Archived - Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures
This page has been archived on the Web
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
MINISTER OF FINANCE
That it is expedient to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures as follows:
Short Title
Short title
1 This Act may be cited as the Budget Implementation Act, 2016, No. 1.
PART 1
Amendments to the Income Tax Act and to Related Legislation
R.S., c. 1 (5th Supp.)
Income Tax Act
2 (1) Paragraph 52(3)(a) of the Income Tax Act is replaced by the following:
(a) where the stock dividend is a dividend,
(i) in the case of a shareholder that is an individual, the amount of the stock dividend, and
(ii) in any other case, the total of all amounts each of which is
(A) the amount, if any, by which
(I) the amount that is the lesser of the amount of the stock dividend and its fair market value
exceeds
(II) the amount of the dividend that the shareholder may deduct under subsection 112(1) in computing the shareholder's taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the amount of the separate dividend would not exceed the amount of the income earned or realized by any corporation – after 1971 and before the safe-income determination time for the transaction, event or series of transactions or events as part of which the dividend is received – that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received, and
(B) the amount determined by the formula
A + B
where
A is the amount of the deemed gain under paragraph 55(2)(c) in respect of that stock dividend, and
B is the amount, if any, by which the amount of the reduction under paragraph 55(2.3)(b) in respect of that stock dividend to which paragraph 55(2)(a) would otherwise apply exceeds the amount determined for clause (A) in respect of that dividend;
(2) Subsection (1) applies to stock dividends received after April 20, 2015, except that, in respect of stock dividends that are declared after April 20, 2015 and before July 31, 2015, and that are received before September 30, 2015,
(a) clause 52(3)(a)(ii)(A), as enacted by subsection (1), is to be read as follows:
(A) the lesser of the amount of the stock dividend and its fair market value, and
(b) the description of B in clause 52(3)(a)(ii)(B), as enacted by subsection (1), is to be read without reference to the words "to which paragraph 55(2)(a) would otherwise apply".
3 (1) Subparagraph 53(1)(b)(ii) of the Act is replaced by the following:
(ii) the portion of the total determined under subparagraph (i) that relates to dividends in respect of which the taxpayer was permitted a deduction under subsection 112(1) in computing the taxpayer's taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the amount of the separate dividend would not exceed the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series of transactions or events as part of which the dividend is received — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received;
(2) Subsection (1) applies to dividends received after April 20, 2015.
4 (1) Paragraph (j) of the definition proceeds of disposition in section 54 of the Act is replaced by the following:
(j) any amount that would otherwise be proceeds of disposition of a share to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed
(i) by paragraph 55(2)(b) to be proceeds of disposition of the share, or
(ii) by subparagraph 88(2)(b)(ii) not to be a dividend, or
(2) Subsection (1) applies to dividends received after April 20, 2015.
5 (1) Subsection 55(2) of the Act is replaced by the following:
Deemed proceeds or gain
(2) If this subsection applies to a taxable dividend received by a dividend recipient, notwithstanding any other provision of this Act, the amount of the dividend (other than the portion of it, if any, subject to tax under Part IV that is not refunded as a consequence of the payment of a dividend by a corporation where the payment is part of the series referred to in subsection (2.1)) is deemed
(a) not to be a dividend received by the dividend recipient;
(b) if the dividend is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies, to be proceeds of disposition of the share that is redeemed, acquired or cancelled except to the extent that the dividend is otherwise included in computing those proceeds; and
(c) if paragraph (b) does not apply to the dividend, to be a gain of the dividend recipient, for the year in which the dividend was received, from the disposition of a capital property.
Application of subsection (2)
(2.1) Subsection (2) applies to a taxable dividend received by a corporation resident in Canada (in subsections (2) to (2.2) and (2.4) referred to as the dividend recipient) as part of a transaction or event or a series of transactions or events if
(a) the dividend recipient is entitled to a deduction in respect of the dividend under subsection 112(1) or (2) or 138(6);
(b) it is the case that
(i) one of the purposes of the payment or receipt of the dividend (or, in the case of a dividend under subsection 84(3), one of the results of which) is to effect a significant reduction in the portion of the capital gain that, but for the dividend, would have been realized on a disposition at fair market value of any share of capital stock immediately before the dividend, or
(ii) the dividend (other than a dividend that is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies) is received on a share that is held as capital property by the dividend recipient and one of the purposes of the payment or receipt of the dividend is to effect
(A) a significant reduction in the fair market value of any share, or
(B) a significant increase in the cost of property, such that the amount that is the total of the cost amounts of all properties of the dividend recipient immediately after the dividend is significantly greater than the amount that is the total of the cost amounts of all properties of the dividend recipient immediately before the dividend; and
(c) the amount of the dividend exceeds the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received.
Special rule — amount of the stock dividend
(2.2) For the purpose of applying subsections (2), (2.1), (2.3) and (2.4), the amount of a stock dividend and the dividend recipient's entitlement to a deduction under subsection 112(1) or (2) or 138(6) in respect of the amount of that dividend are to be determined as if paragraph (b) of the definition amount in subsection 248(1) read as follows:
(b) in the case of a stock dividend paid by a corporation, the greater of
(i) the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and
(ii) the fair market value of the share or shares issued as a stock dividend at the time of payment,
Stock dividends and safe income
(2.3) If this subsection applies in respect of a stock dividend
(a) the amount of the stock dividend is deemed for the purpose of subsection (2) to be a separate taxable dividend to the extent of the portion of the amount that does not exceed the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received; and
(b) the amount of the separate taxable dividend referred to in paragraph (a) is deemed to reduce the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received.
Application of subsection (2.3)
(2.4) Subsection (2.3) applies in respect of a stock dividend if
(a) a dividend recipient holds a share upon which it receives the stock dividend;
(b) the fair market value of the share or shares issued as a stock dividend exceeds the amount by which the paid-up capital of the corporation that paid the stock dividend is increased because of the dividend; and
(c) subsection (2) would apply to the dividend if subsection (2.1) were read without reference to its paragraph (c).
Determination of reduction in fair market value
(2.5) For the purpose of applying clause (2.1)(b)(ii)(A), whether a dividend causes a significant reduction in the fair market value of any share is to be determined as if the fair market value of the share, immediately before the dividend, was increased by an amount equal to the amount, if any, by which the fair market value of the dividend received on the share exceeds the fair market value of the share.
(2) The portion of paragraph 55(3)(a) of the Act before subparagraph (i) is replaced by the following:
(a) in the case of a dividend that is received on a redemption, acquisition or cancellation of a share, by the corporation that issued the share, to which subsection 84(2) or (3) applies, if, as part of a transaction or event or a series of transactions or events as a part of which the dividend is received, there was not at any particular time
(3) Subparagraph 55(3.01)(d)(i) of the Act is replaced by the following:
(i) subparagraph (j)(i) of the definition proceeds of disposition in section 54, and
(4) Paragraph 55(5)(f) of the Act is replaced by the following:
(f) unless subsection (2.3) applies, if a corporation has received a dividend any portion of which is a taxable dividend (such a portion referred to as the taxable part in this paragraph), as part of a transaction or event or series of transactions or events
(i) a portion of the dividend is deemed to be a separate taxable dividend equal to the lesser of
(A) the taxable part, and
(B) the amount of the income earned or realized by any corporation — after 1971 and before the safe-income determination time for the transaction, event or series — that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at fair market value, immediately before the dividend, of the share on which the dividend is received, and
(ii) the amount, if any, by which the taxable part exceeds the portion referred to in subparagraph (i) is deemed to be a separate taxable dividend.
(5) Subsections (1) to (4) apply to dividends received after April 20, 2015 except that, for dividends received after April 20, 2015 and before the day on which the ways and means motion to implement this section is tabled in Parliament, paragraph 55(5)(f) of the Act, as enacted by subsection (4), is to be read as follows:
(f) unless subsection (2.3) applies, if a corporation has received a dividend any portion of which is a taxable dividend
(i) the corporation may designate in its return of income under this Part for the taxation year during which the dividend was received any portion of the taxable dividend to be a separate taxable dividend, and
(ii) the amount, if any, by which the portion of the dividend that is a taxable dividend exceeds the portion designated under subparagraph (i) shall be deemed to be a separate dividend.
6 (1) Subparagraph 56(3)(a)(i) of the Act is replaced by the following:
(i) in an educational program in respect of which the taxpayer is a qualifying student (as defined in subsection 118.6(1)) in the taxation year, in the immediately preceding taxation year or in the following taxation year, or
(2) Paragraph 56(3.1)(b) of the Act is replaced by the following:
(b) if an award is received in connection with an educational program in respect of which the taxpayer is a qualifying student because of subparagraph (a)(ii) of the definition qualifying student in subsection 118.6(1) in the taxation year, in the immediately preceding taxation year or in the following taxation year (in this paragraph referred to as the claim year), the amount included under subparagraph (1)(n)(i) in computing the taxpayer's income for the taxation year in respect of the award may not exceed the amount that is the total of amounts, each of which is the cost of materials related to the program or a fee paid to a designated educational institution in respect of the program, as defined in subsection 118.6(1), in respect of the claim year.
(3) Subsection (1) applies to the 2017 and subsequent taxation years and
(a) for the 2016 taxation year, a taxpayer is considered to be entitled to deduct an amount under subsection 118.6(2) of the Act in respect of an educational program for the immediately following taxation year if the taxpayer is a qualifying student (as defined in subsection 118.6(1) of the Act) in respect of the educational program in that year; and
(b) for the 2017 taxation year, a taxpayer is considered to be a qualifying student in respect of an educational program in the immediately preceding taxation year if the taxpayer was entitled to deduct an amount under subsection 118.6(2) of the Act in respect of the educational program for that year.
(4) Subsection (2) applies to the 2017 and subsequent taxation years and
(a) for the 2016 taxation year, a taxpayer is considered to be entitled to deduct an amount by reason of paragraph (b) of the description of B in subsection 118.6(2) of the Act in respect of an educational program for the immediately following taxation year if the taxpayer is a qualifying student in respect of the educational program because of subparagraph (a)(ii) of the definition qualifying student in subsection 118.6(1) of the Act for that year; and
(b) for the 2017 taxation year, a taxpayer is considered to be a qualifying student in respect of an educational program because of subparagraph (a)(ii) of the definition qualifying student in subsection 118.6(1) of the Act in the immediately preceding taxation year if the taxpayer was entitled to deduct an amount by reason of paragraph (b) of the description of B in subsection 118.6(2) of the Act in respect of the educational program for that year.
7 (1) Paragraph (a) of the definition Canadian exploration expense in subsection 66.1(6) of the Act is replaced by the following:
(a) any expense incurred by the taxpayer (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) for the purpose of determining the existence, location, extent or quality of an accumulation of petroleum or natural gas (other than a mineral resource) in Canada, including such an expense that is
(i) a geological, geophysical or geochemical expense, or
(ii) an expense for environmental studies or community consultations (including studies or consultations that are undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of an accumulation of petroleum or natural gas),
(2) The portion of paragraph (f) of the definition Canadian exploration expense in subsection 66.1(6) of the Act before subparagraph (i) is replaced by the following:
(f) any expense incurred by the taxpayer (other than an expense incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well) for the purpose of determining the existence, location, extent or quality of a mineral resource in Canada including such an expense for environmental studies or community consultations (including, notwithstanding subparagraph (v), studies or consultations that are undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in Canada) and any expense incurred in the course of
(3) Subsections (1) and (2) apply in respect of expenses incurred after February 2015.
8 (1) Subsection 81(1) of the Act is amended by adding the following after paragraph (g.5):
Ontario Electricity Support Program
(g.6) an amount of rate assistance received under section 79.2 of the Ontario Energy Board Act, 1998, S.O. 1998, c. 15, Sch B, as amended from time to time;
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
9 (1) Subparagraph 82(1)(b)(i) of the Act is replaced by the following:
(i) the product of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year multiplied by 17%, and
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
10 (1) Clause (a)(i)(A) of the definition capital dividend account in subsection 89(1) of the Act is replaced by the following:
(A) the amount of the corporation's capital gain – computed without reference to subclause 52(3)(a)(ii)(A)(II) and subparagraph 53(1)(b)(ii) – from the disposition (other than a disposition under paragraph 40(3.1)(a) or subsection 40(12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year that began after the corporation last became a private corporation and that ended after 1971 and ending immediately before the particular time (in this definition referred to as the period)
(2) Clause (a)(ii)(A) of the definition capital dividend account in subsection 89(1) of the Act is replaced by the following:
(A) the amount of the corporation's capital loss – computed without reference to subclause 52(3)(a)(ii)(A)(II) and subparagraph 53(1)(b)(ii) – from the disposition (other than a disposition under subsection 40(3.12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period
(3) Subparagraph (b)(iii) of the definition paid-up capital in subsection 89(1) of the Act is replaced by the following:
(iii) where the particular time is after March 31, 1977, an amount equal to the paid-up capital in respect of that class of shares at the particular time, computed without reference to the provisions of this Act except subsections 51(3) and 66.3(2) and (4), sections 84.1 and 84.2, subsections 85(2.1), 85.1(2.1) and (8), 86(2.1), 87(3) and (9), paragraph 128.1(1)(c.3), subsections 128.1(2) and (3), section 135.2, subsections 138(11.7), 139.1(6) and (7), 192(4.1) and 194(4.1) and sections 212.1 and 212.3,
(4) Subsections (1) and (2) apply to dispositions made after April 20, 2015.
(5) Subsection (3) is deemed to have come into force on July 1, 2015.
11 (1) Paragraph 94(4)(b) of the Act is replaced by the following:
(b) subsections (8.1) and (8.2), paragraph (14)(a), subsections 70(6) and 73(1), the definition Canadian partnership in subsection 102(1), paragraph 107.4(1)(c), the definition qualified disability trust in subsection 122(3), paragraph (a) of the definition mutual fund trust in subsection 132(6) and the definition eligible trust in subsection 135.2(1);
(2) Subsection (1) is deemed to have come into force on July 1, 2015, except that, for taxation years that end before 2016, paragraph 94(4)(b) of the Act, as enacted by subsection (1), is to be read without reference to "the definition qualified disability trust in subsection 122(3),".
12 (1) Paragraphs 95(2)(a.2) and (a.21) of the Act are replaced by the following:
(a.2) in computing the income from a business other than an active business for a taxation year of a foreign affiliate of a taxpayer
(i) there shall be included the income of the affiliate for the year from the insurance of specified Canadian risks (which, for the purposes of this paragraph, includes income for the year from the reinsurance of specified Canadian risks), unless more than 90% of the gross premium revenue of the affiliate for the year from the insurance of risks (net of reinsurance ceded) was in respect of the insurance of risks (other than specified Canadian risks) of persons with whom the affiliate deals at arm's length,
(ii) if subparagraph (i) applies to include income of the affiliate from the insurance of specified Canadian risks,
(A) the insurance of those risks is deemed to be a separate business, other than an active business, carried on by the affiliate, and
(B) any income of the affiliate that pertains to or is incident to that business is deemed to be income from a business other than an active business,
(iii) there shall be included the income of the affiliate for the year in respect of the ceding of specified Canadian risks — except to the extent that the income is included because of subparagraph (i) or (ii) — which, for the purposes of this paragraph, includes
(A) income of the affiliate from services in respect of the ceding of specified Canadian risks, and
(B) except to the extent the amount is included under clause (A), the amount, if any, by which the fair market value of the consideration provided in respect of the ceding of the specified Canadian risks exceeds the affiliate's cost in respect of those specified Canadian risks, and
(iv) if subparagraph (iii) applies to include income of the affiliate in respect of the ceding of specified Canadian risks,
(A) the ceding of those risks is deemed to be a separate business, other than an active business, carried on by the affiliate, and
(B) any income of the affiliate that pertains to or is incident to that business is deemed to be income from a business other than an active business;
(a.21) for the purposes of paragraph (a.2), one or more risks insured by a foreign affiliate of a taxpayer that, if this Act were read without reference to this paragraph, would not be specified Canadian risks (in this paragraph referred to as the foreign policy pool) are deemed to be specified Canadian risks if
(i) the affiliate, or a person or partnership that does not deal at arm's length with the affiliate, enters into one or more agreements or arrangements in respect of the foreign policy pool,
(ii) the affiliate's risk of loss or opportunity for gain or profit in respect of the foreign policy pool, in combination with its risk of loss or opportunity for gain in respect of the agreements or arrangements, can reasonably be considered to be — or could reasonably be considered to be if the affiliate had entered into the agreements or arrangements entered into by the person or partnership — determined, in whole or in part, by reference to one or more criteria in respect of one or more risks insured by another person or partnership (in this paragraph referred to as the tracked policy pool), which criteria are
(A) the fair market value of the tracked policy pool,
(B) the revenue, income, loss or cash flow from the tracked policy pool, or
(C) any other similar criteria, and
(iii) 10% or more of the tracked policy pool consists of specified Canadian risks;
(2) Subsection 95(2) of the Act is amended by adding the following after paragraph (a.22):
(a.23) for the purposes of paragraphs (a.2) and (a.21), specified Canadian risk means a risk in respect of
(i) a person resident in Canada,
(ii) a property situated in Canada, or
(iii) a business carried on in Canada;
(3) Subsections (1) and (2) apply to taxation years of a taxpayer that begin after April 20, 2015.
13 (1) Clauses 110.7(1)(b)(ii)(A) and (B) of the Act are replaced by the following:
(A) $11.00 multiplied by the number of days in the year included in the qualifying period in which the taxpayer resided in the particular area, and
(B) $11.00 multiplied by the number of days in the year included in that portion of the qualifying period throughout which the taxpayer maintained and resided in a self-contained domestic establishment in the particular area (except any day included in computing a deduction claimed under this paragraph by another person who resided on that day in the establishment).
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
14 (1) Subsection 112(2.3) of the Act is replaced by the following:
Where no deduction permitted
(2.3) No deduction may be made under subsection (1) or (2) or 138(6) in computing the taxable income of a particular corporation in respect of a dividend received on a share of the capital stock of a corporation where there is, in respect of the share, a dividend rental arrangement of the particular corporation, a partnership of which the particular corporation is directly or indirectly a member or a trust under which the particular corporation is a beneficiary.
Dividend rental arrangements – exception
(2.31) Subsection (2.3) does not apply to a dividend received on a share where there is, in respect of the share, a dividend rental arrangement of a person or partnership (referred to in this subsection and subsection (2.32) as the taxpayer) throughout a particular period during which the synthetic equity arrangement referred to in paragraph (c) of the definition dividend rental arrangement in subsection 248(1) is in effect if
(a) the dividend rental arrangement is a dividend rental arrangement because of that paragraph; and
(b) the taxpayer establishes that, throughout the particular period, no tax-indifferent investor or group of tax-indifferent investors, each member of which is affiliated with every other member, has all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share because of the synthetic equity arrangement or a specified synthetic equity arrangement.
Representations
(2.32) A taxpayer is considered to have satisfied the condition described in paragraph (2.31)(b) in respect of a share if
(a) the taxpayer or the connected person referred to in paragraph (a) of the definition synthetic equity arrangement in subsection 248(1) (either of which is referred to in this subsection as the synthetic equity arrangement party) obtains accurate representations in writing from its counterparty, or from each member of a group comprised of all its counterparties each of which is affiliated with each other (each member of this group of counterparties is referred to in this subsection as an affiliated counterparty), with respect to the synthetic equity arrangement, as appropriate, that
(i) it is not a tax-indifferent investor and it does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), and
(ii) it has not eliminated and it does not reasonably expect to eliminate all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31);
(b) the synthetic equity arrangement party obtains accurate representations in writing from its counterparty, or from each affiliated counterparty, with respect to the synthetic equity arrangement that the counterparty, or each affiliated counterparty, as appropriate
(i) is not a tax-indifferent investor and does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31),
(ii) has entered into one or more specified synthetic equity arrangements that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit, in respect of the share, in one of the following circumstances:
(A) in the case of a counterparty, that counterparty
(I) has entered into a specified synthetic equity arrangement with its own counterparty (a counterparty of a counterparty or of an affiliated counterparty is referred to in this subsection as a specified counterparty), or
(II) has entered into a specified synthetic equity arrangement with each member of a group of its own counterparties each member of which is affiliated with each other member (each member of this group of counterparties is referred to in this subsection as an affiliated specified counterparty), or
(B) in the case of an affiliated counterparty, each affiliated counterparty
(I) has entered into a specified synthetic equity arrangement with the same specified counterparty, or
(II) has entered into a specified synthetic equity arrangement with an affiliated specified counterparty that is part of the same group of affiliated specified counterparties, and
(iii) has obtained accurate representations in writing from each of its specified counterparties, or from each member of the group of affiliated specified counterparties referred to in subclause (A)(II) or (B)(II), as appropriate, that
(A) it is not a tax-indifferent investor and it does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31), and
(B) it has not eliminated and it does not reasonably expect to eliminate all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31);
(c) the synthetic equity arrangement party obtains accurate representations in writing from its counterparty, or from each affiliated counterparty, with respect to the synthetic equity arrangement that the counterparty, or each affiliated counterparty, as appropriate
(i) is not a tax-indifferent investor and does not reasonably expect to become a tax-indifferent investor during the particular period referred to in subsection (2.31),
(ii) has entered into specified synthetic equity arrangements
(A) that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share,
(B) where no single specified counterparty or group of affiliated specified counterparties has been provided with all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share, and
(C) where each specified counterparty or affiliated specified counterparty deals at arm's length with each other (other than in the case of affiliated specified counterparties, within the same group, of affiliated specified counterparties), and
(iii) has obtained accurate representations in writing from each of its specified counterparties, or from each of its affiliated specified counterparties, that
(A) it is a person resident in Canada and it does not reasonably expect to cease to be resident in Canada during the particular period referred to in subsection (2.31), and
(B) it has not eliminated and it does not reasonably expect to eliminate all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31); or
(d) where a person or partnership is a party to a synthetic equity arrangement chain in respect of the share, the person or partnership
(i) has obtained all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share under the synthetic equity arrangement chain,
(ii) has entered into one or more specified synthetic equity arrangements that have the effect of eliminating all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share, and
(iii) obtains accurate representations in writing of the type described in paragraph (a), (b) or (c), as if it were a synthetic equity arrangement party, from each of its counterparties where each such counterparty deals at arm's length with that person or partnership.
End of particular period
(2.33) If, at a time during a particular period referred to in subsection (2.31), a counterparty, specified counterparty, affiliated counterparty or affiliated specified counterparty reasonably expects to become a tax-indifferent investor or, if it has provided a representation described by subparagraph (2.32)(a)(ii) or clause (2.32)(b)(iii)(B) or (c)(iii)(B) in respect of a share, to eliminate all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share, the particular period for which it has provided a representation in respect of the share is deemed to end at that time.
Interpretation
(2.34) For greater certainty, each reference in subsection (2.32) to a "counterparty", a "specified counterparty", an "affiliated counterparty" or an "affiliated specified counterparty" is to be read as referring only to a person or partnership that obtains all or any portion of the risk of loss or opportunity for gain or profit in respect of the share.
(2) Section 112 of the Act is amended by adding the following after subsection (9):
Synthetic equity arrangements – ordering
(10) For the purposes of subsections (3), (3.1), (4), (4.1) and (5.2), if a synthetic equity arrangement is in respect of a number of shares that are identical properties (referred to in this subsection as identical shares) that is less than the total number of such identical shares owned by a person or partnership at that time and in respect of which there is no other synthetic equity arrangement, the synthetic equity arrangement is deemed to be in respect of those identical shares in the order in which the person or partnership acquired them.
(3) Subsection (1) applies to
(a) dividends that are paid or become payable after April 2017; and
(b) dividends that are paid or become payable at any time after October 2015 and before May 2017 on a share if
(i) there is a synthetic equity arrangement, or one or more agreements or arrangements described by paragraph (d) of the definition dividend rental arrangement in subsection 248(1) of the Act, as enacted by subsection 48(1) of this Act, in respect of the share at that time, and
(ii) after April 21, 2015 and before that time, all or any part of the synthetic equity arrangement, or the agreements or arrangements, referred to in subparagraph (i) — including an option, swap, futures contract, forward contract or other financial or commodity contract or instrument as well as a right or obligation under the terms of such a contract or instrument — that contributes or could contribute to the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit, in respect of the share, to one or more persons or partnerships is
(A) entered into, acquired, extended or renewed after April 21, 2015, or
(B) in the case of a right to increase the notional amount under an agreement that is or is part of the synthetic equity arrangement, is exercised or acquired after April 21, 2015.
(4) Subsection (2) is deemed to have come into force on April 22, 2015.
15 (1) The portion of the description of B in subsection 118.031(2) of the Act before the formula is replaced by the following:
B is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $250 and the amount determined by the formula
(2) Section 118.031 of the Act, as amended by subsection (1), is repealed.
(3) Subsection (1) applies to the 2016 taxation year.
(4) Subsection (2) comes into force on January 1, 2017.
16 (1) Paragraphs (b) and (c) of the definition designated educational institution in subsection 118.6(1) of the Act are replaced by the following:
(b) a university outside Canada at which the individual referred to in the definition qualifying student in this subsection was enrolled in a course, of not less than three consecutive weeks duration, leading to a degree, or
(c) if the individual referred to in the definition qualifying student in this subsection resided, throughout the year referred to in that definition, in Canada near the boundary between Canada and the United States, an educational institution in the United States to which the individual commuted that is a university, college or other educational institution providing courses at a post-secondary school level; (établissement d'enseignement agréé)
(2) Paragraph (b) of the definition qualifying educational program in subsection 118.6(1) of the Act is replaced by the following:
(b) a benefit, if any, received by the student because of a loan made to the student in accordance with the requirements of the Canada Student Loans Act, the Apprentice Loans Act or An Act respecting financial assistance for education expenses, R.S.Q., c. A-13.3, or because of financial assistance given to the student in accordance with the requirements of the Canada Student Financial Assistance Act, or
(3) Subsection 118.6(1) of the Act is amended by adding the following in alphabetical order:
qualifying student, for a month in a taxation year, means an individual who,
(a) in the month,
(i) is enrolled in a qualifying educational program as a full-time student at a designated educational institution, or
(ii) is not described in subparagraph (i) and is enrolled at a designated educational institution in a specified educational program that provides that each student in the program spend not less than 12 hours in the month on courses in the program,
(b) if requested by the Minister, proves the enrolment by filing with the Minister a certificate in prescribed form issued by the designated educational institution and containing prescribed information, and
(c) in the case of an individual who is enrolled in a program at a designated educational institution described in subparagraph (a)(ii) of the definition designated educational institution,
(i) has attained the age of 16 years before the end of the year, and
(ii) is enrolled in the program to obtain skills for, or improve the individual's skills in, an occupation; (étudiant admissible)
(4) Subsections 118.6(2) and (2.1) of the Act are repealed.
(5) The portion of subsection 118.6(3) of the Act before paragraph (a) is replaced by the following:
Students eligible for disability tax credit
(3) For the purposes of subparagraph (a)(i) of the definition qualifying student in subsection (1), the reference to "full-time student" is to be read as "student" if
(6) Subsections (1) and (3) to (5) apply to the 2017 and subsequent taxation years.
(7) Subsection (2) is deemed to have come into force on January 2, 2015.
17 (1) The description of B in subsection 118.61(1) of the Act is replaced by the following:
B is the total of all amounts each of which may be deducted under section 118.5 in computing the individual's tax payable under this Part for the year;
(2) The description of E in subsection 118.61(1) of the Act is replaced by the following:
E is the tuition tax credit transferred for the year by the individual to the individual's spouse, common-law partner, parent or grandparent.
(3) The portion of subsection 118.61(4) of the Act before the formula is replaced by the following:
Change of appropriate percentage
(4) For the purpose of determining the amount that may be deducted under subsection (2) in computing an individual's tax payable for a taxation year, in circumstances where the appropriate percentage for the taxation year is different from the appropriate percentage for the preceding taxation year, the individual's unused tuition, textbook and education tax credits at the end of the preceding taxation year is deemed to be the amount determined by the formula
(4) Subsections (1) to (3) apply to the 2017 and subsequent taxation years.
18 (1) The description of A in section 118.8 of the Act is replaced by the following:
A is the tuition tax credit transferred for the year by the spouse or common-law partner to the individual;
(2) Subparagraph (b)(i) of the description of C in section 118.8 of the Act is replaced by the following:
(i) the total of all amounts that may be deducted under section 118.5 in computing the spouse's or common-law partner's tax payable under this Part for the year, and
(3) Subsections (1) and (2) apply to the 2017 and subsequent taxation years.
19 (1) The portion of section 118.81 of the Act before paragraph (a) is replaced by the following:
Tuition tax credit transferred
118.81 In this subdivision, the tuition tax credit transferred for a taxation year by a person to an individual is the lesser of
(2) Subparagraph (i) of the description of A in paragraph 118.81(a) of the Act is replaced by the following:
(i) the total of all amounts that may be deducted under section 118.5 in computing the person's tax payable under this Part for the year, and
(3) Subsections (1) and (2) apply to the 2017 and subsequent taxation years.
20 (1) Section 118.9 of the Act is replaced by the following:
Transfer to parent or grandparent
118.9 If for a taxation year a parent or grandparent of an individual (other than an individual in respect of whom the individual's spouse or common-law partner deducts an amount under section 118 or 118.8 for the year) is the only person designated in writing by the individual for the year for the purpose of this section, there may be deducted in computing the tax payable under this Part for the year by the parent or grandparent, as the case may be, the tuition tax credit transferred for the year by the individual to the parent or grandparent, as the case may be.
(2) Subsection (1) applies to the 2017 and subsequent taxation years.
21 (1) Subparagraph 118.91(b)(i) of the Act is replaced by the following:
(i) such of the deductions permitted under subsections 118(3) and (10) and sections 118.01 to 118.2, 118.5, 118.62 and 118.7 as can reasonably be considered wholly applicable to the period or periods in the year throughout which the individual is resident in Canada, computed as though that period or those periods were the whole taxation year, and
(2) Subsection (1) applies to the 2017 and subsequent taxation years.
22 (1) Section 118.92 of the Act is replaced by the following:
Ordering of credits
118.92 In computing an individual's tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.031, 118.04, 118.041, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.6, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.
(2) Section 118.92 of the Act, as enacted by subsection (1), is replaced by the following:
Ordering of credits
118.92 In computing an individual's tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.04, 118.041, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.
(3) Subsection (1) applies to the 2016 taxation year.
(4) Subsection (2) applies to the 2017 and subsequent taxation years.
23 (1) Section 118.94 of the Act is replaced by the following:
Tax payable by non-residents (credits restricted)
118.94 Sections 118 to 118.07 and 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 do not apply for the purpose of computing the tax payable under this Part for a taxation year by an individual who at no time in the year is resident in Canada unless all or substantially all the individual's income for the year is included in computing the individual's taxable income earned in Canada for the year.
(2) Subsection (1) applies to the 2017 and subsequent taxation years.
24 (1) Paragraph 118.95(a) of the Act is replaced by the following:
(a) such of the deductions as the individual is entitled to under any of subsections 118(3) and (10) and sections 118.01 to 118.2, 118.5, 118.62 and 118.7, as can reasonably be considered wholly applicable to the taxation year, and
(2) Subsection (1) applies to the 2017 and subsequent taxation years.
25 (1) Section 119.1 of the Act is repealed.
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
26 (1) Paragraph 121(a) of the Act is replaced by the following:
(a) the product of the amount, if any, that is required by subparagraph 82(1)(b)(i) to be included in computing the individual's income for the year multiplied by 21/29, and
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
27 (1) The heading of Subdivision A.1 of the Act is replaced by the following:
Canada Child Benefit
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
28 (1) Paragraph (e) of the definition eligible individual in section 122.6 of the Act is amended by striking out "or" at the end of subparagraph (ii), by adding "or" at the end of subparagraph (iv) and by adding the following after subparagraph (iv):
(v) is an Indian within the meaning of the Indian Act,
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
29 (1) Subsection 122.61(1) of the Act is replaced by the following:
Deemed overpayment
122.61 (1) If a person and, if the Minister so demands, the person's cohabiting spouse or common-law partner at the end of a taxation year have filed a return of income for the year, an overpayment on account of the person's liability under this Part for the year is deemed to have arisen during a month in relation to which the year is the base taxation year, equal to the amount determined by the formula
(A + C + M)/12
where
A is the amount determined by the formula
E – Q – R
where
E is the total of
(a) the product obtained by multiplying $6,400 by the number of qualified dependants in respect of whom the person was an eligible individual at the beginning of the month who have not reached the age of six years at the beginning of the month, and
(b) the product obtained by multiplying $5,400 by the number of qualified dependants, other than those qualified dependants referred to in paragraph (a), in respect of whom the person was an eligible individual at the beginning of the month,
Q is
(a) if the person's adjusted income for the year is less than or equal to $30,000, nil,
(b) if the person's adjusted income for the year is greater than $30,000 but less than or equal to $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of
(i) only one qualified dependant, 7% of the person's adjusted income for the year in excess of $30,000,
(ii) only two qualified dependants, 13.5% of the person's adjusted income for the year in excess of $30,000,
(iii) only three qualified dependants, 19% of the person's adjusted income for the year in excess of $30,000, or
(iv) more than three qualified dependants, 23% of the person's adjusted income for the year in excess of $30,000, and
(c) if the person's adjusted income for the year is greater than $65,000, and if the person is, at the beginning of the month, an eligible individual in respect of
(i) only one qualified dependant, the total of $2,450 and 3.2% of the person's adjusted income for the year in excess of $65,000,
(ii) only two qualified dependants, the total of $4,725 and 5.7% of the person's adjusted income for the year in excess of $65,000,
(iii) only three qualified dependants, the total of $6,650 and 8% of the person's adjusted income for the year in excess of $65,000, or
(iv) more than three qualified dependants, the total of $8,050 and 9.5% of the person's adjusted income for the year in excess of $65,000, and
R is the amount determined for C;
C is the amount determined by the formula
F – (G × H)
where
F is, if the person is, at the beginning of the month, an eligible individual in respect of
(a) only one qualified dependant, $2,308, and
(b) two or more qualified dependants, the total of
(i) $2,308 for the first qualified dependant,
(ii) $2,042 for the second qualified dependant, and
(iii) $1,943 for each of the third and subsequent qualified dependants,
G is the amount determined by the formula
J – [K – (L/0.122)]
where
J is the person's adjusted income for the year,
K is $45,282, and
L is the amount referred to in paragraph (a) of the description of F, and
H is
(a) if the person is an eligible individual in respect of only one qualified dependant, 12.2%, and
(b) if the person is an eligible individual in respect of two or more qualified dependants, the fraction (expressed as a percentage rounded to the nearest one-tenth of one per cent) of which
(i) the numerator is the total that would be determined under the description of F in respect of the eligible individual if that description were applied without reference to the fourth and subsequent qualified dependants in respect of whom the person is an eligible individual, and
(ii) the denominator is the amount referred to in paragraph (a) of the description of F, divided by 0.122; and
M is the amount determined by the formula
N – O
where
N is the product obtained by multiplying $2,730 by the number of qualified dependants in respect of whom both
(a) an amount may be deducted under section 118.3 for the taxation year that includes the month, and
(b) the person is an eligible individual at the beginning of the month, and
O is
(a) if the person's adjusted income for the year is less than or equal to $65,000, nil, and
(b) if the person's adjusted income for the year is greater than $65,000,
(i) where the person is an eligible individual in respect of only one qualified dependant described in N, 3.2% of the person's adjusted income for the year in excess of $65,000, and
(ii) where the person is an eligible individual in respect of two or more qualified dependants described in N, 5.7% of the person's adjusted income for the year in excess of $65,000.
(2) The first formula in subsection 122.61(1) of the Act, as enacted by subsection (1), is replaced by the following:
(A + M)/12
(3) The formula in the description of A in subsection 122.61(1) of the Act, as enacted by subsection (1), is replaced by the following:
E − Q
(4) The description of C in subsection 122.61(1) of the Act, as enacted by subsection (1), is repealed.
(5) Subsection 122.61(1) of the Act, as enacted by subsection (1), is amended by striking out "and" at the end of the description of Q, by adding "and" at the end of the description of E and by repealing the description of R.
(6) Subsection 122.61(5) of the Act is repealed.
(7) Subsection 122.61(7) of the Act is repealed.
(8) Subsections (1), (6) and (7) come into force, or are deemed to have come into force, on July 1, 2016.
(9) Subsections (2) to (5) come into force on July 1, 2017.
30 (1) Subsection 122.62(2) of the Act is replaced by the following:
Extension for notices
(2) The Minister may, on or before the day that is 10 years after the beginning of the month referred to in subsection (1), extend the time for filing a notice under that subsection.
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
31 (1) Section 122.63 of the Act is repealed.
(2) The Act is amended by adding the following after section 122.62:
Agreement
122.63 (1) The Minister of Finance may enter into an agreement with the government of a province whereby the amounts determined under the description of E in subsection 122.61(1) with respect to persons resident in the province shall, for the purpose of calculating overpayments deemed to arise under that subsection, be replaced by amounts determined in accordance with the agreement.
Agreement
(2) The amounts determined under the description of E in subsection 122.61(1) for a base taxation year because of any agreement entered into with a province and referred to in subsection (1) shall be based on the age of qualified dependants of eligible individuals, or on the number of such qualified dependants, or both, and shall result in an amount in respect of a qualified dependant that is not less, in respect of that qualified dependant, than 85% of the amount that would otherwise be determined under that description in respect of that qualified dependant for that year.
Agreement
(3) Any agreement entered into with a province and referred to in subsection (1) shall provide that, where the operation of the agreement results in a total of all amounts, each of which is an amount deemed under subsection 122.61(1) to be an overpayment on account of the liability under this Part for a taxation year of a person subject to the agreement, that exceeds 101% of the total of such overpayments that would have otherwise been deemed to have arisen under subsection 122.61(1), the excess shall be reimbursed by the government of the province to the Government of Canada.
(3) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
(4) Subsection (2) comes into force on July 1, 2017.
32 (1) The portion of the description of B in subsection 122.8(2) of the Act before the formula is replaced by the following:
B is the total of all amounts each of which is, in respect of a qualifying child of the individual for the year, the lesser of $500 and the amount determined by the formula
(2) Subdivision A.3 of Division E of Part I of the Act, as amended by subsection (1), is repealed.
(3) Subsection (1) applies to the 2016 taxation year.
(4) Subsection (2) comes into force on January 1, 2017.
33 (1) The Act is amended by adding the following after section 122.8:
Subdivision A.4
School Supplies Tax Credit
Definitions
122.9 (1) The following definitions apply in this section.
eligible educator, in respect of a taxation year, means an individual who, at any time during the taxation year,
(a) is employed in Canada as a teacher or an early childhood educator at
(i) an elementary or secondary school, or
(ii) a regulated child care facility; and
(b) holds a valid and recognized (in the province or territory in which the individual is employed)
(i) teaching certificate, licence, permit or diploma, or
(ii) certificate or diploma in early childhood education. (éducateur admissible)
eligible supplies expense, of an eligible educator for a taxation year, means an amount (other than any amount deducted in computing any person's income for any taxation year or any amount otherwise included in computing a deduction from any person's tax payable under this Act for any taxation year) paid by the eligible educator in the taxation year for teaching supplies to the extent that
(a) the teaching supplies were
(i) purchased by the eligible educator for the purpose of teaching or facilitating students' learning, and
(ii) directly consumed or used in an elementary or secondary school or in a regulated child care facility in the performance of the duties of the eligible educator's employment; and
(b) the eligible educator is not entitled to receive a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of the eligible educator and that is not deductible in computing the taxable income of the eligible educator) in respect of the amount paid. (dépense admissible)
return of income filed by an eligible educator for a taxation year means a return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the year or that would be required to be filed if the eligible educator had tax payable under this Part for the year. (déclaration de revenu)
teaching supplies means
(a) consumable supplies; and
(b) prescribed durable goods. (fournitures scolaires)
Deemed overpayment
(2) An eligible educator who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, at the end of the year, on account of tax payable under this Part for the year, an amount equal to the amount determined by the formula
A × B
where
A is the appropriate percentage for the year; and
B is the least of
(a) $1,000,
(b) the total of all amounts each of which is an eligible supplies expense of the eligible educator for the year, and
(c) if the eligible educator fails to provide the certificate referred to in subsection (3) in respect of the year, as and when requested by the Minister, nil.
Certificate
(3) If the Minister so demands, an eligible educator making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from their employer, or a delegated official of the employer, attesting to the eligible supplies expenses of the eligible educator for the year.
Effect of bankruptcy
(4) For the purposes of this subdivision, if an eligible educator becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the eligible educator (other than in this subsection) is deemed to be a reference to the particular calendar year.
Part-year residents
(5) If an eligible educator is resident in Canada throughout part of a taxation year and is non-resident throughout another part of the year, the total of the amounts that are deemed to be paid by the eligible educator under subsection (2) for the year cannot exceed the lesser of
(a) the total of
(i) the amounts deemed to be paid under subsection (2) that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the eligible educator is not resident in Canada, computed as though that period or those periods were the whole taxation year, and
(ii) the amounts deemed to be paid under subsection (2) that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the eligible educator is resident in Canada, computed as though that period or those periods were the whole taxation year; and
(b) the total of the amounts that would have been deemed to have been paid under subsection (2) for the year had the eligible educator been resident in Canada throughout the year.
Non-residents
(6) Subsection (2) does not apply in respect of a taxation year of an eligible educator if the eligible educator is, at no time in the year, resident in Canada, unless all or substantially all the eligible educator's income for the year is included in computing the eligible educator's taxable income earned in Canada for the year.
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
34 (1) Subsection 125(1.1) of the Act is amended by adding "and" at the end of paragraph (a) and by replacing paragraphs (b) to (e) with the following:
(b) that proportion of 17.5% that the number of days in the taxation year that are after 2015 is of the number of days in the taxation year.
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
35 (1) Paragraph (a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following:
(a) that is a Canadian exploration expense incurred by a corporation after March 2016 and before 2018 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2018) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1),
(2) Paragraphs (c) and (d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are replaced by the following:
(c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2016 and before April 2017, and
(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2016 and before April 2017;
(3) Subsections (1) and (2) apply to expenses renounced under a flow-through share agreement entered into after March 2016.
36 (1) Paragraph 127.4(5)(a) of the Act is replaced by the following:
(a) the amount determined by the formula
0.15 × A + 0.05 × B
where
A is the lesser of
(i) $5,000, and
(ii) the total of all amounts each of which is the net cost of the original acquisition of shares of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation), and
B is the lesser of
(i) the amount if any by which $5,000 exceeds the amount determined under subparagraph (ii) of the description of A, and
(ii) the total of all amounts each of which is the net cost of the original acquisition of shares of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation, and
(2) Paragraph 127.4(5)(a) of the Act, as enacted by subsection (1), is replaced by the following:
(a) $750, and
(3) Paragraphs 127.4(6)(a) and (a.1) of the Act are replaced by the following:
(a) 15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation),
(a.1) 5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if
(i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and
(ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
(a.2) nil, if
(i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and
(ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
(4) Subsection (1) applies to the 2016 taxation year.
(5) Subsection (2) applies to the 2017 and subsequent taxation years.
(6) Subsection (3) applies to the 2016 and subsequent taxation years.
37 (1) Clause 128(2)(e)(iii)(A) of the Act is replaced by the following:
(A) under any of sections 118 to 118.07, 118.2, 118.3, 118.5, 118.6, 118.8 and 118.9,
(2) Clause 128(2)(e)(iii)(A) of the Act, as enacted by subsection (1), is replaced by the following:
(A) under any of sections 118 to 118.07, 118.2, 118.3, 118.5, 118.8 and 118.9,
(3) Subsection (1) applies to the 2016 taxation year.
(4) Subsection (2) applies to the 2017 and subsequent taxation years.
38 (1) The Act is amended by adding the following after section 135.1:
Continuance of the Canadian Wheat Board
Definitions
135.2 (1) The following definitions apply in this section.
application for continuance means the application for continuance referred to in paragraph (a) of the definition Canadian Wheat Board continuance. (demande de prorogation)
Canadian Wheat Board means the corporation referred to in subsection 4(1) of the Canadian Wheat Board (Interim Operations) Act, as it read before its repeal, that is continued under the Canada Business Corporations Act pursuant to the application for continuance. (Commission canadienne du blé)
Canadian Wheat Board continuance means the series of transactions or events that includes
(a) the application for continuance under the Canada Business Corporations Act that is
(i) made by the corporation referred to in subsection 4(1) of the Canadian Wheat Board (Interim Operations) Act, as it read before its repeal, and
(ii) approved by the Minister of Agriculture and Agri-Food under Part III of the Marketing Freedom for Grain Farmers Act;
(b) the issuance of a promissory note or other evidence of indebtedness by the Canadian Wheat Board to the eligible trust; and
(c) the disposition of the eligible debt by the eligible trust, in the same taxation year of the trust in which the eligible debt is issued to it, in exchange for consideration that includes the issuance of shares by the Canadian Wheat Board that have a total fair market value at the time of their issuance that is equal to the amount by which the principal amount of the eligible debt exceeds $10 million. (prorogation de la Commission canadienne du blé)
eligible debt means the promissory note or other evidence of indebtedness referred to in paragraph (b) of the definition Canadian Wheat Board continuance. (dette admissible)
eligible share means a common share of the capital stock of the Canadian Wheat Board that is issued in exchange for the eligible debt, as referred to in paragraph (c) of the definition Canadian Wheat Board continuance. (action admissible)
eligible trust, at any time, means a trust that meets the following conditions:
(a) it was established in connection with the application for continuance;
(b) it is resident in Canada at that time;
(c) immediately before it acquired the eligible debt, it held only property of nominal value;
(d) it is not exempt because of subsection 149(1) from tax on its taxable income for any period in its taxation year that includes that time;
(e) all of the interests of beneficiaries under it at that time are described by reference to units that are eligible units in it;
(f) the only persons who have acquired an interest as a beneficiary under the trust from it before that time are persons who were participating farmers at the time they acquired the interest;
(g) all or substantially all of the fair market value of its property at that time is based on the value of property that is
(i) eligible debt,
(ii) shares of the capital stock of the Canadian Wheat Board, or
(iii) property described in paragraph (a) or (b) of the definition qualified investment if in section 204 or a deposit with a credit union;
(h) the property that it has paid or distributed at or before that time to a beneficiary under the trust in satisfaction of the beneficiary's eligible unit in the trust is
(i) money denominated in Canadian dollars, or
(ii) shares distributed as an eligible wind-up distribution of the trust; and
(i) at no time in its taxation year that includes that time is any other trust an eligible trust. (fiducie admissible)
eligible unit, in a trust at any time, means a unit that describes all or part of an interest as a beneficiary under the trust, if
(a) the total of all amounts each of which is the value of a unit at the time it was issued by the trust to a participating farmer does not exceed the amount by which the principal amount of the eligible debt exceeds $10 million; and
(b) all of the interests as a beneficiary under the trust are fixed interests if (as defined in subsection 251.2(1)) in the trust. (unité admissible)
eligible wind-up distribution, of a trust, means a distribution of property by the trust to a person if
(a) the distribution includes a share of the capital stock of the Canadian Wheat Board that is listed on a designated stock exchange;
(b) the only property (other than a share described in paragraph (a)) distributed by the trust on the distribution is money denominated in Canadian dollars;
(c) the distribution results in the disposition of all of the person's interest as a beneficiary under the trust; and
(d) the trust ceases to exist immediately after the distribution or immediately after the last of a series of eligible wind-up distributions (determined without reference to this paragraph) of the trust that includes the distribution. (distribution admissible sur liquidation)
participating farmer, in respect of a trust at any time, means a person
(a) who is eligible to receive units of the trust pursuant to the plan under which the trust directs its trustees to grant units to persons who have delivered grain under a contract with the Canadian Wheat Board on or after August 1, 2013; and
(b) engaged in the production of grain or any person entitled, as landlord, vendor or mortgagee or hypothecary creditor, to grain produced by a person engaged in the production of grain or to any share of that grain. (agriculteur participant)
person includes a partnership. (personne)
Trust acquires an eligible debt
(2) If, at any time, an eligible trust acquires eligible debt, the principal amount of the eligible debt is deemed not to be included in computing the income of the eligible trust for the taxation year of the eligible trust that includes that time.
Disposition of eligible debt
(3) If, at any time, an eligible trust disposes of eligible debt in exchange for consideration that includes the issuance of eligible shares
(a) for the purpose of computing the income of the eligible trust for its taxation year that includes that time
(i) an amount, in respect of the disposition of the eligible debt, equal to the fair market value of all property (other than eligible shares) received on the exchange by the trust is included,
(ii) no amount in respect of the disposition of the eligible debt is included (other than the amount described in subparagraph (i)), and
(iii) no amount in respect of the receipt of the eligible shares is included;
(b) the cost to the eligible trust of each eligible share is deemed to be nil;
(c) in computing the paid-up capital in respect of the class of the capital stock of the Canadian Wheat Board that includes the eligible shares, at any time after the shares are issued, there shall be deducted an amount equal to the amount of the paid-up capital in respect of that class at the time the shares are issued;
(d) subsection 75(2) does not apply to property
(i) that is held by the trust in a taxation year that ends at or after that time, and
(ii) that is
(A) received by the trust on the exchange, or
(B) a substitute for property described in subparagraph (i); and
(e) subsections 84(2) and (3) and section 85 do not apply at any time to eligible shares.
Eligible trust
(4) The following rules apply in respect of a trust that is an eligible trust at any time in a taxation year of the trust:
(a) in computing the trust's income for the year
(i) no deduction may be made by the trust under subsection 104(6), except to the extent of the income of the trust (determined without reference to subsection 104(6)) for the year that is paid in the year, and
(ii) no deduction may be made by the trust under subsection 104(6), if the trust ceased to be an eligible trust at the beginning of the following taxation year;
(b) for the purposes of applying Part XII.2 in respect of the year
(i) the trust's designated income for the year is deemed to be the trust's income for the year determined without reference to subsections 104(6) and (30), and
(ii) the designated beneficiaries under the trust at any time in the year are deemed to include any beneficiary under the trust that is at that time
(A) non-resident,
(B) a partnership (other than a partnership that is, throughout its fiscal period that includes that time), or
(C) exempt because of subsection 149(1) from tax under this Part on the person's taxable income;
(c) each property held by the trust that is the eligible debt or an eligible share is deemed to have a cost amount to the trust of nil;
(d) if the trust disposes of a property,
(i) subject to subsection (14), the disposition is deemed to occur for proceeds equal to the fair market value of the property immediately before the disposition,
(ii) the gain, if any, of the trust from the disposition is
(A) deemed not to be a capital gain, and
(B) to be included in computing the trust's income for the trust's taxation year that includes the time of disposition, and
(iii) the loss, if any, of the trust from the disposition is
(A) deemed not to be a capital loss, and
(B) to be deducted in computing the trust's income for the trust's taxation year that includes the time of disposition;
(e) the trust is deemed not to be a
(i) personal trust,
(ii) unit trust,
(iii) trust prescribed for the purpose of subsection 107(2), or
(iv) trust any interest in which is an excluded right or interest in applying section 128.1;
(f) any security (in this paragraph and paragraph (g), as defined in subsection 122.1(1)) of the trust that is held by a trust governed by a deferred profit sharing plan, RDSP, RESP, RRIF, RRSP or TFSA (referred to in this paragraph and paragraph (g) as the registered plan trust) is deemed not to be a qualified investment for the registered plan trust;
(g) if a registered plan trust governed by a TFSA acquires at any time a security of the trust, Part XI.01 applies in respect of the security as though the acquisition is an advantage
(i) in relation to the TFSA that is extended at that time to the controlling individual of the TFSA, and
(ii) that is a benefit the fair market value of which is the fair market value of the security at that time; and
(h) paragraph (h) of the definition disposition in subsection 248(1) does not apply in respect of eligible units of the trust.
Participating farmer — acquisition of eligible unit
(5) If, at any time, a participating farmer acquires an eligible unit in an eligible trust from the trust,
(a) no amount in respect of the acquisition of the eligible unit is included in computing the income of the participating farmer; and
(b) the cost amount to the participating farmer of the eligible unit is deemed to be nil.
Eligible unit issued to estate
(6) If a participating farmer has, immediately before the participating farmer's death, not received an eligible unit of an eligible trust for which the participating farmer was eligible – pursuant to the plan under which the eligible trust directs its trustees to grant units to persons who have delivered grain under a contract with the Canadian Wheat Board on or after August 1, 2013 – and the eligible trust issues the unit to the estate that arose on and as a consequence of the death,
(a) the participating farmer is deemed to have acquired the unit at the time that is immediately before the time that is immediately before the death, as a participating farmer from the eligible trust, and to own the unit at the time that is immediately before the death;
(b) for the purpose of paragraph (f) of the definition eligible trust in subsection (1), the estate is deemed not to have acquired the unit from the trust; and
(c) for the purposes of paragraphs (8)(b) and (c), the estate is deemed to have acquired the eligible unit on and as a consequence of the death.
Eligible unit — gain (loss)
(7) If a person disposes of an eligible unit in a trust that is an eligible trust at the time of the disposition
(a) the gain, if any, of the person from the disposition is
(i) deemed not to be a capital gain, and
(ii) to be included in computing the person's income for the person's taxation year that includes that time; and
(b) the loss, if any, of the person from the disposition is
(i) deemed not to be a capital loss, and
(ii) to be deducted in computing the person's income for the person's taxation year that includes that time.
Death of a participating farmer
(8) If, immediately before an individual's death, the individual owns an eligible unit that the individual acquired as a participating farmer from an eligible trust
(a) the individual is deemed to dispose (referred to in this subsection as the particular disposition) of the eligible unit immediately before death;
(b) if paragraph (d) does not apply,
(i) the individual's proceeds from the particular disposition are deemed to be equal to the unit's fair market value immediately before the particular disposition,
(ii) the gain from the particular disposition is deemed to be included, under subsection 70(1) and not under any other provision, in the individual's income for the individual's taxation year in which the individual dies,
(iii) subsection 159(5) applies in respect of the individual who has died (determined as though a reference in that subsection to subsection 70(5.2) includes a reference to subsection 70(1) in the application of subsection 159(5) to the gain from the particular disposition) in respect of the particular disposition, and
(iv) the person who acquires the eligible unit as a consequence of the individual's death is deemed to have acquired the eligible unit at the time of the death at a cost equal to the individual's proceeds, described in subparagraph (i), from the particular disposition;
(c) paragraph (d) applies if
(i) the individual is resident in Canada immediately before the individual's death,
(ii) the individual's graduated rate estate acquires the eligible unit on and as a consequence of the death,
(iii) the individual's legal representative elects in prescribed form in the course of administering the individual's graduated rate estate that paragraph (b) not apply to the individual in respect of the particular disposition,
(iv) the election is filed with the individual's return of income under this Part for the individual's taxation year in which the death occurred,
(v) the estate distributes the eligible unit to the individual's spouse or common-law partner at a time at which it is the individual's graduated rate estate,
(vi) the individual's spouse or common-law partner is resident in Canada at the time of the distribution, and
(vii) the estate does not dispose of the unit before the distribution; and
(d) if this paragraph applies,
(i) the individual's gain from the disposition is deemed to be nil,
(ii) the cost amount to the estate of the eligible unit is deemed to be nil,
(iii) any amount that is included in the estate's income (determined without reference to this subparagraph and subsections 104(6) and (12)) for a taxation year from a source that is the eligible unit is, notwithstanding subsection 104(24), deemed
(A) to have become payable in that taxation year by the estate to the spouse or common-law partner, and
(B) not be have become payable to any other beneficiary,
(iv) the distribution is deemed to be a disposition by the estate of the eligible unit for proceeds equal to the cost amount to the estate of the unit,
(v) the part of the spouse or common-law partner's interest as a beneficiary under the estate that is disposed of as a result of the distribution is deemed to be disposed of for proceeds of disposition equal to the cost amount to the spouse or common-law partner of that part immediately before the disposition,
(vi) the cost amount to the spouse or common-law partner of the eligible unit is deemed to be nil, and
(vii) the spouse or common-law partner is, except for the purposes of paragraph (c), deemed to have acquired the eligible unit as a participating farmer from an eligible trust.
Participating farmer — disposition of eligible unit
(9) If, at any time, an eligible unit of an eligible trust that was acquired by a participating farmer from the eligible trust is disposed of by the participating farmer (other than a disposition described in paragraph (8)(a), (10)(d) or (11)(b)),
(a) the participating farmer's proceeds from the disposition are deemed to be equal to the fair market value of the unit immediately before its disposition;
(b) if the disposition results from a distribution of money denominated in Canadian dollars by the trust to the participating farmer in a taxation year of the trust, the money is proceeds from the disposition in that taxation year by the trust of other property and, at the time of the disposition, the participating farmer is not a person described in any of clauses (4)(b)(ii)(A) to (C), the trust's gain, if any, from the disposition of the other property is reduced to the extent that the proceeds so distributed would, in the absence of this paragraph, be included under subsection 104(13) in the participating farmer's income for the taxation year of the participating farmer in which the taxation year of the trust ends; and
(c) if the participating farmer is a Canadian-controlled private corporation, for the purposes of section 125, the gain from the disposition is deemed to be income from an active business carried on by the corporation.
Eligible wind-up distribution
(10) If, at any time, an eligible trust distributes property as an eligible wind-up distribution of the trust to a person
(a) subsection 107(2.1) does not apply in respect of the distribution;
(b) the trust is deemed to have disposed of the property for proceeds equal to its fair market value at that time;
(c) the trust's gain from the disposition of the property is, notwithstanding subsection 104(24), deemed
(i) to have become payable at that time by the trust to the person, and
(ii) not to have become payable to any other beneficiary;
(d) the person is deemed to acquire the property at a cost equal to the trust's proceeds from the disposition;
(e) the person's proceeds from the disposition of the eligible unit, or part of it, that results from the distribution are deemed to be equal to the cost amount of the unit to the person immediately before that time; and
(f) for greater certainty, no part of the trust's gain from the disposition is to be included in the cost to the person of the property, other than as determined by paragraph (d).
Ceasing to be an eligible trust
(11) If a trust ceases to be an eligible trust at a particular time
(a) subsection 149(10) applies to the trust as if
(i) it ceased at that particular time to be exempt from tax under this Part on its taxable income, and
(ii) the list of provisions in paragraph 149(10)(c) included a reference to this section; and
(b) each person who holds at the particular time an eligible unit in the trust is deemed to have
(i) disposed of, at the time that is immediately before the time that is immediately before the particular time, each of the eligible units for proceeds equal to the cost amount of the unit to the person, and
(ii) reacquired the eligible unit at the time that is immediately before the particular time at a cost equal to the fair market value of the unit at the time that is immediately before the particular time.
Stock dividends — Canadian Wheat Board shares
(12) If, at any time, the eligible trust holds an eligible share (or another share of the Canadian Wheat Board acquired before that time as a stock dividend) and the Canadian Wheat Board issues, as a stock dividend paid in respect of such a share, a share of a class of its capital stock, the amount by which the paid-up capital is increased – in respect of the issuance of all shares paid by the Canadian Wheat Board to the eligible trust as the stock dividend or any other stock dividend paid to other shareholders in connection with that stock dividend – for all classes of shares of the Canadian Wheat Board is, for the purposes of this Act, deemed to be no more than $1.
Reorganization of capital – Canadian Wheat Board
(13) Subsection (14) applies in respect of the disposition by an eligible trust of all of the shares (in this subsection and subsection (14) referred to collectively as the old shares and individually as an old share) of a class of the capital stock of the Canadian Wheat Board owned by the eligible trust if
(a) the disposition of the old shares results from the acquisition, cancellation or redemption in the course of a reorganization of the capital of the Canadian Wheat Board;
(b) the Canadian Wheat Board issues to the eligible trust, in exchange for the old shares, shares (in this subsection and subsection (14) referred to collectively as the new shares and individually as a new share) of a class of the capital stock of the Canadian Wheat Board the terms and conditions of which – including the entitlement to receive an amount on a redemption, acquisition or cancellation – are in all material respects the same as those of the old shares;
(c) the amount that is the total fair market value of all of the new shares acquired by the eligible trust on the exchange equals the total fair market value of all of the old shares disposed of by the eligible trust; and
(d) the amount that is the total paid-up capital in respect of all of the new shares acquired by the eligible trust on the exchange is equal to the amount that is the total paid-up capital in respect of all of the old shares disposed of on the exchange.
Rollover of shares on reorganization
(14) If this subsection applies in respect of an exchange of an eligible trust's old share for a new share,
(a) the old share is deemed to be disposed of by the eligible trust for proceeds equal to its cost amount to the eligible trust;
(b) the new share acquired for the old share referred to in paragraph (a) is deemed to be acquired for a cost equal to the amount referred to in paragraph (a);
(c) if the old share was an eligible share, the new share is deemed to be an eligible share; and
(d) if new shares are deemed to be eligible shares because of paragraph (c) and those shares are included in a class of shares that also includes other shares that are not eligible shares, those eligible shares are deemed to have been issued in a separate series of the class and the other shares are deemed to have been issued in a separate series of the class.
Information filing requirement
(15) A trust shall file with the Minister a prescribed form in prescribed manner in respect of each taxation year of the trust in which it is an eligible trust on or before the trust's filing-due date for the year.
Failure to file prescribed form
(16) If a trust fails to file the form required by subsection (15) on or before the day that is the trust's filing-due date for a taxation year,
(a) in addition to any other penalty for which the trust may be liable under this Act in respect of the failure, the trust is liable to a penalty equal to the product obtained when $1,000 is multiplied by the number of days during which the failure continues; and
(b) if, within 30 days after the trust is served personally or by registered mail with a demand in writing from the Minister for the form to be filed, the trust has not filed the form with the Minister, the trust is deemed to cease to be an eligible trust at the end of the day on which the demand was served.
(2) Subsection (1) is deemed to have come into force on July 1, 2015, except that, before December 31, 2015, each reference to "graduated rate estate" in section 135.2 of the Act, as enacted by subsection (1), is to be read as "estate".
39 Subparagraphs (a)(i) to (iii) of the definition repayment period in subsection 146.02(1) of the Act are replaced by the following:
(i) at the beginning of the third calendar year within the participation period if, in each of the second and third calendar years within the participation period,
(A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and
(B) for calendar years after 2016, the person would not be a qualifying student (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii),
(ii) at the beginning of the fourth calendar year within the participation period if, in each of the third and fourth calendar years within the participation period,
(A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and
(B) for calendar years after 2016, the person would not be a qualifying student (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii),
(iii) at the beginning of the fifth calendar year within the participation period if, in each of the fourth and fifth calendar years within the participation period,
(A) for calendar years before 2017, the person would not be entitled to claim an amount under subsection 118.6(2) (as it read in the year) in respect of at least three months in the year, if that subsection were read without reference to paragraph (b) of the description of B in that subsection, and
(B) for calendar years after 2016, the person would not be a qualifying student (as defined in subsection 118.6(1)) in respect of at least three months in the year, if that definition were read without reference to its subparagraph (a)(ii), and
40 (1) Section 149.1 of the Act is amended by adding the following after subsection (10):
Partnership look-through rule
(11) For the purposes of this section and sections 149.2 and 188.1, each member of a partnership at any time is deemed at that time to own the portion of each property of the partnership equal to the proportion that the fair market value of the member's interest in the partnership at that time is of the fair market value of all interests in the partnership at that time.
(2) Subsection (1) is deemed to have come into force on April 21, 2015.
41 (1) Paragraph 152(1)(b) of the Act is replaced by the following:
(b) the amount of tax, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.8(2) or (3), 122.9(2), 125.4(3), 125.5(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year.
(2) Paragraph 152(1)(b) of the Act, as enacted by subsection (1), is replaced by the following:
(b) the amount of tax, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.9(2), 125.4(3), 125.5(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year.
(3) Paragraph 152(4.2)(b) of the Act is replaced by the following:
(b) redetermine the amount, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.8(2) or (3), 122.9(2), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer's liability under this Part for the year.
(4) Paragraph 152(4.2)(b) of the Act, as enacted by subsection (3), is replaced by the following:
(b) redetermine the amount, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.9(2), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer's liability under this Part for the year.
(5) Subsections (1) and (3) apply to the 2016 taxation year.
(6) Subsections (2) and (4) apply to the 2017 and subsequent taxation years.
42 (1) Paragraph 153(1)(a) of the Act is replaced by the following:
(a) salary, wages or other remuneration, other than
(i) amounts described in subsection 212(5.1), and
(ii) amounts paid at any time by an employer to an employee if, at that time, the employer is a qualifying non-resident employer and the employee is a qualifying non-resident employee,
(2) Subsection 153(1.3) of the Act is replaced by the following:
Reduction not permitted
(1.3) A joint election made or expected to be made under section 60.03 is not to be considered a basis on which the Minister may determine a lesser amount under subsection (1.1).
(3) Subsection 153(6) of the Act is replaced by the following:
Definitions
(6) The following definitions apply in this section.
designated financial institution means a corporation that
(a) is a bank, other than an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) of the Bank Act;
(b) is authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public; or
(c) is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables. (institution financière désignée)
qualifying non-resident employee, at any time in respect of a payment referred to in paragraph (1)(a), means an employee who
(a) is, at that time, resident in a country with which Canada has a tax treaty;
(b) is not liable to tax under this Part in respect of the payment because of that treaty; and
(c) works in Canada for less than 45 days in the calendar year that includes that time or is present in Canada for less than 90 days in any 12–month period that includes that time. (employé non-résident admissible)
qualifying non-resident employer, at any time, means an employer
(a) that at that time
(i) in the case of an employer that is not a partnership,
(A) is a resident of a country with which Canada has a tax treaty, or
(B) is a corporation that does not satisfy the condition in clause (A), but would be a resident of a country with which Canada has a tax treaty if the corporation were treated, for the purpose of income taxation in that country, as a body corporate, and
(ii) in the case of an employer that is a partnership, is a partnership in respect of which the total of all amounts, each of which is a share of the partnership's income or loss for the fiscal period that includes that time of a member that, at that time, is a resident of a country with which Canada has a tax treaty (or is a corporation that satisfies the condition in clause (i)(B)), is not less than 90% of the income or loss of the partnership for the period (for the purposes of this subparagraph, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000); and
(b) that is at that time certified by the Minister under subsection (7). (employeur non-résident admissible)
Certification by Minister
(7) The Minister may
(a) certify an employer for a specified period of time if the employer has applied in prescribed form containing prescribed information and the Minister is satisfied that the employer
(i) meets the conditions in paragraph (a) of the definition qualifying non-resident employer in subsection (6), and
(ii) meets the conditions established by the Minister; and
(b) revoke an employer's certification if the Minister is no longer satisfied that the employer meets the conditions referred to in subparagraph (a)(i) or (ii).
(4) Subsections (1) and (3) apply in respect of payments made after 2015.
(5) Subsection (2) applies to the 2016 and subsequent taxation years.
43 (1) Subsection 163(1) of the Act is replaced by the following:
Repeated failure to report income
163 (1) Every person is liable to a penalty who
(a) fails to report an amount, equal to or greater than $500, required to be included in computing the person's income in a return filed under section 150 for a taxation year (in this subsection and subsection (1.1) referred to as the unreported amount);
(b) had failed to report an amount, equal to or greater than $500, required to be included in computing the person's income in any return filed under section 150 for any of the three preceding taxation years; and
(c) is not liable to a penalty under subsection (2) in respect of the unreported amount.
Amount of penalty
(1.1) The amount of the penalty to which the person is liable under subsection (1) is equal to the lesser of
(a) 10% of the unreported amount, and
(b) the amount determined by the formula
0.5 × (A – B)
where
A is the total of the amounts that would be determined under paragraphs (2)(a) to (g) if subsection (2) applied in respect of the unreported amount, and
B is any amount deducted or withheld under subsection 153(1) that may reasonably be considered to be in respect of the unreported amount.
(2) Paragraph 163(2)(c.4) of the Act is repealed.
(3) Subsection 163(2) of the Act is amended by adding the following after paragraph (c.4):
(c.5) the amount, if any, by which
(i) the total of all amounts each of which is an amount that would be deemed by subsection 122.9(2) to have been paid on account of the person's tax payable under this Part for the year if that amount were calculated by reference to the person's claim for the year under the subsection
exceeds
(ii) the total of all amounts each of which is the amount that the person is entitled to claim for the year under subsection 122.9(2),
(4) Subsection (1) applies to taxation years that begin after 2014.
(5) Subsection (2) comes into force on January 1, 2017.
(6) Subsection (3) applies to the 2016 and subsequent taxation years.
44 (1) Paragraphs (b) and (c) of the definition labour-sponsored funds tax credit in subsection 211.7(1) of the Act are replaced by the following:
(b) in any other case, the amount that would be determined under subsection 127.4(6) in respect of the share if this Act were read without reference to its paragraphs (b) and (d). (crédit d'impôt relatif à un fonds de travailleurs)
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
45 (1) Subparagraph 217(5)(a)(i) of the Act is replaced by the following:
(i) such of the amounts that would have been deductible under any of section 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 in computing the person's tax payable under Part I for the year if the person had been resident in Canada throughout the year, as can reasonably be considered wholly applicable, and
(2) Subsection (1) applies to the 2017 and subsequent taxation years.
46 (1) Section 227 of the Act is amended by adding the following after subsection (8.5):
No penalty — qualifying non-resident employers
(8.6) Subsection (8) does not apply to a qualifying non-resident employer (as defined in subsection 153(6)) in respect of a payment made to an employee if, after reasonable inquiry, the employer had no reason to believe at the time of the payment that the employee was not a qualifying non-resident employee (as defined in subsection 153(6)).
(2) Subsection (1) applies in respect of payments made after 2015.
47 (1) Paragraph 241(4)(d) of the Act is amended by striking out "or" at the end of subparagraph (xvi), by adding "or" at the end of subparagraph (xvii) and by adding the following after subparagraph (xvii):
(xviii) to an official of the Canada Revenue Agency solely for the purpose of the collection of amounts owing to Her Majesty in right of Canada or of a province under the Government Employees Compensation Act, the Canada Labour Code, the Merchant Seamen Compensation Act, the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Postal Services Continuation Act, 1997, the Wage Earner Protection Program Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level;
(2) Subsection 241(4) of the Act is amended by striking out "or" at the end of paragraph (r), by adding "or'' at the end of paragraph (s) and by adding the following after paragraph (s):
(t) provide taxpayer information to an official solely for the purpose of enabling the Chief Actuary of the Office of the Superintendent of Financial Institutions to conduct actuarial reviews of pension plans established under the Old Age Security Act as required by the Public Pensions Reporting Act.
48 (1) The definition dividend rental arrangement in subsection 248(1) of the Act is replaced by the following:
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 proportionate risk of loss or opportunity for gain as the particular share, and
(B) that, if paid, would be deemed by subsection 260(5.1) to have been received by that other person or partnership, as the case may be, as a taxable dividend,
(c) any synthetic equity arrangement, in respect of a DRA share of the person, and
(d) one or more agreements or arrangements (other than agreements or arrangements described in paragraph (c)) entered into by the person, the connected person referred to in paragraph (a) of the definition synthetic equity arrangement or, for greater certainty, by any combination of the person and connected persons, if
(i) the agreements or arrangements have the effect, or would have the effect if each agreement or arrangement entered into by a connected person were entered into by the person, of eliminating all or substantially all of the person's risk of loss and opportunity for gain or profit in respect of a DRA share of the person,
(ii) as part of a series of transactions that includes these agreements or arrangements, a tax-indifferent investor, or a group of tax-indifferent investors each member of which is affiliated with every other member, obtains all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share or an identical share (as defined in subsection 112(10)), and
(iii) it is reasonable to conclude that one of the purposes of the series of transactions is to obtain the result described in subparagraph (ii); (mécanisme de transfert de dividendes)
(2) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
DRA share, of a person or partnership, means a share
(a) that is owned by the person or partnership,
(b) in respect of which the person or partnership is deemed to have received a dividend under subsection 260(5.1) and is provided with all or substantially all of the risk of loss and opportunity for gain or profit under an agreement or arrangement,
(c) that is held by a trust under which the person or partnership is a beneficiary and in respect of which the person or partnership is deemed to have received a dividend as a result of a designation by the trust under subsection 104(19),
(d) in respect of which the person or partnership is deemed to have received a dividend under subsection 82(2), or
(e) in any other case, in respect of which the person or partnership is (or would be in the absence of subsection 112(2.3)) entitled to a deduction under subsection 112(1) in respect of dividends received on the share; (action de mécanisme de transfert de dividendes ou AMTD)
recognized derivatives exchange means a person or partnership recognized or registered under the securities laws of a province to carry on the business of providing the facilities necessary for the trading of options, swaps, futures contracts or other financial contracts or instruments whose market price, value, delivery obligations, payment obligations or settlement obligations are derived from, referenced to or based on an underlying interest; (bourse reconnue en instruments financiers dérivés)
specified mutual fund trust, at any time, means a mutual fund trust other than a mutual fund trust for which it can reasonably be considered, having regard to all the circumstances, including the terms and conditions of the units of the trust, that the total of all amounts each of which is the fair market value, at that time, of a unit issued by the trust and held by a person exempt from tax under section 149 is all or substantially all of the total of all amounts each of which is the fair market value, at that time, of a unit issued by the trust; (fiducie de fonds commun de placement déterminée)
specified synthetic equity arrangement, in respect of a DRA share of a person or partnership, means one or more agreements or other arrangements that
(a) have the effect of providing to a person or partnership all or any portion of the risk of loss or opportunity for gain or profit in respect of the DRA share and, for greater certainty, opportunity for gain or profit includes rights to, benefits from and distributions on a share, and
(b) can reasonably be considered to have been entered into in connection with a synthetic equity arrangement, in respect of the DRA share, or in connection with another specified synthetic equity arrangement, in respect of the DRA share; (arrangement de capitaux propres synthétiques déterminé)
synthetic equity arrangement in respect of a DRA share of a person or partnership (referred to in this definition as the particular person),
(a) means one or more agreements or other arrangements that
(i) are entered into by the particular person, by a person or partnership that does not deal at arm's length with, or is affiliated with, the particular person (referred to in this definition as a connected person) or, for greater certainty, by any combination of the particular person and connected persons, with one or more persons or partnerships (referred to in this definition as a counterparty and in subsection 112(2.32) as a counterparty or an affiliated counterparty as appropriate),
(ii) have the effect, or would have the effect, if each agreement entered into by a connected person were entered into by the particular person, of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share to a counterparty or a group of counterparties each member of which is affiliated with every other member and, for greater certainty, opportunity for gain or profit includes rights to, benefits from and distributions on a share, and
(iii) if entered into by a connected person, can reasonably be considered to have been entered into with the knowledge, or where there ought to have been the knowledge, that the effect described in subparagraph (ii) would result, and
(b) does not include
(i) an agreement that is traded on a recognized derivatives exchange unless it can reasonably be considered that, at the time the agreement is entered into,
(A) the particular person or the connected person, as the case may be, knows or ought to know that the agreement is part of a series of transactions that has the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share to a tax-indifferent investor, or a group of tax-indifferent investors each member of which is affiliated with every other member, or
(B) one of the main reasons for entering into the agreement is to obtain the benefit of a deduction in respect of a payment, or a reduction of an amount that would otherwise have been included in income, under the agreement, that corresponds to an expected or actual dividend in respect of a DRA share,
(ii) one or more agreements or other arrangements that, but for this subparagraph, would be a synthetic equity arrangement, in respect of a share owned by the particular person (in this subparagraph referred to as the synthetic short position), if
(A) the particular person has entered into one or more other agreements or other arrangements (other than, for greater certainty, an agreement under which the share is acquired or an agreement or arrangement under which the particular person receives a deemed dividend and is provided with all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share) that have the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share to the particular person (in this subparagraph referred to as the synthetic long position),
(B) the synthetic short position has the effect of offsetting all amounts included or deducted in computing the income of the particular person with respect to the synthetic long position, and
(C) the synthetic short position was entered into for the purpose of obtaining the effect referred to in clause (B), and
(iii) an agreement to purchase the shares of a corporation, or a purchase agreement that is part of a series of agreements to purchase the shares of a corporation, under which a counterparty or a group of counterparties each member of which is affiliated with every other member acquires control of the corporation that has issued the shares being purchased, unless the main reason for establishing, incorporating or operating the corporation is to have this subparagraph apply; (arrangement de capitaux propres synthétiques)
synthetic equity arrangement chain, in respect of a share owned by a person or partnership, means a synthetic equity arrangement — or a synthetic equity arrangement in combination with one or more specified synthetic equity arrangements — where
(a) no party to the synthetic equity arrangement or a specified synthetic equity arrangement, if any, is a tax-indifferent investor, and
(b) each other party to these agreements or arrangements is affiliated with the person or partnership; (chaîne d'arrangements de capitaux propres synthétiques)
tax-indifferent investor, at any time, means a person or partnership that is at that time
(a) a person exempt from tax under section 149,
(b) a non-resident person, other than a person to which all amounts paid or credited under a synthetic equity arrangement or a specified synthetic equity arrangement may reasonably be attributed to the business carried on by the person in Canada through a permanent establishment (as defined by regulation) in Canada,
(c) a trust resident in Canada (other than a specified mutual fund trust) if any of the interests as a beneficiary under the trust is not a fixed interest (as defined in subsection 251.2(1)) in the trust (in this definition referred to as a discretionary trust),
(d) a partnership more than 10% of the fair market value of all interests in which can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraphs (a) to (c), or
(e) a trust resident in Canada (other than a specified mutual fund trust or a discretionary trust) if more than 10% of the fair market value of all interests as beneficiaries under the trust can reasonably be considered to be held, directly or indirectly through one or more trusts or partnerships, by any combination of persons described in paragraph (a) or (c); (investisseur indifférent relativement à l'impôt)
(3) Section 248 of the Act is amended by adding the following after subsection (41):
Synthetic equity arrangements – disaggregation
(42) For the purposes of the definition synthetic equity arrangement in subsection (1), paragraphs (c) and (d) of the definition dividend rental arrangement in subsection (1) and subsections 112(2.31), (2.32) and (10), an arrangement that reflects the fair market value of more than one type of identical share (as defined in subsection 112(10)) is considered to be a separate arrangement with respect to each type of identical share the value of which the arrangement reflects.
(4) Subsection (1) applies to
(a) dividends that are paid or become payable after April 2017; and
(b) dividends that are paid or become payable at any time after October 2015 and before May 2017 on a share if
(i) there is a synthetic equity arrangement, or one or more agreements or arrangements described by paragraph (d) of the definition dividend rental arrangement in subsection 248(1) of the Act, as enacted by subsection (1), in respect of the share at that time, and
(ii) after April 21, 2015 and before that time, all or any part of the synthetic equity arrangement, or the agreements or arrangements, referred to in subparagraph (i) — including an option, swap, futures contract, forward contract or other financial or commodity contract or instrument as well as a right or obligation under the terms of such a contract or instrument — that contributes or could contribute to the effect of providing all or substantially all of the risk of loss and opportunity for gain or profit, in respect of the share, to one or more persons or partnerships is
(A) entered into, acquired, extended or renewed after April 21, 2015, or
(B) in the case of a right to increase the notional amount under an agreement that is or is part of the synthetic equity arrangement, is exercised or acquired after April 21, 2015.
(5) Subsections (2) and (3) are deemed to have come into force on April 22, 2015.
49 (1) Section 253.1 of the Act is renumbered as subsection 253.1(1) and is amended by adding the following:
Investments in limited partnerships
(2) For the purposes of section 149.1 and subsections 188.1(1) and (2), if a registered charity or a registered Canadian amateur athletic association holds an interest as a member of a partnership, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business of the partnership if
(a) by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited;
(b) the member deals at arm's length with each general partner of the partnership; and
(c) the member, or the member together with persons and partnerships with which it does not deal at arm's length, holds interests in the partnership that have a fair market value of not more than 20% of the fair market value of the interests of all members in the partnership.
(2) Subsection (1) applies in respect of investments in limited partnerships that are made or acquired after April 20, 2015.
Related Amendments to Other Acts
1992, c. 48, Sch.
Children's Special Allowances Act
2006, c. 4, s. 169
50 Section 2.1 of the Children's Special Allowances Act is repealed.
2015, c. 36, s. 38
51 (1) Subparagraph 3.1(1)(a)(ii) of the Act is replaced by the following:
(ii) a special allowance supplement in the amount of $160, in respect of every month as of January 1, 2015 but before July 1, 2016; and
2015, c. 36, s. 38
(2) Paragraph 3.1(1)(b) of the Act is replaced by the following:
(b) is six years of age or older, a special allowance supplement in the amount of $60, in respect of every month as of January 1, 2015 but before July 1, 2016.
(3) Section 3.1 of the Act is repealed.
1998, c. 21, s. 98(1)
52 Subsection 8(1) of the Act is replaced by the following:
Calculation of amount
8 (1) The amount of special allowance to be paid in respect of a child for a month is one twelfth of the total of
(a) if the child has not reached the age of six years at the beginning of the month, the amount expressed in dollars in paragraph (a) of the description of E in subsection 122.61(1) of the Income Tax Act,
(b) if the child is six years of age or older at the beginning of the month, the amount expressed in dollars in paragraph (b) of the description of E in subsection 122.61(1) of the Income Tax Act, and
(c) if an amount may be deducted under section 118.3 of the Income Tax Act in respect of the child for the taxation year that includes the month, the amount expressed in dollars in the description of N in subsection 122.61(1) of that Act.
2006, c. 4, s. 168
Universal Child Care Benefit Act
2015, c. 36, s. 37(2)
53 (1) The portion of subsection 4(1.1) of the Universal Child Care Benefit Act before paragraph (a) is replaced by the following:
Child under six years — January 2015 to June 2016
(1.1) In respect of every month as of January 1, 2015 but before July 1, 2016, the Minister shall pay to an eligible individual, for each month at the beginning of which he or she is an eligible individual, for each child who, at the beginning of that month, is under the age of six years and is a qualified dependant of the eligible individual,
2015, c. 36, s. 37(2)
(2) The portion of subsection 4(1.2) of the Act before paragraph (a) is replaced by the following:
Other children — January 2015 to June 2016
(1.2) In respect of every month as of January 1, 2015 but before July 1, 2016, the Minister shall pay to an eligible individual, for each month at the beginning of which he or she is an eligible individual, for each child who, at the beginning of that month, is six years of age or older and is a qualified dependant of the eligible individual,
Coming into Force
July 1, 2017
54 (1) Section 50 and subsection 51(3) come into force on July 1, 2017.
July 1, 2016
(2) Subsections 51(1) and (2) and sections 52 and 53 come into force, or are deemed to have come into force, on July 1, 2016.
C.R.C., c. 945
Income Tax Regulations
55 (1) Subsection 200(1) of the Income Tax Regulations is replaced by the following:
200 (1) Subject to subsection (1.1), every person who makes a payment described in subsection 153(1) of the Act (including an amount paid that is described in subparagraph 153(1)(a)(ii) of the Act) shall make an information return in prescribed form in respect of the payment unless an information return in respect of the payment has been made under sections 202, 214, 237 or 238.
(1.1) Subsection (1) does not apply in respect of
(a) an annuity payment in respect of an interest in an annuity contract to which subsection 201(5) applies; or
(b) an amount paid by a qualifying non-resident employer to a qualifying non-resident employee that is exempted under subparagraph 153(1)(a)(ii) of the Act if the employer, after reasonable inquiry, has no reason to believe that the employee's total amount of taxable income earned in Canada under Part I of the Act during the calendar year that includes the time of this payment (including an amount described in paragraph 110(1)(f) of the Act) is more than $10,000.
(2) Subsection (1) applies in respect of payments made after 2015.
56 (1) Section 210 of the Regulations is replaced by the following:
210 Every person who makes a payment described in section 153 of the Act (including an amount paid that is described in subparagraph 153(1)(a)(ii) of the Act), or who pays or credits, or is deemed by any of Part I, XIII and XIII.2 of the Act to have paid or credited, an amount described in that section, Part XIII or XIII.2 of the Act, shall, on demand by registered letter from the Minister, make an information return in prescribed form containing the information required in the return and shall file the return with the Minister within such reasonable time as is stipulated in the registered letter.
(2) Subsection (1) applies in respect of payments made after 2015.
57 (1) Section 6701.1 of the Regulations is repealed.
(2) Subsection (1) is deemed to have come into force on March 22, 2016.
58 (1) The portion of section 8201 of the Regulations before paragraph (a) is replaced by the following:
8201 For the purposes of subsection 16.1(1), the definition outstanding debts to specified non-residents in subsection 18(5), subsections 100(1.3) and 112(2), the definition qualified Canadian transit organization in subsection 118.02(1), subsections 125.4(1) and 125.5(1), the definition taxable supplier in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), the definitions Canadian banking business and tax-indifferent investor in subsection 248(1) and paragraph 260(5)(a) of the Act, a permanent establishment of a person or partnership (either of whom is referred to in this section as the person) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, where the person does not have any fixed place of business, the principal place at which the person's business is conducted, and
(2) Subsection (1) is deemed to have come into force on April 22, 2015.
59 (1) Part XCIV of the Regulations is repealed.
(2) Subsection (1) comes into force on January 1, 2017.
60 (1) The Regulations are amended by adding the following after Part XCV:
PART XCVI
School Supplies Tax Credit
Prescribed durable goods
9600 For the purpose of the definition teaching supplies in subsection 122.9(1) of the Act, the following are prescribed durable goods:
(a) books;
(b) games and puzzles;
(c) containers (such as plastic boxes or banker boxes); and
(d) educational support software.
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
Coordinating Amendments
2013, c. 40
2013, c. 40
61 (1) If this Act receives royal assent before January 1, 2017, then subsections 59(1), (4), (6) and (7) of the Economic Action Plan 2013 Act, No. 2 are deemed never to have produced their effects and are repealed.
(2) If this Act receives royal assent on or after January 1, 2017, then
(a) section 127.4 of the Income Tax Act is amended by adding the following after subsection (1.1):
Deduction of labour-sponsored funds tax credit
(2) There may be deducted from the tax otherwise payable by an individual (other than a trust) for a taxation year such amount as the individual claims not exceeding the individual's labour-sponsored funds tax credit limit for the year.
(b) paragraphs 36(2) and (3) of this Act are replaced by the following:
(2) Section 127.4 of the Act is amended by adding the following before subsection (5.1):
Labour-sponsored funds tax credit limit
(5) For the purpose of subsection (2), an individual's labour-sponsored funds tax credit limit for a taxation year is the lesser of
(a) $750, and
(b) the amount, if any, by which
(i) the total of all amounts each of which is the individual's labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved share
exceeds
(ii) the portion of the total described in subparagraph (i) that was deducted under subsection (2) in computing the individual's tax payable under this Part for the preceeding taxation year.
(3) Section 127.4 of the Act is amended by adding the following after subsection (5.1):
Labour-sponsored funds tax credit
(6) For the purpose of subsection (5), an individual's labour-sponsored funds tax credit in respect of an original acquisition of an approved share is equal to the least of
(a) 15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation),
(a.1) 5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if
(i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and
(ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
(a.2) nil, if
(i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and
(ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
(b) nil, if the share was issued by a registered labour-sponsored venture capital corporation unless the information return described in paragraph 204.81(6)(c) is filed with the individual's return of income for the taxation year for which a claim is made under subsection (2) in respect of the original acquisition of the share (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)),
(c) nil, if the individual dies after December 5, 1996 and before the original acquisition of the share,
(d) nil, if a payment in respect of the disposition of the share has been made under section 211.9, and
(e) nil, if the share is issued in exchange for another share of the corporation.
Bill C-2
62 (1) Subsections (2) to (17) apply if Bill C-2, introduced in the 1st session of the 42nd Parliament and entitled An Act to amend the Income Tax Act, receives royal assent.
(2) Paragraph (b) of the definition relevant tax factor in subsection 95(1) of the Income Tax Act is replaced by the following:
(b) in any other case, 1.9; (facteur fiscal approprié)
(3) Subsection 118.1(3) of the Income Tax Act is replaced by the following:
Deduction by individuals for gifts
(3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted such amount as the individual claims not exceeding the amount determined by the formula
A × B + C × D + E × F
where
A is the appropriate percentage for the year;
B is the lesser of $200 and the individual's total gifts for the year;
C is the highest individual percentage for the year;
D is
(a) in the case of a trust (other than a graduated rate estate or a qualified disability trust as defined in subsection 122(3)), the amount, if any, by which its total gifts for the year exceeds $200, and
(b) in any other case, the lesser of
(i) the amount, if any, by which the individual's total gifts for the year exceeds $200, and
(ii) the amount, if any, by which the individual's amount taxable for the year for the purposes of subsection 117(2) exceeds the first dollar amount for the year referred to in paragraph 117(2)(e);
E is 29%; and
F is the amount, if any, by which the individual's total gifts for the year exceeds the total of $200 and the amount determined for D.
(4) Subparagraph (i) of the description of A in paragraph 122(1)(c) of the Income Tax Act is replaced by the following:
(i) the rate of tax payable under this Part by the trust for each taxation year referred to in the description of B were the highest individual percentage for the taxation year, and
(5) The Income Tax Act is amended by adding the following after section 123.4:
Tax on personal services business income
123.5 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation an amount equal to 5% of the corporation's taxable income for the year from a personal services business.
(6) Clauses 132(1)(a)(i)(A) and (B) of the Income Tax Act are replaced by the following:
(A) 16.5% of the total of the trust's capital gains redemptions for the year, and
(B) the positive or negative amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the trust's capital gains refunds for the year or any previous taxation year and the percentages applicable in determining the trust's refundable capital gains tax on hand at the end of the year, and
(7) The description of C in the definition capital gains redemptions in subsection 132(4) of the Income Tax Act is replaced by the following:
C is 100/16.5 of the trust's refundable capital gains tax on hand at the end of the year,
(8) Paragraphs (a) and (b) of the description of A in the definition refundable capital gains tax on hand in subsection 132(4) of the Income Tax Act are replaced by the following:
(a) the highest individual percentage for the year multiplied by its taxable income for the year,
(b) the highest individual percentage for the year multiplied by its taxed capital gains for the year, and
(9) Paragraph 143.1(3)(c) of the Income Tax Act is replaced by the following:
(c) if the trust is liable to pay tax under Part XII.2 in respect of the particular year, 60% of the fair market value of all property held by it at that time, and
(10) Paragraph 143.1(4)(a) of the Income Tax Act is replaced by the following:
(a) if the trust is liable to pay tax under Part XII.2 in respect of the year, 60% of the fair market value of all property held by it at that time; and
(11) The description of A in subsection 207.8(2) of the Income Tax Act is replaced by the following:
A is the highest individual percentage for the year;
(12) The portion of subsection 210.2(1) of the Income Tax Act before paragraph (a) is replaced by the following:
Tax on income of trust
210.2 (1) Subject to section 210.3, if a trust deducts an amount under paragraph 104(6)(b) in computing its income under Part I for a taxation year, the trust shall pay a tax under this Part in respect of the year equal to 40% of the least of
(13) Paragraph 210.2(1)(c) of the Income Tax Act is replaced by the following:
(c) 100/60 of the amount deducted.
(14) The portion of subsection 210.2(2) of the Income Tax Act before paragraph (a) is replaced by the following:
Amateur athlete trusts
(2) Notwithstanding subsection 210(2), a trust shall pay a tax under this Part in respect of a particular taxation year of the trust equal to 2/3 of the amount that is required by subsection 143.1(2) to be included in computing the income under Part I for a taxation year of a beneficiary under the trust, if
(15) Subsections (2), (4) and (6) to (14) apply to the 2016 and subsequent taxation years and, for the purpose of determining the amount for A in the definition refundable capital gains tax on hand in subsection 132(4) of the Income Tax Act, as amended by subsection (8), in respect of previous taxation years prior to 2016, the references to "the highest individual percentage for the year" in paragraphs (a) and (b) of that description are to be read as "29%".
(16) Subsection 118.1(3) of the Income Tax Act, as enacted by subsection (3), applies to the 2016 and subsequent taxation years and, for the purpose of calculating the amount determined for D in subsection 118.1(3) of that Act, as enacted by subsection (3), an individual's total gifts for the year are determined without reference to gifts made before the 2016 taxation year.
(17) Subsection (5) applies to taxation years that end after 2015 except that, for taxation years that end after 2015 and begin before 2016, the reference to 5% in section 123.5 of the Income Tax Act, as enacted by subsection (5), is to be read as a reference to the percentage determined by the formula
5% (A/B)
where
A is the number of days in the taxation year that are after 2015; and
B is the total number of days in the taxation year.
PART 2
R.S., c. E-15
Amendments to the Excise Tax Act (GST/HST Measures)
63 (1) Section 149 of the Excise Tax Act is amended by adding the following after subsection (4.01):
Exclusion of interest
(4.02) In determining a total under paragraph (1)(c) for a person (in this subsection and subsection (4.03) referred to as the depositor), interest from another person in respect of a deposit of money received or held by the other person in the usual course of its deposit-taking business is not to be included if
(a) the other person is
(i) a bank,
(ii) a credit union,
(iii) a corporation authorized under the laws of Canada or a province to carry on the business of offering to the public its services as a trustee, or
(iv) a corporation authorized under the laws of Canada or a province to accept deposits from the public and that carries on the business of lending money on the security of real property or investing in indebtedness on the security of mortgages or hypothecs on real property; and
(b) the other person is obligated, or may by the demand of the depositor become obligated, to repay the money on or before the particular day that is 364 days after the day on which the deposit of money is made.
Repayment obligation — special cases
(4.03) For the purpose of paragraph (4.02)(b), in determining whether the other person is obligated, or may by the demand of the depositor become obligated, to repay the money on or before the particular day that is 364 days after the day on which the deposit of money is made, the following rules apply:
(a) if the other person is obligated to repay the money to the depositor on a fixed day and also is or may become obligated to repay the money on an earlier day by virtue of a right of withdrawal, reinvestment or other right afforded to the depositor by the terms under which the money was solicited or received or is held, then only the obligation to repay on the fixed day is to be considered, whether or not the right is exercised; and
(b) if the other person is obligated to repay the money to the depositor on a fixed day and also is or may become obligated to repay the money on a later day by virtue of a right afforded to any person to extend the term of the deposit at a rate or rates of interest determined at the time the money was solicited or received, then only the obligation to repay on the later day is to be considered, whether or not the right is exercised.
(2) Subsection (1) applies
(a) for the purpose of determining if a person is a financial institution throughout the person's taxation years that begin on or after March 22, 2016; and
(b) for the purpose of determining if a person is a reporting institution under section 273.2 of the Act throughout the person's fiscal year that begins before March 22, 2016 and that ends on or after that day.
64 (1) The Act is amended by adding the following after section 163:
Donation — value of consideration
164 For the purposes of this Part, if a charity or a public institution makes a taxable supply of property or service to another person, if the value of the property or service is included in determining the amount of the advantage in respect of a gift by the other person to the charity or public institution under subsection 248(32) of the Income Tax Act and if a receipt referred to in subsection 110.1(2) or 118.1(2) of that Act may be issued, or could be issued if the other person were an individual, in respect of part of the consideration for the supply, then the value of the consideration for the supply is deemed to be equal to the fair market value of the property or service at the time the supply is made.
(2) Subsection (1) applies to any supply made after March 22, 2016. It also applies to any taxable supply, other than a supply to which subsection (3) applies, made by a person on or before that day but after December 20, 2002 if, on or before March 22, 2016, the person
(a) did not charge, collect or remit an amount as or on account of tax under Part IX of the Act in respect of the supply; or
(b) charged an amount as or on account of tax under Part IX of the Act that is less than the amount of tax that would have been payable under that Part in respect of the supply in the absence of section 164 of the Act, as enacted by subsection (1).
(3) For the purposes of Part IX of the Act (other than sections 232 and 261 of the Act, section 5 of Part V.1 of Schedule V to the Act and section 10 of Part VI of Schedule V to the Act), a taxable supply of property or service made by a charity or a public institution to another person after December 20, 2002 but on or before March 22, 2016 is deemed to have been made for no consideration if
(a) the value of the property or service is included in determining the amount of the advantage in respect of a gift by the other person to the charity or public institution under subsection 248(32) of the Income Tax Act;
(b) a receipt referred to in subsection 110.1(2) or 118.1(2) of the Income Tax Act may be issued, or could be issued if the other person were an individual, in respect of part of the consideration for the supply;
(c) the fair market value of the property or service at the time the supply is made is less than $500; and
(d) on or before March 22, 2016, the charity or public institution
(i) did not charge, collect or remit an amount as or on account of tax under Part IX of the Act in respect of the supply, or
(ii) charged an amount as or on account of tax under Part IX of the Act that is less than the amount of tax that would have been payable under that Part in respect of the supply in the absence of section 164 of the Act, as enacted by subsection (1).
2010, c. 12, s. 61(2)
65 (1) The description of B in the definition external charge in section 217 of the Act is replaced by the following:
B is the total of all amounts, each of which is included in the amount determined under the description of A and is
(a) a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer, other than a returned commission included in paragraph (b), or
(b) if a particular amount, included in the amount determined under the description of A, is any part of the value of the consideration for a supply made to the qualifying taxpayer of a financial service that includes the issuance, renewal, variation or transfer of ownership of a policy of reinsurance in respect of one or more particular insurance policies issued by the qualifying taxpayer, an amount (in this description referred to as a returned commission) included in the particular amount that
(i) is attributable to expenses incurred exclusively in Canada by the qualifying taxpayer to issue and administer the particular insurance policies,
(ii) is returned to the qualifying taxpayer as a ceding commission in respect of the particular insurance policies, and
(iii) is required to be included under the Income Tax Act in computing the qualifying taxpayer's income for the specified year or for another specified year of the qualifying taxpayer, or would be so required to be included if the conditions set out in subparagraphs (a)(i) to (iii) of the description of A applied to the qualifying taxpayer. (frais externes)
2010, c. 12, s. 61(2)
(2) Paragraph (a) of the definition loading in section 217 of the Act is replaced by the following:
(a) if the financial service includes the issuance, renewal, variation or transfer of ownership of an insurance policy but not of any other qualifying instrument, the total of
(i) the estimate of the net premium of the insurance policy, and
(ii) if the insurance policy is a policy of reinsurance, the margin for risk transfer of the insurance policy;
2010, c. 12, s. 61(2)
(3) The description of A in paragraph (c) of the definition loading in section 217 of the Act is replaced by the following:
A is the total of
(i) the estimate of the net premium of the insurance policy, and
(ii) if the insurance policy is a policy of reinsurance, the margin for risk transfer of the insurance policy, and
2010, c. 12, s. 61(2)
(4) Paragraph (k) of the definition permitted deduction in section 217 of the Act is replaced by the following:
(k) consideration (other than interest referred to in paragraph (g), dividends referred to in paragraph (h) or consideration referred to in paragraph (k.1)) for a specified non-arm's length supply made to the qualifying taxpayer less the total of all amounts, each of which is a part of the value of the consideration and is loading;
(k.1) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified non-arm's length supply made to the qualifying taxpayer of a financial service of issuing, renewing, varying or transferring the ownership of a policy of reinsurance, issued by an insurer to the qualifying taxpayer, in respect of one or more particular insurance policies issued by the qualifying taxpayer, if
(i) the policy of reinsurance is in accordance with all applicable guidelines with respect to sound reinsurance practices and procedures, as amended from time to time, that are issued by the Superintendent or a provincial regulatory authority having powers similar to those of the Superintendent,
(ii) the qualifying taxpayer pays to the insurer, or to persons related to the insurer (each of which is referred to in this paragraph as an affiliate), amounts (each of which is referred to in this paragraph as a fee) under one or more agreements in writing, each of which is not the policy of reinsurance and is between the qualifying taxpayer and the insurer or an affiliate,
(iii) the fees include 99% or more of the total of all amounts, each of which
(A) is payable to the insurer or to an affiliate for property acquired, manufactured or produced, or for a service acquired or performed, in whole or in part outside Canada in respect of the policy of reinsurance, and
(B) does not represent
(I) the estimate of the net premium of the policy of reinsurance,
(II) the margin for risk transfer of the policy of reinsurance, or
(III) expenses incurred exclusively in Canada by the qualifying taxpayer to issue and administer the particular insurance policies,
(iv) each fee paid by the qualifying taxpayer to the insurer or an affiliate
(A) is commensurate with the arm's length transfer price, as defined in subsection 247(1) of the Income Tax Act, for the provision of the property and services to which the fee relates, and
(B) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer's income for a specified year, or would be so allowed if the conditions set out in subparagraphs (a)(i) to (iii) of the description of A in the definition qualifying consideration applied to the qualifying taxpayer, and
(v) the qualifying taxpayer pays or remits any amount that is payable or remittable under this Part by the qualifying taxpayer in respect of each fee paid by the qualifying taxpayer to the insurer or an affiliate;
2010, c. 12, s. 61(2)
(5) Paragraph (a) of the description of B in the definition qualifying consideration in section 217 of the Act is replaced by the following:
(a) an amount that is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer, other than an amount that is included in paragraph (b) or that is a returned commission included in paragraph (c),
(6) The description of B in the definition qualifying consideration in section 217 of the Act is amended by adding "or" at the end of paragraph (b) and by adding the following after that paragraph:
(c) if a particular amount, included in the amount determined under the description of A, is any part of the value of the consideration for a supply made to the qualifying taxpayer of a financial service that includes the issuance, renewal, variation or transfer of ownership of a policy of reinsurance in respect of one or more particular insurance policies issued by the qualifying taxpayer, an amount (in this description referred to as a returned commission) included in the particular amount that
(i) is attributable to expenses incurred exclusively in Canada by the qualifying taxpayer to issue and administer the particular insurance policies,
(ii) is returned to the qualifying taxpayer as a ceding commission in respect of the particular insurance policies, and
(iii) is required to be included under the Income Tax Act in computing the qualifying taxpayer's income for the specified year or for another specified year of the qualifying taxpayer, or would be so required to be included if the conditions set out in subparagraphs (a)(i) to (iii) of the description of A applied to the qualifying taxpayer. (contrepartie admissible)
(7) Section 217 of the Act is amended by adding the following in alphabetical order:
ceding commission means an amount that is paid to a particular insurer by another insurer under an agreement for the supply of a financial service that includes the issuance, renewal, variation or transfer of ownership of a policy of reinsurance issued by the other insurer in respect of one or more particular insurance policies issued by the particular insurer and that compensates the particular insurer for property acquired, manufactured or produced, and for services acquired or performed, exclusively in Canada by the particular insurer in order to issue and administer the particular insurance policies. (commission de réassurance)
margin for risk transfer means an amount payable to a particular insurer by another insurer under an agreement for the supply of a financial service, which includes the issuance, renewal, variation or transfer of ownership of a policy of reinsurance issued by the particular insurer, that exclusively represents compensation for the assumption, by the particular insurer, of the risk of potential future claims under particular insurance policies issued by the other insurer and that is in addition to the estimate of the net premium of the policy of reinsurance. (marge de transfert de risques)
(8) Subsections (1) to (7) apply to any specified year of a person that ends after November 16, 2005, except that for purposes of applying the definition permitted deduction in section 217 of the Act, as amended by subsection (4), in respect of an amount of consideration for a specified non-arm's length supply that became due, or was paid without having become due, on or before that day, paragraph (k) of that definition is to be read without reference to the words "less the total of all amounts, each of which is a part of the value of the consideration and is loading".
(9) If, in assessing under section 296 of the Act tax payable by a person under Division IV of Part IX of the Act for a particular specified year of the person, an amount was taken into consideration as an external charge or as qualifying consideration for the particular specified year and as a result of the application of the definitions ceding commission, external charge, loading, margin for risk transfer, permitted deduction and qualifying consideration in section 217 of the Act, as enacted or amended by subsections (1) to (7), the amount or part of the amount is not qualifying consideration for any specified year of the person and is not an external charge for any specified year of the person for which an election under subsection 217.2(1) of the Act is in effect, the person is entitled until the day that is one year after the day on which this Act receives royal assent to request in writing that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that the amount or the part of the amount, as the case may be, is not, if an election under subsection 217.2(1) of the Act is in effect for the particular specified year, an external charge for the particular specified year or, in any other case, qualifying consideration for the particular specified year and, on receipt of the request, the Minister must with all due dispatch
(a) consider the request; and
(b) under section 296 of the Act assess, reassess or make an additional assessment of the tax payable by the person under Division IV of Part IX of the Act for any specified year of the person, and of any interest, penalty or other obligation of the person, solely for the purpose of taking into account that the amount or the part of the amount, as the case may be, is not, if an election under subsection 217.2(1) of the Act is in effect for the particular specified year, an external charge for the particular specified year or, in any other case, qualifying consideration for the particular specified year.
2010, c. 12, s. 62(1)
66 (1) Subparagraph 217.1(4)(b)(ii) of the Act is replaced by the following:
(ii) a permitted deduction of the qualifying taxpayer for the specified year or a preceding specified year of the qualifying taxpayer, other than a permitted deduction of the qualifying taxpayer that is included under paragraph (a) of the description of B in the definition external charge in section 217 in calculating an external charge of the qualifying taxpayer for the specified year or a preceding specified year of the qualifying taxpayer,
(2) Subsection (1) applies to any specified year of a person that ends after November 16, 2005.
67 (1) Paragraph 295(5)(d) of the Act is amended by adding the following after subparagraph (iv.2):
(iv.3) to an official solely for the purpose of the administration or enforcement of the Canada Education Savings Act or a designated provincial program, as defined in subsection 146.1(1) of the Income Tax Act,
(iv.4) to an official solely for the purpose of the administration or enforcement of the Canada Disability Savings Act or a designated provincial program, as defined in subsection 146.4(1) of the Income Tax Act,
(2) Paragraph 295(5)(d) of the Act is amended by adding the following after subparagraph (v):
(v.1) to an official of the Department of Employment and Social Development solely for the purpose of the administration or enforcement of a program established under the authority of the Department of Employment and Social Development Act in respect of children who are deceased or missing as a result of an offence, or a probable offence, under the Criminal Code,
(3) Paragraph 295(5)(d) of the Act is amended by striking out "or" at the end of subparagraph (vii), by adding "or'' at the end of subparagraph (viii) and by adding the following after subparagraph (viii):
(ix) to an official of the Agency solely for the purpose of the collection of amounts owing to Her Majesty in right of Canada or of a province under the Government Employees Compensation Act, the Canada Labour Code, the Merchant Seamen Compensation Act, the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Postal Services Continuation Act, 1997, the Wage Earner Protection Program Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level;
(4) Subsection 295(5) of the Act is amended by adding the following after paragraph (d):
(d.1) provide confidential information, or allow the inspection of or access to confidential information, as the case may be, under, and solely for the purpose of, paragraph 33.1(a) of the Old Age Security Act;
68 (1) Section 1 of Part V.1 of Schedule V to the Act is amended by striking out "or" at the end of paragraph (n), by adding "or" at the end of paragraph (o) and by adding the following after paragraph (o):
(p) a service rendered to an individual for the purpose of enhancing or otherwise altering the individual's physical appearance and not for medical or reconstructive purposes or a right entitling a person to the service.
(2) Subsection (1) applies to any supply made after March 22, 2016.
1990, c. 45, s. 18
69 (1) Section 21 of Part II of Schedule VI to the Act is replaced by the following:
21 A supply of an insulin infusion pump, insulin syringe, insulin pen or insulin pen needle.
(2) Subsection (1) applies to
(a) any supply made after March 22, 2016; and
(b) any supply made on or before March 22, 2016 unless, on or before that day, an amount was charged, collected or remitted as or on account of tax under Part IX of the Act in respect of the supply.
70 (1) Part II of Schedule VI to the Act is amended by adding the following after section 25:
25.1 A supply of an intermittent urinary catheter if the catheter is supplied on the written order of a specified professional for use by a consumer named in the order.
(2) Subsection (1) applies to any supply made after March 22, 2016.
71 (1) Schedule VI to the Act is amended by adding the following after Part II:
PART II.1
Other Products
1 A supply of a product that is marketed exclusively for feminine hygiene purposes and is a sanitary napkin, tampon, sanitary belt, menstrual cup or other similar product.
(2) Subsection (1) applies to any supply made on or after July 1, 2015.
PART 3
Amendments to the Excise Tax Act (Excise Measures), the Excise Act, 2001 and Other Related Texts
R.S., c. E-15
Excise Tax Act
72 (1) Subsection 2(1) of the Excise Tax Act is amended by adding the following in alphabetical order:
heating oil means any fuel oil that is consumed exclusively for providing heat to a home, building or similar structure and that is not consumed for generating heat in an industrial process, including any commercial process that involves removing moisture from a good; (huile à chauffage)
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
(3) In respect of fuel oil that is delivered to a purchaser or imported, as heating oil, before July 2016, in respect of which no tax was imposed, levied or collected under subsection 23(1) of the Act at the time of delivery or importation and that is not intended for use, or not used, after June 2016, as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection (1), had been in force at the time of delivery or importation, subsection 23(9.1) of the Act is to be read as follows:
(9.1) Where fuel other than aviation gasoline has been purchased or imported for a use for which the tax imposed under this Part on diesel fuel was not payable before July 2016 and the purchaser or importer sells or appropriates the fuel after June 2016 for a purpose for which the fuel could not have been purchased or imported after June 2016 without payment of the tax imposed under this Part on the fuel, the tax imposed under this Part on the diesel fuel shall be payable by the person who sells or appropriates the fuel
(a) where the fuel is sold, at the time of delivery to the purchaser; and
(b) where the fuel is appropriated, at the time of that appropriation.
(4) In respect of diesel fuel that is delivered to a purchaser after March 22, 2016 but before July 2016, subparagraphs 68.01(1)(a)(i) and (ii) of the Act are to be read as follows:
(i) to the vendor, if the vendor applies for the payment, the purchaser certifies that the diesel fuel is either for use exclusively, before July 2016, as heating oil, or for use exclusively, after June 2016, as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection 72(1) of the Budget Implementation Act, 2016, No. 1, had been in force at the time of delivery and the vendor reasonably believes that the purchaser will use it exclusively as the purchaser has certified,
(ii) to the purchaser, if the purchaser applies for the payment, the purchaser uses, before July 2016, the diesel fuel as heating oil, or uses, after June 2016, the diesel fuel as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection 72(1) of the Budget Implementation Act, 2016, No. 1, had been in force at the time of delivery and no application in respect of the diesel fuel can be made by the vendor under subparagraph (i); or
R.S., c. 7 (2nd Supp.), s. 10(4)
73 (1) Paragraph 23(8)(c) of the Act is replaced by the following:
(c) diesel fuel for use in the generation of electricity, unless the diesel fuel is used in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation.
(2) Subsection (1) applies to diesel fuel delivered to a purchaser, or imported, after June 2016.
(3) In respect of diesel fuel that is delivered to a purchaser, or imported, before July 2016, in respect of which no tax was imposed, levied or collected under subsection 23(1) of the Act at the time of delivery or importation and that is used after June 2016 in the generation of electricity in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation, subsection 23(9.1) of the Act is to be read as follows:
(9.1) Where fuel other than aviation gasoline has been purchased or imported for a use for which the tax imposed under this Part on diesel fuel or aviation fuel was not payable before July 2016 and the purchaser or importer sells or appropriates the fuel after June 2016 for a purpose for which the fuel could not have been purchased or imported after June 2016 without payment of the tax imposed under this Part on the fuel, the tax imposed under this Part on diesel fuel or aviation fuel shall be payable by the person who sells or appropriates the fuel
(a) where the fuel is sold, at the time of delivery to the purchaser; and
(b) where the fuel is appropriated, at the time of that appropriation.
2007, c. 29, s. 43(1)
74 (1) Paragraph 68.01(1)(b) of the Act is replaced by the following:
(b) to a purchaser who applies for the payment and who uses the diesel fuel to generate electricity, unless the diesel fuel is used in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation.
(2) Subsection (1) applies in respect of diesel fuel used after June 2016.
2002, c. 22
Excise Act, 2001
75 (1) Subsection 211(6) of the Excise Act, 2001 is amended by adding the following after paragraph (d):
(d.1) provide confidential information, or allow the inspection of or access to confidential information, as the case may be, under, and solely for the purpose of, paragraph 33.1(a) of the Old Age Security Act;
(2) Paragraph 211(6)(e) of the Act is amended by adding the following after subparagraph (iv):
(iv.1) to an official solely for the purpose of the administration or enforcement of the Canada Education Savings Act or a designated provincial program, as defined in subsection 146.1(1) of the Income Tax Act,
(iv.2) to an official solely for the purpose of the administration or enforcement of the Canada Disability Savings Act or a designated provincial program, as defined in subsection 146.4(1) of the Income Tax Act,
(3) Paragraph 211(6)(e) of the Act is amended by adding the following after subparagraph (v):
(v.1) to an official of the Department of Employment and Social Development solely for the purpose of the administration or enforcement of a program established under the authority of the Department of Employment and Social Development Act in respect of children who are deceased or missing as a result of an offence, or a probable offence, under the Criminal Code,
(4) Paragraph 211(6)(e) of the Act is amended by striking out "or" at the end of subparagraph (vii), by adding "or'' at the end of subparagraph (viii) and by adding the following after subparagraph (viii):
(ix) to an official of the Agency solely for the purpose of the collection of amounts owing to Her Majesty in right of Canada or of a province under the Government Employees Compensation Act, the Canada Labour Code, the Merchant Seamen Compensation Act, the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Postal Services Continuation Act, 1997, the Wage Earner Protection Program Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level;
76 (1) The Act is amended by adding the following after section 286:
Over $10,000,000 — security
286.1 (1) The Minister may, by sending a notice to a person, require security in a form satisfactory to the Minister and in an amount up to a specified amount that is the greater of $0 and the amount that is determined by the formula
(A/2) – B – $10,000,000
where
A is the total of all amounts, each of which is
(a) an amount that the person has been assessed under this Act in respect of which a portion remains unpaid, or
(b) a penalty that the person is liable to pay under this Act in respect of which a portion remains unpaid; and
B is the greater of $0 and the amount that is determined by the formula
C – (D/2)
where
C is the total of all amounts that the person has paid against the amount determined for A in the first formula in this subsection, and
D is the amount determined for A in the first formula in this subsection.
When security to be furnished
(2) The security required under subsection (1) shall be furnished to the Minister no later than 60 days following the day on which the Minister required the security.
Types of security
(3) The types of security acceptable for the purpose of subsection (1) are those types of security that are acceptable for the purpose of paragraph 23(3)(b).
Failure to comply
(4) Despite subsections 286(1) to (7), the Minister may collect an amount equivalent to the amount of security that was required under subsection (1) if the security required under that subsection is not furnished to the Minister as set out in this section.
(2) Subsection (1) applies to amounts that a person has been assessed, and penalties for which a person becomes liable, after the day on which this Act receives royal assent.
SOR/2003-115
Regulations Respecting Excise Licences and Registrations
77 (1) Paragraph 5(1)(b) of the Regulations Respecting Excise Licences and Registrations is replaced by the following:
(b) in the case of a tobacco licence, be sufficient to ensure payment of the amount of duty referred to in paragraph 160(b) of the Act up to a maximum amount of $5 million.
(2) Subsection (1) comes into force on the later of June 22, 2016 and the day on which this Act receives royal assent.
SOR/2003-288
Stamping and Marking of Tobacco Products Regulations
78 (1) Subsection 4.1(2) of the Stamping and Marking of Tobacco Products Regulations is replaced by the following:
(2) Subject to subsection (3), if the amount referred to in paragraph (1)(a) is greater than $5 million, the amount of security for the purpose of subsection 25.1(3) of the Act is $5 million.
(2) Subsection (1) comes into force on the later of June 22, 2016 and the day on which this Act receives royal assent.
Report a problem on this page
- Date modified: