(B) construction of the project by or on behalf of the taxpayer begins before 1995, or
	(v) after 1994 where the property
	(A) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994,
	(B) was under construction by or on behalf of the taxpayer on February 22, 1994, or
	(C) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994,
	(2) Subparagraph (a)(iii) of the definition ``specified percentage'' in subsection 127(9) of the Act is amended by striking out the word ``and'' at the end of clause (A) and by replacing clause (B) with the following:
	(B) after 1988 and before 1995, 15%,
	(C) after 1994, 15% where the property
	(I) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994,
	(II) was under construction by or on behalf of the taxpayer on February 22, 1994, or
	(III) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994, and
	(D) after 1994, 10% where the property is not property to which clause (C) applies,
	(3) Subparagraph (a)(v) of the definition ``specified percentage'' in subsection 127(9) of the Act is amended by striking out the word ``and'' at the end of clause (A) and by replacing clause (B) with the following:
	(B) after 1988 and before 1995, 15%,
	(C) after 1994, 15% where the property
	(I) is acquired by the taxpayer under a written agreement of purchase and sale entered into by the taxpayer before February 22, 1994,
	(II) was under construction by or on behalf of the taxpayer on February 22, 1994, or
	(III) is machinery or equipment that will be a fixed and integral part of property under construction by or on behalf of the taxpayer on February 22, 1994, and
	(D) after 1994, 10% where the property is not property to which clause (C) applies,
	(4) Paragraph (e) of the definition ``specified percentage'' in subsection 127(9) of the Act is amended by striking out the word ``and'' at the end of subparagraph (iii) and by replacing subparagraph (iv) with the following:
	(iv) made by a taxpayer
	(A) after the taxpayer's 1984 taxation year and before 1995, or
	(B) after 1994 under a written agreement entered into by the taxpayer before February 22, 1994,
	(other than a qualified expenditure in respect of which subparagraph (ii) applies) in respect of scientific research and experimental development to be carried out in
	(C) the Province of Newfoundland, Prince Edward Island, Nova Scotia or New Brunswick or the Gaspé Peninsula, 30%, and
	(D) in any other area in Canada, 20%, and
	(v) made by a taxpayer after 1994, 20% where the amount is not an amount to which clause (iv)(B) applies,
	(5) Subsections 127(10.1) and (10.2) of the Act are replaced by the following:
Additions to investment tax credit	(10.1) For the purpose of paragraph (e) of the definition ``investment tax credit'' in subsection (9), where a corporation was throughout a particular taxation year a Canadian-controlled private corporation, there shall be added in computing the corporation's investment tax credit at the end of the particular year the amount determined by the formula
	(35/100 x A) - B
	where
	A is the lesser of
	(a) the total of all expenditures described in any of subparagraphs (e)(iv) and (v) of the definition ``specified percentage'' in subsection (9) made by the corporation in the particular year and that were designated by it in its return of income under this Part for the particular year, and
	(b) the corporation's expenditure limit for the particular year; and
	B is the total of all amounts determined under paragraph (a) of the definition ``investment tax credit'' in subsection (9) in respect of an expenditure referred to in paragraph (a) of the description of A.
Expenditure limit determined	(10.2) For the purpose of subsection (10.1), a corporation's expenditure limit for a particular taxation year is the amount determined by the formula
	($4,000,000 - 10A) x B/$200,000
	where
	A is the greater of
	(a) $200,000, and
	(b) the taxable income of the corporation for its preceding taxation year or, if it is associated with one or more other corporations in the particular year, the taxable income of the corporation for its last taxation year ending in the preceding calendar year plus the taxable incomes of all such other corporations for their last taxation years ending in the preceding calendar year, and
	B is the total of the business limits under section 125 for the particular year of the corporation and any such other corporations for the particular year,
	unless the corporation is associated in the particular year with one or more other Canadian-controlled private corporations, in which case, except as otherwise provided in this section, its expenditure limit for the particular year is nil.
	(6) Subsection 127(10.6) of the Act is amended by striking out the word ``and'' at the end of paragraph (a), by adding the word ``and'' at the end of paragraph (b) and by adding the following after paragraph (b):
	(c) for the purpose of subsection (10.2), where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, the taxable income and business limit of the corporation for the year shall be determined by multiplying those amounts by the ratio that 365 is of the number of days in that year.
	(7) Subsection 127(11.2) of the Act is replaced by the following:
Time of expenditure and acquisition	(11.2) In applying subsections (5), (7) and (8), paragraph (a) of the definition ``investment tax credit'' in subsection (9) and section 127.1,
	(a) property described in subparagraph (a)(i) of the definition ``investment tax credit'' in subsection (9) shall be deemed not to have been acquired,
	(b) property that is first term shared-use equipment the expenditure for which is a qualified expenditure included in subparagraph (a)(ii) of the definition ``investment tax credit'' in subsection (9) shall be deemed not to have been acquired, and
	(c) expenditures incurred to acquire property described in subparagraph 37(1)(b)(i) shall be deemed not to have been incurred,
	by the taxpayer before the property is considered to have become available for use by the taxpayer, determined without reference to paragraphs 13(27)(c) and (28)(d).
	(8) Subsections (1) to (4) apply to property acquired and expenditures incurred after 1994.
	(9) Subsections (5) and (6) apply to taxation years that begin after 1995.
	(10) Subsection (7) applies to property acquired and expenditures incurred after February 21, 1994.
	38. (1) The definition ``qualifying corporation'' in subsection 127.1(2) of the Act is replaced by the following:
``qualifying corporation'' « société admissible »	``qualifying corporation'' for a particular taxation year means a corporation that is, throughout the particular year, a Canadian-controlled private corporation the taxable income of which for its preceding taxation year or, if it is associated with one or more other corporations in the particular year, the taxable income of the corporation for its last taxation year ending in the preceding calendar year plus the taxable incomes of all such other corporations for their last taxation years ending in the preceding calendar year, does not exceed the total of the business limits (as determined under section 125) of the corporation and the other corporations for those preceding years, except that for a particular taxation year that begins before 1996 the total of the business limits shall be determined under section 125 as that section read in its application to taxation years ending before July 1994;
	(2) Subsection (1) applies to taxation years that end after June 1994.
	39. (1) The Act is amended by adding the following after section 127.4:
Part XII.4 tax credit	127.41 (1) In this section, the Part XII.4 tax credit of a taxpayer for a particular taxation year means the total of
	(a) all amounts each of which is an amount determined by the formula
	A x B/C
	where
	A is the tax payable under Part XII.4 by a mining reclamation trust for a taxation year (in this paragraph referred to as the ``trust's year'') that ends in the particular year,
	B is the amount, if any, by which the total of all amounts in respect of the trust that were included (otherwise than because of being a member of a partnership) because of the application of subsection 107.3(1) in computing the taxpayer's income for the particular year exceeds the total of all amounts in respect of the trust that were deducted because of the application of subsection 107.3(1) in computing such income, and
	C is the trust's income for the trust's year, computed without reference to subsections 104(4) to (31) and sections 105 to 107, and
	(b) in respect of each partnership of which the taxpayer was a member, the total of all amounts each of which is the amount that can reasonably be considered to be the taxpayer's share of the relevant credit in respect of the partnership and, for this purpose, the relevant credit in respect of a partnership is the amount that would, if a partnership were a person and its fiscal period were its taxation year, be the Part XII.4 tax credit of the partnership for its taxation year that ends in the particular year.
Reduction of Part I tax	(2) There may be deducted from a taxpayer's tax otherwise payable under this Part for a taxation year such amount as the taxpayer claims not exceeding the taxpayer's Part XII.4 tax credit for the year.
Deemed payment of Part I tax	(3) There shall be deemed to have been paid on account of tax payable under this Part by a taxpayer (other than a taxpayer exempt from such tax) for a taxation year, where the taxpayer is an individual, on the individual's balance-due day for the year and, where the taxpayer is a corporation, on the day referred to in paragraph 157(1)(b) on or before which the remainder of the taxes payable under this Part for the year by the taxpayer would be required to be paid if such a remainder were payable, such amount as the taxpayer claims not exceeding the amount, if any, by which
	(a) the taxpayer's Part XII.4 tax credit for the year
	exceeds
	(b) the amount deducted under subsection (2) in computing the taxpayer's tax payable under this Part for the year.
	(2) Subsection (1) applies to taxation years that end after February 22, 1994.
	40. (1) Subsection 130.1(4) of the Act is replaced by the following:
Election re capital gains dividend	(4) Where at any particular time during the period that begins 91 days after the beginning of a taxation year of a corporation that was, throughout the year, a mortgage investment corporation and ends 90 days after the end of the year, a dividend is paid by the corporation to shareholders of the corporation, if the corporation so elects in respect of the full amount of the dividend in prescribed manner and at or before the earlier of the particular time and the first day on which any part of the dividend was paid,
	(a) the dividend shall be deemed to be a capital gains dividend to the extent that it does not exceed the amount, if any, by which
	(i) 4/3 of the taxed capital gains of the corporation for the year
	exceeds
	(ii) the total of all dividends, and parts of dividends, paid by the corporation during the period and before the particular time that are deemed by this paragraph to be capital gains dividends; and
	(b) notwithstanding any other provision of this Act, any amount received by a taxpayer in a taxation year as, on account of, in lieu of payment of or in satisfaction of, the dividend shall not be included in computing the taxpayer's income for the year as income from a share of the capital stock of the corporation, but shall be deemed to be a capital gain of the taxpayer for the year from a disposition, in the year and after February 22, 1994, by the taxpayer of capital property.
	(2) The definitions ``non-qualifying real property'', ``non-qualifying taxed capital gains'' and ``qualifying taxed capital gains'' in subsection 130.1(9) of the Act are repealed.
	(3) Subsection 130.1(9) of the Act is amended by adding the following in alphabetical order:
``taxed capital gains'' « gains en capital imposés »	``taxed capital gains'' has the meaning assigned by paragraph 130(3)(b).
	(4) Subsection (1) applies to dividends paid after February 22, 1994.
	(5) Subsections (2) and (3) apply after February 22, 1994.
	41. (1) Subsection 131(1) of the Act is replaced by the following:
Election re capital gains dividend	131. (1) Where at any particular time a dividend became payable by a corporation, that was throughout the taxation year in which the dividend became payable a mutual fund corporation, to shareholders of any class of its capital stock, if the corporation so elects in respect of the full amount of the dividend in prescribed manner and at or before the earlier of the particular time and the first day on which any part of the dividend was paid,
	(a) the dividend shall be deemed to be a capital gains dividend payable out of the corporation's capital gains dividend account to the extent that it does not exceed the corporation's capital gains dividend account at the particular time; and
	(b) notwithstanding any other provision of this Act, any amount received by a taxpayer in a taxation year as, on account of, in lieu of payment of or in satisfaction of, the dividend shall not be included in computing the taxpayer's income for the year as income from a share of the capital stock of the corporation, but shall be deemed to be a capital gain of the taxpayer for the year from a disposition, in the year and after February 22, 1994, by the taxpayer of capital property.
	(2) The definitions ``non-qualifying real property'' and ``non-qualifying real property capital gains dividend account'' in subsection 131(6) of the Act are repealed.
	(3) The definition ``capital gains dividend account'' in subsection 131(6) of the Act is replaced by the following: