Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations

1 (1) The portion of paragraph 6(1)(e) of the Income Tax Act before subparagraph (i) is replaced by the following:

Standby charge for automobile

(e) if an automobile is made available to the taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person in the year in respect of, in the course of, or because of the taxpayer’s office or employment, the amount, if any, by which

(2) Subparagraph 6(1)(e)(ii) of the Act is replaced by the following:

(ii) the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the person who does not deal at arm’s length with the taxpayer, to the person for the use of the automobile;

(3) Subparagraph 6(1)(k)(ii) of the Act is replaced by the following:

(ii) amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the person that made the automobile available (in this paragraph referred to as the “payor”), and

(4) The portion of subsection 6(2) of the Act before the formula is replaced by the following:

Reasonable standby charge

(2) For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula

(5) Subsections (1) to (4) apply to taxation years that begin after 2022.

2 (1) The portion of paragraph 13(4.3)(d) of the Act before subparagraph (i) is replaced by the following:

(d) any amount that would, if this Act were read without reference to this subsection, be included in the cost of a property of the transferee included in Class 14.1 of Schedule II to the Income Tax Regulations (including a deemed acquisition under subsection (35)) or included in the proceeds of disposition of a property of the transferor included in that Class (including a deemed disposition under subsection (37)) in respect of the disposition or termination of the former property by the transferor is deemed to be

(2) Paragraph 13(42)(a) of the French version of the Act is replaced by the following:

a) pour l’application de la présente loi et de ses règlements (à l’exception du présent article, de l’article 20 et des dispositions réglementaires prises pour l’application de l’alinéa 20(1)a)), si la valeur de l’élément A de la formule figurant à la définition de montant cumulatif des immobilisations admissibles au paragraphe 14(5) avait augmenté immédiatement avant 2017 en raison de la disposition du bien immédiatement avant ce moment, le coût en capital du bien est réputé augmenter des 4/3 du montant de cette augmentation;

(3) Section 13 of the Act is amended by adding the following after subsection (42):

Transitional rule

(43) An amount is to be included in computing a taxpayer’s income from a business for a taxation year, and is deemed not to be a taxable capital gain (other than for the purposes of the definition capital dividend account in subsection 89(1)), to the extent

(a) the amount is part of the proceeds of disposition of eligible capital property (as defined in section 54, as it read on December 31, 2016) that is in respect of the business;

(b) the disposition is under an agreement between the taxpayer and a purchaser that deals at arm’s length with the taxpayer;

(d) the amount becomes receivable under the agreement after 2016 and before 2024 because of a condition of the agreement, if

(i) at the end of 2016, it was uncertain whether the condition would be met, and

(ii) the condition is met after 2016;

(e) the amount would, in the absence of this subsection, be a taxable capital gain;

(f) the amount would have been included in computing the taxpayer’s income from the business if the amount had become receivable on December 31, 2016; and

(g) the taxpayer files an election with the Minister, no later than the filing-due date for the taxpayer’s first taxation year that ends after Announcement Day, to have this subsection apply in respect of the amount.

(4) Subsection (1) is deemed to apply in respect of dispositions that occur after 2016.

(5) Subsections (2) and (3) are deemed to have come into force on January 1, 2017.

3 (1) Subsection 15(2.3) of the Act is replaced by the following:

Exception – ordinary course of business

(2.3) Subsection (2) does not apply to a debt that arose in the ordinary course of the creditor’s business or a loan made in the ordinary course of the lender’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the lender) where, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the debt or loan within a reasonable time.

Interpretation — partnerships

(2.31) For the purposes of this subsection and subsection (2.3),

(a) a person or partnership that is a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership; and

(b) a borrower shall be considered to deal at arm’s length with a lender only if

(i) for greater certainty, the borrower and the lender deal with each other at arm’s length,

(ii) where either the borrower or the lender is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party, and

(iii) where both the borrower and the lender are partnerships, the borrower and each member of the borrower deal at arm’s length with the lender and each member of the lender.

(2) Subsection 15(5) of the English version of the Act is replaced by the following:

Automobile benefit

(5) For the purposes of subsection (1), the value of the benefit to be included in computing a shareholder’s income for a taxation year with respect to an automobile made available to the shareholder, or a person related to the shareholder, by a corporation shall (except where an amount is determined under subparagraph 6(1)(e)(i) in respect of the automobile in computing the shareholder’s income for the year) be computed on the assumption that subsections 6(1), 6(1.1), 6(2) and 6(7) apply, with such modifications as the circumstances require, and as though references therein to “the employer” were read as “the corporation”.

(3) Subsection (1) applies to loans made after 2022. However, subsections 15(2.3) and (2.31) of the Act, as amended by subsection (1), also apply in respect of any portion of a particular loan made before 2023 that remains outstanding on January 1, 2023 as if that portion were a separate loan that was made on January 1, 2023 in the same manner and on the same terms as the particular loan.

(4) Subsection (2) applies to taxation years that begin after 2022.

4 Sections 15.1 and 15.2 of the Act are repealed.

5 (1) Subparagraph 20(1)(e)(vi) of the Act is replaced by the following:

(vi) where a partnership has ceased to exist,

(A) no amount may be deducted by the partnership under this paragraph in computing its income for its last fiscal period, and

(B) there may be deducted for a taxation year ending after the time that is immediately before the end of the partnership’s last fiscal period (referred to in this clause as the “particular time”) by any person or partnership that was a member of the partnership at the particular time, that proportion of the amount that would, but for this subparagraph, have been deductible under this paragraph by the partnership in the fiscal period ending in the year had it continued to exist and had the partnership interest not been redeemed, acquired or cancelled, that the fair market value of the member’s interest in the partnership at the particular time is of the fair market value of all the interests in the partnership at the particular time;

(2) Paragraph 20(1)(v) of the Act is replaced by the following:

Mining taxes

(v) such amount as is allowed by regulation for the year in respect of taxes on income from mining operations;

(3) Subsection (1) is deemed to have come into force on June 26, 2013.

(4) Subsection (2) applies to taxation years that end after 2007. Any assessment of a taxpayer’s tax, interest and penalties payable under the Act for any taxation year that ends before Announcement Date that would, in the absence of this subsection, be precluded because of subsections 152(4) to (5) of the Act is to be made to the extent necessary to take into account subsection (2) and subsection 57(1) if the taxpayer so elects in writing and files that election with the Minister of National Revenue on or before the day that is six months after the day on which this section receives Royal Assent.

6 (1) Paragraphs 44(1)(c) and (d) of the French version of the Act are replaced by the following:

c) si l’ancien bien est visé à l’alinéa a), avant la fin de la deuxième année d’imposition suivant l’année initiale ou, si elle est postérieure, avant la fin de la période de 24 mois qui suit l’année initiale;

d) sinon, avant la fin de la première année d’imposition suivant l’année initiale ou, s’elle est postérieure, avant la fin de la période de 12 mois qui suit l’année initiale,

7 (1) Subparagraph (c.1)(iii.1) of the definition principal residence in section 54 of the Act is amended by striking out “or” at the end of clause (B), by replacing “and” with “or” at the end of clause (C) and by adding the following after clause (C):

(D) a trust

(I) a specified beneficiary of which for the year is a qualifying individual for the year in respect of the trust, and

(II) under which no person other than a beneficiary described in subclause (I) may receive or otherwise obtain the use of, during the beneficiary’s lifetime, any of the income or capital of the trust and the trustees are required to consider the needs of the beneficiary including, without limiting the generality of the foregoing, the comfort, care and maintenance of the beneficiary, and

(2) The definition principal residence in section 54 of the Act is amended by striking out “and” at the end of paragraph (e), by adding “and” at the end of paragraph (f) and by adding the following after paragraph (f):

(g) a qualifying individual, for a taxation year in respect of a trust, means an individual who meets the following conditions:

(i) the individual is, in the year, any of

(A) the settlor of the trust,

(B) the child, grandchild, great grandchild, parent, grandparent, great grandparent, brother, sister, uncle, aunt, niece or nephew of the settlor or of the spouse or common-law partner or former spouse or common-law partner of the settlor, and

(C) the spouse or common-law partner or former spouse or common-law partner of any person described in clause (A) or (B),

(ii) the individual is resident in Canada during the year, and

(iii) an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.3(1)(c), under subsection 118.3(1) in computing the individual’s tax payable under this Part for the year;

(3) Subsections (1) and (2) apply to taxation years that begin after 2016.

8 (1) Paragraph 60(i) of the Act is replaced by the following:

Premium or payment under PRPP, RRSP or RRIF

(i) any amount that is deductible under section 146 or 146.3 or subsection 147.3(13.1) or 147.5(19) in computing the income of the taxpayer for the year;

(2) Subsection (1) is deemed to have come into force on December 14, 2012.

9 (1) Paragraph 60.03(2)(a) of the Act is replaced by the following:

(a) the pensioner is deemed not to have received the portion of the pensioner’s pension income, qualified pension income or an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1), as the case may be, for the taxation year that is equal to the amount of the pensioner’s split-pension amount for that taxation year; and

(2) Paragraph 60.03(2)(b) of the Act is amended by striking out “and” at the end of subparagraph (i), by adding “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

(iii) as an amount described in subparagraph (c)(i) of the definition eligible pension income in subsection (1) to the extent that the split-pension amount was received by the pensioner as an amount described in subparagraph (c)(i) of that definition, if the pension transferee has attained the age of 65 years before the end of the taxation year.

(3) Subsections (1) and (2) apply to the 2015 and subsequent taxation years.

10 (1) The portion of subparagraph (i) before clause (A) of the description of C in paragraph 63(2.3)(c) of the French version of the Act is replaced by the following:

(i) s’il existe une personne assumant les frais d’entretien d’un enfant admissible du contribuable pour l’année, la somme des nombres suivants :

(2) The portion of subparagraph (ii) before clause (A) of the description of C in paragraph 63(2.3)(c) of the French version of the Act is replaced by the following:

(ii) dans les autres cas, la somme des nombres suivants :

11 Paragraph 66.1(9)(f) of the Act is replaced by the following:

(f) all Canadian development expenses described in subparagraph (a)(ii) of the definition Canadian development expense in subsection 66.2(5) incurred by the taxpayer in respect of the well in a taxation year preceding the year, other than

(i) expenses referred to in paragraph (d) or (e),

(ii) restricted expenses, and

(iii) expenses for a well referred to in paragraph (a) that are incurred

(A) after 2020 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2020), if the expenses are incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a license or permit) by the taxpayer before March 22, 2017, and

(B) after 2018 (including expenses that are deemed by subsection 66(12.66) to have been incurred on December 31, 2018), in any other case,

12 (1) Subsection 85.1(4) of the Act is replaced by the following:

Exception

(4) Subsection (3) does not apply in respect of a particular disposition by a taxpayer of a share of the capital stock of a particular foreign affiliate of the taxpayer to another foreign affiliate of the taxpayer if

(a) it is the case that

(i) the particular disposition is part of a transaction or event or a series of transactions or events that includes another disposition, of the share, one or more properties substituted for the share or a property any of the fair market value of which is derived, directly or indirectly, from the share or the substituted property, to an acquirer — other than a non-resident corporation that is a controlled foreign affiliate of the taxpayer for the purposes of section 17 at the time of the transaction or event or throughout the series, as the case may be — that, immediately after the transaction, event or series, was dealing at arm’s length with the taxpayer or was a non-resident person with whom the taxpayer was not dealing at arm’s length, and

(ii) any of the following conditions is satisfied:

(A) all or substantially all of the property of the particular affiliate was, immediately before the particular disposition, excluded property of the particular affiliate, or

(B) at the time of the other disposition, the property that is disposed of is excluded property of a foreign affiliate of the taxpayer; or

(b) the adjusted cost base to the taxpayer of the share at the time of the particular disposition is greater than the amount that would, in the absence of subsection (3), be the taxpayer’s proceeds of disposition of the share in respect of the particular disposition.

(2) Section 85.1 of the Act is amended by adding the following after subsection (4):

Interpretation — partnerships

(4.1) For the purposes of paragraph (4)(a),

(a) the taxpayer and an acquirer are deemed, at any time, to be dealing with each other at arm’s length if

(i) where either the taxpayer or the acquirer is a partnership and the other party is not, any member of the partnership deals at arm’s length, at that time, with the other party, or

(ii) where both the taxpayer and the acquirer are partnerships, the taxpayer or any member of the taxpayer deals at arm’s length, at that time, with the acquirer or any member of the acquirer;

(b) an acquirer is deemed to be a non-resident person with whom the taxpayer does not deal at arm’s length, at any time, if

(i) where either the taxpayer or the acquirer is a partnership and the other party is not,

(A) any member of the partnership does not deal at arm’s length, at that time, with the other party, and

(B) the acquirer — or, where the acquirer is a partnership, any member of the acquirer — is a non-resident person at that time, or

(ii) where both the taxpayer and the acquirer are partnerships,

(A) the taxpayer or any member of the taxpayer does not deal at arm’s length, at that time, with the acquirer or any member of the acquirer, and

(B) any member of the acquirer is a non-resident person at that time; and

(3) Subsections (1) and (2) apply in respect of dispositions that occur on or after Announcement Date.

13 (1) Paragraph 87(2)(j.6) of the Act is replaced by the following:

Continuing corporation

(j.6) for the purposes of paragraphs 12(1)(t) and (x), subsections 12(2.2) and 13(7.1), (7.4) and (24), paragraphs 13(27)(b) and (28)(c), subsections 13(29) and 18(9.1), paragraphs 20(1)(e), (e.1), (v), and (hh), sections 20.1 and 32, paragraph 37(1)(c), subsection 39(13), subparagraphs 53(2)(c)(vi) and (h)(ii), paragraph 53(2)(s), subsections 53(2.1), 66(11.4), 66.7(11) and 127(10.2), section 139.1, subsection 152(4.3), the determination of D in the definition undepreciated capital cost in subsection 13(21) and the determination of L in the definition cumulative Canadian exploration expense in subsection 66.1(6), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

(2) Paragraphs 87(8.3)(b) and (c) of the Act are replaced by the following:

(b) the foreign merger is part of a transaction or event or a series of transactions or events that includes a disposition of property that is:

(i) shares of the capital stock of the new foreign corporation,

(ii) property substituted for shares of the capital stock of the new foreign corporation, or

(iii) property any of the fair market value of which is derived, directly or indirectly, from property referred to in subparagraph (i) or (ii);

(i) is not, immediately after the transaction, event or series, a person resident in Canada with which the taxpayer does not deal at arm’s length, and

(ii) is not, at the time of the transaction or event, or throughout the series, as the case may be, a controlled foreign affiliate of the taxpayer for the purposes of section 17; and

(d) any of the following conditions is satisfied:

(i) all or substantially all of the property of the predecessor foreign corporation was, immediately before the foreign merger, excluded property of the predecessor foreign corporation; or

(ii) at the time of the disposition referred to in paragraph (b), the property that is disposed of is excluded property of a foreign affiliate of the taxpayer.

(3) Section 87 of the Act is amended by adding the following after subsection (8.3):

Interpretation — partnerships

(8.31) For the purposes of paragraph (8.3)(c),

(a) the taxpayer and an acquirer are deemed, at any time, to be dealing with each other at arm’s length if

(i) where either the taxpayer or the acquirer is a partnership and the other party is not, any member of the partnership deals at arm’s length, at that time, with the other party, or

(ii) where both the taxpayer and the acquirer are partnerships, the taxpayer or any member of the taxpayer deals at arm’s length, at that time, with the acquirer or any member of the acquirer; and

(b) an acquirer is deemed to be a non-resident person with which the taxpayer does not deal at arm’s length, at any time, if

(i) where either the taxpayer or the acquirer is a partnership and the other party is not,

(A) any member of the partnership does not deal at arm’s length, at that time, with the other party, and

(B) the acquirer — or, where the acquirer is a partnership, any member of the acquirer — is a non-resident person at that time, or

(ii) where both the taxpayer and the acquirer are partnerships,

(A) the taxpayer or any member of the taxpayer does not deal at arm’s length, at that time, with the acquirer or any member of the acquirer, and

(B) any member of the acquirer is a non-resident person at that time; and

(4) Subsection (1) applies to taxation years that end after 2007 except that, for taxation years that end before March 19, 2019, paragraph 87(2)(j.6) of the Act, as enacted by subsection (1), does not apply to subsection 127(10.2) of the Act.

(5) Subsections (2) and (3) apply in respect of dispositions that occur on or after Announcement Date.

14 (1) Subsection 88(3.3) of the Act is replaced by the following:

Suppression election

(3.3) For the purposes of paragraph (3)(a), if the liquidation and dissolution is a qualifying liquidation and dissolution of the disposing affiliate and the taxpayer would, in the absence of this subsection and, for greater certainty, after taking into account any election under subsection 93(1), realize a capital gain (the amount of which is referred to in subsection (3.4) as the “capital gain amount”) from the disposition of a disposed share, the taxpayer may elect, in accordance with prescribed rules, that distributed property that was, immediately before the disposition, capital property (that is a share of the capital stock of another foreign affiliate of the taxpayer) of the disposing affiliate be deemed to have been disposed of by the disposing affiliate to the taxpayer for proceeds of disposition equal to the amount claimed (referred to in subsection (3.4) as the “claimed amount”) by the taxpayer in the election.

(2) Subsection (1) applies in respect of dispositions that occur on or after Announcement Date.

15 (1) Paragraph 90(8)(b) of the Act is replaced by the following:

(b) indebtedness that arose in the ordinary course of the business of the creditor or a loan made in the ordinary course of the creditor’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the creditor) if, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the indebtedness or loan within a reasonable time;

(2) Section 90 of the Act is amended by adding the following after subsection (8):

Interpretation — partnerships

(8.01) For the purposes of paragraph (8)(b), a borrower shall be considered to deal at arm’s length with a creditor only if

(a) for greater certainty, the borrower and the creditor deal with each other at arm’s length;

(b) where either the borrower or the creditor is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party; and

(c) where both the borrower and the creditor are partnerships, the borrower and each member of the borrower deal at arm’s length with the creditor and each member of the creditor.

(3) Subsections (1) and (2) apply to loans made after 2022. However, paragraph 90(8)(b) and subsection 90(8.01) of the Act, as amended by subsections (1) and (2), also apply in respect of any portion of a particular loan made before 2023 that remains outstanding on January 1, 2023 as if that portion were a separate loan that was made on January 1, 2023 in the same manner and on the same terms as the particular loan.

16 (1) Paragraph 93.1(3)(c) of the Act is replaced by the following:

(2) Subsection (1) applies in respect of dispositions that occur on or after Announcement Date.

17 (1) The portion of subsection 93.3(1) of the Act before paragraph (a) is replaced by the following:

Definition of specified trust

93.3 (1) In this section, specified trust, at any time, means a trust in respect of which the following apply at that time:

(2) Paragraph 93.3(1)(b) of the Act is replaced by the following:

(b) the trust is resident in Australia or India (in this section referred to as the “specified jurisdiction”);

(3) Paragraph 93.3(2)(c) of the Act is replaced by the following:

(4) The portion of subsection 93.3(3) of the Act before paragraph (b) is replaced by the following:

Specified trusts

(3) If this subsection applies at any time to a taxpayer resident in Canada in respect of a trust, the following rules apply at that time for the specified purposes:

(a) the trust is deemed to be a non-resident corporation that is resident in the specified jurisdiction and not to be a trust;

(5) Paragraph 93.3(4)(a) of the Act is replaced by the following:

(a) the determination, in respect of an interest in a specified trust, of the Canadian tax results (as defined in subsection 261(1)) of the taxpayer resident in Canada referred to in subsection (3) for a taxation year in respect of shares of the capital stock of a foreign affiliate of the taxpayer;

(6) Subsections (1) to (5) are deemed to have come into force on January 1, 2022.

18 (1) Section 94.2 of the Act is amended by adding the following after subsection (4):

Tracking interests

(5) If, at any time in a taxation year of a trust referred to in paragraph (2)(a), the condition in paragraph 95(10)(a) is met in respect of the trust by the beneficiary, or the particular person, to whom subsection (2) applies and the condition in paragraph 95(10)(b) is met in respect of the trust by the beneficiary, in applying subsection 95(11) in respect of the trust for the year, subsection 95(11) is to be read as including the following paragraph after its paragraph (f):

(g) if at any particular time in the year subsection 94.2(2) applies to a beneficiary under, or a particular person in respect of, a trust and paragraph (e) deems the beneficiary or the particular person to own the shares of the separate corporation at the end of the year, the separate corporation is deemed at the particular time to be controlled by each of the beneficiary and the particular person (referred to in subsection 94.2(5)).

(2) Subsection (1) applies to taxation years of trusts that begin after February 26, 2018.

19 (1) The portion of the description of A before paragraph (a) of the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following:

A is the amount that would, if section 80 did not apply to the affiliate for the year or a preceding taxation year, be the total of all amounts, each of which is the affiliate’s income for the year from property, the affiliate’s income for the year from a business other than an active business or the affiliate’s income for the year from a non-qualifying business of the affiliate, in each case that amount being determined as if each amount that was paid or payable, directly or indirectly, by the affiliate to another non-resident corporation were nil where an amount in respect of the income derived by the other non-resident corporation from that amount that was paid or payable to it by the affiliate was included in computing its income from an active business for any taxation year because of clause (2)(a)(ii)(D) or was not included in computing its foreign accrual property income for any taxation year because of subsection (3.03), other than

(2) The description of D in the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following:

D is the total of all amounts, each of which is the affiliate’s loss for the year from property, the affiliate’s loss for the year from a business other than an active business or the affiliate’s loss for the year from a non-qualifying business of the affiliate, in each case that amount being determined as if there were not included in the affiliate’s income any amount described in any of paragraphs (a) to (d) of the description of A and as if each amount that was paid or payable, directly or indirectly, by the affiliate to another non-resident corporation were nil where an amount in respect of the income derived by the other non-resident corporation from that amount that was paid or payable to it by the affiliate was included in computing its income from an active business for any taxation year because of clause (2)(a)(ii)(D) or was not included in computing its foreign accrual property income for any taxation year because of subsection (3.03),

(3) The portion of paragraph 95(2)(b) of the French version of the Act before subparagraph (i) is replaced by the following:

b) la fourniture, par une société étrangère affiliée d’un contribuable, de services ou d’un engagement de fournir des services est réputée constituer une entreprise distincte, autre qu’une entreprise exploitée activement, que la société affiliée exploite, et le revenu qui est tiré de cette entreprise, qui s’y rapporte ou qui y est accessoire est réputé être un revenu tiré d’une entreprise autre qu’une entreprise exploitée activement, dans la mesure où, selon le cas :

(4) Subparagraph 95(2)(b)(i) of the Act is replaced by the following:

(i) is deemed to be a separate business, other than an active business, carried on by the affiliate, and any income from that business or that pertains to or is incident to that business is deemed to be income from a business other than an active business,

(A) to the extent that the amounts paid or payable in consideration for those services or for the undertaking to provide services are deductible, or can reasonably be considered to relate to amounts that are deductible, in computing the income from a business carried on in Canada, by

(I) any taxpayer of whom the affiliate is a foreign affiliate, or

(II) another taxpayer who does not deal at arm’s length with

1. the affiliate, or

2. any taxpayer of whom the affiliate is a foreign affiliate, or

(B) to the extent — as determined by the following formula — of the amounts paid or payable in consideration for those services or for the undertaking to provide services:

A × B

where

A is those amounts paid or payable in consideration for those services or for the undertaking to provide services that are deductible, or can reasonably be considered to relate to an amount that is deductible, in computing the foreign accrual property income for a taxation year of a particular foreign affiliate of

(I) any taxpayer of whom the affiliate is a foreign affiliate, or

(II) another taxpayer who does not deal at arm’s length with

1. the affiliate, or

2. any taxpayer of whom the affiliate is a foreign affiliate, and

B is the total of all amounts each of which would — if the definition participating percentage in subsection (1) were read without reference to its paragraph (a) and the portion of its paragraph (b) before subparagraph (i), and the references to “controlled foreign affiliate” in that definition and in section 5904 of the Income Tax Regulations were read as “foreign affiliate” — be the participating percentage, in respect of the particular affiliate, of a share of the capital stock of a corporation that is owned by any taxpayer of which the particular affiliate is a foreign affiliate, determined at the end of the year, and

(5) Section 95 of the Act is amended by adding the following after subsection (3.02):

(3.03) Subparagraph (2)(b)(i) does not apply in respect of a provision of services, or of an undertaking to provide services, by a particular foreign affiliate of a taxpayer, or the income of the particular affiliate for a taxation year from those services, or the undertaking, if

(a) throughout the year, the taxpayer has a qualifying interest in respect of the particular affiliate or the particular affiliate is a controlled foreign affiliate of the taxpayer;

(b) the particular affiliate provides the services or the undertaking to another foreign affiliate (referred to in this subsection as the “second affiliate”) of the taxpayer in respect of which the taxpayer has a qualifying interest throughout the year;

(c) the amounts paid or payable by the second affiliate in consideration for the services or for the undertaking are for expenditures incurred by the second affiliate for the purpose of gaining or producing income from property;

(d) the property referred to in paragraph (c) is excluded property of the second affiliate that is shares of the capital stock of a corporation (referred to in this subsection as the “third affiliate”) that is a foreign affiliate (other than the particular affiliate) of the taxpayer in respect of which the taxpayer has a qualifying interest; and

(e) in respect of each of the second affiliate and the third affiliate, for each of their taxation years (each of which is referred to in this paragraph as a “relevant taxation year”) that end in the year, either

(i) that affiliate is subject to income taxation in a country other than Canada for that relevant taxation year, or

(ii) the members or shareholders of that affiliate (which, for the purposes of this subparagraph, includes a person that has, directly or indirectly, an interest, or for civil law a right, in a share of the capital stock of, or in an equity interest in, the affiliate) at the end of that relevant taxation year are subject to income taxation in a country other than Canada on, in aggregate, all or substantially all of the income of that affiliate for that relevant taxation year in their taxation years in which that relevant taxation year ends.

(6) The definition eligible controlled foreign affiliate in subsection 95(4) of the Act is replaced by the following:

eligible controlled foreign affiliate, of a taxpayer, at any time, means a foreign affiliate of the taxpayer at that time, if

(a) the affiliate is a controlled foreign affiliate of the taxpayer at that time and at the end of the affiliate’s taxation year that includes that time, and

(b) the following condition is met:

A ≥ 90%

where

A is the total of all amounts each of which would be the participating percentage (determined at the end of the taxation year) of a share owned by the taxpayer of the capital stock of a corporation, in respect of the affiliate, if

(i) the definition relevant cost base were read without reference to the words “if the affiliate is an eligible controlled foreign affiliate of the taxpayer at that time,” in its subparagraph (b)(i), and

(ii) the definition participating percentage in subsection (1) were read without reference to its paragraph (a) and the portion of its paragraph (b) before subparagraph (i); (société étrangère affiliée contrôlée admissible)

(7) Subsections (1), (2) and (5) apply in respect of taxation years of a foreign affiliate of a taxpayer that end after 2016.

(8) Subsection (3) applies to taxation years of a foreign affiliate of a taxpayer that begin on or after February 27, 2004.

(9) Subsection (4) applies in respect of taxation years of a foreign affiliate of a taxpayer that begin after 2015.

(10) Subsection (6) applies in respect of determinations made after August 19, 2011 in respect of property of a foreign affiliate of a taxpayer. However, if the taxpayer elects in writing under this subsection, in respect of all of its foreign affiliates, and files the election with the Minister of National Revenue, paragraph (b) of the definition eligible controlled foreign affiliate in subsection 95(4) of the Act, as enacted by subsection (6), is, in respect of any such determination made before Announcement Date, to be read without reference to subparagraph (ii) of the description of A and subparagraph (i) of the description of A is to be read as follows:

(i) the amount determined for paragraph (b) in the definition relevant cost base were nil;

20 (1) Paragraph 98(3)(c) of the Act is amended by striking out “and” at the end of subparagraph (i) and by adding the following after subparagraph (i):

(i.1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the person’s percentage of the fair market value of the property immediately after its distribution to the person is deemed to be determined by the formula

A − B

where

A is the amount that is the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution,

B is the portion of the amount by which the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution as may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time

(A) in the case of depreciable property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such depreciable property exceeds its cost amount,

(B) in the case of a Canadian resource property or a foreign resource property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of such Canadian or foreign resource property, or

(C) in the case of other property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such other property exceeds its cost amount, and

(2) Paragraph 98(5)(c) of the Act is amended by striking out “and” at the end of subparagraph (i) and by adding the following after subparagraph (i):

(i.1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the fair market value of the property immediately after the particular time is deemed to be determined by the formula

A−B

where

A is the amount that is the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution,

B is the portion of the amount by which the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution that may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time

(C) in the case of a property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such property exceeds its cost amount, and

(3) Subsections (1) and (2) apply in respect of partnerships that cease to exist on or after Announcement Date.

21 (1) The portion of subsection 108(3) of the Act before paragraph (a) is replaced by the following:

Income of a trust in certain provisions

(3) For the purposes of the definition income interest in subsection (1), subclause (c.1)(iii.1)(D)(II) of the definition principal residence in section 54 and definitions lifetime benefit trust in subsection 60.011(1) and exempt foreign trust in subsection 94(1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definition pre-1972 spousal trust in subsection (1) and paragraphs 70(6)(b) and (6.1)(b), 73(1.01)(c) and 104(4)(a), the income of a trust is its income computed without reference to the provisions of this Act, minus any dividends included in that income

(2) Subsection (1) applies to taxation years that begin after 2016.

22 Paragraph (b) of the definition action du capital-actions d’une société agricole ou de pêche familiale in subsection 110.6(1) of the French version of the Act is replaced by the following:

b) à ce moment, la totalité ou la presque totalité de la juste valeur marchande des biens de la société est attribuable à des biens visés au sous-alinéa a)(iv).

23 (1) The portion of subsection 115.2(2) of the Act before paragraph (a) is replaced by the following:

Not carrying on business in Canada

(2) For the purposes of subsections 115(1) and 150(1), Part XIV and section 805 of the Income Tax Regulations, a non-resident person is not considered to be carrying on business in Canada at any particular time solely because of the provision to the person, or to a partnership of which the person is a member, at the particular time of designated investment services by a Canadian service provider if

(2) Subsection (1) is deemed to have come into force on Announcement Date.

24 (1) Subaragraph (a)(iii.1) of the definition pension income in subsection 118(7) of the Act is replaced by the following:

(iii.1) a payment (other than a payment described in subparagraph (i)) under a money purchase provision (within the meaning assigned by subsection 147.1(1)) of a registered pension plan or under a specified pension plan,

(2) Subsection (1) applies to the 2019 and subsequent taxation years.

25 The portion of the definition entreprise de placement déterminée before paragraph (a) in subsection 125(7) of the French version of the Act is replaced by the following:

entreprise de placement déterminée Entreprise exploitée par une société, sauf une entreprise exploitée par une caisse de crédit ou une entreprise de location de biens autres que des biens immeubles ou réels, dont le but principal est de tirer un revenu de biens, notamment des intérêts, des dividendes, des loyers et des redevances. Toutefois, sauf dans le cas où la société est une société à capital de risque de travailleurs visée par règlement au cours de l’année, l’entreprise exploitée par une société au cours d’une année d’imposition n’est pas une entreprise de placement déterminée si, selon le cas :

26 (1) Paragraph 144.1(2)(f) of the Act is replaced by the following:

(f) unless the condition in subparagraph (e)(ii) is satisfied, the rights under the trust of each key employee of a participating employer are not more advantageous than the rights of a class of beneficiaries described in subparagraph (e)(i);

(2) Subsection (1) is deemed to have come into force on February 27, 2018.

27 (1) Paragraph 146.01(2)(b) of the Act is replaced by the following:

(b) except for the purposes of paragraphs (d) and (g) of the definition regular eligible amount and paragraphs (e) and (f) of the definition supplemental eligible amount in subsection (1), where an individual agrees to acquire a condominium unit, the individual shall be deemed to have acquired it on the day the individual is entitled to immediate vacant possession of it;

(2) Subsection (1) is deemed to have come into force on Announcement Date.

28 (1) Section 146.2 of the Act is amended by adding the following after subsection (4):

Right of set-off

(4.1) A qualifying arrangement that is a deposit may provide the issuer the right to set off any indebtedness owed by the holder to the issuer, or a person related to the issuer, against the holder’s interest in the arrangement if

(a) the terms and conditions of the indebtedness and the right of set-off are terms and conditions that persons dealing at arm's length with each other would have entered into; and

(b) it is reasonable to conclude that none of the main purposes for the right of set-off is to enable a person (other than the holder) or a partnership to benefit from the exemption from tax under this Part of any amount in respect of the TFSA.

(2) The portion of subsection 146.2(5) of the Act before paragraph (a) is replaced by the following:

TFSA

(5) If the issuer of an arrangement that is, at the time it is entered into, a qualifying arrangement files with the Minister, before March of the calendar year following the calendar year in which the arrangement was entered into (or such later date as is acceptable to the Minister), an election in prescribed form and manner to register the arrangement as a TFSA under the Social Insurance Number of the individual with whom the arrangement was entered into, the arrangement becomes a TFSA at the time the arrangement was entered into and ceases to be a TFSA at the earliest of the following times:

(3) Subsection (1) is deemed to have come into force on Announcement Date.

(4) Subsection (2) applies to the 2009 and subsequent taxation years.

29 (1) The portion of paragraph 146.3(2)(e.1) of the Act before subparagraph (i) is replaced by the following:

(e.1) where the fund does not govern a trust or the fund governs a trust created before 1998 that does not hold an annuity contract as a qualified investment for the trust, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain an amount equal to the lesser of

(2) The portion of paragraph 146.3(2)(e.2) of the Act before subparagraph (i) is replaced by the following:

(e.2) where paragraph (e.1) does not apply, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain property in the fund sufficient to ensure that the total of

(3) Paragraph 146.3(14.1)(b) of the Act is replaced by the following:

(b) is transferred at the direction of the annuitant directly to a registered pension plan of which, at any time before the transfer, the annuitant was a member (within the meaning assigned by subsection 147.1(1)) or to a specified pension plan and is allocated to the annuitant under a money purchase provision (within the meaning assigned by subsection 147.1(1)) of the plan; or

(4) Subsections (1) to (3) are deemed to have come into force on Announcement Date.

30 (1) Paragraph 146.4(5)(b) of the Act is amended by striking out “and” at the end of subparagraph (i) and by replacing subparagraph (ii) with the following:

(ii) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition, and

(iii) the trust’s income shall be computed without reference to subsection 104(6).

(2) Subsection (1) is deemed to have come into force on Announcement Date.

31 (1) Paragraph (a) of the definition compensation in subsection 147.1(1) of the Act is replaced by the following:

(a) an amount in respect of the individual’s employment with the employer, or an office in respect of which the individual is remunerated by the employer, that is required (or that would be required but for paragraph 81(1)(a) as it applies with respect to the Indian Act or the Foreign Missions and International Organizations Act) by section 5 or 6 to be included in computing the individual’s income for the year, except such portion of the amount that

(i) meets the following conditions

(A) the portion may reasonably be considered to relate to a period throughout which the individual was not resident in Canada, and

(B) the portion is

(I) not attributable to the performance of the duties of the office or employment in Canada, or

(II) exempt from income tax in Canada by reason of a tax treaty, or

(ii) is deducted under paragraph 8(1)(o.2) in computing the taxpayer’s income for the year,

(2) Paragraph (b) of the definition money purchase provision in subsection 147.1(1) of the Act is replaced by the following:

(b) under which the only benefits in respect of a member are benefits

(i) determined solely with reference to, and provided by, the amount in the member’s account, or

(ii) provided under a VPLA fund described in subsection 8506(13) of the Income Tax Regulations. (disposition à cotisations déterminées)

(3) Subsection (1) is deemed to have come into force on Announcement Date.

(4) Subsection (2) is deemed to have come into force on January 1, 2020.

32 (1) Paragraph 147.5(2)(f) of the Act is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

(iii) a surrender of benefits payable to a qualifying survivor of a member after the member’s death, to the extent permitted under the Pooled Registered Pension Plans Act or a similar law of a province;

(2) Subsection 147.5(12) of the Act is replaced by the following:

Member’s account

(12) For the purposes of paragraph 18(1)(u), subparagraph (a)(i) of the definition excluded right or interest in subsection 128.1(10), paragraph 146(8.2)(b), subsection 146(8.21), paragraphs 146(16)(a) and (b), subparagraph 146(21)(a)(i), paragraph (b) of the definition excluded premium in subsection 146.01(1), paragraph (c) of the definition excluded premium in subsection 146.02(1), subsections 146.3(14) and 147(19) to (21), sections 147.3 and 160.2 and paragraphs 212(1)(j.1) and (m), and of regulations made under subsection 147.1(18), a member’s account under a PRPP is deemed to be a registered retirement savings plan under which the member is the annuitant.

(3) Subparagraph (b)(ii) of the description of B in subsection 147.5(18) of the Act is replaced by the following:

(ii) an amount distributed from the account to, or on behalf of, a qualifying survivor in relation to the member as a consequence of the death of the member.

(4) Subsections (1) to (3) are deemed to have come into force on Announcement Date.

33 (1) Subsection 149(1) of the Act is amended by adding the following after paragraph (o.4):

Pension Benefits Guarantee Fund

(o.5) the Pension Benefits Guarantee Fund under the Pension Benefits Act, R.S.O. 1990, c. P.8 and any corporation established solely for investing the assets of the Pension Benefit Guarantee Fund;

(2) Paragraph 149(1.2)(a) of the Act is replaced by the following:

(a) under an agreement that meets the following conditions:

(i) the agreement is in writing between

(A) the corporation, commission or association, and

(B) a person who is Her Majesty in right of Canada or of a province, a municipality, a municipal or public body or a corporation to which any of paragraphs (1)(d) to (d.6) applies and that is controlled by Her Majesty in right of Canada or of a province, by a municipality in Canada or by a municipal or public body in Canada,

(ii) the agreement is applicable within the geographical boundaries of,

(A) if the person is Her Majesty in right of Canada or a corporation controlled by Her Majesty in right of Canada, Canada,

(B) if the person is Her Majesty in right of a province or a corporation controlled by Her Majesty in right of a province, the province,

(C) if the person is a municipality in Canada or a corporation controlled by a municipality in Canada, the municipality, and

(D) if the person is a municipal or public body or a corporation controlled by such a body, the area described in subsection (11) in respect of the person,

(iii) the income earned from the activities carried on under the agreement is paid from the party described in clause (i)(B) to the party described in clause (i)(A), and

(iv) the activities under the agreement are activities normally carried out by a local government; or

(3) Subsection (1) applies to 2022 and subsequent taxation years.

(4) Subsection (2) is deemed to have come into force on Announcement Date.

34 (1) Paragraph 149.1(15)(a) of the Act is replaced by the following:

(a) the information contained in a public information return referred to in subsection (14) or (14.1), and the filing status of information returns required by that subsection, shall be communicated or otherwise made available to the public by the Minister in such manner as the Minister considers appropriate;

(2) Subparagraph 149.1(15)(b)(iii) of the Act is replaced by the following:

(iii) the effective date of any suspension, revocation, annulment or termination of registration; and

(3) Subsection (1) applies in respect of information returns required to be filed for taxation years that end after Announcement Date.

(4) Subsection (2) is deemed to have come into force on Announcement Date.

35 Subparagraph 152(4)(b)(ii) of the French version of the Act is replaced by the following:

(ii) est établie par suite de l’établissement, en application du présent alinéa ou du paragraphe (6), d’une cotisation ou d’une nouvelle cotisation concernant l’impôt payable par un autre contribuable,

36 (1) The portion of subsection 189(6.1) of the Act before paragraph (a) is replaced by the following:

Revoked charity to file returns

(6.1) If the registration of a taxpayer as a registered charity has been revoked (and subsection 188(2.1) does not apply to the taxpayer), the taxpayer shall, on or before the day that is one year from the end of the taxation year referred to in paragraph 188(1)(a), and without notice or demand,

(2) The portion of subsection 189(8) of the Act before paragraph (a) is replaced by the following:

Provisions applicable to Part

(8) Subsections 150(2) and (3), sections 152 and 158, subsection 161(11), sections 162 to 167 and Division J of Part I apply in respect of an amount assessed under this Part and of a notice of suspension under subsection 188.2(1), (2) or (2.1) as if the notice were a notice of assessment made under section 152, with any modifications that the circumstances require including, for greater certainty, that a notice of suspension that is reconsidered or reassessed may be confirmed or vacated, but not varied, except that

(3) Subsection (1) applies in respect of taxation years that end after Announcement Date.

(4) Subsection (2) is deemed to have come into force on Announcement Date.

37 (1) Paragraph (a) of the description of J in subsection 204.2(1.2) of the Act is replaced by the following:

(a) the total of all amounts each of which is

(i) an amount received by the individual in the year and before that time out of or under a pooled registered pension plan, a registered retirement savings plan, a registered retirement income fund or a specified pension plan and included in computing the individual’s income for the year, or

(ii) an amount included in computing the individual’s income for the year under any of subsections 146.01(4) to (6) and 146.02(4) to (6)

(2) Subsection (1) applies to the 2018 and subsequent taxation years.

38 (1) Section 204.5 of the Act is replaced by the following:

Publication

204.5 Each year the Minister shall make available to the public, in such a manner as the Minister deems appropriate, the names of all registered investments as at December 31 of the preceding year.

(2) Subsection (1) is deemed to have come into force on Announcement Date.

39 (1) Subparagraph (a)(ii) of the definition advantage in subsection 207.01(1) of the Act is replaced by the following:

(ii) a loan or an indebtedness (including, in the case of a TFSA, a loan or an indebtedness in respect of which the conditions in subsection 146.2(4) or (4.1) are met) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into,

(2) The portion of subparagraph (b)(i) of the definition advantage in subsection 207.01(1) of the Act before clause (A) is replaced by the following:

(i) a transaction or event or a series of transactions or events (other than a payment not exceeding a reasonable amount by the controlling individual of the registered plan where the amount would be described by paragraph 20(1)(bb) if the reference to “the taxpayer” in subparagraph (i) of that paragraph were read as a reference to “a controlling individual of a registered plan” and if the references to “the taxpayer” in subparagraph (ii) of that paragraph were read as references to “the registered plan”) that

(3) Section 207.01 of the Act is amended by adding the following after subsection (1):

Interpretation

(2) For the purposes of this section, income includes dividends described in section 83.

(4) Subsection (1) is deemed to have come into force on Announcement Date.

(5) Subsection (2) applies to the 2018 and subsequent taxation years.

(6) Subsection (3) applies in respect of dividends received on or after Announcement Date.

40 (1) Paragraph (c) of the description of B in subsection 207.8(2) of the Act is replaced by the following:

(c) in any other case, the percentage (rounded to the nearest half percentage, or where it is equidistant from two such consecutive half percentages, to the higher thereof) determined by the formula

E × F

where

E is the highest individual percentage for the year, and

F is the percentage referred to in subsection 120(1); and

(2) Subsection (1) applies to the 2022 and subsequent taxation years.

41 (1) Paragraph 212(13.1)(a) of the Act is replaced by the following:

(a) where a partnership pays or credits a particular amount to a non-resident person, the partnership is deemed to be a person resident in Canada in respect of the total of all amounts each of which is a portion of the particular amount that is deductible, or that would but for section 21 be deductible, in computing, with respect to each member of the partnership,

(i) if the member is a person resident in Canada, the member’s share of the partnership’s income or loss, as the case may be, referred to in paragraph 96(1)(f) or (g), or

(ii) if the member is a non-resident person, the portion of the member’s share of the partnership’s income or loss, as the case may be, referred to in paragraph 96(1)(f) or (g) that is included in

(A) the member’s taxable income earned in Canada, or

(B) the amount on which the member is liable to pay tax under Part I because of section 216;

(2) Paragraph 212(13.1)(b) of the Act is replaced by the following:

(b) where a person resident in Canada pays or credits an amount (other than a partnership, or a non-resident person, that is deemed, in respect of that amount, to be a person resident in Canada under paragraph (a) or (13.2)(b), as the case may be) to a partnership (other than a Canadian partnership), the partnership is deemed, in respect of that amount, to be a non-resident person.

(3) Section 212 of the Act is amended by adding the following after subsection (13.1):

Interpretation — partnerships

(13.11) For the purposes of paragraph (13.1)(a),

(a) if a partnership pays or credits an amount to another partnership (other than a Canadian partnership), the other partnership is deemed, in respect of that amount, to be a non-resident person;

(b) a person or partnership that is (or is deemed by this paragraph to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of, and to have a membership interest in, the other partnership; and

(c) a person’s share of the income or loss of a partnership includes the person’s direct or indirect, through one or more other partnerships, share of that income or loss.

(4) Subsection 212(13.2) of the Act is replaced by the following:

Application of Part XIII tax — payer subject to Part I

(13.2) For the purposes of this Part, if a particular non-resident person pays or credits an amount (other than an amount to which subsection (13) applies) to another non-resident person or to a partnership (other than a Canadian partnership),

(a) if the amount is paid or credited to a partnership, the partnership is deemed, in respect of that amount, to be a non-resident person; and

(b) the particular non-resident person is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing

(i) the particular non-resident person’s taxable income earned in Canada from a source that is neither a treaty-protected business nor a treaty-protected property, or

(ii) the amount on which the particular non-resident person is liable to pay tax under Part I because of section 216.

(5) Subsection 212(13.3) of the Act is replaced by the following:

Application of Part XIII to authorized foreign bank

(13.3) An authorized foreign bank is deemed to be a person resident in Canada for the purposes of

(a) this Part, in respect of any amount paid or credited to or by the bank in respect of its Canadian banking business;

(b) the application in paragraphs (13.1)(b) and (13.11)(a) and subsection (13.2) of the definition Canadian partnership (as defined in subsection 248(1)), in respect of a membership interest in a partnership held by the bank in the course of its Canadian banking business; and

(c) paragraph (13.1)(a), in respect of a membership interest in a partnership held by the bank in the course of its Canadian banking business.

(6) Subsections (1) to (3) and (5) will apply to amounts paid or credited no earlier than the date of a future release of draft legislative proposals for this measure, which would occur after the end of the consultation period on this release.

(7) Subsection (4) applies to amounts paid or credited after 2022.

42 (1) Clause (B) of the description of A in subparagraph 212.3(9)(b)(ii) of the Act is replaced by the following:

(B) as a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of the subject corporation or the portion, of a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of a foreign affiliate of the particular corporation that were substituted for shares of the capital stock of the subject corporation, that can reasonably be considered to relate to the acquired shares, or

(2) The description of A in subparagraph 212.3(9)(b)(ii) of the Act, as amended by subsection (1), is replaced by the following:

A is the amount that is equal to the fair market value of property that

(A) the particular corporation demonstrates has been received at the subsequent time by it or by a corporation resident in Canada that was not dealing at arm’s length with the particular corporation at that time (either of which is in this subparagraph referred to as the “recipient corporation”)

(I) as proceeds from the disposition of the acquired shares, or other shares to the extent that the proceeds from the disposition of those other shares can reasonably be considered to relate to the acquired shares or to shares of the capital stock of the subject corporation in respect of which an investment described in paragraph (10)(b) was made,

(II) as a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of the subject corporation or the portion, of a reduction of paid-up capital or dividend in respect of a class of shares of the capital stock of a foreign affiliate of the particular corporation that were substituted for shares of the capital stock of the subject corporation, that can reasonably be considered to relate to the acquired shares, or

(III) if the investment is described in paragraph (10)(c) or (d) or subparagraph (10)(e)(i),

1 as a repayment of or as proceeds from the disposition of the debt obligation or amount owing, or

2 as interest on the debt obligation or amount owing, and

(B) is not received by the recipient corporation

(I) as a result of an investment, made by the recipient corporation, to which subsection (16) or (18) applies, or

(II) as proceeds from a disposition of property to a corporation resident in Canada for which the acquisition is an investment to which subsection (16) or (18) applies, or to a partnership of which such a corporation is a member,

(3) Subsection (1) applies in respect of transactions and events that occur after March 28, 2012.

(4) Subsection (2) applies in respect of transactions and events that occur on or after Announcement Date.

43 Paragraph 214(3)(g) of the Act is repealed.

44 (1) Paragraph (b) of the definition specified Canadian entity in subsection 233.3(1) of the Act is replaced by the following:

(b) a partnership where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is a non-resident person or a taxpayer referred to in any of subparagraphs (a)(i) to (viii), is less than 90% of the income or loss of the partnership for the period, and, 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 for the purpose of this paragraph. (entité canadienne déterminée)

(2) Paragraph (n) of the definition specified foreign property in subsection 233.3(1) of the Act is replaced by the following:

(n) an interest in a trust that is described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1), or that would be described in paragraph (b) of that definition if that paragraph were read as follows:

(b) a trust that

(i) is resident in Australia or New Zealand for income tax purposes under the laws of Australia or New Zealand, as the case may be,

(ii) qualifies for a reduced rate of income tax under the income tax laws of its country of residence referred to in subparagraph (i),

(iii) is established principally for the purpose of administering or providing benefits under a superannuation, pension or retirement fund or plan, and

(iv) is maintained primarily for the benefit of individuals that are resident in Australia or New Zealand, as the case may be; or

(3) Subsections (1) and (2) apply to taxation years and fiscal periods that end after Announcement Date.

45 Paragraph 237(1)(b) of the English version of the Act is replaced by the following:

(b) within 15 days after the individual is requested by the person to provide the individual’s Social Insurance Number,

46 (1) Subparagraph (i.1)(ii) of the definition term preferred share in subsection 248(1) of the Act is replaced by the following:

(ii) it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.1), 138(6) or 258(3),

(2) Subparagraph (j)(ii) of the definition term preferred share in subsection 248(1) of the Act is replaced by the following:

(ii) one of the main purposes for the issue of the particular share or for the modification of its terms or conditions was to avoid a limitation provided by subsection 112(2.1) or 138(6) in respect of a deduction or to avoid or limit the application of subsection 258(3),

(3) Subsections (1) and (2) apply in respect of amounts received on or after Announcement Date.

47 The portion of subsection 249.1(1) of the French version of the Act before paragraph (a) is replaced by the following:

Définition de exercice

249.1 (1) Pour l’application de la présente loi, l’exercice d’une entreprise ou d’un bien d’une personne ou d’une société de personnes s’entend de la période pour laquelle les comptes correspondants de la personne ou de la société de personnes sont arrêtés pour l’établissement d’une cotisation en vertu de la présente loi. L’exercice ne peut toutefois se prolonger :

48 (1) The definition attribute trading restriction in subsection 256.1(1) of the Act is replaced by the following:

attribute trading restriction means a restriction on the use of a tax attribute arising on the application, either alone or in combination with other provisions, of any of this section, subsections 10(10) and 13(24), section 37, subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 88(1.1) and (1.2), sections 111 and 127, subsections 181.1(7), 190.1(6) and 249(4), section 251.2 and subsection 256(7). (restriction au commerce d’attributs)

(2) The definition specified provision in subsection 256.1(1) of the Act is replaced by the following:

specified provision means any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4), (5), (5.1) and (5.3), paragraphs (j) and (k) of the definition investment tax credit in subsection 127(9), subsections 181.1(7) and 190.1(6), section 251.2 and any provision of similar effect.(dispositions déterminées)

(3) Subsection 256.1(6) of the Act is replaced by the following:

Deemed acquisition of control

(6) If, at any time as part of a transaction or event or series of transactions or events, control of a particular corporation is acquired by a person or group of persons and it can reasonably be concluded that one of the main reasons for the transaction or event or any transaction or event in the series of transactions or events is so that a specified provision does not apply to one or more corporations, the attribute trading restrictions are deemed to apply to each of those corporations as if control of each of those corporations were acquired at that time.

(4) Subsections (1) to (3) are deemed to have come into force on Announcement Date.

49 (1) The definition qualifying currency in subsection 261(1) of the Act is amended by adding the following after paragraph (c):

(c.1) the currency of Japan;

(2) Subparagraph 261(18)(c)(i) of the Act is replaced by the following:

(i) is, or would in the absence of subsections (16) and (17) be, in a functional currency year of the transferor or the transferee and the transferor and the transferee have, or would in the absence of those subsections have, different tax reporting currencies at the transfer time, or

(3) Subsection 261(20) of the Act is replaced by the following:

Application of subsection (21)

(20) Subsection (21) applies in determining a taxpayer’s income, gain or loss for a taxation year in respect of a transaction (referred to in this subsection and subsection (21) as a “specified transaction”) if

(a) the specified transaction was entered into, directly or indirectly, at any time by the taxpayer and a person (referred to in this subsection as the “related person”) to which the taxpayer is at that time related;

(b) the taxpayer and the related person had different tax reporting currencies at any time during the period (referred to in this subsection as the “accrual period”) in which the income, gain or loss accrued; and

(c) it would, in the absence of this subsection and subsection (21), be reasonable to consider that a fluctuation at any time in the accrual period in the value of the taxpayer’s tax reporting currency relative to the value of the related person’s tax reporting currency

(i) increased the taxpayer’s loss in respect of the specified transaction,

(ii) reduced the taxpayer’s income or gain in respect of the specified transaction, or

(iii) caused the taxpayer to have a loss, instead of income or a gain, in respect of the specified transaction.

(4) Subsection (1) applies to taxation years that begin after 2019.

(5) Subsection (2) applies in respect of transfers of property that occur on or after Announcement Date.

(6) Subsection (3) applies in respect of accrual periods (within the meaning assigned by subsection 261(20) of the Act) that begin on or after Announcement Date.

50 (1) The Schedule to the Act is amended by striking out “Ford Credit Canada Limited” and by adding the following in alphabetical order:

Ford Credit Canada Company/Compagnie Crédit Ford du Canada

(2) Subsection (1) is deemed to have come into force on January 9, 2017.

51 (1) The definition remuneration in subsection 100(1) of the Income Tax Regulations is amended by adding the following after paragraph (h):

(h.1) an amount that is required by paragraph 56(1)(z.2) of the Act to be included in computing a taxpayer’s income,

(2) Subsection (1) is deemed to have come into force on Announcement Date.

52 (1) Subsection 202(6) of the Regulations is replaced by the following:

202 (6) A non-resident person, or an authorized foreign bank, that is deemed under paragraph 212(13.2)(b) or (13.3)(a) of the Act to be a person resident in Canada for the purposes of Part XIII of the Act, is deemed, in the same circumstances, to be a person resident in Canada for the purposes of subsections (1) and (2).

(2) Subsection (1) applies to amounts paid or credited after 2022.

53 (1) The table in subsection 205(3) of the Regulations is amended by striking out “Pooled Registered Pension Plan (PRPP) Information Return” and by adding the following in alphabetical order:

Pooled Registered Pension Plan (PRPP) Contribution Information Return

(2) Subsection (1) comes into force on January 1, 2022.

54 (1) The table in subsection 205.1(1) of the Regulations is amended by striking out “Pooled Registered Pension Plan (PRPP) Information Return” and by adding the following in alphabetical order:

Pooled Registered Pension Plan (PRPP) Contribution Information Return

(2) Subsection (1) comes into force on January 1, 2022.

55 (1) The Regulations are amended by adding the following after section 214.1:

PRPP contributions — annual return

214.2 (1) The administrator of a pooled registered pension plan shall make an information return in prescribed form in respect of the amount of contributions made to the account of a member of the plan by

(a) the member in a contribution year; or

(b) an employer of the member in the taxation year of the member that ends in the contribution year.

(2) For greater certainty and for the purposes of subsection (1), amounts contributed to the member’s account do not include amounts that have been transferred to the account in accordance with any of subsections 146(16) and (21), 146.3(14), 147(19), 147.3(1), (4) and (5) to (7) and 147.5(21) of the Act.

(3) The return shall be filed with the Minister on or before the 1st day of May of the year in which the contribution year ends and shall be in respect of

(a) the contribution year in the case of contributions made by the member; and

(b) the taxation year of the member that ends in the contribution year in the case of contributions made by an employer.

(4) The following definitions apply in this section.

administrator has the same meaning as in subsection 147.5(1) of the Act. (administrateur)

contribution year means the period beginning on the 61st day of one year and ending on the 60th day of the following year. (année de contribution)

member has the same meaning as in subsection 147.5(1) of the Act. (participant)

(2) Subsection (1) applies to contribution years and taxation years that end after Announcement Date.

56 (1) Paragraph 3504(a) of the Regulations is replaced by the following:

(a) American Friends of Nature Conservancy of Canada, Inc., a charity established in the United States;

(2) Paragraph 3504(a) of the Regulations is replaced by the following:

(a) American Friends of Canadian Nature Inc., a charity established in the United States;

(3) Subsection (1) is deemed to have come into force on December 7, 2015.

(4) Subsection (2) is deemed to have come into force on October 16, 2018.

57 (1) Subsection 3900(2) of the Regulations is replaced by the following:

(2) For the purpose of paragraph 20(1)(v) of the Act, the amount allowed for a taxation year in respect of taxes on income from mining operations of a taxpayer is the total of all amounts each of which is

(a) an eligible tax that is paid or payable by the taxpayer

(i) on the income of the taxpayer for the taxation year from mining operations, or

(ii) on a non-Crown royalty included in computing the income of the taxpayer for the taxation year;

(b) an eligible tax that is paid by the taxpayer in the taxation year on either the income of the taxpayer for a previous taxation year from mining operations or a non-Crown royalty included in computing the income of the taxpayer for a previous taxation year, if

(i) the amount was deductible in computing the income of the taxpayer for the previous taxation year,

(ii) the amount has not been deducted in computing the income of the taxpayer for a taxation year that is prior to the taxation year, and

(iii) an assessment of the taxpayer to take into account a deduction in respect of the eligible tax under the Act for the previous taxation year would be precluded because of subsections 152(4) to (5) of the Act; or

(c) interest in respect of eligible tax referred to in paragraph (a) or (b) that is paid in the taxation year by the taxpayer to the province imposing the eligible tax.

(2) Subsection (1) applies to taxation years that end after 2007.

58 (1) Paragraph 4301(b.1) of the French version of the Regulations is replaced by the following:

b.1) pour l’application du paragraphe 17.1(1) de la Loi, le taux qui serait déterminé selon l’alinéa a) pour le trimestre donné si le passage « arrondie au point de pourcentage supérieur » au sous-alinéa (i) de cet alinéa était remplacé par « arrondie à deux décimales »;

(2) Subsection (1) is deemed to have come into force on March 29, 2012.

59 (1) Subsection 4802(1) of the Regulations is amended by striking out “and” at the end of paragraph (f) and by adding the following after paragraph (f):

(f.1) the Pension Benefits Guarantee Fund under the Pension Benefits Act, R.S.O. 1990, c. P.8 and any corporation established solely for investing the assets of the Pension Benefit Guarantee Fund; and

(2) Subsection (1) applies to 2022 and subsequent taxation years.

60 (1) Subsection 4900(1) of the Regulations is amended by adding the following after paragraph (i.13):

(i.14) a share of the capital stock of a Canadian corporation that is registered under sections 29 or 34 of the Investing in a Diversified Alberta Economy Act, chapter I-10.5 of the Statutes of Alberta, 2016, the registration of which has not been revoked under that Act;

(2) Paragraph 4900(2)(c) of the Regulations is replaced by the following:

(3) Subsection 4900(2) of the Regulations is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) a subsidiary or affiliate of a company listed in paragraphs (a) to (e), to the extent that it provides credit rating services outside of Canada on behalf of the company in respect of which it is the subsidiary or affiliate;

(4) Subsection (1) is deemed to have come into force on April 14, 2016.

(5) Subsections (2) and (3) are deemed to have come into force on Announcement Date.

61 (1) Section 5600 of the Regulations is amended by striking out “and” at the end of paragraph (i) and by adding the following after paragraph (j):

(k) the distribution by Svenska Cellulosa Aktiebolaget SCA (publ), on June 15, 2017 to its common shareholders, of common shares of Essity Aktiebolag (publ);

(l) the distribution by Modern Times Group MTG AB, on March 28, 2019 to its common shareholders, of common shares of Nordic Entertainment Group AB; and

(m) the distribution by Novartis AG, on April 9, 2019 to its common shareholders, of common shares of Alcon Inc.

(2) Subsection (1) is deemed to have come into force on June 15, 2017.

62 Paragraph 5700(z.3) of the English version of the Regulations is replaced by the following:

(z.3) standing device designed to be used by an individual who has a severe mobility impairment to undertake standing therapy; or

63 (1) The portion of subsection 5907(2.01) of the Regulations before paragraph (b) is replaced by the following:

(2.01) Subparagraphs (2)(f)(ii) and (j)(iii) and subsection (5.1) do not apply to a particular disposition of property (referred to in this subsection as the “affiliate property”) by a particular foreign affiliate of a taxpayer to another foreign affiliate of the taxpayer if

(a) the only consideration in respect of the particular disposition is one or any combination of

(i) shares of the capital stock of the other affiliate, and

(ii) the assumption by the other affiliate of a debt or other obligation owing by the particular affiliate that arose in the ordinary course of the business of the particular affiliate to which the affiliate property relates;

(2) The portion of subsection 5907(2.7) of the Regulations before subparagraph (a)(i) is replaced by the following:

(2.7) Notwithstanding any other provision of this Part, if an amount (referred to in this subsection as the “income amount”) is included in computing the income or loss from an active business of a foreign affiliate of a taxpayer for a taxation year under subparagraph 95(2)(a)(i) or (ii) of the Act, or is not included in computing the foreign accrual property income of a foreign affiliate of a taxpayer for a taxation year because of subsection 95(3.03) of the Act, and the income amount is in respect of a particular amount paid or payable,

(a) if clause 95(2)(a)(ii)(D) or subsection 95(3.03) of the Act is applicable, by the second affiliate referred to in that clause or subsection, as the case may be,

(3) Subsection (1) applies in respect of dispositions that occur on or after Announcement Date.

(4) Subsection (2) applies in respect of taxation years of a foreign affiliate of a taxpayer that end after 2016.

64 (1) Paragraph 6204(1)(b) of the Regulations is amended by striking out “or” at the end of subparagraph (ii), by adding “or’’ at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

(iv) an exchange to which subsection 51(1) of the Act applies or a disposition to which subsection 86(1) of the Act applies, if no consideration is provided by the corporation for the share other than shares of the capital stock of the corporation that are prescribed shares; and

(2) Subsection (1) applies to the 2012 and subsequent taxation years.

65 (1) Section 6700 of the Regulations is amended by striking out “or” at the end of paragraph (e.1), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):

(g) a corporation (including incorporated cooperative associations) registered under section 2 of the Community Development Equity Tax Credit Act, R.S.P.E.I. 1988, Cap. C-13.01.

(2) Section 6700 of the Regulations, as amended by subsection (1), is amended by striking out “or” at the end of paragraph (f), by adding “or” at the end of paragraph (g) and by adding the following after paragraph (g):

(h) community economic development corporations, eligible business corporations and venture capital corporations registered under the Investing in a Diversified Alberta Economy Act, Statutes of Alberta, 2016 Chapter I-10.5.

(3) Subsection (1) is deemed to have come into force on August 1, 2011.

(4) Subsection (2) is deemed to have come into force on April 14, 2016.

66 (1) Paragraph 6701(e) of the Regulations is repealed.

(2) Subsection (1) is deemed to have come into force on Announcement Date.

67 (1) Section 6802 of the Regulations is amended by striking out “or” at the end of paragraph (g), by adding “or” at the end of paragraph (h) and by adding the following after paragraph (h):

(i) a trust and partnership established pursuant to the June 2017 court-approved plan of compromise, arrangement and reorganization for U.S. Steel Canada Inc. under the Companies’ Creditors Arrangement Act where

(i) the trust contributes amounts received or receivable by it to registered pension plans sponsored by U.S. Steel Canada Inc., and

(ii) the limited partners of the partnership are the trust and employee life and health trusts established for employees and former employees of U.S. Steel Canada Inc.

(2) Subsection (1) is deemed to have come into force on June 1, 2017.

68 (1) Paragraph 7000(1)(c) of the Regulations is replaced by the following:

(c) a particular debt obligation in respect of which it can be determined, at the time the taxpayer acquired the interest therein, that the maximum amount of interest payable thereon in a year ending after that time is less than the maximum amount of interest payable thereon in a subsequent year, other than a debt obligation that

(i) is described in paragraph (a) or (b), or

(ii) meets the following conditions:

(A) it is issued by, or by an agency of, the Government of Canada or a province, and

(B) it satisfies the conditions in subparagraphs (2)(c.1)(i) and (ii); and

(2) Subsection (1) applies in respect of debt obligations issued on or after October 16, 1996.

69 (1) The portion of subsection 7303.1(2) of the Regulations before paragraph (a) is replaced by the following:

(2) An area is a prescribed intermediate zone for a taxation year for the purposes of section 110.7 of the Act where it is Haida Gwaii, Anticosti Island, the Magdalen Islands or Sable Island, or where it is not part of a prescribed northern zone referred to in subsection (1) for the year and is

(2) Subsection (1) is deemed to have come into force on June 3, 2010.

70 (1) The definition excluded contribution in subsection 8300(1) of the Regulations is replaced by the following:

excluded contribution, to a registered pension plan, means an amount that is

(a) contributed to the plan and that is deductible under paragraph 60(j.1) of the Act, or

(b) transferred to the plan in accordance with any of subsections 146(16), 146.3(14.1), 147(19), 147.3(1) to (4) and (5) to (7) and 147.5(21) of the Act; (cotisation exclue)

(2) Paragraph (a) of the definition period of reduced services in subsection 8300(1) of the Regulations is replaced by the following:

(a) an eligible period of reduced pay or an eligible period of temporary absence of the individual with respect to an employer who participates under the provision, or

(3) Subsection (1) applies in respect of contributions and transfers that occur on or after Announcement Date.

(4) Subsection (2) is deemed to have come into force on Announcement Date.

71 (1) Paragraph 8304(5.1)(b) of the Regulations is amended by striking out “or” at the end of subparagraph (ii), by replacing “and” at the end of subparagraph (iii) with or and by adding the following after subparagraph (iii):

(iv) the following conditions apply:

(A) the individual has not ceased, at the particular time, to be a member in relation to the former provision, and

(B) subparagraph 8503(3)(a)(v.1) applies to the period described in paragraph (a), and

(2) Subparagraph (ii) of the description of A in paragraph 8304(5.1)(g) of the Regulations is replaced by the following:

(ii) an amount that is to be paid or otherwise made available under the former provision with respect to the individual after the particular time, other than

(A) an amount that is to be transferred to fund the past service benefits or paid directly to the individual, or

(B) the balance of property described in clause 8503(3)(a)(v.1)(B) that is required to be transferred after the particular time to fund the past service benefits,

(3) Subsections (1) and (2) apply in respect of past service events (as defined in subsection 8300(1) of the Regulations) that occur after 2012.

72 (1) Subparagraph 8409(1)(a)(i) of the Regulations is replaced by the following:

(i) in the case of the agreement with the Financial Services Regulatory Authority of Ontario, with the Taxation Data Centre of the Ministry of Finance of Ontario, and

(2) Paragraphs 8409(2)(a) to (e) of the Regulations are replaced by the following :

(a) the Office of the Superintendent of Financial Institutions;

(b) the Financial Services Regulatory Authority of Ontario, Province of Ontario;

(d) the Superintendent of Pensions, Province of Nova Scotia;

(e) the Superintendent of Pensions, Province of New Brunswick;

(f) the Office of the Superintendent — Pension Commission, Province of Manitoba;

(g) the Superintendent of Pensions, Province of British Columbia;

(h) the Superintendent of Pensions, Province of Saskatchewan;

(i) the Superintendent of Pensions, Province of Alberta; and

(j) the Superintendent of Pensions, Province of Newfoundland and Labrador.

(3) Subsections (1) and (2) are deemed to have come into force on June 8, 2019.

73 (1) The definition Consumer Price Index in subsection 8500(1) of the Regulations is replaced by the following:

Consumer Price Index for a month means the Consumer Price Index for Canada for the month as published by Statistics Canada under the authority of the Statistics Act; (indice des prix à la consommation)

(2) Paragraph (a) of the definition eligible period of reduced pay in subsection 8500(1) of the Regulations is replaced by the following:

(a) that begins after the employee has been employed by the employer or predecessor employers to the employer for not less than three months,

(3) Subsection (1) is deemed to have come into force on Announcement Date.

(4) Subsection (2) is deemed to have come into force on January 1, 2022.

74 (1) Paragraph 8502(b)(v.1) of the Regulations is replaced by the following:

(v.1) is paid by the trustee of a trust described in paragraph 6802(h) or (i), where the amount would have been an eligible contribution if the amount had been paid in respect of a defined benefit provision of the plan by an employer with respect to the employer’s employees or former employees,

(2) Subparagraph 8502(f)(ii) of the Regulations is replaced by the following:

(ii) surrender does not include

(A) a reduction in benefits to avoid the revocation of the registration of the plan, or

(B) a surrender of retirement benefits payable to a dependant of a member after the member’s death, to the extent permitted under the Pension Benefits Standards Act, 1985 or a similar law of a province;

(3) Subsection (1) is deemed to have come into force on June 1, 2017.

(4) Subsection (2) is deemed to have come into force on Announcement Date.

75 (1) Subsection 8503(2) of the Regulations is amended by striking out “and” at the end of paragraph (m), by adding “and” at the end of paragraph (n) and by adding the following after paragraph (n):

(o) retirement benefits provided to a member or a beneficiary of the member after the death of the member, if the beneficiary is a spouse or common-law partner or former spouse or common-law partner of the member, as permitted by the Pension Benefits Standards Act, 1985 or a similar law of a province where

(i) the life expectancy of the individual is significantly shorter than normal and has been so certified by a medical doctor or nurse practitioner licensed under the laws of a province or of the place where the individual resides,

(ii) the retirement benefits replace all or a portion of retirement benefits (referred to in subparagraph (iii) as the “former benefits”) that would otherwise be payable under the provision with respect to the individual, and

(iii) at the time the retirement benefits replace the former benefits, the present value of the benefits does not exceed the present value of the former benefits.

(2) Paragraph 8503(26)(c) of the Regulations is replaced by the following:

(i) the retirement benefits payable to the person for the year, and

(ii) the lesser of

(A) the IPP minimum amount for the person for the year, and

(B) the actuarial surplus under the plan at the beginning of the year.

(3) Subsection (1) is deemed to have come into force on September 30, 2015.

(4) Subsection (2) applies to the 2012 and subsequent taxation years.

76 (1) Clause 8506(1)(e.2)(iii)(A) of the Regulations is replaced by the following:

(A) a benefit described in any of paragraphs (b) to (e) and (i),

(2) Subsection (1) is deemed to have come into force on January 1, 2020.

77 (1) Subparagraph 8507(3)(a)(i) of the Regulations is replaced by the following:

(i) the period is an eligible period of reduced pay or an eligible period of temporary absence of the individual in the year with respect to the employer,

(2) Paragraph 8507(3)(b) of the Regulations is replaced by the following:

(b) a period of parenting of an individual is all or a part of a period that

(i) begins at the time of the birth of a child of whom the individual is a natural parent, or at the time the individual adopts a child, and

(ii) ends 18 months after that time.

(3) Paragraph 8507(7)(b) of the Regulations is replaced by the following:

(b) an eligible period of reduced pay or an eligible period of temporary absence of the individual with respect to the employer,

(4) Subsections (1) and (3) are deemed to have come into force on Announcement Date.

(5) Subsection (2) is deemed to have come into force on December 3, 2017.

78 (1) Section 8513 of the Regulations is replaced by the following:

8513 For the purposes of paragraph 8302(3)(m), subparagraph 8502(c)(iii) and paragraph 8517(5)(f), designated provision of the law of Canada or a province means section 21 of the Pension Benefits Standards Act, 1985 and any provision of a law of a province that is similar to that section.

(2) Subsection (1) is deemed to have come into force on July 1, 2011.

79 (1) Subsection 8514(2) of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) except in the case of an individual pension plan, a share of the capital stock of, an interest in, or a debt of a person or partnership that does not deal at arm’s length with a participating employer , if the participating employer’s principal activity is to manage the investments of or provide investment advice to

(i) one or more registered pension plans,

(ii) her Majesty in right of Canada or her Majesty in right of a province, or

(iii) an entity described in paragraph 149(1)(c) or (d) to (d.4) of the Act.

(2) Subsection (1) is deemed to have come into force on June 1, 2017.

80 (1) Paragraph 9002.1(a) of the Regulations is amended by striking out “or” at the end of subparagraph (ii), by replacing “and” at the end of subparagraph (iii) with “or” and by adding the following after subparagraph (iii):

(iv) Interac Corp.; and

(2) Subsection (1) is deemed to have come into force on January 29, 2018.

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