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(iii) subsection (6) does not apply to an
annuity purchased for the beneficiary;
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(b) where a beneficiary under a profit
sharing plan attained 69 years of age in
1996, in applying
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(i) subparagraph 147(2)(k)(iii) and
clause 147(2)(k)(vi)(A) of the Act, as
enacted by subsection (3), in respect of
the beneficiary, and
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(ii) subsection 147(10.6) of the Act, as
enacted by subsection (6), to an annuity
purchased for the beneficiary,
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the references in those provisions to ``69
years of age'' shall be read as ``70 years of
age''; and
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(c) subsection (6) does not apply to an
annuity purchased before March 6, 1996
for a beneficiary under a deferred profit
sharing plan where, under the terms and
conditions of the annuity contract as they
read immediately before that day,
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(i) the day on which annuity payments
are to begin under the contract is fixed
and determined and is after the year in
which the beneficiary attains
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(A) 69 years of age, where the
beneficiary had not attained that age
before 1997, or
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(B) 70 years of age, where the
beneficiary attained 69 years of age
in 1996, and
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(ii) the amount and timing of each
annuity payment are fixed and
determined.
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(10) Subsection (5) applies to the 1992
and subsequent taxation years.
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44. (1) The portion of the definition
``money purchase limit'' in subsection
147.1(1) of the Act after paragraph (f) is
replaced by the following:
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(g) for years after 1995 and before 2003,
$13,500,
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(i) for 2004, $15,500, and
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(j) for each year after 2004, the greater of
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(B) the quotient obtained when the
average wage for the year is divided
by the average wage for 2004,
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rounded to the nearest multiple of $10,
or, if that product is equidistant from 2
such consecutive multiples, to the
higher thereof, and
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(ii) the money purchase limit for the
preceding year;
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(2) Subsection (1) applies after 1996.
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45. (1) Section 147.3 of the Act is amended
by adding the following after subsection
(14):
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| Annuity
contract
commencing
after age 69
|
(15) Where, under circumstances in which
paragraph 254(a) applies, an individual
receives before 1997 an interest in an annuity
contract in full or partial satisfaction of the
individual's entitlement to benefits under a
registered pension plan, and payment of the
annuity has not begun by the end of the
particular year in which the individual attains
69 years of age,
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(a) that interest is deemed not to exist after
the particular year;
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(b) the individual is deemed to have
received immediately after the particular
year the payment of a single amount from
the plan equal to the fair market value of the
interest at the end of the particular year;
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(c) the individual is deemed to have
acquired immediately after the particular
year an interest in the annuity contract as a
separate and newly issued annuity contract
at a cost equal to the amount referred to in
paragraph (b); and
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(d) the issue and acquisition of the newly
issued annuity contract are deemed not to
be pursuant to or under a registered pension
plan.
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(2) Subsection (1) applies after 1996,
except that
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(a) it does not apply to an individual who
attained 70 years of age before 1997;
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(b) in applying subsection 147.3(15) of the
Act, as enacted by subsection (1), to an
individual who attained 69 years of age in
1996, the reference in that provision to
``69 years of age'' shall be read as a
reference to ``70 years of age''; and
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(c) subsection (1) does not apply to an
annuity contract where an individual
received an interest in the contract before
March 6, 1996 and, under the terms and
conditions of the contract as they read
immediately before that day,
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(i) the day on which the annuity
payments are to begin under the
contract is fixed and determined and is
after the year in which the individual
attains
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(A) 69 years of age, where the
individual had not attained that age
before 1997, or
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(B) 70 years of age, where the
individual attained 69 years of age in
1996, and
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(ii) the amount and timing of each
annuity payment are fixed and
determined.
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46. The definition ``relevant authority''
in subsection 148(9) of the Act is repealed.
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47. (1) Paragraph 149(1)(t) of the Act is
replaced by the following:
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| Farmers' and
fishermen's
insurer
|
(t) an insurer that, throughout the period, is
not engaged in any business other than
insurance if, in the opinion of the Minister,
on the advice of the Superintendent of
Financial Institutions or of the
superintendent of insurance of the province
under the laws of which the insurer is
incorporated, not less than 20% of the total
of the gross premium income (net of
reinsurance ceded) earned in the period by
the insurer and, where the insurer is not a
prescribed insurer, by all other insurers that
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(i) are specified shareholders of the
insurer,
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(ii) are related to the insurer, or
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(iii) where the insurer is a mutual
corporation, are part of a group that
controls, directly or indirectly in any
manner whatever, or are controlled,
directly or indirectly in any manner
whatever by, the insurer,
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is in respect of insurance of property used in
farming or fishing or residences of farmers
or fishermen;
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(2) Subsection 149(4.1) of the Act is
replaced by the following:
|
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| Income
exempt under
149(1)(t)
|
(4.1) Subject to subsection (4.2), subsection
(1) applies to an insurer described in
paragraph (1)(t) only in respect of the part of
its taxable income for a taxation year
determined by the formula
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(A x B x C) / D
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where
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A is its taxable income for the year;
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B is
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(a) l/2, where less than 25% of the total
of the gross premium income (net of
reinsurance ceded) earned in the year by
it and, where it is not a prescribed insurer
for the purpose of paragraph (1)(t), by all
other insurers that
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(i) are specified shareholders of the
insurer,
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(ii) are related to the insurer, or
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|
(iii) where the insurer is a mutual
corporation, are part of a group that
controls, directly or indirectly in any
manner whatever, or are controlled,
directly or indirectly in any manner
whatever by, the insurer,
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is in respect of insurance of property used
in farming or fishing or residences of
farmers or fishermen; and
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C is the part of the gross premium income (net
of reinsurance ceded) earned by it in the
year that, in the opinion of the Minister, on
the advice of the Superintendent of
Financial Institutions or of the
superintendent of insurance of the province
under the laws of which it is incorporated,
is in respect of insurance of property used in
farming or fishing or residences of farmers
or fishermen; and
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|
D is the gross premium income (net of
reinsurance ceded) earned by it in the year.
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(3) The portion of subsection 149(4.2) of
the Act after paragraph (c) is replaced by
the following:
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is in respect of insurance of property used in
farming or fishing or residences of farmers or
fishermen.
|
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|
(4) Subsections (1) to (3) apply to the 1996
and subsequent taxation years.
|
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|
|
48. (1) The portion of the definition ``net
tax owing'' in subsection 156.1(1) of the Act
after the description of E is repealed.
|
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|
|
(2) Section 156.1 of the Act is amended by
adding the following after subsection (1):
|
|
| Values of A
and B in ``net
tax owing''
|
(1.1) For the purposes of determining the
values of A and B in the definition ``net tax
owing'' in subsection (1), income taxes
payable by an individual for a taxation year
are determined
|
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|
|
(a) before taking into consideration the
specified future tax consequences for the
year; and
|
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|
|
(b) after deducting all tax credits to which
the individual is entitled for the year
relating to those taxes (other than tax credits
that become payable to the individual after
the individual's balance-due day for the
year, prescribed tax credits and the amount
deemed to have been paid because of the
application of subsection 120(2)).
|
|
| Value of D in
``net tax
owing''
|
(1.2) For the purpose of determining the
value of D in the definition ``net tax owing''
in subsection (1), the amount deemed by
subsection 120(2) to have been paid on
account of an individual's tax under this Part
for a taxation year is determined before taking
into consideration the specified future tax
consequences for the year.
|
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|
(3) Subsections (1) and (2) apply to
amounts that become payable after 1995.
|
|
|
|
49. (1) Subparagraph 157(1)(b)(i) 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:
|
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|
(B) the corporation is, throughout the
year, a Canadian-controlled private
corporation,
|
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|
(C) a particular calendar year
immediately preceded the calendar
year in which the year ends, and
|
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|
(I) the corporation is not associated
with another corporation in the
taxation year and its taxable income
for its immediately preceding
taxation year (determined before
taking into consideration the
specified future tax consequences
for that preceding year) does not
exceed its business limit for that
preceding year, or
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|
(II) where the corporation is
associated with another corporation
in the taxation year, the total of all
amounts each of which is the taxable
income of the corporation or such an
associated corporation for its last
taxation year that ended in the
particular calendar year
(determined before taking into
consideration the specified future
tax consequences for that last year)
does not exceed the total of all
amounts each of which is the
business limit of the corporation or
such an associated corporation for
that last year, or
|
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|
(2) Paragraphs 157(2)(c) and (d) of the
Act are replaced by the following:
|
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|
(c) its taxable income (determined before
taking into consideration the specified
future tax consequences for the year or that
preceding year, as the case may be) was not
more than $10,000, and
|
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|
|
(d) no tax was payable by it under any of
Parts I.3, VI and VI.1 (determined before
taking into consideration the specified
future tax consequences for the year or that
preceding year, as the case may be),
|
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|
(3) Paragraph 157(2.1)(a) of the Act is
replaced by the following:
|
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|
(a) the total of the taxes payable under this
Part and Parts I.3, VI and VI.1 by a
corporation for a taxation year (determined
before taking into consideration the
specified future tax consequences for the
year), or
|
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|
|
(4) Subsections (1) to (3) apply to amounts
that become payable after 1995, except
that, for taxation years that end before
1998, subclause 157(1)(b)(i)(D)(II) of the
Act, as enacted by subsection (1), shall be
read as follows:
|
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|
(II) where the corporation is
associated with another corporation
in the year,
|
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|
|
1. the total of the taxable income
of the corporation for its
immediately preceding taxation
year (determined before taking
into consideration the specified
future tax consequences for that
preceding year) and the total of
the taxable incomes of all such
associated corporations for their
taxation years that ended in the
particular calendar year
(determined before taking into
consideration the specified future
tax consequences for those years)
|
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|
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|
2. the total of the business limit of
the corporation for its
immediately preceding taxation
year and the total of the business
limits of all such associated
corporations for their taxation
years that ended in the particular
calendar year, or
|
|
|
|
50. (1) The portion of subsection 161(1) of
the Act before paragraph (a) is replaced by
the following:
|
|
| General
|
161. (1) Where at any time after a
taxpayer's balance-due day for a taxation year
|
|
|
|
(2) Subsection 161(2.2) of the Act is
replaced by the following:
|
|
| Contra
interest
|
(2.2) Notwithstanding subsections (1) and
(2), the total amount of interest payable by a
taxpayer (other than a testamentary trust)
under those subsections, for the period that
begins on the first day of the taxation year for
which a part or instalment of tax is payable and
ends on the taxpayer's balance-due day for the
year, in respect of the taxpayer's tax or
instalments of tax payable for the year shall
not exceed the amount, if any, by which
|
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|
|
(a) the total amount of interest that would be
payable for the period by the taxpayer under
subsections (1) and (2) in respect of the
taxpayer's tax and instalments of tax
payable for the year if no amount were paid
on account of the tax or instalments
|
|
|
|
exceeds
|
|
|
|
(b) the amount of interest that would be
payable under subsection 164(3) to the
taxpayer in respect of the period on the
amount that would be refunded to the
taxpayer in respect of the year or applied to
another liability if
|
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|
|
(i) no tax were payable by the taxpayer
for the year,
|
|