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Yes. A company can increase the percentage of voting shares that it owns in an original entity even if it started out owning no voting shares. The ordinary English usage of the word 'increase' is to have more of something than at an earlier time or to make or become greater or more in number.

Subparagraph 124-780(2)(a)(ii) requires that the arrangement result in the company which is the acquiring entity increasing the percentage of voting shares that it owns in the original entity. The subparagraph therefore requires a comparison between the ownership of voting shares before the arrangement and after it starts. If the acquiring entity owns no voting shares in the original entity before the arrangement but as a result of the arrangement owns voting shares in the original entity, the acquiring entity will have increased the percentage of voting shares it owns in the original entity. In terms of subparagraph 124-780(2)(a)(ii), the arrangement will result in the acquiring entity increasing its percentage ownership of voting shares in the original entity.

Some commentators have suggested an alternative view that there cannot be an 'increase' from a starting point of zero. We do not agree with this view. It does not accord with the ordinary meaning of the word 'increase'. Nor does it promote the purpose or object of the scrip of the scrip roll-over provisions.

B Co makes a takeover offer for all of the shares in T Co . Before the takeover B Co owned no shares in T Co . After the takeover B Co owns 85 % of the shares in T Co . The takeover has resulted in B Co increasing the percentage of voting shares that it owns in T Co to 85 %.