(2) The portion of paragraph 87(2)(oo.1) of the Act before subparagraph (i) is replaced by the following:
Refundable investment tax credit and balance-due day	(oo.1) for the purpose of applying the definition ``qualifying corporation'' in subsection 127.1(2), and subparagraph (d)(i) of the definition ``balance-due day'' in subsection 248(1), to any corporation, the new corporation is deemed to have had
	(3) Subsections (1) and (2) apply to taxation years that end after 2001.
	31. (1) The portion of paragraph 88(1)(e.9) of the Act before subparagraph (i) is replaced by the following:
	(e.9) for the purpose of applying the definition ``qualifying corporation'' in subsection 127.1(2), and subparagraph (d)(i) of the definition ``balance-due day'' in subsection 248(1), to any corporation (other than the subsidiary)
	(2) Subsection (1) applies to taxation years that end after 2001.
	32. (1) Section 97 of the Act is amended by adding the following after subsection (4):
Acquisition of apprentice tools, re capital cost and deemed depreciation	(5) If subsection (2) has applied in respect of the acquisition at any particular time of any depreciable property by a partnership from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the ``individual's original cost'') exceeds the individual's proceeds of disposition of the property,
	(a) the capital cost to the partnership of the property is deemed to be equal to the individual's original cost; and
	(b) the amount by which the individual's original cost exceeds the individual's proceeds of disposition in respect of the property is deemed to have been deducted by the partnership under paragraph 20(1)(a) in respect of the property in computing income for taxation years that ended before that particular time.
	(2) Subsection (1) applies to dispositions that occur after 2001.
	33. (1) Subparagraph 110(1)(d.01)(ii) of the Act is repealed.
	(2) Subsection 110(1) of the Act is amended by adding the following after paragraph (f):
Financial assistance	(g) any amount that
	(i) is received by the taxpayer in the year under a program referred to in subparagraph 56(1)(r)(ii) or (iii), a program established under the authority of the Department of Human Resources Development Act or a prescribed program,
	(ii) is financial assistance for the payment of tuition fees of the taxpayer that are not included in computing an amount deductible under subsection 118.5(1) in computing the taxpayer's tax payable under this Part for any taxation year,
	(iii) is included in computing the taxpayer's income for the year, and
	(iv) is not otherwise deductible in computing the taxpayer's taxable income for the year;
	(3) Subsection (1) applies to dispositions that occur after 2001.
	(4) Paragraph 110(1)(g) of the Act, as enacted by subsection (2), applies to the 1997 and subsequent taxation years and, notwithstanding subsections 152(4) to (5) of the Act, any assessment of a taxpayer's tax, interest or penalty for any taxation year shall be made that is necessary to give effect to that paragraph.
	34. (1) The description of E in the definition ``non-capital loss'' in subsection 111(8) of the Act is replaced by the following:
	E is the total of all amounts each of which is the taxpayer's loss for the year from an office, employment, business or property, the taxpayer's allowable business investment loss for the year, an amount deducted under paragraph (1)(b) or section 110.6 in computing the taxpayer's taxable income for the year or an amount that may be deducted under any of paragraphs 110(1)(d) to (d.3), (f), (g), (j) and (k), section 112 and subsections 113(1) and 138(6) in computing the taxpayer's taxable income for the year, and
	(2) Subsection (1) applies to the 1997 and subsequent taxation years and, notwithstanding subsections 152(4) to (5) of the Act, any assessment of a taxpayer's tax, interest or penalty for any taxation year shall be made that is necessary to give effect to subsection (1).
	35. (1) The definition ``qualified non-resident'' in subsection 115.2(1) of the Act is repealed.
	(2) The definitions ``designated investment services'' and ``promoter'' in subsection 115.2(1) of the Act are replaced by the following:
``designated investment services'' « services de placement déterminés »	``designated investment services'' provided to a person or partnership means any one or more of the services described in the following paragraphs:
	(a) investment management and advice with respect to qualified investments, regardless of whether the manager has discretionary authority to buy or sell;
	(b) purchasing and selling qualified investments, exercising rights incidental to the ownership of qualified investments such as voting, conversion and exchange, and entering into and executing agreements with respect to such purchasing and selling and the exercising of such rights;
	(c) investment administration services, such as receiving, delivering and having custody of investments, calculating and reporting investment values, receiving subscription amounts from, and paying distributions and proceeds of disposition to, investors in and beneficiaries of the person or partnership, record keeping, accounting and reporting to the person or partnership and its investors and beneficiaries; and
	(d) in the case of a corporation, trust or partnership the only undertaking of which is the investing of its funds in qualified investments, marketing investments in the corporation, trust or partnership to non-resident investors.
``promoter'' « promoteur »	``promoter'' of a corporation, trust or partnership means a particular person or partnership that initiates or directs the founding, organization or substantial reorganization of the corporation, trust or partnership, and a person or partnership that is affiliated with the particular person or partnership.
	(3) The portion of the definition ``qualified investment'' in subsection 115.2(1) of the Act before subparagraph (a)(ii) is replaced by the following:
``qualified investment'' « placement admissible »	``qualified investment'' of a person or partnership means
	(a) a share of the capital stock of a corporation, or an interest in a partnership, trust, entity, fund or organization, other than a share or an interest
	(i) that is either
	(A) not listed on a prescribed stock exchange, or
	(B) listed on a prescribed stock exchange, if the person or partnership, together with all persons with whom the person or partnership does not deal at arm's length, owns 25% or more of the issued shares of any class of the capital stock of the corporation or of the total value of interests in the partnership, entity, trust, fund or organization, as the case may be, and
	(4) Subsection 115.2(1) of the Act is amended by adding the following in alphabetical order:
``Canadian investor'' « investisseur canadien »	``Canadian investor'', at any time in respect of a non-resident person, means a person that the non-resident person knows, or ought to know after reasonable inquiry, is at that time resident in Canada.
	(5) Subsection 115.2(2) of the Act is replaced by the following:
Not carrying on business in Canada	(2) For the purposes of subsection 115(1) and Part XIV, a non-resident person is not considered to be carrying on business in Canada at any particular time solely because of the provision to the person, or to a partnership of which the person is a member, at the particular time of designated investment services by a Canadian service provider if
	(a) in the case of services provided to a non-resident individual other than a trust, the individual is not affiliated at the particular time with the Canadian service provider;
	(b) in the case of services provided to a non-resident person that is a corporation or trust,
	(i) the person has not, before the particular time, directly or through its agents,
	(A) directed any promotion of investments in itself principally at Canadian investors, or
	(B) sold an investment in itself that is outstanding at the particular time to a person who was a Canadian investor at the time of the sale and who is a Canadian investor at the particular time,
	(ii) the person has not, before the particular time, directly or through its agents, filed any document with a public authority in Canada in accordance with the securities legislation of Canada or of any province in order to permit the distribution of interests in the person to persons resident in Canada, and
	(iii) when the particular time is more than one year after the time at which the person was created, the total of the fair market value, at the particular time, of investments in the person that are beneficially owned by persons and partnerships (other than a designated entity in respect of the Canadian service provider) that are affiliated with the Canadian service provider does not exceed 25% of the fair market value, at the particular time, of all investments in the person; and
	(c) in the case of services provided to a partnership of which the non-resident person is a member,
	(i) the particular time is not more than one year after the partnership was formed, or
	(ii) the total of the fair market value, at the particular time, of investments in the partnership that are beneficially owned by persons and partnerships (other than a designated entity in respect of the Canadian service provider) that are affiliated with the Canadian service provider does not exceed 25% of the fair market value, at the particular time, of all investments in the partnership.
	(6) Subsection 115.2(4) of the Act is replaced by the following:
Transfer pricing	(4) For the purpose of section 247, where subsection (2) applies in respect of services provided to a person that is a corporation or trust or to a partnership, if the Canadian service provider referred to in that subsection does not deal at arm's length with the promoter of the person or of the partnership, the service provider is deemed not to deal at arm's length with the person or partnership.
	(7) Subsections (1) to (3) and (5) and (6) apply to the 2002 and subsequent taxation years.
	(8) Subsection (4) applies to the 1999 and subsequent taxation years except that, in applying the definition ``Canadian investor'', as enacted by that subsection, to taxation years that end after 1998 and before 2002, that definition shall be read as follows:
	``Canadian investor'', at any time in respect of a qualified non-resident, means
	(a) a person that the non-resident knows, or ought to know after reasonable inquiry, is at that time resident in Canada; and
	(b) a partnership that the non-resident knows, or ought to know after reasonable inquiry, has a member that is at that time resident in Canada.
	(9) In applying subparagraph 115.2(2)(b)(i) of the Act, as enacted by subsection 21(1) of the Income Tax Amendments Act, 1999, chapter 19 of the Statutes of Canada, 2000, to taxation years that end after 1998 and before 2002, that subparagraph shall be read as follows:
	(i) the non-resident has not, before the particular time, directly or through its agents,
	(A) directed any promotion of investments in itself principally at Canadian investors, or
	(B) sold an investment in itself that is outstanding at the particular time to a person who was a Canadian investor at the time of the sale and who is a Canadian investor at the particular time,
	36. (1) Paragraph (a) of the definition ``qualifying educational program'' in subsection 118.6(1) of the Act is amended by striking out the word ``or'' at the end of subparagraph (i) and by adding the following after subparagraph (ii):
	(iii) an amount that is received by the student in the year under a program referred to in subparagraph 56(1)(r)(ii) or (iii), a program established under the authority of the Department of Human Resources Development Act or a prescribed program, or
	(2) Subsection (1) applies to the 2002 and subsequent taxation years.
	37. (1) Subparagraph 122.3(1)(e)(iii) of the Act is replaced by the following:
	(iii) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under paragraph 110(1)(d.2), (d.3), (f), (g) or (j), in computing the individual's taxable income for the year.
	(2) Subsection (1) applies to the 1997 and subsequent taxation years except that, for the 1997 taxation year, subparagraph 122.3(1)(e)(iii) of the Act, as enacted by subsection (1), shall be read as follows:
	(iii) the total of all amounts each of which is an amount deducted by the individual under section 110.6 or paragraph 111(1)(b), or deductible by the individual under paragraph 110(1)(d.2), (d.3), (f), (g) or (j), for the year or in respect of the period or periods referred to in subparagraph (ii), as the case may be.
	(3) Notwithstanding subsections 152(4) to (5) of the Act, any assessment of a taxpayer's tax, interest or penalty for any taxation year shall be made that is necessary to give effect to subsection (1) or (2).
	38. (1) Subsections 122.5(1) to (3.1) of the Act are replaced by the following:
Definitions	122.5 (1) The following definitions apply in this section.
``adjusted income'' « revenu rajusté »	``adjusted income'' of an individual, for a taxation year in relation to a month specified for the taxation year, means the total of the individual's income for the taxation year and the income for the taxation year of the individual's qualified relation, if any, in relation to the specified month, both calculated as if no amount were included in respect of any gain from a disposition of property to which section 79 applies.
``cohabiting spouse or common-law partner'' « époux ou conjoint de fait visé »	``cohabiting spouse or common-law partner'' of an individual at any time has the meaning assigned by section 122.6.
``eligible individual'' « particulier admissible »	``eligible individual'', in relation to a month specified for a taxation year, means an individual (other than a trust) who
	(a) has, before the specified month, attained the age of 19 years; or
	(b) was, at any time before the specified month,
	(i) a parent who resided with their child, or
	(ii) married or in a common-law partnership.
``qualified dependant'' « personne à charge admissible »	``qualified dependant'' of an individual, in relation to a month specified for a taxation year, means a person who at the beginning of the specified month
	(a) is the individual's child or is dependent for support on the individual or on the individual's cohabiting spouse or common-law partner;
	(b) resides with the individual;
	(c) is under the age of 19 years;
	(d) is not an eligible individual in relation to the specified month; and
	(e) is not a qualified relation of any individual in relation to the specified month.
``qualified relation'' « proche admissible »	``qualified relation'' of an individual, in relation to a month specified for a taxation year, means the person, if any, who, at the beginning of the specified month, is the individual's cohabiting spouse or common-law partner.