C is the total of all amounts each of which is an amount determined under paragraph (13)(d) for the year in respect of the taxpayer;
``taxable supplier'' « fournisseur imposable »	``taxable supplier'' in respect of an amount means
	(a) a person resident in Canada or a Canadian partnership, or
	(b) a non-resident person, or a partnership that is not a Canadian partnership,
	(i) by which the amount was payable, or
	(ii) by or for the benefit of which the amount was receivable in the course of carrying on a business through a permanent establishment (as defined by regulation) in Canada.
	(19) Subsection 127(10.1) of the Act is 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 taxation year a Canadian-controlled private corporation, there shall be added in computing the corporation's investment tax credit at the end of the year the amount that is 15% of the least of
	(a) such amount as the corporation claims;
	(b) the SR&ED qualified expenditure pool of the corporation at the end of the year; and
	(c) the corporation's expenditure limit for the year.
	(20) Subsections 127(10.7) and (10.8) of the Act are replaced by the following:
Further additions to investment tax credit	(10.7) Where a taxpayer has in a particular taxation year repaid an amount of government assistance, non-government assistance or a contract payment that was applied to reduce
	(a) the amount of a qualified expenditure incurred by the taxpayer under paragraph (11.1)(c) for a preceding taxation year that began before 1996,
	(b) the prescribed proxy amount of the taxpayer under paragraph (11.1)(f) for a preceding taxation year that began before 1996, or
	(c) a qualified expenditure incurred by the taxpayer under any of subsections (18) to (20) for a preceding taxation year,
	there shall be added to the amount otherwise determined under subsection (10.1) in respect of the taxpayer for the particular year the amount, if any, by which
	(d) the amount that would have been determined under subsection (10.1) in respect of the taxpayer for that preceding year if subsections (11.1) and (18) to (20) had not applied in respect of the government assistance, non-government assistance or contract payment, as the case may be, to the extent of the amount so repaid,
	exceeds
	(e) the amount determined under subsection (10.1) in respect of the taxpayer for that preceding year.
Further additions to investment tax credit	(10.8) For the purposes of paragraph (e.1) of the definition ``investment tax credit'' in subsection (9), subsection (10.7) and paragraph 37(1)(c), an amount of government assistance, non-government assistance or a contract payment that
	(a) was applied to reduce
	(i) the capital cost to a taxpayer of a property under paragraph (11.1)(b),
	(ii) the amount of a qualified expenditure incurred by a taxpayer under paragraph (11.1)(c) for taxation years that began before 1996,
	(iii) the prescribed proxy amount of a taxpayer under paragraph (11.1)(f) for taxation years that began before 1996, or
	(iv) a qualified expenditure incurred by a taxpayer under any of subsections (18) to (20),
	(b) was not received by the taxpayer, and
	(c) ceased in a taxation year to be an amount that the taxpayer can reasonably be expected to receive,
	is deemed to be the amount of a repayment by the taxpayer in the year of the government assistance, non-government assistance or contract payment, as the case may be.
	(21) Paragraph 127(11.1)(c) of the Act is repealed.
	(22) Subsection 127(11.1) of the Act is amended by adding the word ``and'' at the end of paragraph (c.1) and by repealing paragraphs (e) and (f).
	(23) 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), paragraphs (a) and (a.1) of the definition ``investment tax credit'' in subsection (9) and section 127.1,
	(a) certified property, qualified property and first term shared-use-equipment are deemed not to have been acquired, and
	(b) expenditures incurred to acquire property described in subparagraph 37(1)(b)(i) are deemed not to have been incurred
	by a 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).
	(24) Subsection 127(11.4) of the Act is replaced by the following:
Reclassified expenditures	(11.4) Paragraph (e) of the definition ``qualified expenditure'' in subsection (9) does not apply to an expenditure incurred in a taxation year by a taxpayer where the expenditure is reclassified by the Minister on an assessment of the taxpayer's tax payable under this Part for the year, or on a determination that no tax under this Part is payable for the year by the taxpayer, as an expenditure in respect of scientific research and experimental development.
Adjustments to qualified expenditures	(11.5) For the purpose of the definition ``qualified expenditure'' in subsection (9),
	(a) the amount of an expenditure (other than a prescribed proxy amount or an amount described in paragraph (b)) incurred by a taxpayer in a taxation year is deemed to be the amount of the expenditure, determined without reference to subsections 13(7.1) and (7.4) and after the application of subsection (11.6); and
	(b) the amount of an expenditure incurred by a taxpayer in the taxation year that ends coincidentally with the end of the first period (within the meaning assigned in the definition ``first term shared-use-equipment'' in subsection (9)) or the second period (within the meaning assigned in the definition ``second term shared-use-equipment'' in subsection (9)) in respect of first term shared-use-equipment or second term shared-use-equipment, respectively, of the taxpayer is deemed to be 1/4 of the capital cost of the equipment determined after the application of subsection (11.6) in accordance with the following rules:
	(i) the capital cost to the taxpayer shall be computed as if no amount were added thereto because of section 21, and
	(ii) the capital cost to the taxpayer is determined without reference to subsections 13(7.1) and (7.4).
Non-arm's length costs	(11.6) For the purpose of subsection (11.5), where
	(a) a taxpayer would, if this Act were read without reference to subsection (26), incur at any time an expenditure as consideration for a person or partnership (referred to in this subsection as the ``supplier'') rendering a service (other than a service rendered by a person as an employee of the taxpayer) or providing a property to the taxpayer, and
	(b) at that time the taxpayer does not deal at arm's length with the supplier,
	the amount of the expenditure incurred by the taxpayer for the service or property and the capital cost to the taxpayer of the property are deemed to be
	(c) in the case of a service rendered to the taxpayer, the lesser of
	(i) the amount of the expenditure otherwise incurred by the taxpayer for the service, and
	(ii) the adjusted service cost to the supplier of rendering the service, and
	(d) in the case of a property sold to the taxpayer, the lesser of
	(i) the capital cost to the taxpayer of the property otherwise determined, and
	(ii) the adjusted selling cost to the supplier of the property.
Definitions	(11.7) The definitions in this subsection apply in this subsection and subsection (11.6).
``adjusted service cost'' « coût de service rajusté »	``adjusted service cost'' to a person or partnership (referred to in this definition as the ``supplier'') of rendering a particular service is the amount determined by the formula
	A - B - C - D - E
	where
	A is the cost to the supplier of rendering the particular service,
	B is the total of all amounts each of which is the amount, if any, by which
	(a) the cost to the supplier for a service (other than a service rendered by a person as an employee of the supplier) rendered by a person or partnership that does not deal at arm's length with the supplier to the extent that the cost is incurred for the purpose of rendering the particular service
	exceeds
	(b) the adjusted service cost to the person or partnership referred to in paragraph (a) of rendering the service referred to in that paragraph to the supplier,
	C is the total of all amounts each of which is the amount, if any, by which
	(a) the cost to the supplier of a property acquired by the supplier from a person or partnership that does not deal at arm's length with the supplier
	exceeds
	(b) the adjusted selling cost to the person or partnership referred to in paragraph (a) of the property,
	to the extent that the excess relates to the cost of rendering the particular service,
	D is the total of all amounts each of which is remuneration based on profits or a bonus paid or payable to an employee of the supplier to the extent that it is included in the cost to the supplier of rendering the particular service, and
	E is the total of all amounts each of which is government assistance or non-government assistance that can reasonably be considered to be in respect of rendering the particular service and that the supplier has received, is entitled to receive or can reasonably be expected to receive.
``adjusted selling cost'' « coût de vente rajusté »	``adjusted selling cost'' to a person or partnership (referred to in this definition as the ``supplier'') of a property is the amount determined by the formula
	A - B
	where
	A is
	(a) where the property is purchased from another person or partnership with which the supplier does not deal at arm's length, the lesser of
	(i) the cost to the supplier of the property, and
	(ii) the adjusted selling cost to the other person or partnership of the property, and
	(b) in any other case, the cost to the supplier of the property,
	and for the purpose of paragraph (b),
	(c) where part of the cost to a supplier of a particular property is attributable to another property acquired by the supplier from a person or partnership with which the supplier does not deal at arm's length, that part of the cost is deemed to be the lesser of
	(i) the amount of that part of the cost otherwise determined, and
	(ii) the adjusted selling cost to the person or the partnership of the other property,
	(d) where part of the cost to a supplier of a property is attributable to a service (other than a service rendered by a person as an employee of the supplier) rendered to the supplier by a person or partnership with which the supplier does not deal at arm's length, that part of the cost is deemed to be the lesser of
	(i) the amount of that part of the cost otherwise determined, and
	(ii) the adjusted service cost to the person or partnership of rendering the service, and
	(e) no part of the cost to a supplier of a property that is attributable to remuneration based on profits or a bonus paid or payable to an employee of the supplier shall be included, and
	B is the total of all amounts each of which is the amount of government assistance or non-government assistance that can reasonably be considered to be in respect of the property and that the supplier has received, is entitled to receive or can reasonably be expected to receive.
Interpreta- tion for non-arm's length costs	(11.8) For the purposes of this subsection and subsections (11.6) and (11.7),
	(a) the cost to a person or partnership (referred to in this paragraph as the ``supplier'') of rendering a service or providing a property to another person or partnership (referred to in this paragraph as the ``recipient'') with which the supplier does not deal at arm's length does not include,
	(i) where the cost to the recipient of the service rendered or property provided by the supplier would, but for this paragraph, be a cost to the recipient incurred in rendering a particular service or providing a particular property to a person or partnership with which the recipient does not deal at arm's length, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient in rendering the particular service or providing the particular property, be excluded from a cost to the recipient because of this paragraph, and
	(ii) in any other case, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient, not be a qualified expenditure of the recipient;
	(b) paragraph 69(1)(c) does not apply in determining the cost of a property; and
	(c) the leasing of a property is deemed to be the rendering of a service.
	(25) Section 127 of the Act is amended by adding the following after subsection (12.3):
Agreement to transfer qualified expenditures	(13) Where a taxpayer (referred to in this subsection and subsections (15) and (16) as the ``transferor'') and another taxpayer (referred to in this subsection and subsection (15) as the ``transferee'') file with the Minister an agreement or an amended agreement in respect of a particular taxation year of the transferor, the least of
	(a) the amount specified in the agreement for the purpose of this subsection,