Bill C-72

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``treaty-protec ted business'' « entreprise protégée par traité »	``treaty-protected business'' of a taxpayer at any time means a business in respect of which any income of the taxpayer for a period that includes that time would, because of a tax treaty with another country, be exempt from tax under Part I;
``treaty-protec ted property'' « bien protégé par traité »	``treaty-protected property'' of a taxpayer at any time means property any income or gain from the disposition of which by the taxpayer at that time would, because of a tax treaty with another country, be exempt from tax under Part I;
	(13) Subsection (1) applies after February 23, 1998.
	(14) Subsections (2), (4) and (8) to (10) apply to taxation years that begin after 1998 except that, in the application of subsection (2) to a bond or debenture acquired from a corporation that last acquired the bond or debenture in a taxation year that began before 1999,
	(a) the expression ``at the time the person last acquired the bond or debenture and at the particular time, a person other than a corporation described in any of paragraphs (a) to (f) of that definition'' in clause (e)(iv)(C) of the definition ``income bond'' or ``income debenture'' in subsection 248(1) of the Act, as enacted by subsection (2), shall be read as ``at the time the person last acquired the bond or debenture, a corporation described in subclause (B)(I) or (II), and at the particular time, a corporation described in any of paragraphs (a) to (f) of that definition''; and
	(b) the expression ``a corporation described in any of paragraphs (a) to (f) of the definition'' in clause (e)(v)(B) of the definition ``income bond'' or ``income debenture'' in subsection 248(1) of the Act, as enacted by subsection (2), shall be read as ``a corporation described in subclause (iv)(B)(I) or (II) of the definition''.
	(15) Subsection (3) is deemed to have come into force on April 1, 1996.
	(16) Subsections (5) and (6) apply for the purpose of determining the status of a particular corporation as a specified financial institution, for all purposes of the Act, for taxation years of the particular corporation that begin after 1998.
	(17) Subsection (7) and the definitions ``tax treaty'', ``treaty-protected business'' and ``treaty-protected property'' in subsection 248(1) of the Act, as enacted by subsection (12), apply to the 1998 and subsequent taxation years.
	(18) Subsection (11) applies to taxation years that begin after 1998 except that, in its application to a share acquired from a corporation that last acquired the share in a taxation year that began before 1999, the expression ``described in any of paragraphs (a) to (f) of the definition ``specified financial institution'' in this subsection,'' in clause (h)(vi)(B) of the definition ``term preferred share'' in subsection 248(1) of the Act, as enacted by subsection (11), shall be read as ``described in subclause (iv)(B)(I) or (II)''.
	(19) The definition ``eligible relocation'' in subsection 248(1) of the Act, as enacted by subsection (12), applies to all taxation years.
	81. (1) Subparagraph 249.1(1)(b)(i) of the Act is replaced by the following:
	(i) an individual (other than an individual to whom section 149 or 149.1 applies or a testamentary trust),
	(i.1) a fiscal period of an inter vivos trust (other than a fiscal period to which paragraph 132.11(1)(c) applies),




	(2) Subsection (1) applies to fiscal periods that begin after December 15, 1997.
	82. (1) Paragraph 250(1)(e) of the Act is repealed.
	(2) Paragraph 250(1)(f) of the Act is replaced by the following:
	(f) was at any time in the year a child of, and dependent for support on, an individual to whom paragraph (b), (c), (d) or (d.1) applies and the person's income for the year did not exceed the total of $500 and the amount used under paragraph (c) of the description of B in subsection 118(1) for the year;
	(3) Subsection 250(1) of the Act is amended by striking out the word ``or'' at the end of paragraph (e), by adding the word ``or'' at the end of paragraph (f) and by adding the following after paragraph (f):
	(g) was at any time in the year, under an agreement or a convention with one or more other countries that has the force of law in Canada, entitled to an exemption from an income tax otherwise payable in any of those countries in respect of income from any source (unless all or substantially all of the person's income from all sources was not so exempt), because at that time the person was related to or a member of the family of an individual (other than a trust) who was resident in Canada.
	(4) Subsection 250(5) of the Act is replaced by the following:
Deemed non-resident	(5) Notwithstanding any other provision of this Act, a person is deemed not to be resident in Canada at a time if, at that time, the person would, but for this subsection and any tax treaty, be resident in Canada for the purposes of this Act but is, under a tax treaty with another country, resident in the other country and not resident in Canada.
	(5) Subsection (1) applies after February 23, 1998 except that, where
	(a) any person would, but for paragraph 250(1)(e) of the Act,
	(i) have been non-resident at any time before February 24, 1998, and
	(ii) not have become resident in Canada after that time and before February 24, 1998, and
	(b) the person does not elect in writing filed with the Minister of National Revenue with the person's return of income under Part I of the Act for the 1998 taxation year to have subsection (1) apply after February 23, 1998,
	subsection (1) does not apply in respect of the person before the first time after February 23, 1998 that the person would, but for paragraph 250(1)(e) of the Act, cease to be resident in Canada.
	(6) Subsection (2) applies to the 1998 and subsequent taxation years.
	(7) Subsection (3) applies after February 23, 1998.
	(8) Subsection (4) applies after February 24, 1998 except that, if on that day an individual was, under a tax treaty (as defined in subsection 248(1) of the Act, as amended by this Act), resident in another country, subsection (4) does not apply to the individual until the first time after February 24, 1998 at which the individual becomes, under a tax treaty with a country other than Canada, resident in the other country.
	PART 2
	UNITED STATES TAX REFUNDS - SOCIAL SECURITY
Definitions	83. (1) The definitions in this subsection apply in this Part.
``Convention' ' « Convention »	*``Convention'' has the meaning assigned by section 2 of the Canada-United States Tax Convention Act, 1984.*
``creditable United States tax'' « impôt des États-Unis imputable »	``creditable United States tax'' of an individual for a taxation year means an amount
	(a) that was paid to the government of the United States by or on behalf of the individual, at a time when the individual was resident in Canada, on account of United States tax on the individual's United States social security benefits for the year;
	(b) that would have been so payable to that government if the Convention had not been amended by the Protocol signed at Ottawa on July 29, 1997; and
	(c) that is refundable by that government under the terms of the Convention.
``United States social security benefits'' « prestations de sécurité sociale des États-Unis »	``United States social security benefits'' of an individual for a particular taxation year includes
	(a) benefits of the United States Social Security Administration, and
	(b) tier 1 railroad benefits of the United States Railroad Retirement Board
	paid to or for the benefit of the individual in the particular year (but does not include unemployment benefits) and, for the purpose of this definition, a benefit paid in a taxation year for the following taxation year is deemed to have been paid in that following year.
Additional Amount	(2) Each individual who has paid creditable United States tax for a taxation year is deemed to have paid the amount of $50, on the individual's balance-due day for the year, on account of the individual's tax payable under Part I of the Income Tax Act for the year.
Interest	*(3) For the purpose of determining interest payable under the Income Tax Act* by or to an individual, the individual's creditable United States tax for a taxation year is deemed**
	(a) to have been paid, on the individual's balance-due day for the year, on account of the individual's tax payable under Part I of the Act for the year; and
	(b) to have been refunded to the individual on the first day on which the Minister of National Revenue, in respect of the individual's creditable United States tax,
	(i) pays an amount to or for the benefit of the individual, or
	(ii) applies an amount to a liability of the individual.
	(4) Subsections (1) to (3) apply to the 1996 and 1997 taxation years.
	PART 3
R.S., c. I-4; R.S., c. 48 (1st Supp.); 1991, c. 49; 1993, c. 24; 1998, c. 19	INCOME TAX CONVENTIONS INTERPRETATION ACT
1993, c. 24, s. 147(1)	*84. (1) The definition ``annuity'' in section 5 of the Income Tax Conventions Interpretation Act* is replaced by the following:**
``annuity'' « rente »	``annuity'' does not include any pension payment or any payment under a plan, arrangement or contract described in subparagraphs (a)(i) to (ix) of the definition ``pension'';
1993, c. 24, s. 147(1)	(2) The portion of the definition ``periodic pension payment'' in section 5 of the Act before paragraph (a) is replaced by the following:
``periodic pension payment'' « paiement périodique de pension »	``periodic pension payment'' means, in respect of payments that arise in Canada, a pension payment other than
	(3) Section 5 of the Act is amended by adding the following in alphabetical order:
``pension'' « pension »	``pension'' means, in respect of payments that arise in Canada,
	(a) if the convention does not include a definition ``pension'', a payment under any plan, arrangement or contract that is
	(i) a registered pension plan,
	(ii) a registered retirement savings plan,
	(iii) a registered retirement income fund,
	(iv) a retirement compensation arrangement,
	(v) a deferred profit sharing plan,
	(vi) a plan that is deemed by subsection 147(15) of the Income Tax Act not to be a deferred profit sharing plan,
	(vii) an annuity contract purchased under a plan referred to in subparagraph (v) or (vi),
	(viii) an annuity contract where the amount paid by or on behalf of an individual to acquire the contract was deductible under paragraph 60(l) of the Income Tax Act in computing the individual's income for any taxation year (or would have been so deductible if the individual had been resident in Canada), or
	(ix) a superannuation, pension or retirement plan not otherwise referred to in this paragraph, and
	(b) if the convention includes a definition ``pension'', a payment that is a pension for the purposes of the convention or a payment (other than a payment of social security benefits) that would be a periodic pension payment if the convention did not include a definition ``pension'';
	(4) Subsections (1) to (3) apply with respect to amounts paid after 1996.
1993, c. 24, s. 148(1); 1998, c. 19, s. 287(1)	85. (1) Subsection 5.1(1) of the Act is repealed.
	(2) Subsection (1) applies with respect to amounts paid after 1996.
	86. (1) The Act is amended by adding the following after section 6.2:
Gains arising in Canada	6.3 Except where a convention expressly otherwise provides, any amount of income, gain or loss in respect of the disposition of a property that is taxable Canadian property within the meaning assigned by the Income Tax Act is deemed to arise in Canada.
	(2) Subsection (1) applies to dispositions that occur after February 23, 1998.

Bill C-72

PART 2

UNITED STATES TAX REFUNDS - SOCIAL SECURITY

PART 3

INCOME TAX CONVENTIONS INTERPRETATION ACT