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Bill C-92

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      (e) the processing in Canada of crude oil (other than heavy crude oil recovered from an oil or gas well or a tar sands deposit) recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent, and

      (f) prescribed activities

    and, for the purposes of paragraphs (b) to (d),

      (g) gas is not considered to cease to be raw natural gas solely because of its processing at a field separation and dehydration facility, and

      (h) where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant;

``controlled foreign affiliate''
« société étrangère affiliée contrôlée »

``controlled foreign affiliate'' has the meaning assigned by subsection 95(1);

``designated insurance property''
« bien d'assurance désigné »

``designated insurance property'' has the meaning assigned by subsection 138(12);

``registered labour- sponsored venture capital corporation''
« société agréée à capital de risque de travailleurs »

``registered labour-sponsored venture capital corporation'' means a corporation that was registered under subsection 204.81(1), the registration of which has not been revoked;

``specified future tax consequence''
« conséquenc e fiscale future détermi-
née »

``specified future tax consequence'' for a taxation year means

      (a) the consequence of the deduction or exclusion of an amount referred to in paragraph 161(7)(a), and

      (b) the consequence of a reduction under subsection 66(12.73) of a particular amount purported to be renounced by a corporation after the beginning of the year to a person or partnership under subsection 66(12.6) or (12.601) because of the application of subsection 66(12.66), determined as if the purported renunciation would, but for subsection 66(12.73), have been effective only where

        (i) the purported renunciation occurred in January, February or March of a calendar year,

        (ii) the effective date of the purported renunciation was the last day of the preceding calendar year,

        (iii) the corporation agreed in that preceding calendar year to issue a flow-though share to the person or partnership,

        (iv) the particular amount does not exceed the amount, if any, by which the consideration for which the share is to be issued exceeds the total of all other amounts purported by the corporation to have been renounced under subsection 66(12.6) or (12.601) in respect of that consideration,

        (v) paragraphs 66(12.66)(c) and (d) are satisfied with respect to the purported renunciation, and

        (vi) the form prescribed for the purpose of subsection 66(12.7) in respect of the purported renunciation is filed with the Minister before May of the calendar year;

(4) Subsection 248(25) of the Act is replaced by the following:

Beneficially interested

(25) For the purposes of this Act, a person or partnership beneficially interested in a particular trust includes any person or partnership that has any right (whether immediate or future, whether absolute or contingent or whether conditional on or subject to the exercise of any discretionary power by any person or persons) as a beneficiary under a trust to receive any of the income or capital of the particular trust either directly from the particular trust or indirectly through one or more other trusts.

(5) The definition ``balance-due day'' in subsection 248(1) of the Act, as enacted by subsection (1), applies to the 1996 and subsequent taxation years.

(5.1) The definition ``designated insurance property'' in subsection 248(1) of the Act, as enacted by subsection (3), applies to the 1997 and subsequent taxation years.

(6) The definition ``exempt income'' in subsection 248(1) of the Act, as enacted by subsection (1), the definition ``Canadian field processing'' in subsection 248(1) of the Act, as enacted by subsection (3), and subsection (4) apply after 1996.

(7) The definitions ``oil or gas well'' and ``tar sands'' in subsection 248(1) of the Act, as enacted by subsection (1), the definition ``bituminous sands'' in subsection 248(1) of the Act, as enacted by subsection (3), and subsection (2) apply after March 6, 1996.

(8) The definition ``business limit'' in subsection 248(1) of the Act, as enacted by subsection (3), applies after May 23, 1985.

(9) The definitions ``controlled foreign affiliate'' and ``registered labour-sponsored venture capital corporation'' in subsection 248(1) of the Act, as enacted by subsection (3), apply after 1995.

(10) The definition ``specified future tax consequence'' in subsection 248(1) of the Act, as enacted by subsection (3), applies to the 1996 and subsequent taxation years and, for greater certainty, for taxation years that ended before 1996, there are deemed to be no specified future tax consequences.

PART II

R.S., c. 2 (5th Supp.); 1994, cc. 7, 21; 1995, cc. 3, 21

INCOME TAX APPLICATION RULES

72. (1) Paragraph 26(9.4)(b) of the Income Tax Application Rules is replaced by the following:

    (b) clause 53(2)(c)(i)(B) of the amended Act shall be read as follows:

        ``(B) paragraphs 12(1)(o) and (z.5), 18(1)(m) and 20(1)(v.1), section 31, subsection 40(2), section 55 and subsections 69(6) and (7) of this Act, paragraphs 20(1)(gg) and 81(1)(r) and (s) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and the provisions of the Income Tax Application Rules relating to section 14, and''

(2) Subsection (1) applies for the purpose of computing the adjusted cost base of property after 1996.

73. (1) Subsections 29(6) to (8) of the Rules are repealed.

(2) Subsection (1) applies to renunciations made

    (a) after 2006, in respect of a payment or loan received by a joint exploration corporation before March 6, 1996;

    (b) after 2006, in respect of a payment or loan received by a joint exploration corporation after March 5, 1996 under an agreement in writing made

      (i) by the corporation before March 6, 1996, or

      (ii) by another corporation before March 6, 1996, where

        (A) the other corporation controlled the corporation at the time the agreement was made, or

        (B) the other corporation undertook, at the time the agreement was made, to form the corporation; and

    (c) after March 5, 1996, in any other case.

PART III

1994, c. 8

AN ACT TO AMEND THE INCOME TAX ACT

74. (1) Subsection 4(5) of An Act to Amend the Income Tax Act, being chapter 8 of the Statutes of Canada, 1994, is replaced by the following:

(5) Subsections (1), (2) and (4) apply to taxation years that end after December 2, 1992.

(6) Subsection (3) applies to taxation years of a taxpayer that end after December 2, 1992, except that it does not apply to taxation years of a taxpayer that began before March 6, 1996 with respect to rental expenses incurred pursuant to a written lease agreement renewed, extended or entered into before June 18, 1987 by the taxpayer or a person with whom the taxpayer did not deal at arm's length at the time the lease was renewed, extended or entered into.

(2) Subsection (1) is deemed to have come into force on May 12, 1994.

PART IV

CONDITIONAL AMENDMENTS

Bill C-69

75. (1) If Bill C-69, introduced in the second session of the thirty-fifth Parliament and entitled An Act to amend the Income Tax Act, the Income Tax Application Rules, the Bankruptcy and Insolvency Act, the Canada Pension Plan, the Children's Special Allowances Act, the Cultural Property Export and Import Act, the Customs Act, the Employment Insurance Act, the Excise Tax Act, the Old Age Security Act, the Tax Court of Canada Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act, the Western Grain Transition Payments Act and certain Acts related to the Income Tax Act, is assented to, then,

    (a) the portion of subsection 66(12.66) of the Income Tax Act, as enacted by subsection 31(4) of that Act, is replaced by the following:

for the purpose of subsection (12.6) or for the purposes of subsection (12.601) and paragraph (12.602)(b), as the case may be, the corporation is deemed to have incurred the expenses on the last day of that preceding year.

    (b) subparagraph 115(1)(b)(iii) of the Income Tax Act, as enacted by subsection 58(1) of that Act, is replaced by the following:

      (iii) where the non-resident person is an insurer, any capital property that is its designated insurance property for the year,

    (c) the description of C in section 127 of that Act is replaced by the following:

C is the number of days in the year that are after February 25, 1992 and before 1999; and

    (d) paragraph 219(1)(k) of the Income Tax Act, as enacted by subsection 139(1) of that Act, is replaced by the following:

    (k) the portion of the total of all amounts, each of which is an amount by which the corporation's base amount is increased because of paragraph 12(1)(o) or (z.5) or 18(1)(l.1) or (m) or subsection 69(6) or (7), that is not deductible under paragraph (h) or (j), and

and

    (e) section 23 of this Act is repealed.

(2) Paragraph (1)(a) applies to expenses incurred after 1996 except expenses incurred in January or February of 1997 in respect of an agreement that was made in 1995.

(3) Paragraphs (1)(b) and (e) apply to the 1996 and subsequent taxation years.

(4) Paragraph (1)(c) comes into force or is deemed to have come into force on the day that that Act is assented to.

(5) Paragraph (1)(d) applies to taxation years that begin after 1996.

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