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Item 5. Market for Registrant’s Common Equity

2024-02-09 compared with 2023-02-14 · 80 added, 52 removed, 328 unchanged (29% of the section changed)

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Certain Canadian Federal Income Tax Considerations for U.S.

The following is a general summary of the principal Canadian federal income tax considerations generally applicable under Income Tax Act (Canada) (the “Tax Act”) to a holder of Common Shares, each of whom, at all relevant times, for the purposes of the Tax Act, holds such Common Shares as capital property, deals at arm’s length with the Company, is not affiliated with the Company and, for purposes of the Tax Act, is not, is not deemed to be, a resident of Canada and has not and will not use or hold or be deemed to use or hold the Common Shares in the course of carrying on business in Canada (a “Non-Resident Holder”).

Special rules, which are not discussed below, may apply to a non-resident of Canada that is an insurer which carries on business in Canada and elsewhere.

Such Non-Resident Holders should consilt their own tax advisors.

The Common Shares will generally be considered capital property to a Non-Resident Holder unless either (i) the Non-Resident Holder holds the Common Shares in the course of carrying on a business of buying and selling securities or

(ii) the Non-Resident Holder has acquired the Common Shares in a transaction or transactions considered to be an adventure or concern in the nature of trade.

The following summary describes, as of the date hereof, the principal Canadian federal income tax consequences under Income Tax Act (Canada) (the “Tax Act”) and the regulations thereunder (the “Regulations”) generally applicable to a holder of Common Shares who, at all relevant times, for the purposes of the Tax Act, (i) holds such Common Shares as capital property, (ii) deals at arm’s length with the Company, (iii) is not affiliated with the Company, (iv) is not, and is not deemed to be, a resident of Canada, and (v) does not use or hold (and will not be deemed to use or hold) the Common Shares in the course of carrying on a business in Canada, or otherwise in connection with a business carried on in Canada (a “Non-Resident Holder”).

Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or is an “authorized foreign bank” )as defined in the Tax Act).

Such Non-Resident Holders should consult their own tax advisors.

The Common Shares will generally be considered capital property to a Non-Resident Holder provided that the Non-Resident Holder does not use or hold (and will not use or hold) the Common Shares in the course of carrying on a business of trading or dealing in securities and such Non-Resident Holder has not acquired (and will not acquire) the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade.

The term “U.S.

Holder,” for the purposes of this section, means a Non-Resident Holder who, for purposes of the Canada-United States Tax Convention (1980) as amended, (the “Convention”), is at all relevant times a resident of the United States and is a “qualifying person” within the meaning of the Convention.

In some circumstances, fiscally transparent entities (including limited liability companies) will be entitled to benefits under the Convention.

Non-Resident Holders are urged to consult with their own tax advisors to determine their entitlement to benefits under the Convention based on their particular circumstances.

This summary is based on the current provisions of the Tax Act, the regulations thereunder (the “Regulations”), the current provisions of the Convention, counsel’s understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) publicly available prior to the date hereof.

Holder” for the purposes of this section, means a Non-Resident Holder who, for purposes of the Canada-United States Tax Convention (1980) as amended, (the “Convention”), is at all relevant times a resident of the United States and is a “qualifying person” under, and entitled to the benefits of, the Convention, Certain U.S.

resident entities that are fiscally transparent for United States federal income tax purposes (including certain limited liability companies) may not in all circumstances be entitled to the benefits of the Convention.

Members of or holders of an interest in such an entity that holds Common Shares should consult their own tax advisors regarding the extent, if any, to which the benefits of the Convention will apply to the entity in respect of its Common Shares.

This summary is based on the information contained in this Form 10-K, the current provisions of the Tax Act, the Regulations, the current provisions of the Convention and counsel’s understanding of the published administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) published in writing by the CRA prior to the date hereof.

This summary also takes into account all specific proposals to amend the Tax Act and Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (collectively, the “Proposed Tax Amendments”).

No assurances can be given that the Proposed Tax Amendments will be enacted or will be enacted as proposed.

Other than the Proposed Tax Amendments, this summary does not take into account or anticipate any changes in law or the administration policies or assessing practice of CRA, whether by judicial, legislative, governmental or administrative decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ significantly from those discussed herein.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Non-Resident Holder and no representations with respect to the income tax consequences to any particular Non-Resident Holder are made.

This summary is not exhaustive of all Canadian federal income tax considerations.

Accordingly, Non-Resident Holders should consult their own tax advisors with respect to their own particular circumstances.

The discussion below is qualified accordingly.

This summary assumes that the Proposed Tax Amendments will be enacted substantially as proposed;

however, no assurances can be given that the Proposed Tax Amendments will be enacted as proposed or at all.

Other than the Proposed Tax Amendments, this summary does not take into account or anticipate any changes in law or the administrative policies or assessing practices of the CRA, whether by way of legislative, governmental or judicial decision or action, nor does it take into account other federal or any provincial, territorial or foreign legislation or considerations, which may differ significantly from those discussed herein.

This summary is not exhaustive of all possible Canadian federal income tax considerations of acquiring or holding Common Shares.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal, business, or tax advice to any particular Non-Resident Holder and no representations with respect to the tax consequences to any particular Non-Resident Holder are made.

Accordingly, Non-Resident Holders should consult their own tax advisors as to the Canadian federal tax consequences, and the tax consequences of any other jurisdiction, applicable to them having regard to their own particular circumstances.

Currency Conversion

Subject to certain exceptions that are not discussed herein, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of Common Shares, including dividends, adjusted cost base and proceeds of dispositions must be determined in Canadian dollars using the daily exchange rate of the Bank of Canada on the particular date the particular amount arose or such other rate of exchange as acceptable to the CRA.

Generally, for purposes of the Tax Act, all amounts calculated in a currency other than the Canadian dollar relating to the acquisition, holding or disposition of Common Shares must be converted into Canadian dollars based on the exchange rates determined in accordance with the Tax Act.

The amount of dividends to be included in income, and capital gains and losses realized by a Non-Resident Holder, may be affected by fluctuations in the relevant exchange rates.

Disposition of Common Shares

A Non-Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a disposition of the Common Shares, nor will capital losses arising from the disposition be recognized under the Tax Act, unless the Common Shares constitute “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention.

As long as the shares are then listed on a “designated stock exchange” (as defined in the Tax Act) (which currently includes the TSX and the NYSE American) at the time of disposition, the Common Shares generally will not constitute taxable Canadian property of a Non-Resident Holder, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are met concurrently:

(i) the Non-Resident Holder, persons with whom the Non-Resident Holder did not deal at arm’s length, partnerships in which the Non-Resident Holder or persons with whom the Non-Resident Holder did not deal at arm’s length holds a membership interest directly or indirectly through one or more partnerships, or the Non-Resident Holder together with all such persons, owned or was considered to own 25% or more of the issued shares of any class or series of shares of the capital stock of the Company;

and (ii) more than 50% of the fair market value of the Common Shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Tax Act), “timber resource properties” (as defined in the Tax Act) or a options in respect of, or interests in, or civil law rights in, such properties, whether or not it exists.

If the Common Shares are taxable Canadian property to a Non-Resident Holder, any capital gain realized on the disposition or deemed disposition of such shares, may not be subject to Canadian federal income tax pursuant to the terms of an applicable income tax treaty or convention between Canada and the country of residence of a Non-Resident Holder, including the Convention.

A Non-Resident Holder whose shares are taxable Canadian property should consult their own advisors.

As long as the shares are then listed on a “designated stock exchange” (as defined in the Tax Act) (which currently includes the TSX and the NYSE American) at the time of disposition or deemed disposition, the Common Shares generally will not constitute taxable Canadian property of a Non-Resident Holder, unless (a) at any time during the 60-month period immediately preceding the disposition the following two conditions are met concurrently:

(i) one or any combination of (A) the Non-Resident Holder, (B) persons not dealing at arm’s length with such Non-Resident Holder, (C) partnerships in which the Non-Resident Holder or a person described in (B) holds a membership interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of shares of the capital stock of the Company;

and (ii) more than 50% of the fair market value of the Common Shares was derived, directly or indirectly, from one or any combination of real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Tax Act), “timber resource properties” (as defined in the Tax Act) or options in, or interests in, or for civil law rights in, such properties, whether or not the property exists, or (b) the Common Shares are otherwise deemed to be taxable Canadian property pursuant to certain circumstances prescribed in the Tax Act.

If the Common Shares are taxable Canadian property to a Non-Resident Holder, an applicable income tax treaty or convention, including the Convention, may in certain circumstances exempt that Non-Resident Holder from tax under Tax Act in respect of the disposition or deemed disposition of the Common Shares.

A Non-Resident Holder whose shares are taxable Canadian property should consult their own advisors having regard to their particular circumstances.

Dividends on Common Shares

Under the Tax Act, dividends on Common Shares paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividends.

This withholding tax may be reduced pursuant to the terms of an applicable income tax treaty or convention between Canada and the country of residence of a Non-Resident Holder.

Under the Convention, a U.S.

Holder will generally be subject to Canadian withholding tax at a rate of 15% of the gross amount of such dividends (or 5% in the case of a U.S.

Under the Tax Act, dividends on Common Shares paid or credited or deemed to be paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividends unless such rate is reduced by the terms of an applicable income tax treaty or convention.

In general, in the case of a U.S.

Holder who is paid or credited a dividend or deemed dividend, is the beneficial owner of such dividend or deemed dividend, and who qualifies for full benefits under the Convention, the rate of such Canadian withholding tax will generally be reduced to 15% of the gross amount of such dividend (or 5% in the case of a U.S.

Holder that is a company beneficially owning at least 10% of the Company’s voting shares).

In addition, under the Convention, dividends may be exempt from Canadian non-resident withholding tax if paid to certain U.S.

In addition, under the Convention, dividends may be exempt from Canadian withholding tax if paid to certain U.S.

Holders that are qualifying religious, scientific, literary, educational or charitable tax-exempt organizations and qualifying trusts, companies, organizations or arrangements operated exclusively to administer or provide pension, retirement or employee benefits that are exempt from tax in the United States and that have complied with specific administrative procedures.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of which Canada is a signatory, affects many of Canada’s tax treaties (but not the Convention), including the ability to claim benefits thereunder.

Non-Resident Holders should consult their own tax advisors to determine their entitlement to relief under an applicable income tax treaty or convention.

Federal Income Tax Considerations

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federal income tax considerations that may apply to a U.S.

Holder as a result of acquisition of Common Shares.

Holder as a result of the acquisition of Common Shares.

Furthermore, this summary does not take into account the individual facts and circumstances of any particular U.S.

7 unchanged sentences

federal, U.S.

state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of Common Shares.

state and local, and non-U.S.

tax consequences relating to the acquisition, ownership and disposition of Common Shares.

No ruling from the U.S.

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federal, U.S.

state and local, and foreign tax consequences (including the potential application of and operation of any tax treaties) relating to the acquisition, ownership, and disposition of Common Shares.

state and local, and non-U.S.

tax consequences (including the potential application of and operation of any tax treaties) relating to the acquisition, ownership, and disposition of Common Shares.

Holders Subject to Special U.S.

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Holders that have a “functional currency” other than the U.S.

Holders that own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other arrangement involving more than one position;

Holders that own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale or other integrated transactions;

Holders that acquired Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services;

Holders that hold Common Shares other than as a capital asset (generally property held for investment purposes) within the meaning of Section 1221 of the Code;

Holders that are required to accelerate the recognition of any item of gross income with respect to Common Shares as a result of such income being recognized on an applicable financial statement;

Holders that are subject to special tax accounting rules;

Holders that own, directly, indirectly or by attribution, 10% or more, by voting power or value, of the outstanding shares of the Company;

(i) are partnerships and other pass-through entities (and investors in such partnerships and entities);

(j) are S corporations (and shareholders thereof):

expatriates or former long-term residents of the United States;

or (k) are subject to taxing jurisdictions other than, or in addition to, the United States.

Holders that hold Common Shares in connection with a trade or business, permanent establishment, or fixed base outside the United States;

Holders that are subject to the alternative minimum tax.

Holders and others that are subject to special provisions under the Code, including U.S.

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federal net investment income, U.S.

alternative minimum tax, or foreign tax consequences to U.S.

Holders relating to the acquisition, ownership, and

disposition of Common Shares.

alternative minimum tax, or non-U.S.

tax consequences to U.S.

Holders relating to the acquisition, ownership, and disposition of Common Shares.

Holder should consult its own tax advisor regarding the U.S.

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federal net investment income, U.S.

federal alternative minimum tax and foreign tax consequences relating to the acquisition, ownership, and disposition of Common Shares.

federal alternative minimum tax and non-U.S.

tax consequences relating to the acquisition, ownership, and disposition of Common Shares.

Federal Income Tax Consequences of the Acquisition, Ownership and Disposition of Common Shares

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Subject to applicable limitations, dividends paid by the Company to non-corporate U.S.

Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC (as discussed below) in the tax year of distribution or in the preceding tax year.

Holders, including individuals, generally will be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period and other conditions are

satisfied, including that the Company not be classified as a PFIC (as discussed below) in the tax year of distribution or in the preceding tax year.

Dividends received on Common Shares by corporate U.S.

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Foreign Tax Credit

Subject to the PFIC rules discussed below, a U.S.

Dividends paid on Common Shares will be treated as foreign-source income, and generally will be treated as “passive category income” or “general category income” for U.S.

foreign tax credit purposes.

Any gain or loss recognized on a sale or other disposition of Offered Shares generally will be United States source gain or loss.

Holders that are eligible for the benefits of the Convention may elect to treat such gain or loss as Canadian source gain or loss for U.S.

foreign tax credit purposes.

The Code applies various complex limitations on the amount of foreign taxes that may be claimed as a credit by U.S.

In addition, Treasury Regulations that apply to taxes paid or accrued (the “Foreign Tax Credit Regulations”) impose additional requirements for Canadian withholding taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied.

The Treasury Department has recently released guidance temporarily pausing the application of certain of the Foreign Tax Credit Regulations.

Subject to the PFIC rules discussed below, and the Foreign Tax Credit Regulations, as discussed above, a U.S.

Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on Common Shares generally will be entitled, at the election of such U.S.

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Holders who use the accrual method of tax accounting.

Holders should consult their own U.S.

Holders should consult

their own U.S.

tax advisors regarding the U.S.

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federal income tax rules, which are subject to differing interpretations.

In addition, whether the Company (or subsidiary) will be a PFIC for any tax year depends on the assets and income of the Company (and each such subsidiary) over the course of each

such tax year and, as a result, cannot be predicted with certainty as of the date of this document.

In addition, whether the Company (or subsidiary) will be a PFIC for any tax year depends on the assets and income of the Company (and each such subsidiary) over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document.

Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or subsidiary) concerning its PFIC status or that the Company (and any subsidiary) was not, or will not be, a PFIC for any tax year.

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Holder’s pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S.

Holder, and (b) the ordinary earnings of the Company, which will be taxed as

ordinary income to such U.S.

Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S.

Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital gain, and “ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain.

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Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock.

The Common Shares generally will be “marketable stock” if they are regularly traded on (a) a national securities exchange that is

registered with the SEC;

The Common Shares generally will be “marketable stock” if they are regularly traded on (a) a national securities exchange that is registered with the SEC;

(b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934;

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However, if a U.S.

Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S.

Holder does not make a Mark-to-Market

Election beginning in the first tax year of such U.S.

Holder’s holding period for Common Shares or such U.S.

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For example, under Section 1298(b)(6) of the Code, a U.S.

Holder that uses

Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.

Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.

In any year in which the Company is classified as a PFIC, a U.S.

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Information Reporting, Backup Withholding Tax

Holders are required to report information relating to an interest in Common Shares subject to certain exceptions (including an exception for Common Shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in Common Shares.

Holders should consult their own tax advisors regarding information reporting requirements relating to their ownership of Common Shares.

federal income tax law, certain categories of U.S.

Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation.

For example, U.S.

return disclosure obligations (and related penalties) are imposed on individuals who are U.S.

Holders that hold certain specified foreign financial assets in excess of certain thresholds.

The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S.

person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S.

person and any interest in a foreign entity.

Holders may be subject to these reporting requirements unless their Common Shares are held in an account at certain financial institutions.

Penalties for failure to file certain of these information returns are substantial.

Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the United States, or by a U.S.

payor or U.S.

middleman, of dividends on Common Shares, and proceeds arising from certain sales or other taxable dispositions of Common Shares, may be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S.

Holder (a) fails to furnish such U.S.

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Holders should consult their own tax advisors regarding the information reporting and backup withholding tax rules.

Selected Financial Data

The discussion of reporting requirements set forth above is not intended to constitute a complete description of all reporting requirements that may apply to a U.S.

A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement.

Holder should consult its own tax advisors regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S.

HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES.

HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.

Not applicable

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity