CRA notes that the excessive eligible dividend election must be made on a pro rata basis rather than being streamed

When an Canadian-controlled private corporation has been assessed Part III.1 tax for having designated eligible dividends in excess of its general rate income pool (GRIP), it can eliminate that tax by making valid excessive eligible dividend designations (EEDDs) to effectively convert the excess into ordinary (full rate) dividends.

The amount of the EEDD must be pro-rated among the eligible dividends paid in the year. This means, for example, that if three shareholders of a CCPC holding separate classes of shares each received a $30,000 dividend (designated to be an eligible dividend) and CRA then assessed the CCPC on the basis that the year-end GRIP was only $60,000, not $90,000, the maximum EEDD for each dividend would be $10,000 – so that it would not be possible to make the election so that one shareholder would be considered post-election to have received an ordinary dividend of $30,000, with the other two shareholders each continuing to benefit from full eligible dividends of $30,000 each.

The EEDDs for all shareholders can be combined into one letter.

Neal Armstrong. Summary of 2016-0626371E5 under s. 185.1(2)(a).