(2) Subsection (1) applies after December 2, 1992.

8. (1) Subparagraph 66.7(3)(a)(iii) of the Act is replaced by the following:

      (iii) deducted or required to be deducted under subsection 66.1(2) or (3) by the original owner or deducted by any predecessor owner of the particular property in computing income for any taxation year,

(2) The portion of subsection 66.7(10) of the Act after paragraph (b) and before paragraph (c) is replaced by the following:

for the purposes of the provisions of the Income Tax Application Rules and this Act (other than subsections 66(12.6), (12.601), (12.602), (12.62), (12.64) and (12.71)) relating to deductions with respect to drilling and exploration expenses, prospecting, exploration and development expenses, Canadian exploration and development expenses, foreign exploration and development expenses, Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses (in this subsection referred to as ``resource expenses'') incurred by the corporation before that time, the following rules apply:

(3) Paragraphs 66.7(12)(b.1) and (b.2) of the Act are replaced by the following:

    (b.1) for the purposes of paragraph (3)(a), the cumulative Canadian exploration expenses of the original owner determined immediately after the disposition that was deducted or required to be deducted under subsection 66.1(2) or (3) in computing the original owner's income for the year shall be deemed to be equal to the lesser of

      (i) the amount deducted under paragraph (b) in respect of the disposition, and

      (ii) the amount, if any, by which

        (A) the specified amount determined under paragraph (12.1)(a) in respect of the original owner for the year

      exceeds

        (B) the total of all amounts each of which is an amount determined under this paragraph in respect of any disposition made by the original owner before the disposition and in the year;

    (b.2) for greater certainty, any amount (other than the amount determined under paragraph (b.1)) that was deducted or required to be deducted under subsection 66.1(2) or (3) by the original owner for the year or a subsequent taxation year shall, for the purposes of paragraph (3)(a), be deemed not to be in respect of the cumulative Canadian exploration expense of the original owner determined immediately after the disposition;

(4) Subsections (1) to (3) apply to taxation years that end after December 2, 1992.

9. (1) Subsection 87(2) of the Act is amended by adding the following after paragraph (ll):

Idem

    (mm) for the purposes of section 126.1, the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation;

(2) The portion of subsection 87(4.4) of the Act after paragraph (d) and before paragraph (e) is replaced by the following:

for the purpose of subsection 66(12.66) and for the purposes of renouncing an amount under subsection 66(12.6), (12.601), (12.62) or (12.64) in respect of Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses that would, but for the renunciation, be incurred by the new corporation after the amalgamation,

(3) Subsection (1) applies to amalgamations occurring, and windings-up beginning, after 1991.

(4) Subsection (2) applies to amalgamations occurring after December 2, 1992.

10. (1) Paragraph 88(1)(e.3) of the Act is amended by adding the following after subparagraph (ii):

    and, for the purposes of the definitions ``first term shared-use-equipment'' and ``second term shared-use-equipment'' in subsection 127(9), the parent shall be deemed to be the same corporation as, and a continuation of, the subsidiary;

(2) Subsection (1) applies to taxation years that end after December 2, 1992.

11. (1) The portion of subsection 96(3) of the Act before paragraph (a) is replaced by the following:

Election by members

(3) Where a taxpayer who was a member of a partnership during a fiscal period has, for any purpose relevant to the computation of the taxpayer's income from the partnership for the fiscal period, made or executed an election under or in respect of the application of any of subsections 13(4), (15) and (16), 14(6), 20(9) and 21(1) to (4), section 22, subsection 29(1), section 34, clause 37(8)(a)(ii)(B) and subsections 44(1) and (6), 50(1) and 97(2) that, but for this subsection, would be a valid election,

(2) Subsection (1) applies to fiscal periods that end after December 2, 1992.

12. (1) Paragraph 104(23)(e) of the Act is replaced by the following:

    (e) in lieu of making the payments required by sections 155, 156 and 156.1, the trust shall pay to the Receiver General within 90 days after the end of each taxation year, the tax payable under this Part by it for the year.

(2) Subsection (1) applies to the 1994 and subsequent taxation years.

13. (1) Paragraph (d) of the definition ``investment expense'' in subsection 110.6(1) of the Act is replaced by the following:

      (d) 50% of the total of all amounts each of which is an amount deducted under subsection 66(4), 66.1(3), 66.2(2) or 66.4(2) in computing the individual's income for the year in respect of expenses incurred and renounced under subsection 66(12.6), (12.601), (12.62) or (12.64) by a corporation or incurred by a partnership of which the individual was a specified member in the fiscal period of the partnership in which the expense was incurred, and

(2) Subsection (1) applies to the 1992 and subsequent taxation years.

14. (1) The Act is amended by adding the following after section 126:

Definitions

126.1 (1) In this section,

``1992 cumulative premium base''
« base des cotisations cumulatives pour 1992 »

``1992 cumulative premium base'' of an employer on any particular day means the total of all qualifying employer premiums of the employer for the period beginning on January 1, 1992 and ending on the day that is 365 days earlier than the particular day that became payable on or before the last day of that period;

``1992 premium base''
« base des cotisations pour 1992 »

``1992 premium base'' of an employer means the total of all qualifying employer premiums for 1992 of the employer;

``1993 cumulative premium base''
« base des cotisations cumulatives pour 1993 »

``1993 cumulative premium base'' of an employer on any particular day means the total of all qualifying employer premiums of the employer for the period beginning on January 1, 1993 and ending on the particular day that became payable on or before the last day of that period;

``1993 premium base''
« base des cotisations pour 1993 »

``1993 premium base'' of an employer means the total of all qualifying employer premiums for 1993 of the employer;

``employer''
« employeur »

``employer'' at any time means any person or partnership (other than a person who at that time is exempt because of any of paragraphs 149(1)(a) to (d), (h.1), (o) to (o.2), (o.4) to (s) and (u) to (y) from tax under this Part on all or part of the person's taxable income) that has a qualifying employee in 1992 or 1993;

``qualifying employee''
« employé admissible »

``qualifying employee'' of an employer means,

      (a) where the employer is not exempt because of subsection 149(1) from tax under this Part on all or part of the employer's taxable income,

        (i) any employee of the employer, other than any employee whose remuneration is not deductible in computing income from a business or property, and

        (ii) any person in respect of whom the employer is deemed under any regulation under the Unemployment Insurance Act to be an employer for the purpose of determining an employer's UI premium, and

      (b) in any other case, any employee of the employer;

``qualifying employer premium''
« cotisation patronale admissible »

``qualifying employer premium'' for a period of an employer means that portion of the employer's UI premium that can reasonably be attributed to the remuneration paid in the period to qualifying employees of the employer;

``remittance date''
« date de versement »

``remittance date'' for 1993 of an employer means the day prescribed under the Unemployment Insurance Act on or before which the employer is required to remit a UI premium in respect of remuneration paid in 1993;

``UI premium''
« cotisation d'assurance-c hômage »

``UI premium'' of an employer means a premium under subsection 51(2) of the Unemployment Insurance Act payable,

      (a) where the employer is a partnership, by the members of the partnership in respect of remuneration paid by the partnership to employees of the partnership, and

      (b) in any other case, by the employer.

Associated employers

(2) For the purpose of this section,

    (a) employers that are corporations that are associated with each other at any time shall be deemed to be employers that are associated with each other at that time; and

    (b) where 2 employers

      (i) would, but for this paragraph, not be associated with each other at any time, and

      (ii) are associated, or are deemed by this subsection to be associated, with another corporation at that time,

    they shall be deemed to be associated with each other at that time.

Idem

(3) In determining for the purpose of this section whether 2 or more employers are associated with each other at any time, and in determining whether an employer is at any time a specified employer in relation to another employer,

    (a) where an employer at any time is an individual, the employer shall be deemed at that time to be a corporation all the issued shares of the capital stock of which, having full voting rights under all circumstances, are owned by the individual; and

    (b) where an employer at any time is a partnership,

      (i) the employer shall be deemed at that time to be a corporation having one class of issued shares, which shares have full voting rights under all circumstances, and

      (ii) each member of the partnership shall be deemed to own at that time the greatest proportion of the number of issued shares of the capital stock of the corporation that

        (A) the member's share of the income or loss of the partnership from any source for the fiscal period of the partnership that includes that time

      is of

        (B) the income or loss of the partnership from that source for that period

      and for the purpose of this paragraph, where the income and loss of the partnership from any source for that period are nil, that proportion shall be computed as if the partnership had income from that source for that period in the amount of $1,000,000.

Business carried on by another employer

(4) Where at any time before 1994 an employer (referred to in this subsection and subsection (5) as the ``successor'') carries on, as a separate business or as part of another business, a business or part of a business that was carried on at any earlier time after 1991 by a specified employer in relation to the successor (which business or part of a business is referred to in this subsection as the ``specified business''), in determining

    (a) the UI premium tax credit of the specified employer and the successor, and

    (b) each amount that is or would, but for subsection (13), be deemed by subsection (12) to be paid to the specified employer or the successor at any time after the successor began to carry on the specified business,

that portion of the qualifying employer premiums for any period of the specified employer that can reasonably be considered to relate to the specified business shall be deemed not to be qualifying employer premiums for the period of the specified employer and to be qualifying employer premiums for the period of the successor.

Definition of ``specified employer''

(5) For the purposes of subsection (4), ``specified employer'' at any time in relation to a successor means any particular employer with whom the successor at that time is not or would not be dealing at arm's length if,

    (a) where the particular employer ceased to exist before that time, the particular employer were in existence at that time, and

    (b) the particular employer were controlled at that time by each person or group of persons who at any time in 1992 or 1993 controlled the particular employer,

except that a particular employer is not a specified employer in relation to a successor where the successor is, for the purposes of this section, deemed by paragraph 87(2)(mm) or 88(1)(e.2) to be a continuation of, and the same corporation as, the particular employer.

UI premium tax credit

(6) Where an employer (other than a partnership) files with the Minister a prescribed form containing prescribed information, an overpayment on account of the employer's liability under this Part for the employer's last taxation year beginning before 1994 equal to the employer's UI premium tax credit shall be deemed to have arisen on the later of March 1, 1994 and the day on which the form is so filed.

Idem

(7) Where a member of a partnership, acting on behalf of all of the members of the partnership, files with the Minister a prescribed form containing prescribed information, an overpayment on account of each taxpayer's liability under this Part for the taxpayer's last taxation year beginning before 1994 equal to that portion of the partnership's UI premium tax credit that can reasonably be considered to be the taxpayer's share thereof shall be deemed to have arisen on the later of March 1, 1994 and the day on which the form is so filed.

Definition of ``UI premium tax credit''

(8) For the purposes of this section, an employer's ``UI premium tax credit'' is the lesser of

    (a) the amount, if any, by which $30,000 exceeds the amount, if any, by which the employer's 1992 premium base exceeds $30,000, and

    (b) the amount, if any, by which the employer's 1993 premium base exceeds the employer's 1992 premium base,

unless the employer is associated at the end of 1993 with any other employer, in which case, subject to subsection (11), the employer's UI premium tax credit is nil.

Allocation by associated employers

(9) An employer that is a member of a group of employers that are associated with each other at the end of 1993 (referred to in this subsection and in subsections (10) and (11) as ``associated employers'') may file with the Minister an agreement in prescribed form on behalf of the associated employers allocating among them an amount not exceeding the lesser of

    (a) the amount, if any, by which $30,000 exceeds the amount, if any, by which the total of the 1992 premium bases of all of the associated employers exceeds $30,000, and

    (b) the amount, if any, by which

      (i) the total of the 1993 premium bases of all of the associated employers

    exceeds

      (ii) the total of the 1992 premium bases of all of the associated employers.

Allocation by the Minister

(10) The Minister may request any of the associated employers to file with the Minister an agreement referred to in subsection (9) and, where the employer does not file the agreement within 30 days after receiving the request, the Minister may allocate among them an amount not exceeding the lesser of the amounts determined under paragraphs (9)(a) and (b).

UI premium tax credit - associated employers

(11) For the purposes of this section, the least amount allocated to an associated employer under an agreement described in subsection (9) or the amount allocated to the employer by the Minister under subsection (10), as the case may be, is the UI premium tax credit of the employer.