Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations
Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations
Income Tax Act
1 (1) The portion of paragraph 8(1)(e) of the Income Tax Act after subparagraph (ii) is replaced by the following:
to the extent that the taxpayer has not been reimbursed and is not entitled to be reimbursed in respect thereof and has not received and is not entitled to receive an allowance in respect thereof the inclusion of which is not required under this Act in computing the taxpayer’s income;
(2) The portion of paragraph 8(1)(g) of the Act after subparagraph (ii) is replaced by the following:
amounts so disbursed by the taxpayer in the year to the extent that the taxpayer has not been reimbursed and is not entitled to be reimbursed in respect thereof and has not received and is not entitled to receive an allowance in respect thereof the inclusion of which is not required under the Act in computing the taxpayer’s income;
2 (1) Paragraph 12(1)(z.6) of the French version of the Act is replaced by the following:
Marginal note:Remboursement
z.6) la somme reçue par le contribuable au cours de l’année à titre de remboursement d’un montant qui a été déduit en application de l’alinéa 20(1)vv) dans le calcul du revenu pour une année d’imposition;
(2) Paragraph 12(13)(b) of the Act is amended by adding the following after subparagraph (i):
(i.1) if a taxpayer is a trust, a deemed disposition by the taxpayer by application of paragraph 104(4)(a),
(3) Subsection (2) applies to the period throughout which a flipped property of a taxpayer is owned or held by the taxpayer in respect of a disposition that occurs after 2022.
3 The description of F in the definition fraction non amortie du coût en capital in subsection 13(21) of the French version of the Act is replaced by the following:
- F
- le total des sommes dont chacune est une somme à l’égard d’une disposition, avant ce moment, d’un bien (sauf un avoir forestier) de cette catégorie dont le contribuable est propriétaire, et qui correspond à la moins élevée des sommes suivantes :
4 (1) The portion of subsection 15(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Shareholder debt
(2) Subject to subsection (2.01), if a person or a partnership is
(2) Section 15 of the Act is amended by adding the following after subsection (2):
(3) Paragraph 15(2.01)(a) of the Act, as enacted by subsection (2), is replaced by the following:
(a) a person that is
(4) Subsection 15(2.1) of the Act is replaced by the following:
Marginal note:Meaning of connected
(2.1) For the purposes of subsection (2), a person or partnership is connected with a shareholder of a particular corporation if that person or partnership does not deal at arm’s length with, or is affiliated with, the shareholder.
(5) Subsections (1) and (2) apply to loans received and indebtedness incurred after October 31, 2011.
(6) Subsections (3) and (4) apply to loans received and indebtedness incurred after Announcement Date.
5 (1) Paragraph (c) of the definition excluded interest in subsection 18.2(1) of the Act is replaced by the following:
(c) where the payee is a financial institution group entity, the payer
(2) Paragraphs (b) and (c) of the definition special purpose loss corporation in subsection 18.2(1) of the Act are replaced by the following:
(b) is formed or exists solely for the purpose of generating a loss of the particular corporation from the interest; and
(c) would, in the absence of this section, have a loss for the year resulting from the interest that is, or will be, utilized exclusively by a financial institution group entity that is an eligible group entity in respect of the particular corporation. (société à usage déterminé ayant subi des pertes)
(3) Subsections (1) and (2) apply to taxation years of a taxpayer that end on or after Announcement Date.
6 (1) Subparagraph 56(1)(a)(i) of the Act is amended by striking out “and” at the end of clause (C), by adding “and” at the end of clause (C.1) and by adding the following after clause (C.1):
(C.2) the amount of a payment, from an entity authorized under the Pension Benefits Standards Act, 1985 and its regulations (or a law of a province) to receive and hold pension assets of an individual who cannot be located, to an individual who is entitled to claim the amount in accordance with the applicable law,
(2) Subparagraph 56(1)(a)(i) of the Act is amended by striking out “and” at the end of clause (F), by adding “and” at the end of clause (G) and by adding the following after clause (G):
(H) an amount transferred from a registered pension plan, in respect of an individual who cannot be located, to an entity authorized under the Pension Benefits Standards Act, 1985 and its regulations (or a law of a province) to receive and hold the amount,
(3) The portion of paragraph 56(4.1)(c) of the French version of the Act before subparagraph (i) is replaced by the following:
c) le revenu du particulier donné pour une année d’imposition provenant du bien visé à l’alinéa b), qui se rapporte à une ou plusieurs périodes de l’année tout au long desquelles le créancier ou la fiducie créancière réside au Canada et le créancier ou le cédant initial a un lien de dépendance avec le particulier donné, est considéré :
7 Subsection 62(2) of the French version of the Act is replaced by the following:
Marginal note:Frais de déménagement d’étudiants
(2) Un contribuable peut déduire dans le calcul de son revenu pour une année d’imposition la somme qu’il pourrait déduire en application du paragraphe (1) s’il n’était pas tenu compte du sous-alinéa a)(i) de la définition de réinstallation admissible au paragraphe 248(1) et si l’alinéa c) de cette définition était remplacé par ce qui suit :
« c) sauf si le contribuable est absent du Canada mais y réside, l’ancienne résidence ou la nouvelle résidence est située au Canada ou les deux y sont situées; »
8 Clause 66.7(10)(j)(ii)(B) of the French version of the Act is replaced by the following:
(B) ce que serait sa part du revenu de la société de personnes, pour l’exercice de celle-ci se terminant au cours de l’année, qu’il est raisonnable de considérer comme attribuable à la production tirée de l’avoir, si elle était déterminée en fonction de la part, exprimée en pourcentage, visée au sous-alinéa (i).
9 (1) Subsection 81(1) of the Act is amended by adding the following after paragraph (c.1):
Marginal note:Ship of resident corporations — gains
(c.2) the portion of a taxable capital gain of the taxpayer for the year from the disposition of a ship, or personal or movable property pertaining to its operation, that can reasonably be considered to have accrued while the ship
(2) Subsection (1) applies to the portion of a taxable capital gain that accrues on or after December 31, 2023.
10 (1) Paragraph 87(2)(ii) of the Act is replaced by the following:
Marginal note:Public corporation
(ii) where a predecessor corporation was a public corporation immediately before the amalgamation, the new corporation shall be deemed to have been a public corporation at the commencement of its first taxation year, unless
(i) after the last time a class of shares of the capital stock of the predecessor corporation became listed on a designated stock exchange in Canada and before the amalgamation, an election or designation was made in respect of the predecessor corporation under paragraph (c) of the definition public corporation in subsection 89(1),
(ii) immediately before the amalgamation, the predecessor corporation was a subsidiary wholly-owned corporation of another corporation (other than a public corporation) (in this paragraph referred to as the “parent”), and
(iii) the amalgamation was an amalgamation of the parent and the predecessor corporation to which subsection (11) applies;
(2) Subsection (1) applies to amalgamations that occur after royal assent.
11 (1) Paragraph (b) of the description of A in the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following:
(b) a dividend from another foreign affiliate of the taxpayer,
(2) Paragraph (a) of the description of H in the definition foreign accrual property income in subsection 95(1) of the Act is replaced by the following:
(a) if the affiliate was a member of a partnership at the end of the fiscal period of the partnership that ended in the year and the partnership received a dividend at a particular time in that fiscal period from a corporation (referred to in this paragraph as the “payer affiliate”) that would be, if the reference in subsection 93.1(1) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, a foreign affiliate of the taxpayer for the purposes of sections 93 and 113 at that particular time, the amount by which the portion of the dividend that is included in the value determined for A in respect of the affiliate for the year and that would be, if the reference in subsection 93.1(2) to “corporation resident in Canada” were a reference to “taxpayer resident in Canada”, deemed by paragraph 93.1(2)(a) to have been received by the affiliate for the purposes of sections 93 and 113 exceeds
(3) Subsections (1) and (2) apply in respect of any dividend received on or after July 1, 2024.
12 (1) Subsection 104(1) of the Act is replaced by the following:
Marginal note:Reference to trust or estate
104 (1) In this Act, a reference to a trust or estate (in this Subdivision referred to as a “trust”) shall, unless the context otherwise requires, be read to include a reference to the trustee, executor, administrator, liquidator of a succession, heir or other legal representative having ownership or control of the trust property, but, except for the purposes of this subsection, subsection (1.1), subparagraph (b)(v) of the definition disposition in subsection 248(1) and paragraph (k) of that definition, a trust is deemed not to include an arrangement under which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property unless the trust is described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1).
(2) Subsection (1) applies to taxation years that end after December 30, 2024.
13 (1) Paragraph 107.4(2)(b) of the Act is replaced by the following:
(b) where a trust (in this paragraph referred to as the “transferor”) governed by a FHSA, a registered retirement savings plan or a registered retirement income fund transfers a property to a trust (in this paragraph referred to as the “transferee”) governed by a FHSA, a registered retirement savings plan or a registered retirement income fund, the transfer is deemed not to result in a change in the beneficial ownership of the property if the annuitant or holder of the plan or fund that governs the transferor is also the annuitant or holder of the plan or fund that governs the transferee.
(2) Subsection (1) is deemed to have come into force on April 1, 2023.
14 (1) The portion of clause 110(1)(d)(i)(B) of the Act before subclause (I) is replaced by the following:
(B) in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, within the first three taxation years of the graduated rate estate of the taxpayer, by
(2) Subsection 110(1.31) of the Act is replaced by the following:
Marginal note:Annual vesting limit
(1.31) If this subsection applies to a taxpayer in respect of an agreement, the securities to be sold or issued under the agreement in respect of which an amount could be deducted in computing the taxable income of the taxpayer, determined without reference to this subsection, under paragraph (1)(d) (referred to in this subsection as “specified securities”), for each vesting year of those specified securities, are deemed to be non-qualified securities for the purposes of this section in the proportion determined by the formula
A/B
where
- A
- is the amount determined by the formula
C + D − $200,000
where
- C
- is the total of all amounts each of which is the fair market value at the relevant time of each specified security under the agreement that has that same vesting year, and
- D
- is the lesser of
(a) $200,000, and
(b) the total of all amounts each of which is an amount determined for C in respect of specified securities that have that same vesting year under agreements (other than the agreement) entered into at or before the relevant time with the particular qualifying person referred to in subsection (1.3) (or another qualifying person that does not deal at arm’s length with the particular qualifying person), other than
(i) old securities (within the meaning of subsection 7(1.4)),
(ii) securities where the right to acquire those securities is an old right (within the meaning of subsection (1.7)), and
(iii) securities in respect of which the right to acquire those securities has expired, or has been cancelled, before the relevant time; and
- B
- is the amount determined for C.
(3) Subsection (1) applies to taxation years of individuals who die on or after Announcement Date.
(4) Subsection (2) applies in respect of agreements to sell or issue securities entered into after June 2021. However, subsection (2) does not apply in respect of rights under an agreement to which subsection 7(1.4) of the Act applies that are “new options” (within the meaning of that subsection) in respect of which an “exchanged option” (within the meaning of that subsection and on the assumption that paragraph 7(1.4)(e) of the Act applies for those purposes) was issued before July 2021.
15 The portion of paragraph (d) of the definition action admissible de petite entreprise in subsection 110.6(1) of the French version of the Act before subparagraph (i) is replaced by the following:
d) dans le cas où, pour une période donnée comprise dans la période de 24 mois se terminant au moment donné, la totalité, ou presque, de la juste valeur marchande de l’actif d’une société donnée qui est la société ou une autre société rattachée à celle-ci n’est attribuable ni à des éléments visés au sous-alinéa c)(i), ni à des actions ou dettes de sociétés visées à la division c)(ii)(B), ni à une combinaison de tels éléments, actions ou dettes, le passage « plus de 50 % », à cette division, est remplacé, pour cette période donnée, par le passage « la totalité, ou presque, » quant à chacune des autres sociétés rattachées à la société donnée; pour l’application du présent alinéa, une société n’est rattachée à une autre que si, à la fois :
16 (1) The portion of subparagraph 112(3.2)(a)(iii) of the Act before clause (A) is replaced by the following:
(iii) if the trust is an individual’s graduated rate estate, the share was acquired as a consequence of the individual’s death and the disposition occurs during the trust’s first three taxation years, 1/3 of the lesser of
(2) Subsection (1) applies to taxation years of graduated rate estates of individuals who die on or after Announcement Date.
17 Subsection 115(2.3) of the Act is repealed.
18 Subsection 117.1(1) of the French version of the Act is replaced by the following:
Marginal note:Ajustement annuel
117.1 (1) Chaque somme déterminée relativement à l’impôt à payer en vertu de la présente partie ou de la partie I.2 pour une année d’imposition doit être rajustée pour que la somme pour l’année en vertu de la disposition pertinente soit égale au total des montants suivants :
a) le montant qui, sans le paragraphe (3), serait la somme pour l’année précédente en vertu de la disposition pertinente;
b) le produit des montants suivants :
(i) la montant visé à l’alinéa a),
(ii) le montant rajusté de manière prescrite et arrêté à la troisième décimale, les résultats ayant au moins cinq en quatrième décimale étant arrondis à la troisième décimale supérieure, obtenu par la formule suivante :
(A/B) - 1
où :
- A
- représente l’indice des prix à la consommation pour la période de 12 mois se terminant le 30 septembre précédant l’année,
- B
- l’indice des prix à la consommation pour la période de douze mois qui précède la période visée à l’élément A.
19 (1) Subparagraph (a)(iii.1) of the definition revenu de pension in subsection 118(7) of the French version of the Act is replaced by the following:
(iii.1) à titre de paiement (sauf le versement visé au sous-alinéa (i)) prévu par la disposition à cotisations déterminées, au sens du paragraphe 147.1(1), d’un régime de pension agréé ou dans le cadre d’un régime de pension déterminé,
(2) Subsection (1) applies to the 2019 and subsequent taxation years.
20 (1) The portion of paragraph (a) of the definition excluded amount in subsection 120.4(1) of the Act before subparagraph (i) is replaced by the following:
(a) if the individual has not attained the age of 24 years before the year, is from a property (or from property substituted for that property) that was acquired by, or for the benefit of, the individual as a consequence of the death of a person who is
(2) Paragraph (b) of the definition excluded amount in subsection 120.4(1) of the Act is replaced by the following:
(b) is from a property acquired by the individual under a transfer described in subsection 160(4), or from property substituted for that property;
(3) Subsections (1) and (2) come into force on Announcement Date.
21 (1) Subsubclause (A)(III)2 of the description of B in subparagraph 122.91(2)(a)(i) of the Act is replaced by the following:
2 the total of all amounts each of which is an amount payable to the individual under subsection 22(1), 22.1(1), 23(1), 152.04(1), 152.041(1) or 152.05(1) of the Employment Insurance Act in the preceding taxation year, and
(2) Subsection (1) is deemed to come into force on the same day as Division 12 of Part 5 of the Fall Economic Statement Implementation Act, 2023.
22 Section 126 of the Act is amended by adding the following after subsection (2.21):
Marginal note:Former resident — reassessment period
(2.211) Despite subsections 152(4) to (5), any assessment, reassessment or additional assessment of the tax payable by the individual in respect of the emigration year (within the meaning of subsection (2.21)) may be made as is necessary to take into account the deduction under subsection (2.21).
23 (1) Section 127.42 of the Act is amended by adding the following after subsection (9):
Marginal note:Deemed rebate in respect of fuel charges
(10) An amount for a designated province included in the total of all amounts deemed by this section to have been paid on account of tax payable for a taxation year is deemed to have been paid during the taxation year as a rebate in respect of charges levied under Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the designated province.
(2) Subsection (1) applies to the 2021 and subsequent taxation years.
24 (1) Paragraph 127.52(1)(d.1) of the Act is replaced by the following:
(d.1) in respect of a disposition to which paragraph 38(a.1) applies (other than a disposition of a flow-through share class of property, as defined in section 54), the portion of that paragraph before subparagraph (i) were read as “a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to 3/10 of the taxpayer’s capital gain for the year from the disposition of the property if”;
(d.2) in respect of a disposition of a flow-through share class of property (as defined in section 54) to which paragraph 38(a.1) applies, the portion of that paragraph before subparagraph (i) were read as “a taxpayer’s taxable capital gain for a taxation year from the disposition of a flow-through share class of property is equal to 3/10 of the amount, if any, by which the taxpayer’s capital gain for the year from the disposition of the flow-through share class of property, exceeds the amount deemed to be a capital gain of the taxpayer from the disposition of another capital property because of the application of subsection 40(12) in respect of the disposition of the flow-through share class of property”;
(2) Subparagraph 127.52(1)(j)(ii) of the Act is replaced by the following:
(ii) paragraphs 20(1)(c) to (f) and (bb) in respect of an amount borrowed or paid to earn income from property for the year, other than an amount described under any of paragraphs (b), (c), (c.2), (c.3) and (e.1),
(3) Paragraphs 127.52(1)(e) and (e.1) of the Act are repealed.
(4) Subsections (1) to (3) are deemed to apply to taxation years that begin after 2023.
25 Section 128.1 of the Act is amended by adding the following after subsection (8):
Marginal note:Post-emigration loss — reassessment period
(8.1) Despite subsections 152(4) to (5), any assessment, reassessment or additional assessment of the tax payable by the individual in respect of the year that includes the particular time referred to in subsection (8) may be made as is necessary to take into account the amount deducted from the proceeds of disposition of the property under subsection (8).
26 (1) The portion of subsection 146(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Acceptance of plan for registration
(2) The Minister shall not accept for registration for the purposes of this Act any retirement savings plan unless an application is made in the prescribed manner and, in the Minister’s opinion, it complies with the following conditions:
(2) Paragraph 146(16)(b) of the Act is replaced by the following:
(b) to a registered pension plan, registered retirement savings plan or registered retirement income fund under which the spouse or common-law partner or former spouse or common-law partner of the transferor is the member or annuitant, where the transferor’s spouse or common-law partner or former spouse or common-law partner is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the transferor and the transferor’s spouse or common-law partner or former spouse or common-law partner in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership,
27 (1) The portion of subsection 146.3(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Acceptance of fund for registration
(2) The Minister shall not accept for registration for the purposes of this Act any retirement income fund of an individual unless an application is made in the prescribed manner and, in the Minister’s opinion, the following conditions are complied with:
(2) Paragraph 146.3(14)(b) 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 registered pension plan for the benefit of the individual.
28 (1) Subparagraph (c)(ii) of the definition advanced life deferred annuity in subsection 146.5(1) of the Act is replaced by the following:
(ii) are payable for the life of the annuitant or for the lives, jointly, of the annuitant and spouse or common-law partner or former spouse or common-law partner of the annuitant;
(2) Subparagraph (d)(ii) of the definition advanced life deferred annuity in subsection 146.5(1) of the Act is amended by striking out the “or” after subclause (A)(II) and adding the following after clause (B):
(C) are reduced as a result of an amount required to be paid to an individual by reason of a provision of the law of Canada or a province applicable in respect of the division of property between the annuitant and the individual, on or after the breakdown of their marriage or common-law partnership, or
(D) are increased on an actuarially equivalent basis in lieu of payments that would have otherwise been payable to the current or former spouse or common-law partner, if the spouse or common-law partner is no longer entitled to an amount under the contract;
(3) Subparagraph (f)(ii) of the definition advanced life deferred annuity in subsection 146.5(1) of the Act is replaced by the following:
(ii) not exceed the amount, if any, by which the total amount transferred to acquire the annuity plus interest on that amount computed at a rate not exceeding the rate specified under the Pension Benefits Standards Act, 1985 or a similar law of a province exceeds the total amount of annuity payments made under the contract;
(4) The definition advanced life deferred annuity in subsection 146.5(1) of the Act is amended by adding the following after paragraph (g):
(g.1) it provides that an individual who is the spouse or common-law partner or former spouse or common-law partner of the annuitant is entitled to a payment under the contract that
(i) is required by reason of a provision of the law of Canada or a province applicable in respect of the division of property between the annuitant and the individual, on or after the breakdown of their marriage or common-law partnership, in settlement of rights arising out of their marriage or common-law partnership, and
(ii) is paid to the individual
(5) Paragraph (i) of the definition advanced life deferred annuity in subsection 146.5(1) of the Act is replaced by the following:
(i) no right under the contract is capable of being assigned, charged, anticipated, given as security or surrendered, and for this purpose, assignment does not include
(i) a payment described in paragraph (g.1), or
(ii) a payment, made under a decree, order or judgment of a competent tribunal or written separation agreement in settlement of rights on the breakdown of the annuitant’s marriage or common-law partnership, of an amount to an individual for the benefit of the annuitant’s spouse or common-law partner, or former spouse or common-law partner, or for the benefit of the children of the annuitant or the current or former spouse or common-law partner; and
(6) Section 146.5 of the Act is amended by adding the following after subsection (4):
Marginal note:Taxable amount — marriage breakdown
(4.1) The amount of a payment described in clause (g.1)(ii)(A) or (B) of the definition advanced life deferred annuity in subsection (1) that is paid to an individual shall be included in the income of the individual for the year of the payment.
(7) The portion of subsection 146.5(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Treatment of amount transferred
(5) If an amount is paid in circumstances described in clause (g)(ii)(B) or (g.1)(ii)(C) of the definition advanced life deferred annuity in subsection (1),
(8) Subsections (1) to (7) are deemed to have come into force on January 1, 2023.
29 (1) The description of C in paragraph (a) of the definition annual FHSA limit in subsection 146.6(1) of the Act is replaced by the following:
- C
- is the total of all designated amounts described in paragraph (b) of the definition designated amount in subsection 207.01(1) for the year (other than amounts designated after the taxpayer’s first qualifying withdrawal),
(2) The portion of subsection 146.6(15) of the Act before paragraph (c) is replaced by the following:
Marginal note:Deemed transfer or distribution
(15) If an amount is received at any time from the FHSA of a deceased holder by the holder’s legal representative and a survivor of the holder is entitled to all or a portion of the amount (in this subsection referred to as the “survivor’s amount”) under a decree, order or judgment of a competent tribunal or under a written agreement (provided that the entitlement relates to the survivor’s rights or interests in respect of property as a result of marriage or common-law partnership), or as a person beneficially interested under the deceased’s estate, the following rules apply:
(a) if a payment is made from the estate to a FHSA, RRSP or RRIF of the survivor, the payment is deemed to be a transfer from the FHSA to the extent that it does not exceed the survivor’s amount and it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister;
(b) if a payment is made from the estate to the survivor, the payment is deemed for the purposes of subsection (14) to have been received by the survivor as a beneficiary to the extent that it does not exceed the survivor’s amount and it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister; and
(3) Subsections (1) and (2) are deemed to have come into force on April 1, 2023.
30 (1) The definition deferred profit sharing plan in subsection 147(1) of the Act is replaced by the following:
- deferred profit sharing plan
deferred profit sharing plan means a profit sharing plan accepted by the Minister for registration for the purposes of this Act, on application therefor in prescribed manner by a trustee under the plan or an employer of employees who are beneficiaries under the plan, as complying with the requirements of this section; (régime de participation différée aux bénéfices)
(2) Subsection (1) is deemed to have come into force on Announcement Date.
31 The portion of subsection 147.1(12) of the Act after paragraph (b) is replaced by the following:
give notice (in this subsection and subsection 147.1(13) referred to as a “notice of revocation”) by registered mail to the plan administrator that the registration of the plan is revoked as of the date specified in the notice of revocation, which date may not be earlier than the date specified in the notice of intent or, if there is no notice of intent, the administrator’s application.
32 (1) Section 147.4 of the Act is amended by adding the following after subsection (3):
Marginal note:Application of subsection (5)
(4) Subsection (5) applies in respect of an annuity contract, of an individual, described in subsection (1) if
(a) a spouse or common-law partner or former spouse or common-law partner is entitled to an interest in the annuity under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership with the individual;
(b) the individual acquired the interest in the annuity as a consequence of proceedings under the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act and subsequently receives a commuted amount in respect of the annuity before payments have commenced; or
(c) the Pension Benefits Standards Act, 1985 or a similar law of a province permits the individual to commute or surrender all or part of the annuity.
Marginal note:Commutation of annuity
(5) If this subsection applies in respect of an annuity contract, of an individual, described in subsection (1), the commuted amount may be paid
(a) if the interest in the annuity was purchased as a consequence of a transfer of property from a money purchase provision (as defined in subsection 147.1(1)) of a registered pension plan, as a direct transfer to a plan or fund described in subsection 147.3(1) or (5); or
(b) if the interest in the annuity was purchased as a consequence of a transfer of property from a defined benefit provision (as defined in subsection 147.1(1)) of a registered pension plan, as a direct transfer
(2) Subsection (1) is deemed to have come into force on January 1, 2018.
33 Paragraph 149.1(1.1)(d) of the Act is replaced by the following:
(d) expenditures on administration, management and fundraising of the charity.
34 (1) Paragraph 150(1.1)(a) of the Act is replaced by the following:
(a) the taxpayer was a registered charity throughout the year; or
(2) Paragraphs 150(1.2)(b) and (c) of the Act are replaced by the following:
(b) holds assets with a total fair market value that does not exceed $50,000 throughout the year;
(b.1) meets the following conditions:
(i) each trustee is an individual,
(ii) each beneficiary is an individual and is related to each trustee, and
(iii) the total fair market value of the property of the trust does not exceed $250,000 throughout the year and the only assets held by the trust throughout the year are one or more of
(A) money,
(B) a guaranteed investment certificate issued by a Canadian bank or trust company incorporated under the laws of Canada or of a province,
(C) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3),
(D) debt obligations issued by
(I) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a designated stock exchange in Canada,
(II) a corporation the shares of which are listed on a designated stock exchange outside Canada, or
(III) an authorized foreign bank that are payable at a branch in Canada of the bank,
(E) a share, debt obligation or right listed on a designated stock exchange,
(F) a share of the capital stock of a mutual fund corporation,
(G) a unit of a mutual fund trust,
(H) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)),
(I) an interest as a beneficiary under a trust, all the units of which are listed on a designated stock exchange,
(J) personal-use property of the trust, or
(K) a right to receive income on property described in clauses (A) to (J); and
(c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of an activity that is regulated under those rules or laws, provided
(3) Section 150(1.2) of the Act is amended by striking out “or” at the end of paragraph (o), by adding “or” at the end of paragraph (p) and by adding the following after paragraph (p):
(q) is established for the purpose of complying with a statute of Canada or a province that requires the person or persons acting as trustee of the trust to hold property in trust for a specified purpose.
(4) Subsection 150(1.3) of the Act is repealed.
(5) Section 150 of the Act is amended by adding the following after subsection (1.2):
Marginal note:Deemed trust
(1.3) For the purpose of this section and section 204.2 of the Income Tax Regulations,
(a) an express trust is deemed to include any arrangement under which
(i) one or more persons (in this subsection and subsection (1.31) referred to as a “legal owner”) have legal ownership of property that is held for the use of, or benefit of, one or more persons or partnerships, and
(ii) the legal owner can reasonably be considered to act as agent for the persons or partnerships who have the use of, or benefit of, the property;
(b) each person that is a legal owner of an arrangement that is described under paragraph (a) is deemed to be a trustee of the trust; and
(c) each person or partnership that has the use or benefit of property under an arrangement that is described under paragraph (a) is deemed to be a beneficiary of the trust.
Marginal note:Deemed trust — exceptions
(1.31) Subsection (1.3) does not apply to an arrangement for a taxation year if
(a) each person or partnership that is deemed to be a beneficiary under paragraph (1.3)(c) at any time in the year is also a legal owner of the property referred to in that paragraph at that time and there are no legal owners that are not deemed to be beneficiaries;
(b) the legal owners are individuals that are related persons and the property is real property that would be the principal residence of one or more of the legal owners for the year if those legal owners had designated the property for the year under the definition principal residence in section 54;
(c) the legal owner is an individual and the property is real property that
(d) under the arrangement
(i) the property is held throughout the year solely for the use of, or benefit of, a partnership,
(ii) each legal owner is a partner (other than a limited partner) of the partnership, and
(iii) a member of the partnership is, or but for subsection 220(2.1) would be, required under section 229 of the Income Tax Regulations to make an information return for a fiscal period of the partnership that includes December 31 of that year;
(e) the legal owner holds the property pursuant to an order of a court;
(f) the property under the arrangement is Canadian resource property (as defined in subsection 66(15)) that is held solely for the use of, or benefit of, one or more persons or partnerships each of which is
(i) a corporation, the shares of which are listed on a designated stock exchange,
(ii) a corporation that is controlled by one or more corporations described in subparagraph (i),
(iii) a partnership if
(iv) a partnership if
(A) a majority-interest partner of the partnership is a person or partnership described in subparagraph (i) to (iii); or
(B) a majority-interest group of partners (as defined in subsection 251.1(3)) of the partnership consists of two or more persons or partnerships described in subparagraph (i) to (iii); or
(g) under the arrangement
(6) Subsections (2), (3) and (4) apply to taxation years that end after December 30, 2024.
(7) Subsection (5) applies to taxation years that end after December 30, 2025.
35 (1) Paragraph 152(1)(b) of the Act is replaced by the following:
(b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.42(2) or (3), 127.421(2) or (3), 127.44(2), 127.45(2), 127.48(2), 127.49(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year.
(2) Paragraph 152(1.2)(d) of the Act is replaced by the following:
(d) the Minister determines the amount deemed by any of subsections 122.5(3) to (3.003), 122.72(1), 122.8(4) or 127.421(2) or (3) to have been paid by a person for a taxation year to be nil, subsection (2) does not apply to the determination unless the individual requests a notice of determination from the Minister.
(3) Paragraph 152(4.2)(b) of the Act is replaced by the following:
(b) redetermine the amount, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 122.91(1), 122.92(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the year.
(4) Paragraphs 152(6)(f.1) and (f.2) of the Act are replaced by the following:
(f.1) a deduction under subsection 126(2) in respect of an unused foreign tax credit (as defined in subsection 126(7)), or under subsection 126(2.22) in respect of foreign taxes paid, for a subsequent taxation year,
(5) Subsection (1) is deemed to have come into force on June 20, 2024.
(6) Subsection (3) is deemed to have come into force on January 1, 2023.
36 (1) Paragraph 153(1)(b) of the Act is replaced by the following:
(2) Paragraph 153(1)(g) of the Act is replaced by the following:
(g) fees, commissions or other amounts for services, other than amounts described in subsection 212(5.1),
37 (1) Paragraph 160.1(1)(b) of the Act is replaced by the following:
(b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion of the excess that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61, 122.72, 122.8 or 127.421) from the day it became payable to the date of payment.
(2) Subsection (1) is deemed to have come into force on June 20, 2024.
38 (1) The portion of subsection 160.2(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Rules applicable
(4) If a taxpayer and an annuitant have, by virtue of subsection (1) or (2) become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant under this Act, the following rules apply:
(2) Paragraph 160.2(4)(b) of the Act is replaced by the following:
(b) a payment by the annuitant on account of the annuitant’s liability discharges the taxpayer’s liability only to the extent that the payment operates to reduce the annuitant’s liability to an amount less than the amount in respect of which the taxpayer was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable.
(3) Subsections (1) and (2) are deemed to have come into force on April 1, 2023.
39 (1) Subsection 163(2) of the Act is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):
(j) the amount if any by which
(i) the amount that would be deemed by subsection 122.92(3) to be paid for the year by the person if that amount were calculated by reference to the information provided in the return or form filed for the year under that subsection
exceeds
(ii) the amount that is deemed by subsection 122.92(3) to be paid for the year by the person.
(2) Subparagraph 163(5)(a)(ii) of the Act is replaced by the following:
(ii) fails to file a return described in subparagraph (i) as and when required by this Act; or
(3) Subsection (1) applies in respect of returns of income filed on or after announcement date.
40 (1) Subsections 164(6) and (6.1) of the Act are replaced by the following:
Marginal note:Disposition by legal representative of deceased
(6) If in the course of administering the graduated rate estate of a taxpayer, the taxpayer’s legal representative has, in a taxation year (in this subsection referred to as the “particular year”) that is within the first three taxation years of the estate,
(a) disposed of capital property of the estate so that the total of all amounts each of which is a capital loss from the disposition of a property in the particular year exceeds the total of all amounts each of which is a capital gain from the disposition of a property in the particular year, or
(b) disposed of all of the depreciable property of a prescribed class of the estate so that the undepreciated capital cost to the estate of property of that class at the end of the particular year is, by virtue of subsection 20(16) or any regulation made under paragraph 20(1)(a), deductible in computing the income of the estate for the particular year,
despite any other provision of this Act, the following rules apply:
(c) such parts of one or more capital losses of the estate from the disposition of properties in the particular year (the total of which is not to exceed the excess referred to in paragraph (a)) as the legal representative so elects, in prescribed form and manner on or before the filing-due date for the particular taxation year of the estate, are deemed (except for the purpose of subsection 112(3) and this paragraph) to be capital losses of the deceased taxpayer from the disposition of the properties by the taxpayer in the taxpayer’s last taxation year and not to be capital losses of the estate from the disposition of those properties,
(d) such part of the amount of any deduction described in paragraph (b) (not exceeding the amount that, but for this subsection, would be the total of the non-capital loss and the farm loss of the estate for the particular year) as the legal representative so elects, in prescribed form and manner on or before the filing-due date for the particular year of the estate, is deductible in computing the income of the taxpayer for the taxpayer’s last taxation year and is not deductible in computing any loss of the estate,
(e) the legal representative shall, at or before the time prescribed for filing the election referred to in paragraphs (c) and (d), file a prescribed form amending the return of income of the deceased taxpayer for the taxpayer’s last taxation year to give effect to the rules in those paragraphs, and
(f) in computing the taxable income of the deceased taxpayer for a taxation year preceding the taxpayer’s last taxation year, no amount may be deducted in respect of an amount referred to in paragraph (c) or (d).
Marginal note:Realization of deceased employees’ options
(6.1) Despite any other provision of this Act, if a right to acquire securities (as defined in subsection 7(7)) under an agreement in respect of which a benefit was deemed by paragraph 7(1)(e) to have been received by a taxpayer (in this subsection referred to as the “right”) is exercised or disposed of by the taxpayer’s legal representative in a taxation year that is within the first three taxation years of the graduated rate estate of the taxpayer and the representative so elects in prescribed form and manner on or before the filing-due date for the taxation year of the estate,
(a) the amount, if any, by which
(i) the amount of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in respect of the right
exceeds the total of
(ii) the amount, if any, by which the value of the right immediately before the time it was exercised or disposed of exceeds the amount, if any, paid by the taxpayer to acquire the right, and
(iii) where in computing the taxpayer’s taxable income for the taxpayer’s last taxation year an amount was deducted under paragraph 110(1)(d) in respect of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in that year by reason of paragraph 7(1)(e) in respect of that right, the total of
(A) 1/3 of the amount, if any, by which the amount determined under subparagraph (i) exceeds the amount determined under subparagraph (ii), and
(B) the lesser of
(I) 1/6 of the amount, if any, by which the amount determined under subparagraph (i) exceeds the amount determined under subparagraph (ii), and
(II) the amount that was deducted under paragraph 110(1)(d.4) in respect of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in that year by reason of paragraph 7(1)(e) in respect of that right,
shall be deemed to be a loss of the taxpayer from employment for the taxpayer’s last taxation year;
(b) there shall be deducted in computing the adjusted cost base to the estate of the right at any time the amount of the loss that would be determined under paragraph (a) if that paragraph were read without reference to subparagraph (a)(iii); and
(c) the legal representative shall, at or before the time prescribed for filing the election under this subsection, file a prescribed form amending the return of income of the taxpayer for the taxpayer’s last taxation year to give effect to paragraph (a).
(2) Subsection (1) applies to taxation years of
41 Subsection 169(3) of the Act is replaced by the following:
Marginal note:Disposition of appeal on consent
(3) Notwithstanding section 152, the Minister may at any time, with the consent in writing of a particular taxpayer, reassess tax, interest, penalties or other amounts payable under this Act by the particular taxpayer for the purpose of disposing of an appeal
42 (1) Subparagraph (a)(ii) of the definition qualifying issuance in subsection 183.3(1) of the Act is replaced by the following:
(ii) a bond, debenture, note or other security (other than equity) of the covered entity that was issued solely for cash consideration, or that was issued in an exchange described in paragraph (c), the terms of which confer on the holder the right to make the exchange, or
(2) Paragraph (c) of the definition qualifying issuance in subsection 183.3(1) of the Act is replaced by the following:
(c) to a person or partnership, with which the covered entity deals at arm’s length and is not affiliated, in exchange for property used in an active business carried on by the covered entity or by a specified affiliate of the covered entity. (émission admissible)
(3) Subparagraph (a)(ii) of the definition reorganization transaction in subsection 183.3(1) of the Act is replaced by the following:
(ii) another entity that is related to the covered entity immediately before the exchange and is a covered entity for its taxation year that includes the exchange, or
(4) Paragraph (c) of the definition reorganization transaction in subsection 183.3(1) of the Act is replaced by the following:
(c) on a winding-up of the covered entity during which all or substantially all of the property owned by the covered entity is distributed to the equity holders of the covered entity or to which subsection 88(1) applies;
(5) The definition reorganization transaction in subsection 183.3(1) of the Act is amended by striking out “or” at the end of paragraph (g) and by adding the following after paragraph (g):
(g.1) at the demand of a holder of the equity, in accordance with the conditions of the issued units of the trust, for an amount that does not exceed the portion of the net asset value (as defined in subsection 132(4)) of the trust attributable to that equity at the time of the redemption, acquisition or cancellation, if the covered entity is a trust that has one or more classes of units in continuous distribution; or
(6) The portion of paragraph (a) of the description of B in subsection 183.3(2) of the Act before the formula is replaced by the following
(a) if equity of the covered entity (other than substantive debt) is redeemed, acquired or cancelled in the taxation year by the covered entity, pursuant to a reorganization transaction described in paragraph (a) or (b) of that definition and any portion of the consideration received by a holder for the equity is not equity consideration described in paragraph (a) or (b) of the definition reorganization transaction, the amount determined by the formula
(7) The portion of subsection 183.3(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Similar transactions
(5) For the purposes of subsection (2), if a specified affiliate of a covered entity acquires or borrows equity of the covered entity, the equity is deemed to be acquired by the covered entity unless the specified affiliate is
(8) Subsections (1) to (7) are deemed to have come into force on January 1, 2024.
43 (1) Paragraph 183.4(1)(c) of the Act is replaced by the following:
(c) if the entity is a partnership, every member of the partnership shall — on or before the day on or before which a return is, or would be if the entity were a SIFT partnership, required to be filed for the year under section 229 of the Income Tax Regulations — file with the Minister a return for the year under this Part in prescribed form.
(2) Section 183.4 of the Act is amended by adding the following after subsection (1):
Marginal note:Authority to file return for partnership
(1.1) For the purposes of paragraph (1)(c), if, in respect of a taxation year of a partnership, a particular member of the partnership has authority to act for the partnership,
(a) if the particular member has filed a return as required by this Part for the year, each other person who was a member of the partnership during the year is deemed to have filed the return; and
(b) a return that has been filed by any other member of the partnership for the year is not valid and is deemed not to have been filed by any member of the partnership.
(3) Subsections (1) and (2) are deemed to have come into force on January 1, 2024.
44 Paragraph (c) of the description of B in subsection 188(1.1) of the Act is replaced by the following:
(c) an amount in respect of a property transferred by the charity during the winding-up period and not later than the latter of one year from the end of the taxation year and the day, if any, referred to in subparagraph (1.2)(b)(iii), to a person that was at the time of the transfer an eligible donee in respect of the charity, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the consideration given by the person for the transfer.
45 (1) The description of C in the definition excess ALDA transfer in subsection 205(1) of the Act is replaced by the following:
- C
- is the amount, at the end of the calendar year preceding the calendar year in which the transfer is made, equal to
(a) if the transferor plan is a registered pension plan, a deferred profit sharing plan or a pooled registered pension plan, the total value of the property held for the benefit of the individual under the transferor plan other than property held in connection with
(i) a defined benefit provision (as defined in subsection 147.1(1)) of a registered pension plan,
(ii) a VPLA fund, as described in subsection 8506(13) of the Income Tax Regulations, or
(iii) benefits that would be described in paragraph 147.5(5)(a) if the reference in that paragraph to “8506(1)(e.1) or (e.2)” were read as a reference to “8506(1)(e.2)”, and
(b) if the transferor plan is a registered retirement income fund or a registered retirement savings plan, the total value of property under all registered retirement income funds and registered retirement savings plans under which the individual is an annuitant, other than contracts for annuities held in connection with the fund or plan that are not described in paragraph (b.1) of the definition qualified investment in subsection 146.3(1) or in paragraph (c.1) of the definition qualified investment in subsection 146(1),
(2) Subsection (1) is deemed to have come into force on Announcement Date.
46 (1) Subsection 207.04(3) of the Act is replaced by the following:
Marginal note:Both prohibited and non-qualified investment
(3) For the purposes of this section and subsections 146(10.1), 146.1(5), 146.2(6), 146.3(9), 146.4(5), 146.6(3) and 207.01(6), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.
(2) Subsection (1) is deemed to have come into force on April 1, 2023.
47 (1) The portion of the definition prohibited investment in subsection 207.5(1) of the Act before paragraph (a) is replaced by the following:
- prohibited investment
prohibited investment, for a retirement compensation arrangement at any time, means property (other than excluded property) that is at that time
(2) Subsection 207.5(1) of the Act is amended by adding the following in alphabetical order:
- excluded property
excluded property has the meaning assigned by subsection 207.01(1), if that definition were read without reference to the words “registered investment” and if
(a) the portion of paragraph (b) before subparagraph (i) were read as follows:
“(b) an equity of a mutual fund corporation, an investment corporation, a mutual fund trust or a trust described in paragraph 204.4(2)(a) if”;
(b) each reference to “controlling individual” were read as a reference to “specified beneficiary”; and
(c) each reference to “registered plan” were read as a reference to “retirement compensation arrangement”. (bien exclu)
(3) Subsections (1) and (2) are deemed to have come into force on Announcement Date.
48 (1) The portion of subsection 211.8(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Disposition of approved share
211.8 (1) If an approved share of the capital stock of a registered labour-sponsored venture capital corporation or a revoked corporation is, before the first discontinuation of its venture capital business, redeemed, acquired or cancelled by the corporation less than eight years after the day on which the share was issued (other than in circumstances described in subclause 204.81(1)(c)(v)(A)(I) or (III) or clause 204.81(1)(c)(v)(B) or (D) or other than if the share is a Class A share of the capital stock of the corporation that is exchanged for another Class A share of the capital stock of the corporation as part of a qualifying exchange) or any other share that was issued by any other prescribed labour-sponsored venture capital corporation is disposed of, the person who was the shareholder immediately before the redemption, acquisition, cancellation or disposition shall pay a tax under this Part equal to the lesser of
(2) Subparagraph (ii) of the description of A in paragraph 211.8(1)(a) of the Act is replaced by the following:
(ii) where the share was issued by any other prescribed labour-sponsored venture capital corporation and was at any time an approved share, the amount, if any, required to be remitted to the government of a province as a consequence of the redemption, acquisition, cancellation or disposition (otherwise than as a consequence of an increase in the corporation’s liability for a penalty under a law of the province), and
49 (1) Paragraph 212(1)(i) of the Act is replaced by the following:
Marginal note:Restrictive covenant amount
(i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year, except an amount deemed to be a payment of interest and referred to in subsection 214(15);
(2) Subsection 212(17.1) of the Act is repealed.
(3) Subsection (1) is deemed to have come into force on Announcement Date.
50 (1) The portion of paragraph 212.1(6)(b) of the Act before subparagraph (i) is replaced by the following:
(b) for the purposes of subsections (1) and (1.1) and paragraph (c), if at any time a conduit disposes of shares — other than a disposal of shares by a non-resident trust or by a trust resident in Canada that is, at that time, a graduated rate estate of an individual (if the trust acquired the shares on and as a consequence of the individual’s death and the individual was, immediately before their death, resident in Canada) — of the capital stock of a corporation resident in Canada to a purchaser, then
(2) Subsection (1) applies to dispositions that occur after February 26, 2018.
(3) A written application made by a person under subsection 227(6) of the Act in respect of an amount that has been paid to the Receiver General is deemed to be filed on time if
(a) the application is filed with the Minister of National Revenue within 180 days after the day on which this Act receives royal assent; and
(b) the person is not liable to pay the amount as a result of the enactment of the portion of paragraph 212.1(6)(b) of the Act before subparagraph (i) by subsection (1).
51 (1) Subsection 214(15) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(b) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to lend money, or to make money available, to a person resident in Canada, any amount paid or credited as consideration for so agreeing to lend money or to make money available is deemed to be a payment of interest; and
(c) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to the rescheduling or restructuring of a debt obligation of a person resident in Canada, and the rescheduling or restructuring, as the case may be, provides for the modification of the terms or conditions of the debt obligation or the conversion or substitution of the debt obligation to or with a share or another debt obligation, any amount paid or credited as consideration for so agreeing is deemed to be a payment of interest.
(2) Subsection (1) is deemed to have come into force on Announcement Date.
52 (1) Section 215 of the Act is amended by adding the following after subsection (1.1):
Marginal note:Exception — residential tenants
(1.2) Subsection (1) does not apply in respect of an amount paid or credited by an individual (other than a trust) to a non-resident person as rent for the use of a residential property (as defined in subsection 67.7(1)) in which an individual resides.
Marginal note:Payment — residential tenants
(1.3) If subsection (1.2) applies and subsection (3) does not apply, the non-resident person must forthwith remit to the Receiver General the income tax payable under this Part in respect of the amount and submit with the remittance a statement in prescribed form.
(2) Subsection (1) is deemed to have come into force on Announcement Date.
53 The portion of subsection 220(3.3) of the French version of the Act before paragraph (a) is replaced by the following:
Marginal note:Date présumée d’un choix modifié, annulé ou produit en retard
(3.3) Lorsque le ministre, en vertu du paragraphe (3.2), proroge le délai pour faire un choix ou permet qu’un choix soit modifié ou annulé, les présomptions suivantes s’appliquent :
54 (1) Paragraph 222(5)(c) of the Act is replaced by the following:
(c) the Minister assesses any person who is jointly and severally, or solidarily, liable with the taxpayer in respect of the tax debt.
(2) Subsection (1) applies in respect of assessments made on or after Announcement Date.
55 (1) Subparagraph 241(4)(d)(vii.1) of the Act is replaced by the following:
(vii.1) to an official solely for the purpose of the administration or enforcement of the Canada Education Savings Act or a designated provincial program as defined in subsection 146.1(1) or for the purposes of the evaluation or formulation of policy for that Act,
(2) Subparagraph 241(4)(d)(vii.5) of the Act is replaced by the following:
(vii.5) to an official solely for the purposes of the administration or enforcement of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1) or for the purposes of the evaluation or formulation of policy for that Act,
(3) Subparagraph 241(4)(l)(ii) of the English version of the Act is replaced by the following:
(ii) a by-law of a municipality in Canada or a law of an Aboriginal government;
(4) The portion of paragraph 241(4)(u) of the Act before subparagraph (i) is replaced by the following:
(u) provide to an official of the Department of Industry, solely for the purpose of verifying and validating the data required to be sent under section 21.21 of the Canada Business Corporations Act in respect of a corporation, other than a corporation any of the securities of which are listed on a designated stock exchange (in this paragraph referred to as the “particular corporation”), the following information:
(5) The definition aboriginal government in subsection 241(10) the Act is replaced by the following:
- Aboriginal government
Aboriginal government means an Aboriginal government as defined in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act; (gouvernement autochtone)
(6) Paragraph (c) of the definition government entity in subsection 241(10) of the English version of the Act is replaced by the following:
(c) an Aboriginal government,
56 (1) The definition prescribed in subsection 248(1) of the Act is amended by striking out “and” at the end of paragraph (a.1) and by adding the following after paragraph (a.1):
(a.2) in the case of the manner of applying for or amending the registration of a plan or arrangement described in Division G of Part I, authorized by the Minister, and
(2) Subparagraph (a)(i) of the definition réinstallation admissible in subsection 248(1) of the French version of the Act is replaced by the following:
(i) soit d’exploiter une entreprise ou d’occuper un emploi à un endroit (appelé « nouveau lieu de travail » à l’article 62 et dans la présente définition), qui, sauf si le contribuable est absent du Canada mais y réside, est situé au Canada,
(3) Subsection 248(36) of the Act is replaced by the following:
Marginal note:Non-arm’s length transaction
(36) If a taxpayer acquired a property, otherwise than by reason of the death of an individual, that is the subject of a gift to which subsection (35) applies because of subparagraph (35)(b)(i) or (ii) and the property was, at any time within the 3-year or 10-year period, respectively, that ends when the gift was made, acquired by a person or partnership with whom the taxpayer does not deal at arm’s length, for the purpose of applying subsection (35) to the taxpayer, the cost or in the case of capital property, the adjusted cost base, of the property – or, in the case of a life insurance policy in respect of which the taxpayer is a policyholder, the adjusted cost basis (as defined in subsection 148(9)) – to the taxpayer immediately before the gift is made is deemed to be equal to the lowest amount that is the cost or in the case of capital property, the adjusted cost base – or, in the case of a life insurance policy in respect of which the taxpayer is a policyholder, the adjusted cost basis (as defined in subsection 148(9)) – to the taxpayer or any of those persons or partnerships immediately before the property was disposed of by that person or partnership.
57 (1) Subsection 260(2) of the Act is replaced by the following:
Marginal note:Non-disposition
(2) Subject to subsections 260(3) and 260(4), for the purposes of this Act (other than Part II.2), any transfer or loan by a lender of a security under a securities lending arrangement shall be deemed not to be a disposition of the security and the security shall be deemed to continue to be property of the lender and, for the purposes of this subsection, a security shall be deemed to include an identical security that has been transferred or returned to the lender under the arrangement.
(2) Subsection (1) is deemed to have come into force on January 1, 2024.
Income Tax Regulations
58 (1) The portion of subsection 204.2(1) of the Income Tax Regulations before paragraph (b) is replaced by the following:
(1) Every trust, other than a trust described in any of paragraphs 150(1.2)(a) to (q) of the Act, that is required to file a return of income under subsection 150(1) of the Act, shall provide information that includes the name, address, date of birth (in the case of an individual other than a trust), jurisdiction of residence and TIN (as defined in subsection 270(1) of the Act) for each person or partnership who, in the year,
(a) is a trustee, beneficiary (subject to subsection (2)) or settlor of the trust; or
(2) Section 204.2 of the Regulations is amended by adding the following after subsection (2):
Definition of settlor
(3) For the purpose of subsection (1), a settlor of a trust at any time means any person or partnership that has directly or indirectly, in any manner whatever, transferred property to the trust at or before that time, other than a transfer made by the person or partnership to the trust for fair market value consideration or pursuant to a legal obligation to make the transfer.
(3) Subsections (1) and (2) apply to taxation years that end after December 30, 2024.
59 (1) The portion of section 600 of the Regulations before paragraph (a) is replaced by the following:
600 For the purposes of paragraph 220(3.2)(a) of the Act, the following are prescribed provisions:
(2) Paragraph 600(c) of the Regulations is replaced by the following:
(c) paragraphs 12(2.2)(b), 66.7(7)(c), (d) and (e) and (8)(c), (d) and (e), 80.01(4)(c), 84.1(2.31)(h) and (2.32)(i), 86.1(2)(f), and 128.1(4)(d), (6)(a) and (c), (7)(d) and (g) and (8)(c) of the Act;
(3) Subsection (2) is deemed to have come into force on January 1, 2024.
(2) Subsection (1) applies to taxation years of individuals who die on or after Announcement Date.
(2) Subsection (1) applies to taxation years of individuals who die on or after Announcement Date.
62 The portion of subsection 1101(1) of the French version of the Regulations before paragraph (c) is replaced by the following:
1101 (1) Lorsqu’une même catégorie de l’annexe II vise plus d’un bien d’un contribuable, et qu’à la fois :
63 (1) The formula in subsection 1400(3) of the Regulations is replaced by the following:
A + B + (0.95 × C) − (0.9 × D) + E + F + G − (H − (0.9 × I) − (0.05 × J))
(2) Subsection 1400(3) of the Regulations is amended by striking out “and” at the end of the description of H, by adding “and” at the end of the description of I and by adding the following after the description of I:
- J
- is the reinsurance contract held amount in respect of a group of reinsurance contracts that is included in the description of H and that is in respect of a liability for incurred claims in respect of a group of insurance contracts that is included in the description of C.
(3) Subsections (1) and (2) apply to taxation years that begin after 2022.
64 The portion of section 2301 of the Regulations before paragraph (a) is replaced by the following:
2301 Any designation by a taxpayer under the definition principal residence in section 54 of the Act shall be made in the return of income required by section 150 of the Act to be filed by him for any taxation year of the taxpayer in which
65 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 a)(i) était remplacé par « arrondie à deux décimales »;
66 (1) Section 5600 of the Regulations is amended by striking out “and” at the end of paragraph (l), by adding “and” at the end paragraph (m) and by adding the following after paragraph (m):
(n) the distribution by Novartis AG, on October 4, 2023 to its common shareholders, of common shares of Sandoz Group AG.
(2) Subsection (1) is deemed to have come into force on October 4, 2023.
67 (1) Subparagraph (iii) of the description of A in the definition exempt surplus in subsection 5907(1) of the Regulations is replaced by the following:
(iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed by subsection 5905(7) to have been received by the subject affiliate) to the extent that it
(A) was prescribed by paragraph 5900(1)(a) to have been paid out of the payer affiliate’s exempt surplus in respect of the corporation,
(B) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and
(C) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act,
(2) Subparagraph (iv) of the description of A in the definition hybrid surplus in subsection 5907(1) of the Regulations is replaced by the following:
(iv) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed by subsection 5905(7) to have been received by the subject affiliate) to the extent that it
(A) was prescribed by paragraph 5900(1)(a.1) to have been paid out of the payer affiliate’s hybrid surplus in respect of the corporation,
(B) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and
(C) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act, or
(3) Subparagraph (iii) of the description of A in the definition hybrid underlying tax in subsection 5907(1) of the Regulations is replaced by the following:
(iii) the total of all amounts each of which is an amount determined by the formula
C × D ÷ E
where
- C
- is the amount that was prescribed by paragraph 5900(1)(c.1) to have been the foreign tax applicable to the portion (referred to in this subparagraph as the “relevant portion”) of a dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, a dividend deemed by subsection 5905(7) to have been received by the subject affiliate) that was prescribed by paragraph 5900(1)(a.1) to have been paid out of the payer affiliate’s hybrid surplus in respect of the corporation,
- D
- is the amount included under subparagraph (iv) of the description of A in the definition hybrid surplus, in respect of the relevant portion of the dividend received, in computing the subject affiliate’s hybrid surplus, and
- E
- is the relevant portion of the dividend received, or
(4) Subparagraph (iii) of the description of A in the definition taxable surplus in subsection 5907(1) of the Regulations is replaced by the following:
(iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed by subsection 5905(7) to have been received by the subject affiliate) to the extent that it
(A) was prescribed by paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation,
(B) does not give rise to the application of subsection 12.7(3) of the Act in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and
(C) is excluded in computing the subject affiliate’s foreign accrual property income because of subparagraph (b)(i) or (ii) of the description of A, or because an amount is determined for H, in the definition foreign accrual property income in subsection 95(1) of the Act,
(5) Subparagraph (iv) of the description of A in the definition underlying foreign tax in subsection 5907(1) of the Regulations is replaced by the following:
(iv) the total of all amounts each of which is an amount determined by the formula
C × D ÷ E
where
- C
- is the amount that was prescribed by paragraph 5900(1)(d) to have been the foreign tax applicable to the portion (referred to in this subparagraph as the “relevant portion”) of a dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, a dividend deemed by subsection 5905(7) to have been received by the subject affiliate) that was prescribed by paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation,
- D
- is the amount included under subparagraph (iii) of the description of A in the definition taxable surplus, in respect of the relevant portion of the dividend received, in computing the subject affiliate’s taxable surplus, and
- E
- is the relevant portion of the dividend received, or
(6) Subsections (1) to (5) apply in respect of any dividend received on or after July 1, 2024.
68 Section 6400 of the Regulations and the heading “Child Tax Credits” are repealed.
69 The portion of section 6701 of the Regulations before paragraph (a) is replaced by the following:
6701 For the purposes of paragraph 40(2)(i), clause 53(2)(k)(i)(C), the definition public corporation in subsection 89(1), the definition specified investment business in subsection 125(7), the definition approved share in subsection 127.4(1), subsections 131(8) and (11), section 186.1, the definition financial intermediary corporation in subsection 191(1), the definition eligible investment in subsection 204.8(1), and subsections 204.81(8.3) and 211.8(1) of the Act and paragraph 6702(b), prescribed labour-sponsored venture capital corporation means, at any particular time,
70 Paragraph 6702(b) of the Regulations is replaced by the following:
(b) a tax credit provided in respect of, or for the acquisition of, a share of a prescribed labour-sponsored venture capital corporation; and
71 Subparagraph 6802(h)(i) of the Regulations is replaced by the following:
(i) to hold shares of Air Canada, pursuant to the June 2009 memorandum of understanding and the April 2022 letter of intent between Air Canada and certain trade unions who represent employees of Air Canada, if
(A) the shares are held by the trust for the benefit of the trade unions,
(B) amounts received or receivable by the trust in respect of the shares, whether as dividends, proceeds of disposition or otherwise, are not to be distributed unless
(C) all of the property of the trust is distributed no later than December 31, 2037, or
72 (1) Paragraph 8308(5.2)(c) of the Regulations is replaced by the following:
(c) the retroactive contribution replaces, in whole or in part, a contribution that would have been required to be made to the plan in the calendar year 2020 or 2021 but for an amendment made to the plan under section 8511 that reduced the contributions required to be made.
(2) Subsection (1) is deemed to have come into force on Announcement Date.
73 Subparagraph 8502(b)(iv) of the Regulations is replaced by the following:
(iv) is transferred to the plan in accordance with any of subsections 146(16), 146.3(14) and (14.1), 147(19), 147.3(1) to (8) and 147.5(21) of the Act,
74 (1) Subparagraph 8503(2)(e)(i) of the Regulations is replaced by the following:
(i) no other benefits (other than benefits permissible under paragraph (g), (j), (i), (l.1) or (n)) are payable as a consequence of the member’s death,
(2) Subparagraphs 8503(2)(i)(i) and (ii) of the Regulations are replaced by the following:
(i) no retirement benefits are payable as a consequence of the member’s death, other than survivor retirement benefits described in subparagraph (e)(iv) payable to an individual that does not receive an amount under this paragraph, and
(ii) the aggregate of all amounts, each of which is such a single amount (other than the portion thereof, if any, that can reasonably be considered to be interest, computed at a rate not exceeding a reasonable rate, in respect of the period from the day of death of the member to the day the single amount is paid), does not exceed the present value, immediately before the death of the member or at any other time allowed under the Pension Benefits Standards Act, 1985 or similar law of a province, of all benefits that have accrued under the provision with respect to the member to the day of the member’s death less the present value of any survivor retirement benefits described in subparagraph (e)(iv);
(3) Clause 8503(2)(l)(i)(B) of the Regulations is replaced by the following:
(B) the description of A in subparagraph (b)(ii) were read as follows:
- “A
- is 50% of the Year’s Additional Maximum Pensionable Earnings for the year in which the bridging benefits commence to be paid to the member,”
(4) The portion of subparagraph 8503(4)(a)(i) of the Regulations before clause (A) is replaced by the following:
(i) in the case of a plan that is subject to a designated provision of the law of Canada or a province, the aggregate amount of current service contributions to be made by a member in respect of a calendar year, no part of which is a period of disability or an eligible period of reduced pay or temporary absence of the member, does not exceed the lesser of
(5) Paragraph 8503(4)(a) of the Regulations is amended by adding the following after subparagraph (i):
(i.1) in the case of a plan that is not subject to a designated provision of the law of Canada or a province, the aggregate amount of current service contributions to be made by a member in respect of a calendar year, no part of which is a period of disability or an eligible period of reduced pay or temporary absence of the member, does not exceed the money purchase limit for the year,
(6) Subsection 8503(5) of the Regulations is replaced by the following:
(5) The Minister may waive the condition in subparagraph (4)(a)(i) where member contributions under a defined benefit provision of a pension plan are determined in a manner acceptable to the Minister and it is reasonable to expect that, on a long-term basis, the aggregate of the regular current service contributions made under the provision by all members will not exceed ½ of the amount that is required to fund the aggregate benefits in respect of which those contributions are made.
(7) Subsections (1) to (6) are deemed to have come into force on Announcement Date.
75 (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), (i) and (j),
(2) Subsection 8506(1) of the Regulations is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):
Capital guarantee
(j) the payment with respect to one or more beneficiaries of one or more single amounts after the death of the last annuitant, if
(i) the payments are the last payments to be made under the annuity contract, and
(ii) the aggregate amount to be paid at any time does not exceed the total of all amounts transferred to a licensed annuities provider to purchase the annuity less the total amount of all annuity payments made to the member from the annuity.
(3) Subsections (1) and (2) are deemed to have come into force on Announcement Date.
(2) Subsection (1) is deemed to have come into force on Announcement Date.
77 (1) Section 8513 of the Regulations is replaced by the following:
Designated laws
8513 For the purposes of paragraph 8302(3)(m), subparagraph 8502(c)(iii), subsection 8503(4) 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 Announcement Date.
78 (1) Section 9002 of the Regulations is amended by adding the following after subsection (3):
(4) For the purpose of subsection (3), if a partnership holds or owns shares of a corporation (or is deemed under this subsection to own or hold shares of a corporation) at a particular time that have a fair market value of at least 50% of all the issued shares of the corporation,
(a) the partnership is deemed not to exist at that time; and
(b) each member of the partnership is deemed to hold at that time that proportion of shares of any class of the capital stock of the corporation that are property of the partnership at that time that the fair market value at that time of the member’s interest in the partnership is of the fair market value at that time of the interests of all members in the partnership.
(5) For the purpose of paragraph (3)(b), a subsidiary wholly-owned corporation of a credit union is deemed to be a credit union.
(2) Subsection (1) applies to taxation years beginning after 2023.
- Date modified: