CRA recognizes that the s. 7 rules apply to agreements to sell shares for no cash consideration

CRA recognizes (e.g., in IT-113R4, para. 7) that the s. 7 rules can apply where an employer issues its shares to an employee for no monetary consideration. After up to three years of deliberation, CRA has concluded that the s. 7 rules can also apply to an employee incentive arrangement under which an employer purchases shares of a non-arm's length corporation (e.g., an open-market purchase of its non-resident parent’s shares) and grants those shares to the employees for no monetary consideration.

Neal Armstrong. Summary of 24 March 2015 T.I. 2012-0432951E5 F under s. 7(1)(a).