Charitable donation of employee option securities	(d.01) subject to subsection (2.1), where the taxpayer disposes of a security acquired in the year by the taxpayer under an agreement referred to in subsection 7(1) by making a gift of the security to a qualified donee (other than a private foundation), an amount in respect of the disposition of the security equal to 1/4 of the lesser of the benefit deemed by paragraph 7(1)(a) to have been received by the taxpayer in the year in respect of the acquisition of the security and the amount that would have been that benefit had the value of the security at the time of its acquisition by the taxpayer been equal to the value of the security at the time of the disposition, if
	(i) the security is a security described in subparagraph 38(a.1)(i),
	(ii) the taxpayer acquired the security after February 27, 2000 and before 2002,
	(iii) the gift is made in the year and on or before the day that is 30 days after the day on which the taxpayer acquired the security, and
	(iv) the taxpayer is entitled to a deduction under paragraph (d) in respect of the acquisition of the security;
	(4) Paragraphs 110(1)(d.1), (d.2) and (d.3) of the Act are amended by replacing the reference to the fraction ``1/4'' with a reference to the fraction ``1/2''.
	(5) Subsection 110(1.5) of the Act is replaced by the following:
Determina- tion of amounts relating to employee security options	(1.5) For the purpose of paragraph (1)(d),
	(a) the amount payable by a taxpayer to acquire a security under an agreement referred to in subsection 7(1) shall be determined without reference to any change in the value of a currency of a country other than Canada, relative to Canadian currency, occurring after the agreement was made;
	(b) the fair market value of a security at the time an agreement in respect of the security was made shall be determined on the assumption that all specified events associated with the security that occurred after the agreement was made and before the sale or issue of the security or the disposition of the taxpayer's rights under the agreement in respect of the security, as the case may be, had occurred immediately before the agreement was made; and
	(c) in determining the amount that was included, in respect of a security that a qualifying person has agreed to sell or issue to a taxpayer, in the amount determined under subparagraph 7(1.4)(c)(ii) for the purpose of determining if the condition in paragraph 7(1.4)(c) was satisfied with respect to a particular disposition, an assumption shall be made that all specified events associated with the security that occurred after the particular disposition and before the sale or issue of the security or the taxpayer's subsequent disposition of rights under the agreement in respect of the security, as the case may be, had occurred immediately before the particular disposition.
Meaning of ``specified event''	(1.6) For the purpose of subsection (1.5), a specified event associated with a security is
	(a) where the security is a share of the capital stock of a corporation,
	(i) a subdivision or consolidation of shares of the capital stock of the corporation,
	(ii) a reorganization of share capital of the corporation, and
	(iii) a stock dividend of the corporation; and
	(b) where the security is a unit of a mutual fund trust,
	(i) a subdivision or consolidation of the units of the trust, and
	(ii) an issuance of units of the trust as payment, or in satisfaction of a person's right to enforce payment, out of the trust's income (determined before the application of subsection 104(6)) or out of the trust's capital gains.
Definitions in subsection 7(7)	(1.7) The definitions in subsection 7(7) apply for the purposes of subsections (1.5) and (1.6).
	(6) Section 110 of the Act is amended by adding the following after subsection (2):
Charitable donation - proceeds of disposition of employee option securities	(2.1) Where a taxpayer, in exercising a right to acquire a security that a particular qualifying person has agreed to sell or issue to the taxpayer under an agreement referred to in subsection 7(1), directs a broker or dealer appointed or approved by the particular qualifying person (or by a qualifying person that does not deal at arm's length with the particular qualifying person) to immediately dispose of the security and pay all or a portion of the proceeds of disposition of the security to a qualified donee,
	(a) if the payment is a gift, the taxpayer is deemed, for the purpose of paragraph (1)(d.01), to have disposed of the security by making a gift of the security to the qualified donee at the time the payment is made; and
	(b) the amount deductible under paragraph (1)(d.01) by the taxpayer in respect of the disposition of the security is the amount determined by the formula
	A x B/C
	where
	A is the amount that would be deductible under paragraph (1)(d.01) in respect of the disposition of the security if this subsection were read without reference to this paragraph,
	B is the amount of the payment, and
	C is the amount of the proceeds of disposition of the security.
	(7) Subsections (1), (3) and (6) apply to the 2000 and subsequent taxation years except that, for the 2000 taxation year,
	(a) the reference to the fraction ``1/2'' in the portion of paragraph 110(1)(d) of the Act before subparagraph 110(1)(d)(i), as enacted by subsection (1), shall be read as a reference to
	(i) the fraction ``1/4'', if the transaction, event or circumstance as a result of which a benefit is deemed by subsection 7(1) of the Act, as enacted by subsection 2(1), to have been received by a taxpayer occurred before February 28, 2000, and
	(ii) the fraction ``1/3'', if the transaction, event or circumstance as a result of which a benefit is deemed by subsection 7(1) of the Act, as enacted by subsection 2(1), to have been received by a taxpayer occurred after February 27, 2000 and before October 18, 2000; and
	(b) the reference to the fraction ``1/4'' in the portion of paragraph 110(1)(d.01) of the Act before subparagraph 110(1)(d.01)(i), as enacted by subsection (3), shall be read as a reference to the fraction ``1/3'' if the transaction, event or circumstance as a result of which a benefit is deemed by subsection 7(1) of the Act, as enacted by subsection 2(1), to have been received by a taxpayer occurred after February 27, 2000 and before October 18, 2000.
	(8) Subsections (2) and (5) apply to the 1998 and subsequent taxation years.
	(9) Subsection (4) applies in respect of dispositions and exchanges that occur after February 27, 2000 except that, for dispositions and exchanges that occurred after February 27, 2000 and before October 18, 2000, the reference to the fraction ``1/2'' in paragraphs 110(1)(d.1) to (d.3) of the Act, as enacted by subsection (4), shall be read as a reference to the fraction ``1/3''.
	85. (1) The portion of paragraph 110.1(1)(d) of the Act before subparagraph (i) is replaced by the following:
Ecological gifts	(d) the total of all amounts each of which is the fair market value of a gift of land, including a servitude for the use and benefit of a dominant land, a covenant or an easement, the fair market value of which is certified by the Minister of the Environment and that is certified by that Minister, or by a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister, or that person, important to the preservation of Canada's environmental heritage, which gift was made by the corporation in the year or in any of the five preceding taxation years to
	(2) Subsection 110.1(2) of the Act is replaced by the following:
Proof of gift	(2) A gift shall not be included for the purpose of determining a deduction under subsection (1) unless the making of the gift is proven by filing with the Minister
	(a) a receipt for the gift that contains prescribed information;
	(b) in the case of a gift described in paragraph (1)(c), the certificate issued under subsection 33(1) of the Cultural Property Export and Import Act; and
	(c) in the case of a gift described in paragraph (1)(d), both certificates referred to in that paragraph.
	(3) The portion of subsection 110.1(3) of the Act after paragraph (b) is replaced by the following:
	such amount, not greater than the fair market value otherwise determined and not less than the adjusted cost base to the corporation of the property at that time, as the corporation designates in its return of income under section 150 for the year in which the gift is made is, if the making of the gift is proven by filing with the Minister a receipt containing prescribed information, deemed to be its proceeds of disposition of the property and, for the purposes of subsection (1), the fair market value of the gift made by the corporation.
	(4) Subsection 110.1(5) of the Act is replaced by the following:
Ecological gifts	(5) For the purposes of applying subparagraph 69(1)(b)(ii), section 207.31 and this section in respect of a gift described in paragraph (1)(d) that is made by a taxpayer and that is a servitude, covenant or easement to which land is subject, the greater of
	(a) the fair market value otherwise determined of the gift, and
	(b) the amount by which the fair market value of the land is reduced as a result of the making of the gift
	is deemed to be the fair market value (or, for the purpose of subsection (3), the fair market value otherwise determined) of the gift at the time the gift was made and, subject to subsection (3), to be the taxpayer's proceeds of disposition of the gift.
	(5) Subsection 110.1(5) of the Act, as enacted by subsection (4), is replaced by the following:
Ecological gifts	(5) For the purposes of applying subparagraph 69(1)(b)(ii), this section and section 207.31 in respect of a gift described in paragraph (1)(d) that is made by a taxpayer, the amount that is the fair market value (or, for the purpose of subsection (3), the fair market value otherwise determined) of the gift at the time the gift was made and, subject to subsection (3), the taxpayer's proceeds of disposition of the gift, is deemed to be the amount determined by the Minister of the Environment to be
	(a) where the gift is land, the fair market value of the gift; or
	(b) where the gift is a servitude, covenant or easement to which land is subject, the greater of
	(i) the fair market value otherwise determined of the gift, and
	(ii) the amount by which the fair market value of the land is reduced as a result of the making of the gift.
	(6) Subsections (1), (2) and (5) apply in respect of gifts made after February 27, 2000, except that subsection 110.1(2) of the Act, as enacted by subsection (2), shall be read without reference to paragraph 110.1(2)(b) in respect of gifts made before December 21, 2000.
	(7) Subsection (3) applies in respect of gifts made after February 27, 1995.
	(8) Subsection (4) applies in respect of gifts made after February 27, 1995 and before February 28, 2000.
	86. (1) Subparagraph (a)(ii) of the definition ``investment expense'' in subsection 110.6(1) of the Act is replaced by the following:
	(ii) paragraph 20(1)(j) or subsection 65(1), 66(4), 66.1(3), 66.2(2), 66.21(4) or 66.4(2),
	(2) 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), 66.21(4) or 66.4(2) in computing the individual's income for the year in respect of expenses
	(i) incurred and renounced under subsection 66(12.6), (12.601), (12.62) or (12.64) by a corporation, or
	(ii) 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
	(3) Paragraph 110.6(2)(a) of the Act is replaced by the following:
	(a) the amount determined by the formula
	[$250,000 - (A + B + C + D)] x E
	where
	A is the total of all amounts each of which is an amount deducted under this section in computing the individual's taxable income for a preceding taxation year that ended before 1988,
	B is the total of all amounts each of which is
	(i) 3/4 of an amount deducted under this section in computing the individual's taxable income for a preceding taxation year that ended after 1987 and before 1990 (other than amounts deducted under this section for a taxation year in respect of an amount that was included in computing an individual's income for that year because of subparagraph 14(1)(a)(v) as that subparagraph applied for taxation years that ended before February 28, 2000), or
	(ii) 3/4 of an amount deducted under this section in computing the individual's taxable income for a preceding taxation year that began after February 27, 2000 and ended before October 18, 2000,
	C is 2/3 of the total of all amounts each of which is an amount deducted under this section in computing the individual's taxable income
	(i) for a preceding taxation year that ended after 1989 and before February 28, 2000, or
	(ii) in respect of an amount that was included because of subparagraph 14(1)(a)(v) (as that subparagraph applied for taxation years that ended before February 28, 2000) in computing the individual's income for a taxation year that began after 1987 and ended before 1990,
	D is the product obtained when the reciprocal of the fraction determined for E that applied to the taxpayer for a preceding taxation year that began before and included February 28, 2000 or October 17, 2000 is multiplied by the amount deducted under this subsection in computing the individual's taxable income for that preceding year, and
	E is
	(i) in the case of a taxation year that includes February 28, 2000 or October 17, 2000, the amount determined by the formula
	2 x (F + G)/H
	where
	F is the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year,
	G is the amount by which the amount determined in respect of the taxpayer for the year under paragraph 3(b) exceeds the amount determined for F, and
	H is the total of
	(A) the amount deemed by subsection 14(1.1) to be a taxable capital gain of the taxpayer for the taxation year multiplied by
	(I) where that amount is deter mined by reference to paragraph 14(1.1)(a), the reciprocal of the fraction obtained by multiplying the fraction 3/4 by the fraction in paragraph 14(1)(b) that applies to the taxpayer for the taxation year,
	(II) where that amount is deter mined by reference to paragraph 14(1.1)(b), and the taxation year does not end after February 27, 2000 and before October 18, 2000, 2, and
	(III) where that amount is deter mined by reference to paragraph 14(1.1)(b), and the taxation year ends after February 27, 2000 and before October 18, 2000, 3/2, and
	(B) the amount determined for G multiplied by the reciprocal of the fraction in paragraph 38(a) that applies to the taxpayer for the taxation year, and