) will allow Opco to make an eligible dividend designation under subsection 89(14) equal to XXXXXXXXXX% of Opco’s GRIP balance (computed as if Opco were to have a year-end immediately before the transfer)

at the time Opco is deemed, pursuant to subsection 84(3), to pay a dividend to Newco1 upon the redemption of the Opco Class B Shares not transferred to Newco4 described in Paragraph 174.

155. Newco4 will resolve to add to the stated capital account maintained for the particular class of Newco4 Preferred Shares issued to Newco1 an amount not exceeding the cost to Newco4 of the particular class of Opco Preferred Shares transferred in exchange therefor.

156. Newco1 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the particular Opco Preferred Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

157. Newco2 will transfer to Newco4 a portion of its Opco Class B Shares and all of its Opco Class A Shares, Opco Class C Shares, Opco Class E Shares, Opco Class F Shares, and Opco Class G Shares in consideration for the same class and number of Newco4 Preferred Shares.

More specifically, Newco2 will retain such number of the Opco Class B Shares as:

(i) will cause Newco2 to have a Part IV tax liability equal to XXXXXXXXXX% of Opco’s NERDTOH balance (computed as if Opco were to have a year-end immediately before the transfer); and

(ii) will allow Opco to make an eligible dividend designation under subsection 89(14) equal to XXXXXXXXXX% of Opco’s GRIP balance (computed as if Opco were to have a year-end immediately before the transfer)

at the time Opco is deemed, pursuant to subsection 84(3), to pay a dividend to Newco2 upon the redemption of the Opco Class B Shares not transferred to Newco4 described in Paragraph 175.

158. Newco4 will resolve to add to the stated capital account maintained for the particular class of Newco4 Preferred Shares issued to Newco2 an amount not exceeding the cost to Newco4 of the particular class of Opco Preferred Shares transferred in exchange therefor.

159. Newco2 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the particular Opco Preferred Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

160. Newco3 will transfer to Newco4 a portion of its Opco Class B Shares and all of its Opco Class A Shares, Opco Class C Shares, Opco Class E Shares, Opco Class F Shares, and Opco Class G Shares in consideration for the same class and number of Newco4 Preferred Shares.

More specifically, Newco3 will retain such number of the Opco Class B Shares as:

(i) will cause Newco3 to have a Part IV tax liability equal to XXXXXXXXXX% of Opco’s NERDTOH balance (computed as if Opco were to have a year-end immediately before the transfer); and

(ii) will allow Opco to make an eligible dividend designation under subsection 89(14) equal to XXXXXXXXXX% of Opco’s GRIP balance (computed as if Opco were to have a year-end immediately before the transfer)

at the time Opco is deemed, pursuant to subsection 84(3), to pay a dividend to Newco3 upon the redemption of the Opco Class B Shares not transferred to Newco4 as described in Paragraph 176.

161. Newco4 will resolve to add to the stated capital account maintained for the particular class of Newco4 Preferred Shares issued to Newco3 an amount not exceeding the cost to Newco4 of the particular class of Opco Preferred Shares transferred in exchange therefor.

162. Newco3 and Newco4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the particular Opco Preferred Shares to Newco4. The agreed amount in respect of the election will, with respect to each such share exchange, be not less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will, in each instance, not exceed the fair market value of the particular Opco Preferred Shares transferred to Newco4.

Opco Transfers to Newco1

163. Opco will transfer the following properties to Newco1:

• All of the Newco5 Common Shares
• All of the Newco6 Common Shares
• All of the Newco11 Common Shares
• Right to receive XXXXXXXXXX of Opco’s dividend refund in respect of the taxation year that includes the day of the redemptions of the Opco Class B Shares described in Paragraphs 174, 175, and 176
• Cash

for a purchase price equal to the aggregate fair market value of the properties so transferred. It is expected that the FMV of all of these properties transferred to Newco1 by Opco will equal the aggregate of the FMV of the shares of Opco and Newco4 held by Newco1.

In connection with the property transfers:

(a) the parties will make the elections described in Paragraph 164;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco1 will issue to Opco XXXXXXXXXX Newco1 Class Z Shares having a fair market value equal to the fair market value of the transferred properties; and

(c) Newco1 will resolve to add to the stated capital account maintained for the Newco1 Class Z Shares an amount not exceeding the sum of the aggregate agreed amount of the eligible property and the FMV of the property that is not eligible property (i.e., cash and the right to receive the dividend refund) acquired by Newco1.

164. Opco will jointly elect with Newco1, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco1 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii); and

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).

Opco Transfers to Newco2

165. Opco will transfer the following properties to Newco2:

• All of the Newco7 Common Shares
• All of the Newco8 Common Shares
• All of the Newco12 Common Shares
• Right to receive XXXXXXXXXX of Opco’s dividend refund in respect of the taxation year that includes the day of the redemptions of the Opco Class B Shares described in Paragraphs 174, 175, and 176
• Cash

for a purchase price equal to the aggregate fair market value of the properties so transferred. It is expected that the FMV of all of these properties transferred to Newco2 by Opco will equal the FMV of the shares of Opco and Newco4 held by Newco2.

In connection with the property transfers:

(a) the parties will make the elections described in Paragraph 166;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco2 will issue to Opco XXXXXXXXXX Newco2 Class Z Shares having a fair market value equal to the fair market value of the transferred properties; and

(c) Newco2 will resolve to add to the stated capital account maintained for the Newco2 Class Z Shares an amount not exceeding the sum of the aggregate agreed amount of the eligible property and the FMV of the property that is not eligible property (i.e., cash and the right to receive the dividend refund) acquired by Newco2.

166. Opco will jointly elect with Newco2, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco2 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii); and

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).

Opco Transfers to Newco3

167. Opco will transfer the following properties to Newco3:

• All of the Newco9 Common Shares
• All of the Newco10 Common Shares
• All of the Newco13 Common Shares
• Right to receive XXXXXXXXXX of Opco’s dividend refund in respect of the taxation year that includes the day of the redemptions of the Opco Class B Shares described in Paragraphs 174, 175, and 176
• Cash

for a purchase price equal to the aggregate fair market value of the properties so transferred. It is expected that the FMV of all of these properties transferred to Newco3 by Opco will equal the aggregate of the FMV of the shares of Opco and Newco4 held by Newco3.

In connection with the property transfers:

(a) the parties will make the elections described in Paragraph 168;

(b) as consideration for the properties, and in satisfaction of the purchase price of such properties, Newco3 will issue to Opco XXXXXXXXXX Newco3 Class Z Shares having a fair market value equal to the fair market value of the transferred properties; and

(c) Newco3 will resolve to add to the stated capital account maintained for the Newco3 Class Z Shares an amount not exceeding the sum of the aggregate agreed amount of the eligible property and the FMV of the property that is not eligible property (i.e., cash and the right to receive the dividend refund) acquired by Newco3.

168. Opco will jointly elect with Newco3, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property by Opco to Newco3 and:

(a) the agreed amount in respect of each such eligible property will not be less than the least of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii); and

(b) the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).

Purchase for Cancellation and Redemptions by Newco4 of all Newco4 shares held by Holdco

169. Newco4 will purchase for cancellation the XXXXXXXXXX Newco4 Common shares held by Holdco at their fair market value and will redeem the Newco4 Class A Shares, Newco4 Class B Shares, Newco4 Class C Shares, Newco4 Class D Shares, Newco4 Class E Shares, Newco4 Class F Shares and Newco4 Class G Shares held by Holdco for an amount equal to their fair market value, being the product obtained when each of the Newco4 Class A Redemption Amount, Newco4 Class B Redemption Amount, Newco4 Class C Redemption Amount, Newco4 Class D Redemption Amount, Newco4 Class E Redemption Amount, Newco4 Class F Redemption Amount and Newco4 Class G Redemption Amount, respectively, is multiplied by the number of Newco4 Preferred Shares of the particular share class so redeemed, all in consideration for a non-interest-bearing promissory note (the “Holdco Note”) payable on demand, and having a principal amount and fair market value equal to the aggregate purchase and redemption amounts of the purchased Newco4 Common Shares and redeemed Newco4 Preferred Shares. Holdco will accept such note as full payment of the aggregate purchase and/or redemption amount.

Redemptions by each of Newco1, Newco2 and Newco3 of all Class Z Shares held by Opco

170. Newco1 will redeem the Newco1 Class Z Shares held by Opco for an amount equal to their fair market value, being the product obtained when the Newco1 Class Z Share Redemption Amount is multiplied by the number of Newco1 Class Z Shares so redeemed. Newco1 will satisfy the foregoing aggregate redemption amount by issuing and delivering to Opco a non-interest-bearing promissory note (the “Newco1 Note”) payable on demand, and having a principal amount and fair market value equal to the aggregate redemption amount of the Newco1 Class Z Shares so redeemed. Opco will accept such note as full payment of the aggregate redemption amount.

171. Contemporaneously with the transaction in Paragraph 170, Newco2 will redeem the Newco2 Class Z Shares held by Opco for an amount equal to their fair market value, being the product obtained when the Newco2 Class Z Share Redemption Amount is multiplied by the number of Newco2 Class Z Shares so redeemed. Newco2 will satisfy the foregoing aggregate redemption amount by issuing and delivering to Opco a non-interest-bearing promissory note (the “Newco2 Note”) payable on demand, and having a principal amount and fair market value equal to the aggregate redemption amount of the Newco2 Class Z Shares so redeemed. Opco will accept such note as full payment of the aggregate redemption amount.

172. Contemporaneously with the transaction in Paragraph 170, Newco3 will redeem the Newco3 Class Z Shares held by Opco for an amount equal to their fair market value, being the product obtained when the Newco3 Class Z Share Redemption Amount is multiplied by the number of Newco3 Class Z Shares so redeemed. Newco3 will satisfy the foregoing aggregate redemption amount by issuing and delivering to Opco a non-interest-bearing promissory note (the “Newco3 Note”) payable on demand, and having a principal amount and fair market value equal to the aggregate redemption amount of the Newco3 Class Z Shares so redeemed. Opco will accept such note as full payment of the aggregate redemption amount.

First Taxation Year of Newco1, Newco2 and Newco3

173. Each of Newco1, Newco2 and Newco3 will have its first taxation year-end.

Redemption by Opco of all Class B Preferred Shares held by each of Newco1, Newco2, and Newco3

174. Opco will redeem the Opco Class B Shares held by Newco1 for an amount equal to their fair market value, being the product obtained when the Opco Class B Redemption Amount is multiplied by the number of Opco Class B Shares redeemed. Opco will satisfy the foregoing aggregate redemption amount by issuing and delivering to Newco1 a non-interest-bearing note (the “Opco Note 1”) payable on demand and having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the shares so redeemed. The Opco Note 1 will be non-assignable and non-negotiable (subject to any price adjustments). Newco1 will accept such note as full payment of the aggregate redemption amount.

175. Contemporaneously with the transaction in Paragraph 174, Opco will redeem the Opco Class B Shares held by Newco2 for an amount equal to their fair market value, being the product obtained when the Opco Class B Redemption Amount is multiplied by the number of Opco Class B Shares redeemed. Opco will satisfy the foregoing aggregate redemption amount by issuing and delivering to Newco2 a non-interest-bearing note (the “Opco Note 2”) payable on demand and having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the shares so redeemed. The Opco Note 2 will be non-assignable and non-negotiable (subject to any price adjustments). Newco2 will accept such note as full payment of the aggregate redemption amount.

176. Contemporaneously with the transaction in Paragraph 174, Opco will redeem the Opco Class B Shares held by Newco3 for an amount equal to their fair market value, being the product obtained when the Opco Class B Redemption Amount is multiplied by the number of Opco Class B Shares redeemed. Opco will satisfy the foregoing aggregate redemption amount by issuing and delivering to Newco3 a non-interest-bearing note (the “Opco Note 3”) payable on demand and having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the shares so redeemed. The Opco Note 3 will be non-assignable and non-negotiable (subject to any price adjustments). Newco3 will accept such note as full payment of the aggregate redemption amount.

177. Opco will designate (under subsection 89(14)) a portion of the deemed dividends, arising on the redemptions described in Paragraphs 174, 175 and 176, to be eligible dividends, but only to the extent of its GRIP.

Purchase for Cancellation and Redemptions of all Newco4 shares held by each of Newco1, Newco2, and Newco3

178. Newco4 will purchase for cancellation the Newco4 Common Shares held by Newco1 for an amount equal to the fair market value of such Newco4 Common Shares (the “Newco4 Common Share Purchase Amount 1”).

Newco4 will satisfy the Newco4 Common Share Purchase Amount 1 by issuing and delivering to Newco1 a non-interest-bearing note (the “Newco4 Note 1A”) payable on demand having an aggregate principal amount and fair market value equal to the Newco4 Common Share Purchase Amount 1.

Newco1 will accept the Newco4 Note 1A as full payment of the Newco4 Common Share Purchase Amount 1.

179. Contemporaneously with the transactions in Paragraph 178, Newco4 will redeem the Newco4 Preferred Shares held by Newco1 for an amount equal to their fair market value, being the sum of the products of the number of Newco 4 Preferred Shares of the particular share class so redeemed multiplied by the Newco4 Class A Redemption Amount, Newco4 Class B Redemption Amount, Newco4 Class C Redemption Amount, Newco4 Class D Redemption Amount, Newco4 Class E Redemption Amount, Newco4 Class F Redemption Amount and the Newco4 Class G Redemption Amount, respectively, for each such share.

Newco4 will satisfy the foregoing aggregate redemption amount in relation to the Newco4 Preferred Shares by issuing and delivering to Newco1 a non-interest-bearing promissory note (the “Newco4 Note 1B”) payable on demand having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the Newco4 Preferred Shares so redeemed.

Newco1 will accept the Newco4 Note 1B as full payment of the aggregate redemption amount in relation to the Newco4 Preferred Shares.

180. Contemporaneously with the transactions in Paragraph 178, Newco4 will purchase for cancellation the Newco4 Common Shares held by Newco2 for an amount equal to the fair market value of such Newco4 Common Shares (the “Newco4 Common Share Purchase Amount 2”).

Newco4 will satisfy the Newco4 Common Share Purchase Amount 2 by issuing and delivering to Newco2 a non-interest-bearing note (the “Newco4 Note 2A”) payable on demand having an aggregate principal amount and fair market value equal to the Newco4 Common Share Purchase Amount 2.

Newco2 will accept the Newco4 Note 2A as full payment of the Newco4 Common Share Purchase Amount 2.

181. Contemporaneously with the transactions in Paragraph 178, Newco4 will redeem the Newco4 Preferred Shares held by Newco2 for an amount equal to their fair market value, being the sum of the products of the number of Newco 4 Preferred Shares of the particular share class so redeemed multiplied by the Newco4 Class A Redemption Amount, Newco4 Class B Redemption Amount, Newco4 Class C Redemption Amount, Newco4 Class D Redemption Amount, Newco4 Class E Redemption Amount, Newco4 Class F Redemption Amount and the Newco4 Class G Redemption Amount, respectively, for each share.

Newco4 will satisfy the foregoing aggregate redemption amount in relation to the Newco4 Preferred Shares by issuing and delivering to Newco2 a non-interest-bearing promissory note (the “Newco4 Note 2B”) payable on demand having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the Newco4 Preferred Shares so redeemed.

Newco2 will accept the Newco4 Note 2B as full payment of the aggregate redemption amount in relation to the Newco4 Preferred Shares.

182. Contemporaneously with the transactions in Paragraph 178, Newco4 will purchase for cancellation the Newco4 Common Shares held by Newco3 for an amount equal to the fair market value of such Newco4 Common Shares (the “Newco4 Common Share Purchase Amount 3”)

Newco4 will satisfy the Newco4 Common Share Purchase Amount 3 by issuing and delivering to Newco3 a non-interest-bearing note (the “Newco4 Note 3A”) payable on demand having an aggregate principal amount and fair market value equal to the Newco4 Common Share Purchase Amount 3.

Newco3 will accept the Newco4 Note 3A as full payment of the Newco4 Common Share Purchase Amount 3.

183. Contemporaneously with the transactions in Paragraph 178, Newco4 will redeem the Newco4 Preferred Shares held by Newco3 for an amount equal to their fair market value, being the sum of the products of the number of Newco4 Preferred Shares of the particular share class so redeemed multiplied by the Newco4 Class A Redemption Amount, Newco4 Class B Redemption Amount, Newco4 Class C Redemption Amount, Newco4 Class D Redemption Amount, Newco4 Class E Redemption Amount, Newco4 Class F Redemption Amount and the Newco4 Class G Redemption Amount, respectively, for each such share.

Newco4 will satisfy the foregoing aggregate redemption amount in relation to the Newco4 Preferred Shares by issuing and delivering to Newco3 a non-interest-bearing promissory note (the “Newco4 Note 3B”) payable on demand having an aggregate principal amount and fair market value equal to the aggregate redemption amount of the Newco4 Preferred Shares so redeemed.

Newco3 will accept the Newco4 Note 3B as full payment of the aggregate redemption amount in relation to the Newco4 Preferred Shares.

Amalgamation of Newco4 and Opco to form Amalco

184. Newco4 and Opco (referred to in this Paragraph as “predecessor corporations”) will amalgamate by way of vertical short-form amalgamation under the provisions of the Corporations Act to form “Amalco” in such a manner that, on and by virtue of the amalgamation:

(a) Amalco will possess all of the property, rights, privileges and franchises of each predecessor corporation (other than the shares described in item (b) below and any amounts receivable from any predecessor corporation) and will be subject to all of the liabilities, including civil, criminal and quasi-criminal, and all contracts, liabilities and debts of each predecessor corporation (other than any amounts payable to any predecessor corporation);

(b) each issued and outstanding share of Opco held by Newco4 will be cancelled without any payment of capital in respect thereof;

(c) Amalco’s authorized share capital will be the same as the authorized share capital of Newco4;

(d) the issued and outstanding shares of Newco4 will survive and continue to be shares in Amalco, without amendment;

(e) the stated capital of each class of shares of Amalco will be an amount equal to the stated capital of such class of shares of Newco4 immediately before the amalgamation; and

(f) no securities will be issued and no properties will be distributed by Amalco in connection with the amalgamation.

Amalco will be a CCPC and a TCC and will be governed by the provisions of the Corporations Act.

Repayment of Holdco Note

185. Amalco will repay the Holdco Note in cash in full satisfaction of the obligation thereunder and the Holdco Note will be cancelled.

Cancellation of Notes between Amalco and each of Newco1, Newco2 and Newco3

186. The Newco1 Note (payable by Newco1 to Amalco) will be set off against the Opco Note 1, Newco4 Note 1A, and Newco4 Note 1B (in each case, payable by Amalco to Newco1) in full satisfaction of the respective obligations thereunder and each such note will be cancelled. The principal amount of the Newco1 Note will equal the aggregate principal amount of the Opco Note1, Newco4 Note 1A and Newco4 Note 1B.

187. The Newco2 Note (payable by Newco2 to Amalco) will be set off against the Opco Note 2, Newco4 Note 2A, and Newco4 Note 2B (in each case, payable by Amalco to Newco2) in full satisfaction of the respective obligations thereunder and each such note will be cancelled. The principal amount of the Newco2 Note will equal the aggregate principal amount of the Opco Note2, Newco4 Note 2A and Newco4 Note 2B.

188. The Newco3 Note (payable by Newco3 to Amalco) will be set off against the Opco Note 3, Newco4 Note 3A, and Newco4 Note 3B (in each case, payable by Amalco to Newco3) in full satisfaction of the respective obligations thereunder and each such note will be cancelled. The principal amount of the Newco3 Note will equal the aggregate principal amount of the Opco Note3, Newco4 Note 3A and Newco4 Note 3B.

ADDITIONAL INFORMATION

189. As part of the series of transactions or events that includes any of the Proposed Transactions, other than as described herein, there will not be:

a. a disposition of property described in subparagraphs 55(3)(a)(i), (iii) or (iv); or

b. a significant increase described in subparagraphs 55(3)(a)(ii) or (v).

190. Amalco, Newco5, Newco7 and Newco 9 may enter into a co-tenancy joint venture agreement regarding any properties that might be jointly owned.

191. Newco5, Newco7, Newco9 and Amalco may, if necessary, enter into a transition services agreement to provide for applicable services to facilitate an orderly transition with respect to the assets received.

192. None of the shares of Opco, Holdco, Newco1, Newco2, Newco3, Newco4, Newco5, Newco6, Newco7, Newco8, Newco9, Newco10, Newco11, Newco12 and Newco13 have been or will be, at any time during the implementation of the Proposed Transactions,

a. the subject of any undertaking that is referred to in subsection 112(2.2) as a “guarantee agreement”;

b. the subject of any secured undertaking of the type described in paragraph 112(2.4)(a);

c. a share that is issued or acquired as part of a transaction, event or series of transactions or events of the type described in subsection 112(2.5); or

d. the subject of a dividend rental arrangement referred to in subsection 112(2.3).

193. None of Opco, Holdco, Newco1, Newco2, Newco3, Newco4, Newco5, Newco6, Newco7, Newco8, Newco9, Newco10, Newco11, Newco12 and Newco13 is or will be a financial intermediary corporation prior to the completion of the Proposes Transactions. None of Opco, Holdco, Newco1, Newco2, Newco3, Newco4, Newco5, Newco6, Newco7, Newco8, Newco9, Newco10, Newco11, Newco12 and Newco13 is or will be a financial institution or a specified financial institution prior to the completion of the Proposed Transactions.

194. The Partnership is a Canadian partnership because each of the partners of the Partnership (i.e., Opco, Newco5, Newco7, and Newco9) are resident in Canada. Property A, Property B and Property C were capital properties of Opco immediately before their transfer by Opco to Partnership as described in Paragraph 84.

194.1 The purpose of transferring Property A, Property B and Property C to Partnership as described in Paragraph 84 was for Opco to realize accrued gains on these properties prior to the proposed changes to the capital gains inclusion rate, as Partnership plans to sell some (or all) of these properties to arm’s length persons for FMV proceeds in the next XXXXXXXXXX. A partnership was used because it is a common vehicle for investing in XXXXXXXXXX.

194.2 The purpose of Opco transferring marketable securities to Newco6, Newco8 and Newco10 as described in Paragraph 86 was to provide Opco the flexibility to realize accrued gains on these transfers prior to the proposed changes to the capital gains inclusion rate.

194.3 As described in Paragraph 185, Amalco will repay the Holdco Note in cash. After the repayment of the Holdco Note, the proceeds therefrom or property substituted for the proceeds therefrom will not XXXXXXXXXX.

194.4 Parent, who is the President of Opco, has been, and will continue to be, involved in the day-to-day management of the businesses of Opco/Amalco, Newco1, Newco2 and Newco3. Parent will continue to be involved with all major and strategic issues relating to Opco/Amalco, Newco1, Newco2 and Newco3, as is presently the case with Opco.

Parent will not assign, dispose, delegate, encumber or otherwise restrict his entitlement to exercise voting rights in the pertinent corporations, other than by way of redemption or purchase for cancellation which may occur from time to time in such manner and in such amounts as is consistent with historical practice.

PURPOSES OF THE PROPOSED TRANSACTIONS

195. The overall purpose of the Proposed Transactions is: i) to divide a portion of the assets of Opco among Sibling1, Sibling2, Sibling3 and Sibling4, along with Parent, so that each such sibling has separate ownership of those assets through one or more corporations controlled by Parent; ii) XXXXXXXXXX; and iii) to proportionally allocate Opco’s GRIP and NERDTOH between Newco1, Newco2 and Newco3 and Opco/Amalco (but not Holdco).

The reorganization will allow each of Sibling1, Sibling2, Sibling3, and Sibling4 to own a different mix of assets in line with the objectives of each of Sibling1, Sibling2, Sibling3, Sibling4, and Parent and will facilitate estate planning objectives.

195.1 The purpose for Parent to control each of Opco/Amalco, Newco1, Newco2, and Newco3 is for Parent to protect his economic interest in the assets of Opco and to continue to be in a position where he can manage and meet his financial requirements. Parent has an active role in the management of the business and has no desire to relinquish this role.

Parent is the founder of Opco and has successfully grown the enterprise to its current size over a period of decades, with an accumulation of expertise in the XXXXXXXXXX, the impact of the economic cycle in that market, and available financing sources in the market.

Accordingly, Parent believes that with his experience, he is the best person to ensure the preservation of value in current economic times for XXXXXXXXXX.

195.2 The purpose of redeeming Holdco’s interest in Amalco/Opco is to provide Parent with some directly held assets for investment and potential distribution to Parent. Parent will hold XXXXXXXXXX% of his preferred share investment (that is currently held in Opco) in each of Newco1, Newco2, Newco3 and Amalco. It is expected that Parent’s indirect holdings in Opco (held by Holdco) that are to be redeemed will represent approximately XXXXXXXXXX% of Parent’s total holdings in Opco.

196. The purpose of the steps relating to Newco4 is to allow a proportionate allocation of the NERDTOH and GRIP of Opco. As described in Paragraphs 142, 145, 148, 154, 157, and 160, each of Newco1, Newco2 and Newco3 will transfer all of the Opco Common Shares and Opco Preferred Shares held by them to Newco4 except for a portion of the Opco Class B Shares that, when redeemed, is expected to result in XXXXXXXXXX% of Opco’s NERDTOH and GRIP moving to each of Newco1, Newco2 and Newco3.

In the absence of Newco4, it is expected that a disproportionate amount of the NERDTOH balance of Opco would move to Newco1, Newco2, Newco3 and Holdco as a result of dividend refunds to Opco and the payment of Part IV tax by each of Newco1, Newco2, Newco3 and Holdco based on their proportion of dividends received while Opco would retain a disproportionate amount of the NERDTOH balance.

197. The purpose of Opco transferring property to Newco5, Newco6, Newco7, Newco8, Newco9, Newco10, Newco11, Newco12 and Newco13 is to facilitate the reorganization and to ensure that the FMV of all property transferred to each of Newco1, Newco2 and Newco3 is equal to the FMV of the shares of Opco and Newco4 held by each of Newco1, Newco2 and Newco3.

198. Reserved.

199. Reserved.

200. The purpose of the increase in the stated capital account described in Paragraph 89 is to proportionately allocate the CDA balance, if any, of Opco to Holdco, Trust1, Trust2, Trust3, and Trust4.

RULINGS REQUESTED

Provided that the preceding statements constitute a complete and accurate disclosure of all relevant facts, proposed transactions, additional information, and purposes of the Proposed Transactions, and provided that the Proposed Transactions are completed in the manner described above, and there are no other transactions which may be relevant, we confirm the following:

Capital Dividend Payments

A. As a result of the increase in the stated capital account of the Opco Common Shares described in Paragraph 89:

(a) pursuant to subsection 84(1), Opco will be deemed to have paid at that time a dividend on those shares equal to the amount of the increase in the paid-up capital and any shareholder of the class will be deemed to have received at that time a proportionate amount of such dividend; and

(b) provided that Opco elects pursuant to subsection 83(2) in respect of the full amount of the dividend referred to in Paragraph 89, in prescribed form and manner, such dividend will be deemed to be a capital dividend to the extent of Opco’s capital dividend account and no part of the dividend will be included in computing the income of a recipient shareholder. For greater certainty, the amount of the capital dividend deemed to have been received by a particular shareholder will, pursuant to paragraph 53(1)(b), be added to the ACB of the Opco Common Shares owned by that shareholder.

Opco Property Transfers to Newco5, Newco7, and Newco9

B. By virtue of subsection 20(24), Opco will be entitled to deduct, in computing its income for the taxation year in which the assumption occurs:

(a) the amount it pays to Newco5 in respect of the undertakings of Opco to which paragraph 12(1)(a) applied and are assumed by Newco5, as described in Paragraph 90 and which are the subject of a joint election described in Paragraph 91;

(b) the amount it pays to Newco7 in respect of the undertakings of Opco to which paragraph 12(1)(a) applied and are assumed by Newco7, as described in Paragraph 93 and which are the subject of a joint election described in Paragraph 94; and

(c) the amount it pays to Newco9 in respect of the undertakings of Opco to which paragraph 12(1)(a) applied and are assumed by Newco9, as described in Paragraph 96 and which are the subject of a joint election described in Paragraph 97

provided that each such election is made in the manner and within the time limit specified in subsection 20(25) and that the payments so made by Opco are reasonable.

For greater certainty, the amount so received by each of Newco5, Newco7, and Newco 9 will be deemed to be an amount described in paragraph 12(1)(a).

C. Provided joint elections are filed in prescribed form and manner, and within the time limits specified in subsection 85(6) and provided that each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, subsection 85(1) will apply to:

(a) the transfer, by Opco, of property to Newco5, as described in Paragraph 90;

(b) the transfer, by Opco, of property to Newco7, as described in Paragraph 93; and

(c) the transfer, by Opco, of property to Newco9, as described in Paragraph 96

such that the agreed amount in respect of each such transfer will be deemed to be Opco’s proceeds of disposition of the particular property and the transferee’s cost thereof.

For purposes of a joint election in respect of depreciable property of a prescribed class, the reference to “the undepreciated capital cost to the taxpayer of all the property of that class immediately before the disposition” in subparagraph 85(1)(e)(i) shall be interpreted to mean the proportion of the undepreciated capital cost to Opco of all the property of that class that the fair market value of the property so transferred immediately before the disposition is of the aggregate fair market value of all property of that class immediately before the disposition.

For purposes of each election herein described, no portion of Opco’s liabilities assumed by Newco5, Newco7, or Newco9, as the case may be, shall be treated as being assumed in consideration for the transfer of a particular property by Opco to Newco5, Newco7 or Newco9 to the extent that the principal amount of the liabilities exceeds the agreed amount under subsection 85(1) in respect of that transfer and where such excess portion is assumed by Newco5, Newco7, or Newco9, as the case may be, as consideration for the transfer of another property or properties as described in Paragraphs 90, 93, and 96.

For greater certainty, the provisions of paragraph 85(1)(e.2) will not apply to the transfers referred to herein.

D. By virtue of paragraph 1102(14)(d) of the Regulations, each property which, immediately before the transfers described in Paragraphs 90, 93, or 96 is depreciable property of a prescribed class or separate prescribed class of Opco, and which is acquired by Newco5, Newco7, or Newco9 will be depreciable property of the same prescribed class or separate prescribed class, as the case may be, of Newco5, Newco7, or Newco9.

E. Provided that the condition specified in paragraph 1100(2.2)(f) or (g) of the Regulations is satisfied, paragraph 1100(2.2)(h) of the Regulations will apply so that no amount will be included by Newco5, Newco7, or Newco9 in determining an amount for F in subsection 1100(2) of the Regulations in respect of property of a class in Schedule II of the Regulations that is property acquired by Newco5, Newco7, or Newco9 from Opco, on the transfers described in Paragraphs 90, 93, and 96.

Parent Transfers Opco Preferred Shares to Newco1, Newco2 and Newco3

F. Provided joint elections are filed in the prescribed form and manner within the time limits specified in subsection 85(6) and provided that each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

(a) the transfers of Opco Preferred Shares by Parent to Newco1, as described in Paragraph 103;

(b) the transfers of Opco Preferred Shares by Parent to Newco2, as described in Paragraph 106; and

(c) the transfers of Opco Preferred Shares by Parent to Newco3, as described in Paragraph 109

such that the agreed amount in respect of each such transfer will be deemed to be Parent’s proceeds of disposition of such property and the transferee’s cost thereof.

For greater certainty, paragraph 85(1)(e.2) will not apply to such transfers.

Siblings Transfer Opco Preferred Shares to Newco1, Newco2 and Newco3

G. Provided joint elections are filed in the prescribed form and manner within the time limits specified in subsection 85(6) and provided that each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

(a) the transfers of Opco Class B Shares and Opco Class C Shares by Sibling1 to Newco1, as described in Paragraph 112;

(b) the transfers of Opco Class B Shares and Opco Class C Shares by Sibling2 to Newco2, as described in Paragraph 115; and

(c) the transfers of Opco Class B shares and Opco Class C Shares by Sibling3 to Newco3, as described in Paragraph 118,

such that the agreed amount in respect of each such transfer will be deemed to be the transferor’s proceeds of disposition of such property and the transferee’s cost thereof.

For greater certainty, paragraph 85(1)(e.2) will not apply to such transfers.

Trusts Transfer Opco Common Shares to Newco1, Newco2 and Newco3

H. Provided joint elections are filed in the prescribed form and manner within the time limits specified in subsection 85(6) and provided that the property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

(a) the transfer of Opco Common Shares by Trust1 to Newco1, as described in Paragraph 121;

(b) the transfer of Opco Common Shares by Trust2 to Newco2, as described in Paragraph 124; and

(c) the transfer of Opco Common Shares by Trust3 to Newco3, as described in Paragraph 127

such that the agreed amount in respect of such transfer will be deemed to be the transferor’s proceeds of disposition of such property and the transferee’s cost thereof.

For greater certainty, paragraph 85(1)(e.2) will not apply to such transfers.

Transfers of Opco Common Shares and Opco Preferred Shares to Newco4

I. Provided joint elections are filed in the prescribed form and manner within the time limits specified in subsection 85(6) and provided that each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

(a) the transfers of Opco Preferred Shares by Parent to Newco4, as described in Paragraph 130;

(b) the transfers of Opco Class B Shares and Opco Class C Shares by Sibling 4 to Newco4, as described in Paragraph 133;

(c) the transfers of Opco Preferred Shares by Holdco to Newco4, as described in Paragraph 136;

(d) the transfer of Opco Common Shares by Holdco to Newco4, as described in Paragraph 139;

(e) the transfer of Opco Common Shares by Newco1 to Newco4, as described in Paragraph 142;

(f) the transfer of Opco Common Shares by Newco2 to Newco4, as described in Paragraph 145;

(g) the transfer of Opco Common Shares by Newco3 to Newco4, as described in Paragraph 148;

(h) the transfer of Opco Common Shares by Trust4 to Newco4, as described in Paragraph 151;

(i) the transfers of Opco Preferred Shares (excluding the portion of Opco Class B Shares not transferred) by Newco1 to Newco4, as described in Paragraph 154;

(j) the transfers of Opco Preferred Shares (excluding the portion of Opco Class B Shares not transferred) by Newco2 to Newco4, as described in Paragraph 157; and

(k) the transfers of Opco Preferred Shares (excluding the portion of Opco Class B Shares not transferred) by Newco3 to Newco4, as described in Paragraph 160;

such that the agreed amount in respect of each such transfer will be deemed to be the transferor’s proceeds of disposition of such property and the transferee’s cost thereof.

For greater certainty, paragraph 85(1)(e.2) will not apply to such transfers.

Opco Transfers to Newco1, Newco2 and Newco3

J. Provided joint elections are filed in prescribed form and manner, and within the time limits specified in subsection 85(6) and provided that each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, subsection 85(1) will apply to:

(a) the transfers, by Opco, of property to Newco1, as described in Paragraph 163;

(b) the transfers, by Opco, of property to Newco2, as described in Paragraph 165; and

(c) the transfers, by Opco, of property to Newco3, as described in Paragraph 167

such that the agreed amount in respect of each such transfer will be deemed to be Opco’s proceeds of disposition of the particular property and the transferee’s cost thereof.

For greater certainty, Paragraph 85(1)(e.2) will not apply to such transfers.

Purchase for Cancelation and Redemptions by Newco4 of all Newco4 shares held by Holdco

K. Subsection 84(3) will apply upon the purchase for cancellation of the Newco4 Common Shares and redemption of the Newco4 Preferred Shares, held by Holdco, as described in Paragraph 169, to deem Newco4, with respect to each such Newco4 share class to have paid, and Holdco to have received, a taxable dividend equal to the amount, if any, by which the aggregate amount paid to Holdco, on the purchase or redemption, of each class of shares, exceeds the paid-up capital in respect of the particular class of purchased or redeemed shares immediately before such purchase or redemption, and any such dividend:

(a) will be included in computing the income of Holdco pursuant to subsection 82(1) and paragraph 12(1)(j);

(b) will be deductible by Holdco pursuant to subsection 112(1) in computing its taxable income for the taxation year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) will be excluded in determining the proceeds of disposition to Holdco of the shares so purchased or redeemed pursuant to paragraph (j) of the definition of proceeds of disposition;

(d) will reduce, by virtue of subsection 112(3), the loss, if any, in respect of the purchase or redemption of the shares on which the particular dividend is deemed to be received;

(e) will not be subject to tax under Part IV, except to the extent provided in paragraph 186(1)(b);

(f) will not be subject to tax under Part IV.1; and

(g) will not be subject to tax under Part VI.1.

Redemption by each of Newco1, Newco2 and Newco3 of all Class Z shares held by Opco

L. Subsection 84(3) will apply upon the redemption of the Newco1 Class Z Shares, the Newco2 Class Z shares and the Newco3 Class Z Shares, held by Opco, as described in Paragraphs 170 to 172 (inclusive), to deem Newco1, Newco2 and Newco3, in each case, to have paid, and Opco to have received, a taxable dividend equal to the amount, if any, by which the aggregate amount paid to Opco on the redemption exceeds the paid-up capital in respect of the redeemed shares immediately before such redemption, and any such dividend:

(a) will be included in computing the income of Opco pursuant to subsection 82(1) and paragraph 12(1)(j);

(b) will be deductible by Opco pursuant to subsection 112(1) in computing its taxable income for the taxation year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) will be excluded in determining the proceeds of disposition to Opco of the shares so redeemed pursuant to paragraph (j) of the definition of proceeds of disposition;

(d) will reduce, by virtue of subsection 112(3), the loss, if any, in respect of the redemption of the shares on which the particular dividend is deemed to be received;

(e) will not be subject to tax under Part IV, except to the extent provided in paragraph 186(1)(b);

(f) will not be subject to tax under Part IV.1; and

(g) will not be subject to tax under Part VI.1.

Redemption by Opco of all Class B Preferred Shares held by each of Newco1, Newco2 and Newco3

M. Subsection 84(3) will apply upon the redemption of the Opco Class B Shares, held by Newco1, Newco2 and Newco3, respectively, as described in Paragraphs 174 to 176 (inclusive), to deem Opco, with respect to each such shareholder, to have paid, and each of Newco1, Newco2 and Newco3 to have received, a taxable dividend equal to the amount, if any, by which the aggregate amount paid to each such shareholder, on the redemption exceeds the paid-up capital in respect of the redeemed shares immediately before such redemption, and any such dividend:

(a) will be included in computing the income of Newco1, Newco2 or Newco3, as the case may be, pursuant to subsection 82(1) and paragraph 12(1)(j);

(b) will be deductible by each of Newco1, Newco2 or Newco3 pursuant to subsection 112(1) in computing its respective taxable income for the taxation year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) will be excluded in determining the proceeds of disposition to Newco1, Newco2 or Newco3 of the shares so redeemed pursuant to paragraph (j) of the definition of proceeds of disposition;

(d) will reduce, by virtue of subsection 112(3), the loss, if any, in respect of the redemption of the shares on which the particular dividend is deemed to be received;

(e) will not be subject to tax under Part IV, except to the extent provided in paragraph 186(1)(b);

(f) will not be subject to tax under Part IV.1; and

(g) will not be subject to tax under Part VI.1.

Purchase for Cancellation and Redemptions by Newco4 of all Newco4 shares held by each of Newco1, Newco2, and Newco3

N. Subsection 84(3) will apply upon the purchase for cancellation of Newco4 Common Shares and redemption of Newco4 Preferred Shares, held by each of Newco1, Newco2, and Newco3 respectively, as described in Paragraphs 178 to 183 (inclusive), to deem Newco4, with respect to each such shareholder and each such Newco4 share class, to have paid, and each of Newco1, Newco2, and Newco3 to have received, a taxable dividend equal to the amount, if any, by which the aggregate amount paid to each such shareholder, on the purchase or redemption, of each class of shares, exceeds the paid-up capital, in respect of particular class of purchased or redeemed shares immediately before such purchase or redemption, and any such dividend

(a) will be included in computing the income of Newco1, Newco2, and Newco3 pursuant to subsection 82(1) and paragraph 12(1)(j);

(b) will be deductible by each of Newco1, Newco2, and Newco3 pursuant to subsection 112(1) in computing its respective taxable income for the taxation year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) will be excluded in determining the proceeds of disposition to Newco1, Newco2, and Newco3 of the shares so purchased or redeemed pursuant to paragraph (j) of the definition of proceeds of disposition;

(d) will reduce, by virtue of subsection 112(3), the loss, if any, in respect of the purchase or redemption of the shares on which the particular dividend is deemed to be received;

(e) will not be subject to tax under Part IV, except to the extent provided in paragraph 186(1)(b);

(f) will not be subject to tax under Part IV.1; and

(g) will not be subject to tax under Part VI.1.

Amalgamation of Newco4 and Opco

O. Upon the amalgamation of Newco4 and Opco, as described in Paragraph 184:

(a) the provisions of subsection 87(1) will apply; and

(b) provided that the Newco4 Special Voting Shares and the particular Newco4 Preferred Shares owned by Parent, the Newco4 Class B Shares and Newco4 Class C Shares owned by Sibling4, and the Newco4 Common Shares owned by Trust4, immediately before the amalgamation, are capital properties of each of Parent, Sibling4, and Trust4, as the case may be, the provisions of subsection 87(4), other than paragraphs (c), (d) and (e) thereof, will apply, so that:

(i) each shareholder (other than any predecessor corporation) of each predecessor corporation will be deemed by paragraph 87(4)(a) to have disposed of such shareholder’s shares for proceeds of disposition equal to the shareholder’s ACB of such shares immediately prior to the amalgamation; and

(ii) each such shareholder will be deemed by paragraph 87(4)(b) to have acquired the shares of Amalco at a cost equal to the proceeds of disposition described in paragraph 87(4)(a).

Cancellation of Notes between Amalco and each of Newco1, Newco2 and Newco3

P. The extinguishment of debt obligations as a result of the cancellation of:

(a) the Newco1 Note (payable by Newco1 to Amalco) as against the Opco Note1, the Newco4 Note1A, and the Newco4 Note1B (in each case payable by Amalco to Newco1) as described in Paragraph 186;

(b) the Newco2 Note (payable by Newco2 to Amalco) as against the Opco Note 2, the Newco4 Note2A, and the Newco4 Note2B (in each case payable by Amalco to Newco2) as described in Paragraph 187; and

(c) the Newco3 Note (payable by Newco3 to Amalco) as against the Opco Note 3, Newco4 Note 3A, and the Newco4 Note 3B (in each case payable by Amalco to Newco3) as described in Paragraph 188

will not give rise to a forgiven amount and neither Newco1, Newco2, Newco3, nor Amalco will realize any gain or sustain any loss upon the extinguishment of the aforementioned debt obligations.

Paragraph 55(3)(a)

Q. By virtue of paragraph 55(3)(a), subsection 55(2) will not apply to any of the taxable dividends referred to in Rulings K, L, M, and N, provided that as part of a series of transactions or events that includes any of the Proposed Transactions, there is no disposition or significant increase in interest as described in any of subparagraphs 55(3)(a)(i) to (v), other than as described herein. For greater certainty, the Proposed Transactions described herein, in and of themselves, will not be considered to result in any disposition or significant increase in interest described in subparagraphs 55(3)(a)(i) to (v).

For greater certainty, subsection 55(4) will not apply.

Other Rulings

R. The provisions of subsections 15(1), 56(2), 56(4), 69(4), and 246(1) will not apply to any of the Proposed Transactions described herein, in and of themselves.

S. As a result of the Proposed Transactions, in and of themselves, subsection 245(2) will not be applied to redetermine the tax consequences as confirmed by any of the Rulings described in A to R above.

The above Rulings are given subject to the general limitations and qualifications set out in Information Circular 70-6R12 dated April 1, 2022, and are binding on the CRA provided that the Proposed Transactions are completed no later than six (6) months after the date of this letter. The above Rulings are based on the law as it presently reads and do not take into account any proposed amendments to the Act and the Regulations which, if enacted, could have an effect on the Rulings provided herein.

COMMENTS

Unless otherwise expressly confirmed, nothing in this letter should be construed as implying that the CRA has confirmed, reviewed, made any determination, or accepted any method for the determination in respect of:

a) the FMV or ACB of any property or the PUC of any shares referred to herein;

b) the balances of the CDA, NERDTOH, ERDTOH and GRIP (including, for greater certainty, the amounts computed in Paragraphs 154, 157, and 160) or any other tax account for any corporation described herein;

c) whether or not the division of the Insurance Policy into 5 separate policies as described in Paragraph 99 constitutes a disposition of the Insurance Policy;

d) the allocation of safe income (we are generally of the view that safe income should be allocated in a manner consistent with CRA documents 2020-0861031C6 and 2021-0889611E5);

e) the tax consequences relating to the Completed Transactions; and

f) any tax consequences relating to the Facts and Proposed Transactions described herein other than those specifically described in the Rulings given above.

Nothing in this letter should be construed as confirmation, express or implied, that, for the purposes of any of the Rulings given above, any adjustment to the FMV of the properties transferred or the redemption amount of the shares issued as consideration (or the principal amounts of any debt/note issued), whether pursuant to a price adjustment clause or otherwise, will be effective retroactively to the time of the transfer and issuance of shares. The general position of the CRA with respect to price adjustment clauses is stated in Income Tax Folio S4-F3-C1 Price Adjustment Clauses.

An invoice for our fees in connection with this Ruling will be forwarded to you under separate cover.

Yours truly,

XXXXXXXXXX
For Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch