``approved
share''
« action
approuvée »
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``approved share'' means a share of the capital
stock of a prescribed labour-sponsored
venture capital corporation, but does not
include
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(a) a share issued by a registered
labour-sponsored venture capital
corporation the venture capital business
of which was discontinued before the
time of the issue, and
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(b) a share issued by a prescribed
labour-sponsored venture capital
corporation (other than a registered
labour-sponsored venture capital
corporation) if, at the time of the issue,
every province under the laws of which
the corporation is a prescribed
labour-sponsored venture capital
corporation has suspended or terminated
its assistance in respect of the acquisition
of shares of the capital stock of the
corporation;
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``tax
otherwise
payable''
« impôt
payable par
ailleurs »
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``tax otherwise payable'' by an individual
means the amount that, but for this section,
would be the individual's tax payable under
this Part.
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(2) Section 127.4 of the Act is amended by
adding the following after subsection (1):
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Amalgama-
tions or
mergers
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(1.1) Subsections 204.8(2) and 204.85(3)
apply for the purpose of this section.
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(3) The definition ``approved share'' in
subsection 127.4(1) of the Act, as enacted by
subsection (1), applies to the 1999 and
subsequent taxation years.
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(4) The definition ``tax otherwise
payable'' in subsection 127.4(1) of the Act,
as enacted by subsection (1), applies to the
1998 and subsequent taxation years.
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(5) Subsection (2) applies after February
16, 1999.
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37. (1) Section 127.5 of the Act is replaced
by the following:
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| Obligation to
pay minimum
tax
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127.5 Notwithstanding any other provision
of this Act but subject to subsection 120.4(3)
and section 127.55, where the amount that,
but for section 120, would be determined
under Division E to be an individual's tax
payable for a taxation year is less than the
amount determined under paragraph (a) in
respect of the individual for the year , the
individual's tax payable under this Part for the
year is the total of
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(a) the amount, if any, by which
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(i) the individual's minimum amount for
the year determined under section 127.51
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(ii) the individual's special foreign tax
credit determined under section 127.54
for the year, and
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(b) the amount, if any , required by section
120 to be added to the individual's tax
otherwise payable under this Part for the
year.
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(2) Subsection (1) applies to the 1998 and
subsequent taxation years except that, in its
application to the 1998 and 1999 taxation
years, section 127.5 of the Act, as enacted by
subsection (1), shall be read without
reference to the expression ``subsection
120.4(3) and''.
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38. (1) The Act is amended by adding the
following after section 139:
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| Definitions
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139.1 (1) The definitions in this subsection
apply in this section and sections 139.2 and
147.4.
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``conversion
benefit''
« avantage de
transformatio
n »
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``conversion benefit'' means a benefit
received in connection with the
demutualization of an insurance
corporation because of an interest, before
the demutualization, of any person in an
insurance policy to which the insurance
corporation has been a party.
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``deadline''
« échéance »
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``deadline'' for a payment in respect of a
demutualization of an insurance
corporation means the latest of
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(a) the end of the day that is 13 months
after the time of the demutualization,
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(b) where the entire amount of the
payment depends on the outcome of an
initial public offering of shares of the
corporation or a holding corporation in
respect of the insurance corporation, the
end of the day that is 60 days after the day
on which the offering is completed,
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(c) where the payment is made after the
initial deadline for the payment and it is
reasonable to conclude that the payment
was postponed beyond that initial
deadline because there was not sufficient
information available 60 days before that
initial deadline with regard to the
location of a person, the end of the day
that is six months after such information
becomes available, and
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(d) the end of any other day that is
acceptable to the Minister.
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``demutualiza-
tion''
« démutuali-
sation »
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``demutualization'' means the conversion of
an insurance corporation from a mutual
company into a corporation that is not a
mutual company.
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``holding
corporation''
« société de
portefeuille »
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``holding corporation'' means a corporation
that
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(a) in connection with the
demutualization of an insurance
corporation, has issued shares of its
capital stock to stakeholders; and
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(b) owns shares of the capital stock of the
insurance corporation acquired in
connection with the demutualization that
entitle it to 90% or more of the votes that
could be cast in respect of shares under all
circumstances at an annual meeting of
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(i) shareholders of the insurance
corporation, or
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(ii) shareholders of the insurance
corporation and holders of insurance
policies to which the insurance
corporation is a party.
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``initial
deadline''
« échéance
initiale »
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``initial deadline'' for a payment is the time
that would, if the definition ``deadline''
were read without reference to paragraph
(c) of that definition, be the deadline for the
payment.
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``mutual
holding
corporation''
« société
mutuelle de
portefeuille »
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``mutual holding corporation'', in respect of
an insurance corporation, means a mutual
company established to hold shares of the
capital stock of the insurance corporation,
where the only persons entitled to vote at an
annual meeting of the mutual company are
policyholders of the insurance corporation.
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``ownership
rights''
« droits de
propriété »
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``ownership rights'' means
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(a) in a particular mutual holding
corporation, the following rights and
interests held by a person in respect of the
particular corporation because of an
interest or former interest of any person
in an insurance policy to which an
insurance corporation, in respect of
which the particular corporation is the
mutual holding corporation, has been a
party:
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(i) rights that are similar to rights
attached to shares of the capital stock
of a corporation, and
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(ii) all other rights with respect to, and
interests in, the particular corporation
as a mutual company; and
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(b) in a mutual insurance corporation, the
following rights and interests held by a
person in respect of the mutual insurance
corporation because of an interest or
former interest of any person in an
insurance policy to which that
corporation has been a party:
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(i) rights that are similar to rights
attached to shares of the capital stock
of a corporation,
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(ii) all other rights with respect to, and
interests in, the mutual insurance
corporation as a mutual company, and
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(iii) any contingent or absolute right to
receive a benefit in connection with
the demutualization of the mutual
insurance corporation.
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``person''
« personne »
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``person'' includes a partnership.
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``share''
« action »
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``share'' of the capital stock of a corporation
includes a right granted by the corporation
to acquire a share of its capital stock.
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``specified
insurance
benefit''
« avantage
déterminé »
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``specified insurance benefit'' means a taxable
conversion benefit that is
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(a) an enhancement of benefits under an
insurance policy;
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(b) an issuance of an insurance policy;
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(c) an undertaking by an insurance
corporation of an obligation to pay a
policy dividend; or
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(d) a reduction in the amount of
premiums that would otherwise be
payable under an insurance policy.
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``stakeholder'
'
« intéressé »
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``stakeholder'' means a person who is entitled
to receive or who has received a conversion
benefit but, in respect of the
demutualization of an insurance
corporation, does not include a holding
corporation in connection with the
demutualization or a mutual holding
corporation in respect of the insurance
corporation.
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``taxable
conversion
benefit''
« avantage de
transforma-
tion
imposable »
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``taxable conversion benefit'' means a
conversion benefit received by a
stakeholder in connection with the
demutualization of an insurance
corporation, other than a conversion benefit
that is
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(a) a share of a class of the capital stock
of the corporation;
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(b) a share of a class of the capital stock
of a corporation that is or becomes a
holding corporation in connection with
the demutualization; or
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(c) an ownership right in a mutual
holding corporation in respect of the
insurance corporation.
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| Rules of
general
application
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(2) For the purpose of this section,
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(a) subject to paragraphs (b) to (g), if in
providing a benefit in respect of a
demutualization, a corporation becomes
obligated, either absolutely or contingently,
to make or arrange a payment, the person to
whom the undertaking to make or arrange
the payment was given is considered to
have received a benefit
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(i) as a consequence of the undertaking of
the obligation, and
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(ii) not as a consequence of the making of
the payment;
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(b) where, in providing a benefit in respect
of a demutualization, a corporation makes
a payment (other than a payment, made
pursuant to the terms of an insurance policy,
that is not a policy dividend) at any time on
or before the deadline for the payment,
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(i) subject to paragraphs (f) and (g), the
recipient of the payment is considered to
have received a benefit as a consequence
of the making of the payment, and
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(ii) no benefit is considered to have been
received as a consequence of the
undertaking of an obligation, that is
either contingent or absolute, to make or
arrange the payment;
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(c) no benefit is considered to have been
received as a consequence of the
undertaking of an absolute or contingent
obligation of a corporation to make or
arrange a payment (other than a payment,
made pursuant to the terms of an insurance
policy, that is not a policy dividend) unless
it is reasonable to conclude that there is
sufficient information with regard to the
location of a person to make or arrange the
payment;
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(d) where a corporation's obligation to
make or arrange a payment in connection
with a demutualization ceases on or before
the initial deadline for the payment and
without the payment being made in whole
or in part, no benefit is considered to have
been received as a consequence of the
undertaking of the obligation unless the
payment was to be a payment (other than a
policy dividend) pursuant to the terms of an
insurance policy;
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(e) no benefit is considered to have been
received as a consequence of the
undertaking of an absolute or contingent
obligation of a corporation to make or
arrange a payment where
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(i) paragraph (a) would, but for this
paragraph, apply with respect to the
obligation,
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(ii) paragraph (d) would, if that
paragraph were read without reference to
the words ``on or before the initial
deadline for the payment'', apply in
respect of the obligation,
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(iii) it is reasonable to conclude that there
was not, before the initial deadline for the
payment, sufficient information with
regard to the location of a person to make
or arrange the payment, and
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(iv) such information becomes available
on a particular day after the initial
deadline and the obligation ceases not
more than six months after the particular
day;
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(f) no benefit is considered to have been
received as a consequence of
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(i) an undertaking of an absolute or
contingent obligation of a corporation to
make or arrange an annuity payment
through the issuance of an annuity
contract, or
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(ii) a receipt of an annuity payment under
the contract so issued
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where it is reasonable to conclude that the
purpose of the undertaking or the making of
the annuity payment is to supplement
benefits provided under either an annuity
contract to which subsection 147.4(1) or
paragraph 254(a) applied or a group annuity
contract that had been issued under, or
pursuant to, a registered pension plan that
has wound up;
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(g) no benefit is considered to have been
received as a consequence of
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(i) an amendment to which subsection
147.4(2) would, but for subparagraph
147.4(2)(a)(ii), apply, or
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(ii) a substitution to which paragraph
147.4(3)(a) applies;
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(h) the time at which a stakeholder is
considered to receive a benefit in
connection with the demutualization of an
insurance corporation is
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(i) where the benefit is a payment made
at or before the time of the
demutualization or is a payment to which
paragraph (b) applies, the time at which
the payment is made, and
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(ii) in any other case, the latest of
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(A) the time of the demutualization,
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(B) where the extent of the benefit or
the stakeholder's entitlement to it
depends on the outcome of an initial
public offering of shares of the
corporation or a holding corporation in
respect of the insurance corporation
and the offering is completed before
the day that is 13 months after the time
of the demutualization, the time at
which the offering is completed,
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(C) where the entire amount of the
benefit depends on the outcome of an
initial public offering of shares of the
corporation or a holding corporation in
respect of the insurance corporation,
the time at which the offering is
completed,
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(D) where it is reasonable to conclude
that the person conferring the benefit
does not have sufficient information
with regard to the location of the
stakeholder before the later of the
times determined under clauses (A) to
(C), to advise the stakeholder of the
benefit, the time at which sufficient
information with regard to the location
of the stakeholder to so advise the
stakeholder was received by that
person, and
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(E) the end of any other day that is
acceptable to the Minister;
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(i) the time at which an insurance
corporation is considered to demutualize is
the time at which it first issues a share of its
capital stock (other than shares of its capital
stock issued by it when it was a mutual
company if the corporation did not cease to
be a mutual company because of the
issuance of those shares); and
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(j) subject to paragraph (3)(b), the value of
a benefit received by a stakeholder is the
fair market value of the benefit at the time
the stakeholder receives the benefit.
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| Special cases
|
(3) For the purpose of this section,
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(a) where benefits under an insurance
policy are enhanced (otherwise than by way
of an amendment to which subsection
147.4(2) would, but for subparagraph
147.4(2)(a)(ii), apply) in connection with a
demutualization, the value of the
enhancement is deemed to be a benefit
received by the policyholder and not by any
other person;
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(b) where premiums payable under an
insurance policy to an insurance
corporation are reduced in connection with
a demutualization, the policyholder is
deemed, as a consequence of the
undertaking to reduce the premiums, to
have received a benefit equal to the present
value at the time of the demutualization of
the additional premiums that would have
been payable if the premiums had not been
reduced in connection with the
demutualization;
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