Income Tax Act — I-3.3 248
any issue of a bond, debenture, note, certificate, mortgage or hypothecary claim, (m) any issue by a corporation of a share of its capital stock, or any other transaction that, but for this paragraph, would be a disposition by a corporation of a share of its capital stock, and (n) a redemption, an acquisition or a cancellation of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this paragraph as the “security”) of the capital stock of a corporation (referred to in this paragraph as the “issuing corporation”) held by another corporation (referred to in this paragraph as the “disposing corporation”) if (i) the redemption, acquisition or cancellation occurs as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this paragraph as the “new corporation”), (ii) the merger or combination (A) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) does not apply, (B) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) as the parent and the subsidiary, respectively, (C) is a foreign merger (within the meaning assigned by subsection 87(8.1)), or (D) would be a foreign merger (within the meaning assigned by subsection 87(8.1)) if subparagraph 87(8.1)(c)(ii) were read without reference to the words “that was resident in a country other than Canada”, and (iii) either (A) the disposing corporation receives no consideration for the security, or (B) in the case where the merger or combination is described by clause (ii)(C) or (D), the disposing corporation receives no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, becomes property of the new corporation; ( disposition ) distribution equipment has the same meaning as in subsection 1104(13) of the Income Tax Regulations ; ( matériel de distribution ) dividend includes a stock dividend (other than a stock dividend that is paid to a corporation or to a mutual fund trust by a non-resident corporation); ( dividende ) dividend rental arrangement , of a person or a partnership (each of which is referred to in this definition as the person ), means (a) any arrangement entered into by the person where it can reasonably be considered that (i) the main reason for the person entering into the arrangement was to enable the person to receive a dividend on a share of the capital stock of a corporation, other than a dividend on a prescribed share or on a share described in paragraph (e) of the definition term preferred share in this subsection or an amount deemed by subsection 15(3) to be received as a dividend on a share of the capital stock of a corporation, and (ii) under the arrangement someone other than that person bears the risk of loss or enjoys the opportunity for gain or profit with respect to the share in any material respect, (b) for greater certainty, any arrangement under which (i) a corporation at any time receives on a particular share a taxable dividend that would, if this Act were read without reference to subsection 112(2.3), be deductible in computing its taxable income or taxable income earned in Canada for the taxation year that includes that time, and (ii) the corporation or a partnership of which the corporation is a member is obligated to pay to another person or partnership an amount (A) that is compensation for (I) the dividend described in subparagraph (i), (II) a dividend on a share that is identical to the particular share, or (III) a dividend on a share that, during the term of the arrangement, can reasonably be expected to provide to a holder of the share the same or substantially the same pr