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(B) the day that is one year after the
day on which the Income Tax
Amendments Act, 2000 receives royal
assent.
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| Winding-up
of Canadian
affiliate:
losses
|
(12) If
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(a) within the period described in paragraph
(11)(c) in respect of the entrant bank,
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(i) the Minister of Finance has issued
letters patent under section 342 of the
Bank Act or section 347 of the Trust and
Loan Companies Act dissolving the
Canadian affiliate or an order under
section 345 of the Bank Act or section 350
of the Trust and Loan Companies Act
approving the Canadian affiliate's
application for dissolution (such letters
patent or order being referred to in this
subsection as the ``dissolution order''), or
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(ii) the affiliate has been wound up under
the terms of the corporate law that
governs it,
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(b) the entrant bank carries on all or part of
the business in Canada that was formerly
carried on by the Canadian affiliate, and
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(c) the Canadian affiliate and the entrant
bank jointly elect in accordance with
subsection (11) to have this section apply
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then in applying section 111 for the purpose of
computing the taxable income earned in
Canada of the entrant bank for any taxation
year that begins after the date of the
dissolution order or the commencement of the
winding up, as the case may be,
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(d) subject to paragraphs (e) and (h), the
portion of a non-capital loss of the Canadian
affiliate for a taxation year (in this
paragraph referred to as the ``Canadian
affiliate's loss year'') that can reasonably be
regarded as being its loss from carrying on
a business in Canada (in this paragraph
referred to as the ``loss business'') or being
in respect of a claim made under section
110.5, to the extent that it
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(i) was not deducted in computing the
taxable income of the Canadian affiliate
or any other entrant bank for any taxation
year, and
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(ii) would have been deductible in
computing the taxable income of the
Canadian affiliate for any taxation year
that begins after the date of the
dissolution order or the commencement
of the winding up, as the case may be, on
the assumption that it had such a taxation
year and that it had sufficient income for
that year,
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is deemed, for the taxation year of the
entrant bank in which the Canadian
affiliate's loss year ended, to be a
non-capital loss of the entrant bank from
carrying on the loss business (or, in respect
of a claim made under section 110.5, to be
a non-capital loss of the entrant bank in
respect of a claim under subparagraph
115(1)(a)(vii)) that was not deductible by
the entrant bank in computing its taxable
income earned in Canada for any taxation
year that began before the date of the
dissolution order or the commencement of
the winding up, as the case may be,
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(e) if at any time control of the Canadian
affiliate or entrant bank has been acquired
by a person or group of persons, no amount
in respect of the Canadian affiliate's
non-capital loss for a taxation year that ends
before that time is deductible in computing
the taxable income earned in Canada of the
entrant bank for a particular taxation year
that ends after that time, except that the
portion of the loss that can reasonably be
regarded as the Canadian affiliate's loss
from carrying on a business in Canada and,
where a business was carried on by the
Canadian affiliate in Canada in the earlier
year, the portion of the loss that can
reasonably be regarded as being in respect
of an amount deductible under paragraph
110(1)(k) in computing its taxable income
for the year are deductible only
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(i) if that business is carried on by the
Canadian affiliate or the entrant bank for
profit or with a reasonable expectation of
profit throughout the particular year, and
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(ii) to the extent of the total of the entrant
bank's income for the particular year
from that business, and where properties
were sold, leased, rented or developed or
services rendered in the course of
carrying on that business before that
time, from any other business
substantially all of the income of which
was derived from the sale, leasing, rental
or development, as the case may be, of
similar properties or the rendering of
similar services,
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and, for the purpose of this paragraph,
where subsection 88(1.1) applied to the
dissolution of another corporation in
respect of which the Canadian affiliate was
the parent and paragraph 88(1.1)(e) applied
in respect of losses of that other
corporation, the Canadian affiliate is
deemed to be the same corporation as, and
a continuation of, that other corporation
with respect to those losses,
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(f) subject to paragraphs (g) and (h), a net
capital loss of the Canadian affiliate for a
taxation year (in this paragraph referred to
as the ``Canadian affiliate's loss year'') is
deemed to be a net capital loss of the entrant
bank for its taxation year in which the
Canadian affiliate's loss year ended to the
extent that the loss
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(i) was not deducted in computing the
taxable income of the Canadian affiliate
or any other entrant bank for any taxation
year, and
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(ii) would have been deductible in
computing the taxable income of the
Canadian affiliate for any taxation year
beginning after the date of the dissolution
order or the commencement of the
winding-up, as the case may be, on the
assumption that the Canadian affiliate
had such a taxation year and that it had
sufficient income and taxable capital
gains for that year,
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(g) if at any time control of the Canadian
affiliate or the entrant bank has been
acquired by a person or group of persons, no
amount in respect of the Canadian
affiliate's net capital loss for a taxation year
that ends before that time is deductible in
computing the entrant bank's taxable
income earned in Canada for a taxation year
that ends after that time, and
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(h) any loss of the Canadian affiliate that
would otherwise be deemed by paragraph
(d) or (f) to be a loss of the entrant bank for
a particular taxation year that begins after
the date of the dissolution order or the
commencement of the winding-up, as the
case may be, is deemed, for the purpose of
computing the entrant bank's taxable
income earned in Canada for taxation years
that begin after that date, to be such a loss
of the entrant bank for its immediately
preceding taxation year and not for the
particular year, if the entrant bank so elects
in its return of income for the particular
year.
|
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| Winding-up
of Canadian
affiliate: stop
loss
|
(13) If a Canadian affiliate and its entrant
bank have at any time made a joint election
under either of subsection (3) or (12),
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(a) in respect of any transfer of property,
directly or indirectly, by the Canadian
affiliate to the entrant bank or a person with
whom the entrant bank does not deal at
arm's length,
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(i) subparagraph 13(21.2)(e)(iii) shall be
read without reference to clause (E) of
that subparagraph,
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(ii) subsection 14(12) shall be read
without reference to paragraph (g) of that
subsection,
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(iii) paragraph 18(15)(b) shall be read
without reference to subparagraph (iv) of
that paragraph, and
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(iv) paragraph 40(3.4)(b) shall be read
without reference to subparagraph (v) of
that paragraph;
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(b) in respect of any property of the
Canadian affiliate appropriated to or for the
benefit of the entrant bank or any person
with whom the entrant bank does not deal at
arm's length, section 69(5) shall be read
without reference to paragraph (d); and
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(c) for the purposes of applying subsection
13(21.2), 14(12), 18(15) and 40(3.4) to any
property that was disposed of by the
affiliate, after the dissolution or winding-up
of the affiliate, the entrant bank is deemed
to be the same corporation as, and a
continuation of, the affiliate.
|
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| Winding-up
of Canadian
affiliate:
SDOs
|
(14) If a Canadian affiliate of an entrant
bank and the entrant bank meet the conditions
set out in paragraphs (12)(a) and (b) and
jointly elect in accordance with subsection
(11) to have this subsection apply, and the
Canadian affiliate has not made an election
under this subsection with any other entrant
bank, the entrant bank is deemed to be the
same corporation as, and a continuation of, the
Canadian affiliate for the purposes of
paragraphs 142.4(4)(c) and (d) in respect of
any specified debt obligation disposed of by
the Canadian affiliate.
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(2) Subsection (1) applies after June 27,
1999.
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139. (1) Paragraph (b) of the definition
``qualified investment'' in subsection 146(1)
of the Act is replaced by the following:
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(b) a bond, debenture, note or similar
obligation
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(i) issued by a corporation the shares of
which are listed on a prescribed stock
exchange in Canada, or
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(ii) issued by an authorized foreign bank
and payable at a branch in Canada of the
bank ,
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(2) Subsection (1) applies after June 27,
1999.
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140. (1) Paragraph (b) of the definition
``qualified investment'' in subsection
146.1(1) of the Act is replaced by the
following:
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(b) a bond, debenture, note or similar
obligation
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(i) issued by a corporation the shares of
which are listed on a prescribed stock
exchange in Canada, or
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(ii) issued by an authorized foreign bank
and payable at a branch in Canada of the
bank ,
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(2) Subsection (1) applies after June 27,
1999.
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141. (1) Paragraph (b) of the definition
``qualified investment'' in subsection
146.3(1) of the Act is replaced by the
following:
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(b) a bond, debenture, note or similar
obligation
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(i) issued by a corporation the shares of
which are listed on a prescribed stock
exchange in Canada, or
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(ii) issued by an authorized foreign bank
and payable at a branch in Canada of the
bank ,
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(2) Subsection (1) applies after June 27,
1999.
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142. (1) Subsection 147(10.5) of the Act is
repealed.
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(2) Subsection (1) applies to shares
acquired, but not disposed of, before
February 28, 2000 and to shares acquired
after February 27, 2000.
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143. (1) Paragraph 147.2(4)(a) of the Act
is replaced by the following:
|
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| Service after
1989
|
(a) the total of all amounts each of which is
a contribution (other than a prescribed
contribution) made by the individual in the
year to a registered pension plan that is in
respect of a period after 1989 or that is a
prescribed eligible contribution , to the
extent that the contribution was made in
accordance with the plan as registered,
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(2) Subsection (1) applies to contributions
made after 1990.
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144. (1) Paragraph 147.3(5)(a) of the Act
is replaced by the following:
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(a) is a single amount no portion of which
relates to an actuarial surplus ;
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(2) Section 147.3 of the Act is amended by
adding the following after subsection (7):
|
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| Transfer
where money
purchase plan
replaces
money
purchase plan
|
(7.1) An amount is transferred from a
registered pension plan (in this subsection
referred to as the ``transferor plan'') in
accordance with this subsection if
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(a) the amount is a single amount;
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(b) the amount is transferred in respect of
the surplus (as defined by regulation) under
a money purchase provision (in this
subsection referred to as the ``former
provision'') of the transferor plan;
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(c) the amount is transferred directly to
another registered pension plan to be held in
connection with a money purchase
provision (in this subsection referred to as
the ``current provision'') of the other plan;
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(d) the amount is transferred in conjunction
with the transfer of amounts from the
former provision to the current provision on
behalf of all or a significant number of
members of the transferor plan whose
benefits under the former provision are
replaced by benefits under the current
provision; and
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(e) the transfer is acceptable to the Minister
and the Minister has so notified the
administrator of the transferor plan in
writing.
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(3) Paragraphs 147.3(8)(b) and (c) of the
Act are replaced by the following:
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(b) the amount is transferred in respect of
the actuarial surplus under a defined benefit
provision of the transferor plan;
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(c) the amount is transferred directly to
another registered pension plan to be held in
connection with a money purchase
provision of the other plan;
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(4) Subsection (1) applies to transfers that
occur after November 1999.
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(5) Subsection (2) applies to transfers that
occur after 1998.
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(6) Subsection (3) applies to transfers that
occur after 1990.
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|
145. (1) Paragraphs 149(1)(d) to (d.2) of
the Act are replaced by the following:
|
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| Corporations
owned by the
Crown
|
(d) a corporation, commission or
association all of the shares (except
directors' qualifying shares) or of the
capital of which was owned by one or more
persons each of which is Her Majesty in
right of Canada or Her Majesty in right of
a province;
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| Corporations
90% owned
by the Crown
|
(d.1) a corporation, commission or
association not less than 90% of the shares
(except directors' qualifying shares) or of
the capital of which was owned by one or
more persons each of which is Her Majesty
in right of Canada or Her Majesty in right of
a province;
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| Wholly-owne
d corporations
|
(d.2) a corporation all of the shares (except
directors' qualifying shares) or of the
capital of which was owned by one or more
persons each of which is a corporation,
commission or association to which this
paragraph or paragraph (d) applies for the
period;
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|
(2) Subparagraph 149(1)(d.3)(i) of the
Act is replaced by the following:
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|
(i) one or more persons each of which is
Her Majesty in right of Canada or a
province or a person to which paragraph
(d) or (d.2) applies for the period, or
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|
(3) Paragraph 149(1)(d.4) of the Act is
replaced by the following:
|
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| Combined
ownership
|
(d.4) a corporation all of the shares (except
directors' qualifying shares) or of the
capital of which was owned by one or more
persons each of which is a corporation,
commission or association to which this
paragraph or any of paragraphs (d) to (d.3)
applies for the period;
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(4) The portion of paragraph 149(1)(d.6)
of the Act before subparagraph (i) is
replaced by the following:
|
|
| Subsidiaries
of municipal
corporations
|
(d.6) subject to subsections (1.2) and (1.3),
a particular corporation all of the shares
(except directors' qualifying shares) or of
the capital of which was owned by one or
more persons each of which is a
corporation, commission or association to
which paragraph (d.5) or this paragraph
applies for the period if the income for the
period of the particular corporation from
activities carried on outside
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(5) Clause 149(1)(o.2)(ii)(A) of the Act is
replaced by the following:
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(A) limited its activities to
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(I) acquiring, holding, maintaining,
improving, leasing or managing
capital property that is real property
or an interest in real property owned
by the corporation, another
corporation described by this
subparagraph and subparagraph (iv)
or a registered pension plan, and
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(II) investing its funds in a
partnership that limits its activities
to acquiring, holding, maintaining,
improving, leasing or managing
capital property that is real property
or an interest in real property owned
by the partnership ,
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(6) Subsection 149(1.1) of the Act is
replaced by the following:
|
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| Exception
|
(1.1) Where at a particular time
|
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(a) a corporation, commission or
association (in this subsection referred to as
``the entity'') would, but for this subsection,
be described in any of paragraphs (1)(d) to
(d.6),
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(b) one or more other persons (other than
Her Majesty in right of Canada or a
province, a municipality in Canada or a
person which, at the particular time, is a
person described in any of subparagraphs
(1)(d) to (d.6)) have at the particular time
one or more rights in equity or otherwise,
either immediately or in the future and
either absolutely or contingently to, or to
acquire, shares or capital of the entity, and
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(c) the exercise of the rights referred to in
paragraph (b) would result in the entity not
being a person described in any of
paragraphs (1)(d.1) to (d.6) at the particular
time,
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the entity is deemed not to be, at the particular
time, a person described in any of paragraphs
(1)(d) to (d.6).
|
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| Election
|
(1.11) Subsection (1) does not apply in
respect of a person's taxable income for a
particular taxation year that begins after 1998
where
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