Words and Phrases - "trader or dealer in securities"

In response to a Rule 474 question as to whether the words “trader or dealer in securities” in s. 39(5)(a) “refer only to a person who is registered or licensed by regulatory authority to buy and sell securities, or to a person who in the ordinary course of business buys and sells securities on behalf of other persons; or are the words broad enough to include anyone other than a person engaged in an adventure or concern in the nature of trade?”, Létourneau J.A. concluded in favour of the broader interpretation, stating:

[T]he words "trader or dealer” should be given their ordinary meaning. They normally refer to a person who deals in merchandise, is engaged in buying and selling or whose business is trade or commerce. ...

I have no doubt that a taxpayer who makes it a profession or a business of buying and selling securities is a trader or a dealer in securities within the meaning of paragraph 39(5)(a) of the Act. ... Obviously, factors such as the frequency of the transactions, the duration of the holdings (whether, for instance, it is for a quick profit or a long term investment), the intention to acquire for resale at a profit, the nature and quantity of the securities held or made the subject matter of the transaction, the time spent on the activity, are all relevant and helpful factors in determining whether one has embarked upon a trading or dealing business. ...

In conclusion, a taxpayer … loses [the] right to elect when he becomes a trader or a dealer, that is to say when his dealings amount to carrying on a business and can no longer be characterized as investor's transactions or mere adventures or concerns in the nature of trade.