(g) where the property is a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation, the amount, if any, by which the principal amount of the obligation exceeds the amount for which the obligation was issued, if the excess was required by subsection 16(2) or (3) to be included in computing the income of the taxpayer for a taxation year commencing before that time;
	207. (1) Paragraph (g) of the definition ``proceeds of disposition'' in section 54 of the English version of the Act is replaced by the following:
	(g) an amount by which the liability of a taxpayer to a mortgagee or hypothecary creditor is reduced as a result of the sale of mortgaged or hypothecated property under a provision of the mortgage or hypothec, plus any amount received by the taxpayer out of the proceeds of the sale,
	(2) The portion of the definition ``superficial loss'' in section 54 of the English version of the Act after paragraph (h) is replaced by the following:
	and, for the purpose of this definition, a right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property.
	208. (1) Paragraph 70(8)(a) of the English version of the Act is replaced by the following:
	(a) the ``fair market value'' at any time of any property subject to a mortgage or hypothec is the amount, if any, by which the fair market value at that time of the property otherwise determined exceeds the amount outstanding at that time of the debt secured by the mortgage or hypothec, as the case may be;
	(2) Subparagraph 70(8)(b)(ii) of the English version of the Act is replaced by the following:
	(ii) any debt secured by a mortgage or hypothec on property owned by the taxpayer immediately before the taxpayer's death; and
	209. The definitions ``creditor'' and ``debt'' in subsection 79(1) of the Act are replaced by the following:
``creditor'' « créancier »	``creditor'' of a particular person includes a person to whom the particular person is obligated to pay an amount under a mortgage, hypothecary claim or similar obligation and, where property was sold to the particular person under a conditional sales agreement, the seller of the property (or any assignee with respect to the agreement) is deemed to be a creditor of the particular person in respect of that property;
``debt'' « dette »	``debt'' includes an obligation to pay an amount under a mortgage, hypothecary claim or similar obligation or under a conditional sales agreement;
	210. The portion of subsection 80.1(1) of the Act before paragraph (a) is replaced by the following:
Expropria- tion assets acquired as compensation for, or as consideration for sale of, foreign property taken by or sold to foreign issuer	80.1 (1) Where in a taxation year ending coincidentally with or after December 31, 1971 a taxpayer resident in Canada has acquired any bonds, debentures, mortgages, hypothecary claims, notes or similar obligations (in this section referred to as ``expropriation assets'') issued by the government of a country other than Canada or issued by a person resident in a country other than Canada and guaranteed by the government of that country,
	211. The portion of subsection 87(6) of the Act before paragraph (a) is replaced by the following:
Obligations of predecessor corporation	(6) Notwithstanding subsection (7), where there has been an amalgamation of two or more corporations after May 6, 1974, each taxpayer (except any predecessor corporation) who, immediately before the amalgamation, owned a capital property that was a bond, debenture, mortgage, hypothecary claim, note or other similar obligation of a predecessor corporation (in this subsection referred to as the ``old property'') and who received no consideration for the disposition of the old property on the amalgamation other than a bond, debenture, mortgage, hypothecary claim, note or other similar obligation respectively, of the new corporation (in this subsection referred to as the ``new property'') is, if the amount payable to the holder of the new property on its maturity is the same as the amount that would have been payable to the holder of the old property on its maturity, deemed
	212. Paragraph 116(6)(d) of the Act is replaced by the following:
	(d) a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation; or
	213. Subparagraph (d)(i) of the definition ``qualified property'' in subsection 127(9) of the Act is replaced by the following:
	(i) the property is leased in the ordinary course of carrying on a business in Canada by a corporation whose principal business is leasing property, lending money, purchasing conditional sales contracts, accounts receivable, bills of sale, chattel mortgages or hypothecary claims on movables, bills of exchange or other obligations representing all or part of the sale price of merchandise or services, or any combination thereof,
	214. (1) Subparagraph 130.1(6)(f)(i) of the English version of the Act is replaced by the following:
	(i) debts owing to the corporation that were secured, whether by mortgages, hypothecs or in any other manner, on houses (as defined in section 2 of the National Housing Act) or on property included within a housing project (as defined in that section), and
	(2) Paragraph 130.1(6)(g) of the English version of the Act is replaced by the following:
	(g) the cost amount to the corporation of all real property of the corporation, including leasehold interests in such property, (except real property acquired by the corporation by foreclosure or otherwise after default made on a mortgage, hypothec or agreement of sale of real property) did not exceed 25% of the cost amount to it of all its property;
	215. (1) Subparagraph (b)(i) of the definition ``non-resident-owned investment corporation'' in subsection 133(8) of the Act is replaced by the following:
	(i) ownership of, or trading or dealing in, bonds, shares, debentures, mortgages, hypothecary claims, bills, notes or other similar property or any interest therein,
	(2) Subparagraph (d)(ii) of the definition ``non-resident-owned investment corporation'' in subsection 133(8) of the Act is replaced by the following:
	(ii) trading or dealing in bonds, shares, debentures, mortgages, hypothecary claims, bills, notes or other similar property or any interest therein,
	216. (1) Subparagraphs 137.1(1)(b)(i) and (ii) of the Act are replaced by the following:
	(i) the total of profits or gains made in the year by the corporation in respect of bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations owned by it that were disposed of by it in the year, and
	(ii) the total of each such portion of each amount, if any, by which the principal amount, at the time it was acquired by the corporation, of a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by the corporation at the end of the year exceeds the cost to the corporation of acquiring it as was included by the corporation in computing its profit for the year.
	(2) Paragraphs 137.1(3)(a) and (b) of the Act are replaced by the following:
	(a) the total of losses sustained in the year by the corporation in respect of bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations owned by it and issued by a person other than a member institution that were disposed of by it in the year;
	(b) the total of each such portion of each amount, if any, by which the cost to the corporation of acquiring a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by the corporation at the end of the year exceeds the principal amount of the bond, debenture, mortgage, hypothecary claim, note or other similar obligation, as the case may be, at the time it was so acquired as was deducted by the corporation in computing its profit for the year;
	(3) The portion of paragraph (a) of the definition ``investment property'' in subsection 137.1(5) of the Act before subparagraph (i) is replaced by the following:
	(a) bonds, debentures, mortgages, hypothecary claims, notes or other similar obligations
	217. (1) The portion of paragraph 137.2(a) of the Act before subparagraph (i) is replaced by the following:
	(a) property of the corporation that is a bond, debenture, mortgage, hypothecary claim, note or other similar obligation owned by it at the commencement of the corporation's 1975 taxation year shall be valued at its cost to the corporation less the total of all amounts that, before that time, the corporation was entitled to receive as, on account or in lieu of payment of, or in satisfaction of, the principal amount of the bond, debenture, mortgage, hypothecary claim, note or other similar obligation,
	(2) Paragraph 137.2(c) of the English version of the Act is replaced by the following:
	(c) property of the corporation (other than property in respect of which any amount for the year has been included under paragraph (a)) that was acquired, by foreclosure or otherwise, after default made under a mortgage or hypothec shall be valued at its cost amount to the corporation; and
	218. The portion of subsection 138(11.93) of the Act before paragraph (a) is replaced by the following:
Property acquired on default in payment	(11.93) Where, at any time in a taxation year of an insurer, the beneficial ownership of property is acquired or reacquired by the insurer in consequence of the failure to pay all or any part of an amount (in this subsection referred to as the ``insurer's claim'') owing to the insurer at that time in respect of a bond, debenture, mortgage, hypothecary claim, agreement of sale or any other form of indebtedness owned by the insurer, the following rules apply to the insurer:
	219. Paragraph (a) of the definition ``specified debt obligation'' in subsection 142.2(1) of the Act is replaced by the following:
	(a) a loan, bond, debenture, mortgage, hypothecary claim, note, agreement of sale or any other similar indebtedness, or
	220. Paragraph (d) of the definition ``financial institution'' in subsection 181(1) of the Act is replaced by the following:
	(d) authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real estate or investing in mortgages or hypothecary claims on real estate,
	221. (1) Paragraph 181.2(3)(d) of the Act is replaced by the following:
	(d) the amount of all indebtedness of the corporation at the end of the year represented by bonds, debentures, notes, mortgages, hypothecary claims, banker's acceptances or similar obligations,
	(2) Paragraph 181.2(4)(c) of the Act is replaced by the following:
	(c) a bond, debenture, note, mortgage, hypothecary claim or similar obligation of another corporation (other than a financial institution),
	(3) Paragraph 181.2(4)(d.1) of the Act is replaced by the following:
	(d.1) a loan or advance to, or a bond, debenture, note, mortgage, hypothecary claim or similar obligation of, a partnership all of the members of which, throughout the year, were other corporations (other than financial institutions) that were not exempt from tax under this Part (otherwise than because of paragraph 181.1(3)(d)),
	(4) Paragraph 181.2(6)(b) of the Act is replaced by the following:
	(b) acquired any bond, debenture, note, mortgage, hypothecary claim or similar obligation of nor issued any bond, debenture, note, mortgage, hypothecary claim or similar obligation to
	222. Paragraph (c) of the definition ``financial institution'' in subsection 190(1) of the Act is replaced by the following:
	(c) is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real estate or investing in mortgages or hypothecary claims on real estate;
	223. Paragraph (b) of the definition ``qualified investment'' in section 204 of the Act is replaced by the following:
	(b) bonds, debentures, notes, mortgages, hypothecary claims or similar obligations described in clause 212(1)(b)(ii)(C), whether issued before, on or after April 15, 1966,
	224. (1) Clause 204.4(2)(a)(ii)(A) of the Act is replaced by the following:
	(A) the fair market value at the time of acquisition of its
	(I) shares, marketable securities and cash, and
	(II) bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations, and
	(2) Subparagraph 204.4(2)(a)(iii) of the Act is replaced by the following:
	(iii) the fair market value at the time of acquisition of its shares, bonds, mortgages, hypothecary claims and other securities of any one corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality) is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is an amount owing by it on account of its acquisition of real property,
	(3) Clause 204.4(2)(a)(viii)(A) of the Act is replaced by the following:
	(A) a mortgage or hypothecary claim (other than a mortgage or hypothecary claim insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages and that is approved as a private insurer of mortgages by the Superintendent of Financial Institutions pursuant to the powers assigned to the Superintendent under subsection 6(1) of the Office of the Superintendent of Financial Institutions Act), or an interest therein, in respect of which the mortgagor or hypothecary debtor is the annuitant under a registered retirement savings plan or a registered retirement income fund, or a person with whom the annuitant is not dealing at arm's length, if any of the funds of a trust governed by such a plan or fund have been used to acquire an interest in the applicant, or
	(4) Subsections (1) and (3) apply to property acquired after March 16, 2001.
	225. The portion of subsection 204.6(2) of the Act before paragraph (a) is replaced by the following:
Tax payable	(2) Where at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) or (b) holds property that is a share, bond, mortgage, hypothecary claim or other security of a corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality), it shall, in respect of that month, pay a tax under this Part equal to 1% of the amount, if any, by which
	226. (1) The portion of clause 212(1)(b)(ii)(C) of the Act before subclause (I) is replaced by the following:
	(C) bonds, debentures, notes, mortgages, hypothecary claims or similar obligations
	(2) Subparagraph 212(1)(b)(viii) of the Act is replaced by the following:
	(viii) interest payable on a mortgage, hypothecary claim or similar obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real property situated outside Canada,
	(3) Paragraph 212(13)(f) of the Act is replaced by the following:
	(f) interest on any mortgage, hypothecary claim or other indebtedness entered into or issued or modified after March 31, 1977 and secured by real property situated in Canada or an interest therein to the extent that the amount so paid or credited is deductible in computing the non-resident person's taxable income earned in Canada or the amount on which the non-resident person is liable to pay tax under Part I,
	(4) Subsection 212(15) of the Act is replaced by the following:
Certain obligations	(15) For the purposes of subparagraph (1)(b)(ii), after November 18, 1974 interest on a bond, debenture, note, mortgage, hypothecary claim or similar obligation that is insured by the Canada Deposit Insurance Corporation is deemed not to be interest with respect to an obligation guaranteed by the Government of Canada.
	227. (1) The portion of subsection 214(6) of the Act before paragraph (a) is replaced by the following:
Deemed interest	(6) Where, in respect of interest stipulated to be payable, on a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation that has been assigned or otherwise transferred by a non-resident person to a person resident in Canada, subsection 20(14) would, if Part I were applicable, require an amount to be included in computing the transferor's income, that amount is, for the purposes of this Part, deemed to be a payment of interest on that obligation made by the transferee to the transferor at the time of the assignment or other transfer of the obligation, if
	(2) Paragraph 214(7)(a) of the Act is replaced by the following:
	(a) a non-resident person has at any time assigned or otherwise transferred to a person resident in Canada a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by a person resident in Canada,
	(3) The portion of subsection 214(8) of the Act before paragraph (a) is replaced by the following: