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Shares transferred from one account to another triggers a 'deemed disposition" for income tax purposes. There is not an actual sell and buy. The transfer in and transfer out share price is the same for these type of transactions, which would not be guaranteed in a sell and buy situation.
If there is a capital gain going from a non-registered to a registered account, it must be reported on your tax return, however a capital loss cannot be claimed.
The taxable benefit is based on the price at the time the options are exercised. The taxable benefit is the difference between the price paid (exercise price) and the value of the shares when exercised. The employer would report a taxable benefit for this difference. In Canada (except for Quebec), you can claim a deduction of half of the taxable benefit, which is the same benefit as a capital gain.
For options that were exercised prior to March 4, 2010 there are rules in place to provide relief as there were huge losses for some people who exercised their options but did not sell the shares at the time of acquisition.