Skip to main content
;

Bill C-28

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

PDF

RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled ``An Act to implement certain provisions of the budget tabled in Parliament on February 18, 2003''.

SUMMARY

Part 1 authorizes the Minister of Finance to pay $1.5 billion into a trust, to be provided to provinces for the purposes of acquiring diagnostic and medical equipment and training specialized staff in order to improve access to publicly funded diagnostic and treatment services. The funds will be distributed to the provinces on a per capita basis.

Part 2 amends the Federal-Provincial Fiscal Arrangements Act to implement a $16 billion Health Reform transfer and a $2.5 billion Canada Health and Social Transfer (CHST) supplement, and to create two new transfer mechanisms. The Health Reform transfer will be distributed to the provinces on a per capita basis over a five-year period beginning on April 1, 2003. The Minister is authorized to pay a $2.5 billion CHST supplement into a trust from which these funds will be distributed to the provinces on an equal per capita basis. The new Canada Health Transfer and Canada Social Transfer will replace the CHST on April 1, 2004, and funding levels are set out through to 2007-08. In addition, Part 2 removes the maximum amount payable to provinces under the Equalization program, effective in fiscal year 2002-03.

Part 3 amends the Canada Student Financial Assistance Act to add protected persons within the meaning of the Immigration and Refugee Protection Act to the list of students eligible for a student loan, and to ensure that appropriate compensation continues to be paid to provinces and territories not participating in the Canada Student Loans Program. It also amends the Canada Student Financial Assistance Act and the Canada Student Loans Act to provide for a limitation period of six years for the collection of student loans.

Part 4 amends the Employment Insurance Act and the Employment Insurance (Fishing) Regulations to introduce a new type of special benefits. It amends the Act in order to: provide six weeks of new compassionate benefits for families to share; establish the medical proof required to receive such benefits; establish the period during which such benefits may be paid; provide for one waiting period per family when such benefits are shared; provide for the authority to make new regulations consequential to the introduction of compassionate care benefits; set the annual premium rate for 2004; and make other minor consequential amendments to the Employment Insurance Act and the Employment Insurance (Fishing) Regulations. It also makes related amendments to the Canada Labour Code.

Part 5 amends the Budget Implementation Act, 1997, the Budget Implementation Act, 1998, and the Canada Foundation for Sustainable Development Technology Act to permit repayment of public moneys provided to, respectively, the Canada Foundation for Innovation, the Canada Millennium Scholarship Foundation and the Canada Foundation for Sustainable Development Technology to the Receiver General for credit to the Consolidated Revenue Fund on the winding up or dissolution of those foundations. Secondly, this Part provides for the making of grants to certain organizations. Thirdly, this Part amends the Farm Credit Canada Act to remove the temporal restriction on investments and to increase its capital. Finally, this Part repeals the Debt Servicing and Reduction Account Act and provides that it does not apply to the 2002-2003 or any later fiscal year.

Part 6 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel from $12 to $7 for one-way travel and from $24 to $14 for round-trip travel, applicable to air travel purchased on or after March 1, 2003.

Part 7 amends the Customs Tariff, Excise Act, 2001 and Excise Tax Act to implement tobacco tax increases proposed on June 17, 2002. The proposed amendments include increases in the taxes and duties on cigarettes, tobacco sticks and other manufactured tobacco, cigars, exported tobacco products, and tobacco products delivered to duty-free shops, sold as ships' stores or imported by Canadian residents returning to Canada.

Part 8 amends the Excise Tax Act to implement measures relating to the fuel excise taxes imposed under Part III of that Act and the goods and services tax or harmonized sales tax (GST/HST) imposed under Part IX of that Act. With respect to excise taxes, Part 8 removes the 4-cent-per-litre federal excise tax on diesel fuel from bio-diesel fuel, from the bio-diesel portion of blended diesel fuel, and from the biomass-produced ethanol or methanol portion of blended diesel fuel, effective February 19, 2003. As well, it clarifies that no rebate of the excise tax on fuel is payable in respect of fuel taken out of the country in the fuel tank of a vehicle being driven across the border, applicable to rebate claims received by the Canada Customs and Revenue Agency on or after February 18, 2003. With respect to the GST/HST, it ensures that the supply of school transportation services by school authorities continues to be treated as an exempt activity and that the supply of municipal services by a private contractor to a municipality or government continues to be treated as taxable, in both cases effective from the date of first enactment of the respective provisions on December 17, 1990.

Part 9 enacts the First Nations Goods and Services Tax Act, which provides for the imposition by eligible first nations of a first nations goods and services tax (FNGST) on first nation lands. The FNGST would be payable by both aboriginals and non-aboriginals and would be identical to the 7-per-cent goods and services tax (GST) or the federal component of the harmonized sales tax (HST) that is imposed under Part IX of the Excise Tax Act. A first nation may enact a law that imposes an FNGST either under the authority granted by the First Nations Goods and Services Tax Act or under a power to enact a law that has been recognized or granted under another Act of Parliament or under an agreement that has been given effect by another Act of Parliament.

A key feature of the enactment is that it provides for the seamless operation of the GST/HST and an FNGST imposed by a first nation. Also, the enactment provides for the authority to enter into an administration agreement between the Government of Canada and the authorized body of a first nation respecting the collection and administration of the 7-per-cent first nations goods and services tax imposed under the law of a first nation and for the estimation and sharing of tax revenues between the Government of Canada and the first nation.

Part 10 enacts amendments to the Income Tax Act that

- increase the annual National Child Benefit Supplement through successive increases of $150 per child in July 2003, $185 in July 2005 and $185 in July 2006 (indexed after year of introduction);

- introduce, effective July 2003, a $1600 Child Disability Benefit as a supplement to the Canada Child Tax Benefit (with payments starting March 2004);

- increase, from $7,634 to $13,814 (indexed after 2003), the level of income used to determine the financial dependence of a child or grandchild for the purposes of the rollovers of RRSP and RRIF proceeds on the death of an annuitant;

- clarify the eligibility criteria for the Disability Tax Credit;

- expand the list of expenses eligible for the Medical Expense Tax Credit to include certain expenses for real-time captioning and note-taking services, and voice recognition software, and the incremental cost to individuals with celiac disease of acquiring gluten-free food products;

- increase the limits for tax-assisted retirement saving;

- expand the capital gains rollover for eligible small-business shares by eliminating the original investment limit and the reinvestment limit and allowing an eligible reinvestment to be made in the year of disposition of the original investment shares or within 120 days after the year;

- provide relieving measures concerning the deductibility of automobile expenses and the recognition of taxable benefits relating to automobiles;

- increase, to $300,000 from $200,000, in increments of $25,000 commencing in 2003, the annual amount of active business income of a small business corporation that is eligible for the special 12 per cent federal corporate income tax rate;

- eliminate the federal capital tax on large corporations over a period of 5 years and increase the threshold at which it begins to apply from $10,000,000 to $50,000,000 in 2004;

- extend the Mineral Exploration Tax Credit to the end of 2004;

- improve the application of the tax shelter rules to arrangements representing the deductibility of tax credits; and

- increase the amount of the Film or Video Production Services Tax Credit to 16 per cent from 11 per cent.

Part 10 also amends the Children's Special Allowances Act as a consequence to add, with respect to special allowances payable for months that are after June 2003, a benefit parallel to the new $1600 Child Disability Benefit Supplement to the Canada Child Tax Benefit.

Part 11 amends the Excise Act, 2001, the non-GST/HST parts of the Excise Tax Act and the Income Tax Act to harmonize various accounting, interest, penalty and related administrative and enforcement provisions, generally applicable after June 2003.

EXPLANATORY NOTES

Federal-Provincial Fiscal Arrangements Act

Clause 3: The relevant portion of subsection 4(9) reads as follows:

(9) Notwithstanding anything in this Part, where

    (a) the total amount of the fiscal equalization payments to all provinces as determined under this Part for any fiscal year commencing with the fiscal year that begins on April 1, 2000

Clause 3.1: Subsection 13(4) reads as follows:

(4) In this section, ``social programs'' includes programs in respect of health, post-secondary education, social assistance and social services, including early childhood development.

Clause 4: (1) to (3) Paragraph 14(h) is new. The relevant portion of section 14 reads as follows:

14. The Canada Health and Social Transfer shall consist of

    . . .

    (f) a cash contribution of $15.5 billion for each fiscal year in the period beginning on April 1, 2004 and ending on March 31, 2006; and

    (g) a cash contribution of

      . . .

      (iii) $4.3 billion for the fiscal year beginning on April 1, 2003,

      (iv) $4.9 billion for the fiscal year beginning on April 1, 2004, and

      (v) $5.5 billion for the fiscal year beginning on April 1, 2005.

Clause 5: New.

Clause 6: (1) and (2) The relevant portion of subsection 16(2) reads as follows:

(2) For the purposes of subsection (1), the amount represented by the federal income tax reduction in a province in respect of the Canada Health and Social Transfer for a fiscal year is an amount equal to the aggregate of

    (a) seventy-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year ending in the fiscal year, within the meaning of the Income Tax Act,

      (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year ending in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      (iii) on the incomes from businesses earned in the province in the taxation year ending in the fiscal year by individuals, within the meaning of the Income Tax Act,

    equal to the product obtained by multiplying 13.5/(100-9.143) by the ``tax otherwise payable under this Part'', within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

    (b) twenty-five per cent of the amount, as determined by the Minister, that would be derived from a tax, computed in accordance with the Income Tax Act,

      (i) on the incomes, other than incomes from businesses, of individuals resident in the province on the last day of the taxation year beginning in the fiscal year, within the meaning of the Income Tax Act,

      (ii) on the incomes, other than incomes from businesses, earned in the province in the taxation year beginning in the fiscal year by individuals not resident in Canada at any time during the taxation year, within the meaning of the Income Tax Act, and

      (iii) on the incomes from businesses earned in the province in the taxation year beginning in the fiscal year by individuals, within the meaning of the Income Tax Act,

    equal to the product obtained by multiplying 13.5/(100-9.143) by the ``tax otherwise payable under this Part'', within the meaning assigned by subsection 120(4) of the Income Tax Act, on those incomes,

Clause 7: New.

Clause 8: New.

Canada Student Financial Assistance Act

Clause 9: The relevant portion of the definition ``qualifying student'' in subsection 2(1) reads as follows:

``qualifying student'' means a person

      (a) who is a Canadian citizen or a permanent resident within the meaning of the Immigration Act,

Clause 10: (1) The definitions ``net costs'' and ``total program net costs'' in subsection 14(6) read as follows:

``net costs'', for a province for a loan year, means the amount by which

      (a) the estimated aggregate of all amounts paid by the Minister in that loan year

        (i) to lenders, service providers or financial institutions under this Act, the regulations or an agreement entered into under section 5, 6.2 or 6.3, to lenders under the Canada Student Loans Act or the regulations made under that Act, and to collection agencies, in respect of student loans or guaranteed student loans made pursuant to certificates of eligibility issued or caused to be issued in any loan year by the appropriate authority for that province, and

        (ii) to persons pursuant to regulations made under paragraph 15(p),

      excluding

        (iii) any amounts paid pursuant to paragraph 5(e) or pursuant to regulations made under paragraph 15(o), and

        (iv) any provincial share paid pursuant to an agreement or arrangement made under subparagraph 18(b)(ii),

    exceeds

      (b) the estimated aggregate of all amounts received by or on behalf of Her Majesty in right of Canada in that loan year, including any amount received pursuant to the Financial Administration Act, in respect of loans referred to in paragraph (a), excluding

        (i) any amounts received pursuant to paragraph 5(e) or pursuant to regulations made under paragraph 15(o), and

        (ii) any amounts received by or on behalf of Her Majesty in right of Canada in respect of a provincial share paid pursuant to an agreement or arrangement made under subparagraph 18(b)(ii);

``total program net costs'', for a loan year, means the amount by which

      (a) the aggregate of all amounts paid by the Minister in that loan year

        (i) to lenders, service providers or financial institutions under this Act, the regulations or an agreement entered into under section 5, 6.2 or 6.3, to lenders under the Canada Student Loans Act or the regulations made under that Act, and to collection agencies, in respect of student loans or guaranteed student loans made pursuant to certificates of eligibility issued or caused to be issued in any loan year by the appropriate authorities for participating provinces, and

        (ii) to persons pursuant to regulations made under paragraph 15(p),

      excluding

        (iii) any amounts paid pursuant to paragraph 5(e) or pursuant to regulations made under paragraph 15(o), and

        (iv) any provincial share paid pursuant to an agreement or arrangement made under subparagraph 18(b)(ii),

    exceeds

      (b) the aggregate of all amounts received by or on behalf of Her Majesty in right of Canada in that loan year, including any amount received pursuant to the Financial Administration Act, in respect of loans referred to in paragraph (a), excluding

        (i) any amounts received pursuant to paragraph 5(e) or pursuant to regulations made under paragraph 15(o), and

        (ii) any amounts received by or on behalf of Her Majesty in right of Canada in respect of a provincial share paid pursuant to an agreement or arrangement made under subparagraph 18(b)(ii).

(2) Subsection 14(8) is new. Subsection 14(7) reads as follows:

(7) Amounts paid or received in relation to subparagraph 5(a)(viii) or section 7, 10 or 11, or in relation to programs established by regulations made under paragraph 15(l), (m), (n) or (p) or under section 11 of the Canada Student Loans Act, shall be included in the calculations described in the definitions ``net costs'' and ``total program net costs'' in subsection (6) only if the government of the province satisfies the Minister, by written notice received by the Minister before the beginning of the loan year in question, that, in relation to the matter in question, the provincial student financial assistance plan has substantially the same effect as the plan established by this Act and the regulations.

Clause 11: New.

Clause 12: New.

Canada Student Loans Act

Clause 13: New.

Employment Insurance Act

Clause 15: The definition ``common-law partner'' in subsection 2(1) reads as follows:

``common-law partner'', in relation to a claimant, means a person who is cohabiting with the claimant in a conjugal relationship, having so cohabited for a period of at least one year;

Clause 16: (1) New.

(2) Subsections 10(13.1) to (13.3) are new. Subsections 10(13) to (15) read as follows:

(13) If, during a claimant's benefit period,

    (a) regular benefits were not paid to the claimant,

    (b) benefits were paid because of the three reasons mentioned in subsection 12(3), and

    (c) with respect to the reasons mentioned in paragraphs 12(3)(b) and (c), benefits were not paid for the maximum number of weeks established for those reasons,

the benefit period is extended so that benefits may be paid up to the maximum number of weeks available to the claimant for the reason mentioned in each of those paragraphs.

(14) Subject to subsection (15), no extension under any of subsections (10) to (13) may result in a benefit period of more than 104 weeks.

(15) No extension under subsection (13) may result in a benefit period of more than 67 weeks, unless the benefit period is also extended under any of subsections (10) to (12).

Clause 17: (1) Paragraph 12(3)(d) is new. The relevant portion of subsection 12(3) reads as follows:

(3) The maximum number of weeks for which benefits may be paid in a benefit period

(2) New.

(3) Subsection 12(5) reads as follows:

(5) In a claimant's benefit period, the claimant may combine weeks of benefits to which the claimant is entitled because of a reason mentioned in subsection (3), but the maximum number of combined weeks is 50. If the benefit period is extended under subsection 10(13), the maximum number of combined weeks is 65.

Clause 18: Subsections 23(3.21) to (3.23) and (3.4) are new. Subsections 23(3.2) and (3.3) read as follows:

(3.2) If, during a claimant's benefit period,

    (a) regular benefits were not paid to the claimant,

    (b) benefits were paid because of the three reasons mentioned in subsection 12(3), and

    (c) with respect to the reason mentioned in paragraph 12(3)(b), benefits were not paid for the maximum number of weeks established for that reason,

the period referred to in subsection (2) is extended so that benefits may be paid up to the maximum number of weeks available to the claimant for that reason.

(3.3) No extension under subsection (3.2) may result in the period being longer than 67 weeks or, if the benefit period is extended under any of subsections 10(10) to (13), 104 weeks.

Clause 19: New.

Clause 20: (1) and (2) Paragraphs 54(c.2) and (f.2) to (f.7) are new. The relevant portion of section 54 reads as follows:

54. The Commission may, with the approval of the Governor in Council, make regulations

Clause 21: Section 66.2 is new. Section 67 reads as follows:

67. Subject to section 70, a person employed in insurable employment shall pay, by deduction as provided in subsection 82(1), a premium equal to their insurable earnings multiplied by the premium rate set under section 66 or 66.1, as the case may be.

Clause 22: (1) The relevant portion of subsection 69(1) reads as follows:

69. (1) The Commission shall, with the approval of the Governor in Council, make regulations to provide a system for reducing the employer's premium where

    (a) the payment of any allowances, money or other benefits because of illness, injury, quarantine, pregnancy or child care under a plan that covers insured persons employed by the employer, other than one established under provincial law, would have the effect of reducing the special benefits payable to the insured persons; and

(2) Subsection 69(2) reads as follows:

(2) The Commission shall, with the approval of the Governor in Council, make regulations to provide a system for reducing the employer's and employee's premiums when the payment of any allowances, money or other benefits because of illness, injury, quarantine, pregnancy or child care under a provincial law to insured persons would have the effect of reducing or eliminating the special benefits payable to those insured persons.

(3) New.

Employment Insurance (Fishing) Regulations

Clause 23: (1) Subsection 8(11.1) reads as follows:

(11.1) Notwithstanding subsection (11) and subject to the applicable maximums referred to in subsections (17) and (18), the benefit period of a fisher shall be extended by one week for each week in respect of which the fisher is entitled to special benefits under section 21, 22 or 23 of the Act, but shall not exceed a maximum of 52 weeks.

(2) Subsections 8(11.31) to (11.33) are new. Subsections 8(11.3) to (11.5) read as follows:

(11.3) Notwithstanding subsection (11) and subject to the applicable maximums referred to in subsection (17), if, during a fisher's benefit period,

    (a) benefits were not paid to the fisher under subsection (12),

    (b) benefits were paid because of the three reasons mentioned in subsection 12(3) of the Act, and

    (c) with respect to the reasons mentioned in paragraphs 12(3)(b) and (c) of the Act, benefits were not paid for the maximum number of weeks established for those reasons,

the benefit period is extended so that benefits may be paid up to the maximum number of weeks available to the fisher for the reason mentioned in each of those paragraphs.

(11.4) Subject to subsection (11.5), no extension under any of subsections (11.1) to (11.3) may result in a benefit period of more than 104 weeks.

(11.5) No extension under subsection (11.3) may result in a benefit period of more than 67 weeks, unless the benefit period is also extended under subsection (11.1) or (11.2).

(3) Subsection 8(14) reads as follows:

(14) No benefit period established under subsection (1) or (6) shall be extended beyond the date determined in accordance with any of subsections (11) to (11.3).

(4) Subsection 8(17.1) reads as follows:

(17.1) For the purpose of subsection (17), the reference in subsection 12(5) of the Act to subsection 10(13) of the Act is to be read as a reference to subsection (11.3) of this section.

Clause 24: (1) Subsection 12(3) reads as follows:

(3) Subject to subsection (4), sections 22 and 23 of the Act apply to the payment of special benefits under this section.

(2) The relevant portion of subsection 12(4) reads as follows:

(4) Notwithstanding section 18 of the Act, a claimant is not entitled to be paid special benefits for a working day, in a benefit period established under this section, in respect of which the claimant fails to prove that on that day the claimant was

    . . .

    (b) entitled to benefits under section 22 or 23 of the Act.

Canada Labour Code

Clause 26: The heading reads as follows:

REASSIGNMENT, MATERNITY LEAVE, AND PARENTAL LEAVE

Clause 27: New.

Clause 28: New.

Clause 29: Paragraph 209.4(a.1) is new. The relevant portion of section 209.4 reads as follows:

209.4 The Governor in Council may make regulations

Budget Implementation Act, 1997

Clause 31: New.

Budget Implementation Act, 1998

Clause 32: New.

Canada Foundation for Sustainable Development Technology Act

Clause 33: New.

Farm Credit Canada Act

Clause 41: The relevant portion of subsection 4(2) reads as follows:

(2) In carrying out its purpose, the Corporation has the power to

    . . .

    (f.4) acquire and dispose of short- or medium-term equity interests in farming operations or in businesses related to farming, within parameters that are satisfactory to the Minister of Finance;

Clause 42: Subsection 11(1) reads as follows:

11. (1) At the request of the Corporation, the Minister of Finance may, with the approval of the Governor in Council, pay to the Corporation, out of the Consolidated Revenue Fund, amounts not exceeding in the aggregate one billion, one hundred and seventy-five million dollars, or such greater aggregate amount as may be authorized from time to time under an appropriation Act.

Air Travellers Security Charge Act

Clause 44: (1) Subsection 12(1) reads as follows:

12. (1) Subject to subsection (3), if an air transportation service is acquired in Canada, the amount of the charge in respect of the service is

    (a) $11.22 for each chargeable emplanement included in the service, to a maximum of $22.43, if

      (i) the service does not include transportation to a destination outside the continental zone, and

      (ii) tax under subsection 165(1) of the Excise Tax Act is required to be paid in respect of the service;

    (b) $12.00 for each chargeable emplanement included in the service, to a maximum of $24.00, if

      (i) the service does not include transportation to a destination outside the continental zone, and

      (ii) tax under subsection 165(1) of the Excise Tax Act is not required to be paid in respect of the service; or

    (c) $24.00, if the service includes transportation to a destination outside the continental zone.

Customs Tariff

Clause 45: Subsection 21(2) reads as follows:

(2) There shall be levied on traveller's tobacco, at the time of its importation, and paid in accordance with the Customs Act, a duty of

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $0.0375 per gram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.

Excise Act, 2001

Clause 46: Section 240 reads as follows:

240. Every tobacco licensee who contravenes subsection 50(5) is liable to a penalty equal to the total of

    (a) $0.25995 per cigarette that was removed in contravention of that subsection,

    (b) $0.159966 per tobacco stick that was removed in contravention of that subsection, and

    (c) $149.966 per kilogram of manufactured tobacco, other than cigarettes and tobacco sticks, that was removed in contravention of that subsection.

Clause 47: (1) and (2) The relevant portion of section 1 of Schedule 1 reads as follows:

1. Cigarettes:

    (a) $0.287375 for each five cigarettes or fraction of five cigarettes contained in any package, if the cigarettes are black stock

    . . .

    (b) $0.308755 for each five cigarettes or fraction of five cigarettes contained in any package, in any other case.

Clause 48: (1) and (2) The relevant portion of section 2 of Schedule 1 reads as follows:

2. Tobacco sticks:

    (a) $0.042483 per stick, if the tobacco sticks are black stock

    . . .

    (b) $0.045483 per stick, in any other case.

Clause 49: (1) and (2) The relevant portion of section 3 of Schedule 1 reads as follows:

3. Manufactured tobacco other than cigarettes and tobacco sticks:

    (a) $37.483 per kilogram, if the manufactured tobacco is black stock

    . . .

    (b) $41.481 per kilogram, in any other case.

Clause 50: (1) and (2) The relevant portion of Schedule 2 reads as follows:

Cigars:

      The greater of

      (a) $0.03947 per cigar, and

      (b) 50%, computed on

Clause 51: Section 1 of Schedule 3 reads as follows:

1. Special duty on imported manufactured tobacco:

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $0.0375 per gram, in the case of manufactured tobacco other than cigarettes or tobacco sticks.

Clause 52: Section 2 of Schedule 3 reads as follows:

2. Special duty on traveller's tobacco:

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $0.0375 per gram, in the case of manufactured tobacco other than cigarettes or tobacco sticks.

Clause 53: Section 3 of Schedule 3 reads as follows:

3. Special duty on unstamped tobacco products:

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $37.50 per kilogram, in the case of tobacco products other than cigarettes or tobacco sticks.

Clause 54: Section 4 of Schedule 3 reads as follows:

4. Special duty on stamped tobacco products:

    (a) $0.068224 per cigarette, in the case of cigarettes;

    (b) $0.0345 per stick, in the case of tobacco sticks; and

    (c) $33.502 per kilogram, in the case of tobacco products other than cigarettes or tobacco sticks.

Excise Tax Act

Clause 55: Subsection 23.11(2) reads as follows:

(2) The rate of tax imposed under subsection (1) is

    (a) $0.03 per cigarette, in the case of cigarettes;

    (b) $0.02415 per stick, in the case of tobacco sticks; and

    (c) $19.15 per kilogram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.

Clause 56: Subsection 23.12(1) reads as follows:

23.12 (1) If imported tobacco products are delivered to a duty free shop, there shall be imposed, levied and collected in respect of them, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax at the rate of

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $0.0375 per gram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.

Clause 57: (1) and (2) Subsections 23.13(1) and (2) read as follows:

23.13 (1) If tobacco products manufactured or produced in Canada are exported in bond in accordance with subparagraph 58.1(3)(a)(i) and paragraph 58.1(3)(b) of the Excise Act by their manufacturer or producer, there shall be imposed, levied and collected in respect of the tobacco products, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax at the rate of

    (a) $0.0575 per cigarette, in the case of cigarettes;

    (b) $0.0425 per stick, in the case of tobacco sticks; and

    (c) $37.50 per kilogram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.

(2) If tobacco products manufactured or produced in Canada are exported and subsection (1) does not apply to those products, there shall be imposed, levied and collected in respect of those products, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax at the rate of

    (a) $0.1025 per cigarette, in the case of cigarettes;

    (b) $0.06165 per stick, in the case of tobacco sticks; and

    (c) $56.65 per kilogram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.

Clause 58: Sections 1 to 4 of Schedule II read as follows:

1. Cigarettes: $0.17138 for each five cigarettes or fraction of five cigarettes contained in any package.

2. Tobacco sticks: $0.02715 per stick.

3. Manufactured tobacco other than cigarettes and tobacco sticks: $23.148 per kilogram.

4. Cigars, the greater of $0.03947 per cigar and 50 per cent.

Excise Tax Act

Clause 61: (1) New.

Clause 62: (1) New.

Clause 63: (1) New.

Clause 64: (1) Section 5 of Part III of Schedule V reads as follows:

5. A supply made by a school authority to elementary or secondary school students of a service of transporting the students to or from a school that is operated by a school authority.

Clause 65: (1) Section 21 of Part VI of Schedule V reads as follows:

21. A supply of a municipal service made by or on behalf of a government or municipality to owners or occupants of real property situated in a particular geographic area where

    (a) the owners or occupants have no option but to receive the service, or

    (b) the service is supplied because of a failure by an owner or occupant to comply with an obligation imposed under a law,

but not including a supply of a service of testing or inspecting any property for the purpose of verifying or certifying that the property meets particular standards of quality or is suitable for consumption, use or supply in a particular manner.

Excise Act, 2001

Clause 66: (1) Section 377 reads as follows:

377. Subsection 68.1(1) of the Act is renumbered as section 68.1 and subsection 68.1(2) of the Act is repealed.

First Nations Goods and Services Tax Act

Clause 67: (1) and (2) New.

Excise Tax Act

Clause 68: (1) and (2) Subparagraph 295(5)(d)(iv.2) is new. The relevant portion of subsection 295(5) reads as follows:

(5) An official may

    . . .

    (d) provide confidential information

      (i) to an official of the Department of Finance solely for the purposes of the formulation or evaluation of fiscal policy,

Income Tax Act

Clause 69: (1) The relevant portion of subsection 6(2) reads as follows:

(2) For the purposes of paragraph (1)(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the ``total available days'') in a taxation year during which the automobile is made available to a taxpayer or to a person related to the taxpayer by the employer of the taxpayer or by a person related to the employer (both of whom are in this subsection referred to as the ``employer'') shall be deemed to be the amount determined by the formula

A/B x [2% x (C x D) + 2/3 x (E - F)

where

A is the lesser of

      (a) the total number of kilometres that the automobile is driven (otherwise than in connection with or in the course of the taxpayer's office or employment) during the total available days, and

      (b) the value determined for B for the year under this subsection in respect of the standby charge for the automobile during the total available days,

    except that the amount determined under paragraph (a) shall be deemed to be equal to the amount determined under paragraph (b) unless

      (c) the taxpayer is required by the employer to use the automobile in connection with or in the course of the office or employment, and

      (d) all or substantially all of the distance travelled by the automobile in the total available days is in connection with or in the course of the office or employment;

B is the product obtained when 1,000 is multiplied by the quotient obtained by dividing the total available days by 30 and, if the quotient so obtained is not a whole number and exceeds one, by rounding it to the nearest whole number or, where that quotient is equidistant from two consecutive whole numbers, by rounding it to the lower of those two numbers;

Clause 70: (1) The definitions ``qualifying cost'', ``qualifying portion of a capital gain'' and ``qualifying portion of the proceeds of disposition'' in subsection 44.1(1) read as follows:

``qualifying cost'' to an individual of particular replacement shares of the individual in respect of a qualifying disposition of the individual that are shares of the capital stock of a particular eligible small business corporation means the lesser of

      (a) the total of all amounts each of which is the cost to the individual of such a replacement share; and

      (b) the amount by which $2,000,000 exceeds the total of all amounts each of which is the cost to the individual of a share that was a share of the capital stock of the particular eligible small business corporation or of a corporation related to it at the time the particular replacement shares were acquired and that was a replacement share of the individual in respect of another qualifying disposition.

``qualifying portion of a capital gain'' of an individual from a particular qualifying disposition of the individual means the amount determined by the formula

J x (1 - (K/L))

    where

    J is the individual's capital gain from the particular qualifying disposition, determined without reference to this section

    K is the amount, if any, by which the total of

        (a) the total of all amounts each of which is the adjusted cost base to the individual of a share of a particular corporation that was the subject of the particular qualifying disposition (which adjusted cost base shall be determined immediately before the share was disposed of and without reference to this section), and

        (b) the total of all amounts each of which is the adjusted cost base to the individual of a share of the particular corporation or a corporation related to it at the time of the particular qualifying disposition that was the subject of another qualifying disposition (in respect of which a permitted deferral was deducted under this section by the individual) that occurred at or before the time of the particular qualifying disposition (which adjusted cost base shall be determined immediately before the share was disposed of and without reference to this section)

      exceeds

        (c) $2,000,000; and

    L is the total of all amounts each of which is the adjusted cost base to the individual of a share of the particular corporation that was the subject of the particular qualifying disposition (which adjusted cost base shall be determined immediately before the share was disposed of and without reference to this section).

``qualifying portion of the proceeds of disposition'' of an individual from a qualifying disposition means the amount determined by the formula

M x (N/O)

    where

    M is the individual's proceeds of disposition from the qualifying disposition;

    N is the individual's qualifying portion of the capital gain from the qualifying disposition; and

    O is the individual's capital gain from the qualifying disposition, determined without reference to this section.

(2) The relevant portion of the definition ``ACB reduction'' in subsection 44.1(1) reads as follows:

``ACB reduction'' of an individual in respect of a replacement share of the individual in respect of a qualifying disposition of the individual means the amount determined by the formula

D x (E/F)

    where

    . . .

    E is the qualifying cost to the individual of the replacement share; and

    F is the qualifying cost to the individual of all the replacement shares of the individual in respect of the qualifying disposition.

(3) The definition ``permitted deferral'' in subsection 44.1(1) reads as follows:

``permitted deferral'' of an individual in respect of a qualifying disposition of the individual means the amount determined by the formula

(G/H) x I

    where

    G is the lesser of the amount included in the description of H and the total of all amounts each of which is the qualifying cost to the individual of a replacement share in respect of the qualifying disposition;

    H is the qualifying portion of the individual's proceeds of disposition from the qualifying disposition; and

    I is the qualifying portion of the individual's capital gain from the qualifying disposition.

(4) The relevant portion of the definition ``replacement share'' in subsection 44.1(1) reads as follows:

``replacement share'' of an individual in respect of a qualifying disposition of the individual in a taxation year means an eligible small business corporation share of the individual that is

      (a) acquired by the individual in the year or within 60 days after the end of the year but not later than 120 days after the qualifying disposition occurred; and

Clause 71: (1) and (2) Clause 60(l)(v)(B.01) is new. The relevant portion of section 60 reads as follows:

60. There may be deducted in computing a taxpayer's income for a taxation year such of the following amounts as are applicable

    . . .

    (l) the total of all amounts each of which is an amount paid by or on behalf of the taxpayer in the year or within 60 days after the end of the year (or within such longer period after the end of the year as is acceptable to the Minister)

      . . .

      (v) does not exceed the total of

        . . .

        (B.1) the least of

          . . .

          (II) the amount (other than any portion thereof included in the amount determined under clause (B) or (B.2)) included in computing the taxpayer's income for the year as

Clause 72: (1) and (2) The relevant portion of subsection 104(27) reads as follows:

(27) Where a testamentary trust has, in a taxation year throughout which it was resident in Canada, received a superannuation or pension benefit or a benefit out of or under a foreign retirement arrangement and has designated, in the return of its income for the year under this Part, an amount in respect of a beneficiary under the trust equal to such portion (in this subsection referred to as the ``beneficiary's share'') of the benefit as

    . . .

the following rules apply:

    (c) where

      (i) the benefit is an amount described in subparagraph (a)(i) of the definition ``pension income'' in subsection 118(7), and

      (ii) the beneficiary was a spouse or common-law partner of the settlor of the trust,

    the beneficiary's share of the benefit shall be deemed, for the purposes of subsections 118(3) and (7), to be a payment described in subparagraph (a)(i) of the definition ``pension income'' in subsection 118(7) that is included in computing the beneficiary's income for the particular year,

    . . .

    (e) where the benefit is a single amount (within the meaning assigned by subsection 147.1(1)) paid by a registered pension plan to the trust as a consequence of the death of the settlor of the trust and the beneficiary was, at the time of the settlor's death, under 18 years of age and a child or grandchild of the settlor, the beneficiary's share of the benefit (other than any portion thereof that relates to an actuarial surplus) shall be deemed, for the purposes of paragraph 60(l), to be an amount from a registered pension plan included in computing the beneficiary's income for the particular year as a payment described in subclause 60(l)(v)(B.1)(II).

Clause 73: (1) and (2) Paragraphs 118.2(2)(l.41), (l.42) and (r) are new. The relevant portion of subsection 118.2(2) reads as follows:

(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid

    . . .

      (l.4) on behalf of the patient who has a speech or hearing impairment, for sign language interpretation services, to the extent that the payment is made to a person engaged in the business of providing such services;

Clause 74: (1) and (2) The relevant portion of subsection 118.3(1) reads as follows:

118.3 (1) Where

    . . .

    (a.2) in the case of

      . . .

      (iii) an impairment with respect to an individual's ability in feeding and dressing themself, or in walking, a medical doctor or an occupational therapist,

      (iv) an impairment with respect to an individual's ability in perceiving, thinking and remembering, a medical doctor or a psychologist, and

      . . .

    has certified in prescribed form that the impairment is a severe and prolonged mental or physical impairment the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted or would be markedly restricted but for therapy referred to in paragraph (a.1),

    . . .

there may be deducted in computing the individual's tax payable under this Part for the year the amount determined by the formula

Clause 75: (1) and (2) Paragraphs 118.4(1)(e) and (f) are new. The relevant portion of subsection 118.4(1) reads as follows:

118.4 (1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,

    . . .

    (c) a basic activity of daily living in relation to an individual means

      . . .

      (ii) feeding and dressing oneself,

Clause 76: (1) to (4) Subparagraph 118.6(3)(b)(i.1) is new. The relevant portion of subsection 118.6(3) reads as follows:

(3) In calculating the amount deductible under subsection (2) in computing an individual's tax payable under this Part for a taxation year, the reference in that subsection to ``full-time student'' shall be read as ``student'' if either

    . . .

    (b) the individual has in the year a mental or physical impairment the effects of which on the individual have been certified in writing, to be such that the individual cannot reasonably be expected to be enrolled as a full-time student while so impaired, by a medical doctor or, where the impairment is

      . . .

      (iii) an impairment with respect to the individual's ability in feeding and dressing themself, or in walking, by a medical doctor or an occupational therapist, or

Clause 77: (1) to (4) The relevant portion of subsection 122.61(1) reads as follows:

122.61 (1) Where a person and, where the Minister so demands, the person's cohabiting spouse or common-law partner at the end of a taxation year have filed a return of income for the year, an overpayment on account of the person's liability under this Part for the year is deemed to have arisen during a month in relation to which the year is the base taxation year, equal to the amount determined by the formula

1/12[(A - B) + C]

where

. . .

C is the amount determined by the formula

F - (G x H)

      where

      F is, where the person is, at the beginning of the month, an eligible individual in respect of

          (a) only one qualified dependant, $1,255, and

          (b) two or more qualified dependants, the total of

            (i) $1,255 for the first qualified dependant,

            (ii) $1055 for the second qualified dependant, and

            (iii) $980 for each of the third and subsequent qualified dependants,

      G is the amount, if any, by which the person's adjusted income for the year exceeds $21,214, and

      H is the proportion (expressed as a percentage rounded to the nearest one-tenth of one per cent) that

          (a) the total that would be determined under the description of F in respect of the eligible individual if that description were applied without reference to the fourth and subsequent qualified dependants in respect of whom the person is an eligible individual

        is of

          (b) the amount by which

            (i) the amount referred to in paragraph (b) of the description of B

          exceeds

            (ii) $21,214.

(5) Subsection 122.61(6) reads as follows:

(6) For the purpose of subsection (5), the amount of $1,090, and the amounts in respect of the amounts of $213 and $75, referred to in subsection (1), that are used for the purpose of determining the amount deemed to be an overpayment arising during particular months that are

    (a) after June 2000 and before July 2001, are deemed to be $1,104, $219 and $77, respectively;

    (b) after June 2001 and before July 2002, shall be equal to the greater of the amounts deemed under paragraph (a) to be an overpayment arising during the months referred to in that paragraph and the amounts that would otherwise be determined for those particular months if this Act were read without reference to this subsection; and

    (c) after June 2002, shall be computed without reference to paragraphs (a) and (b).

Clause 78: (1) The definition ``CCPC rate reduction percentage'' in subsection 123.4(1) reads as follows:

``CCPC rate reduction percentage'' of a Canadian-controlled private corporation for a taxation year is that proportion of 7% that the number of days in the year that are after 2000 is of the number of days in the year.

(2) and (3) The relevant portion of the definition ``full rate taxable income'' in subsection 123.4(1) reads as follows:

``full rate taxable income'' of a corporation for a taxation year is

      . . .

      (b) if the corporation is a Canadian-controlled private corporation throughout the year, the amount by which the corporation's taxable income for the year exceeds the total of

        . . .

        (iv) 100/7 of the amount, if any, deducted under subsection (3) from the corporation's tax otherwise payable under this Part for the year; and

      (c) if the corporation is throughout the year an investment corporation, a mortgage investment corporation, a mutual fund corporation, or a non-resident-owned investment corporation, nil.

(4) and (5) Subsection 123.4(3) reads as follows:

(3) There may be deducted from the tax otherwise payable under this Part for a taxation year by a Canadian-controlled private corporation the product obtained by multiplying the corporation's CCPC rate reduction percentage for the year by the amount by which the least of

    (a) 3/2 of the corporation's business limit for the year, as determined under section 125 for the purpose of paragraph 125(1)(c),

    (b) the amount that would be determined under paragraph 125(1)(a) in respect of the corporation for the year if the references in the description of M in the definition ``specified partnership income'' in subsection 125(7) to ``$200,000'' and ``$548'' were read as references to ``$300,000'' and ``$822'', respectively, and

    (c) the amount by which

      (i) the amount that would, if subsection 126(1) did not apply in respect of any amount included in the corporation's aggregate investment income for the year (determined under subsection 129(4)), be determined under paragraph 125(1)(b) in respect of the corporation for the year

    exceeds

      (ii) the corporation's aggregate investment income for the year,

exceeds the total of

    (d) the amounts that would, if paragraph (a) of the definition ``full-rate taxable income'' in subsection (1) applied to the corporation for the year, be determined under subparagraphs (a)(i) to (iv) of that definition in respect of the corporation for the year, and

    (e) 100/16 of the amount, if any, deducted under subsection 125(1) from the corporation's tax otherwise payable under this Part for the year.

Clause 79: (1) Subsections 125(2) to (4) read as follows:

(2) For the purposes of this section, a corporation's ``business limit'' for a taxation year is $200,000 unless the corporation is associated in the year with one or more other Canadian-controlled private corporations in which case, except as otherwise provided in this section, its business limit for the year is nil.

(3) For the purposes of this section, a corporation's ``business limit'' for a taxation year is $200,000 unless the corporation is associated in the year with one or more other Canadian-controlled private corporations in which case, except as otherwise provided in this section, its business limit for the year is nil.

(4) If any of the Canadian-controlled private corporations that are associated with each other in a taxation year has failed to file with the Minister an agreement as contemplated by subsection (3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year, which amount or the total of which amounts, as the case may be, shall equal $200,000, and in any such case, notwithstanding subsection (2), the business limit for the year of each of the corporations is the amount so allocated to it.

(2) The relevant portion of the definition ``specified partnership income'' in subsection 125(7) reads as follows:

``specified partnership income'' of a corporation for a taxation year means the amount determined by the formula

A + B

where

A is the total of all amounts each of which is an amount in respect of a partnership of which the corporation was a member in the year equal to the lesser of

      . . .

      (b) the amount determined by the formula

K/L x M

      where

      . . .

      M is the lesser of

          (i) $200,000, and

          (ii) the product obtained when $548 is multiplied by the total of all amounts each of which is the number of days contained in a fiscal period of the partnership ending in the year, and

Clause 80: (1) Subsection 125.5(3) reads as follows:

(3) Subject to subsection (4), where

      (a) an eligible production corporation in respect of an accredited production for a taxation year files with its return of income for the year

        (i) a prescribed form containing prescribed information in respect of the production,

        (ii) an accredited film or video production certificate in respect of the production, and

        (iii) each other document prescribed in respect of the production, and

      (b) the principal filming or taping of the production began before the end of the year,

    the corporation is deemed to have paid on its balance-due day for the year an amount on account of its tax payable under this Part for the year equal to 11% of its qualified Canadian labour expenditure for the year in respect of the production.

Clause 81: (1) and (2) The relevant portion of the definition ``flow-through mining expenditure'' in subsection 127(9) reads as follows:

``flow-through mining expenditure'' of a taxpayer for a taxation year means an expense deemed by subsection 66(12.61) (or by subsection 66(18) as a consequence of the application of subsection 66(12.61) to the partnership, referred to in paragraph (c) of this definition, of which the taxpayer is a member) to be incurred by the taxpayer in the year

      (a) that is a Canadian exploration expense incurred after October 17, 2000 and before 2004 by a corporation in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition ``mineral resource'' in subsection 248(1),

      . . .

      (e) that is an expense that would be incurred by the corporation before 2004 if this Act were read without reference to subsection 66(12.66);

(3) Subsection 127(10.21) is new. Subsection 127(10.2) reads as follows:

(10.2) For the purpose of subsection (10.1), a corporation's expenditure limit for a particular taxation year is the amount determined by the formula

($4,000,000 - 10A) x B/$200,000

where

A is the greater of $200,000 and either

      (a) where the corporation is associated with one or more other corporations in the particular year and the particular year ends in a calendar year, the total of all amounts each of which is the taxable income of the corporation or such an associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year), or

      (b) where paragraph (a) does not apply, the corporation's taxable income for its immediately preceding taxation year (determined before taking into consideration the specified future tax consequences for that preceding year), and

B is the total of the business limits under section 125 for the particular year of the corporation and any such other corporations for the particular year,

unless the corporation is associated in the particular year with one or more other Canadian-controlled private corporations, in which case, except as otherwise provided in this section, its expenditure limit for the particular year is nil.

Clause 82: (1) The definition ``refund of premiums'' in subsection 146(1) reads as follows:

``refund of premiums'' means

      (a) any amount paid to a spouse or common-law partner of the annuitant out of or under a registered retirement savings plan of the annuitant (other than any part of the amount that is a tax-paid amount in respect of the plan), where the annuitant died before the maturity of the plan and the amount was paid as a consequence of the death, or

      (b) any amount paid out of or under a registered retirement savings plan of the annuitant (other than any part of the amount that is a tax-paid amount in respect of the plan) after the death to a child or grandchild (in this definition referred to as a ``dependant'') of the annuitant, who was, at the time of the death, financially dependent on the annuitant for support,

      and for the purpose of paragraph (b), it is assumed, unless the contrary is established, that a dependant was not financially dependent on the annuitant for support at the time of the annuitant's death if the dependant's income for the year preceding the taxation year in which the annuitant died exceeded the amount used under paragraph (c) of the description of B in subsection 118(1) for that preceding year;

(2) The definition ``RRSP dollar limit'' in subsection 146(1) reads as follows:

``RRSP dollar limit'' for a calendar year means

      (a) for years other than 1996, the money purchase limit for the preceding year, and

      (b) for 1996, $13,500;

(3) New.

Clause 83: (1) to (3) The relevant portion of subsection 146.3(2) reads as follows:

(2) The Minister shall not accept for registration for the purposes of this Act any retirement income fund of an individual unless, in the Minister's opinion, the following conditions are complied with:

    (a) the fund provides that the carrier shall make only those payments described in any of paragraphs (d) and (e), the definition ``retirement income fund'' in subsection (1) and paragraph (14)(b);

    . . .

    (e.1) where the fund does not govern a trust or the fund governs a trust created before 1998 that does not hold an annuity contract as a qualified investment for the trust, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to a person who has agreed to be a carrier of another registered retirement income fund of the annuitant, the transferor shall retain an amount equal to the lesser of

      . . .

    (e.2) where paragraph (e.1) does not apply, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to a person who has agreed to be a carrier of another registered retirement income fund of the annuitant, the transferor shall retain property in the fund sufficient to ensure that the total of

(4) Subsections 146.3(14.1) and (14.2) are new. Subsection 146.3(14) reads as follows:

(14) Notwithstanding anything in this section, an amount

    (a) transferred as described in paragraph (2)(e), or

    (b) transferred from a registered retirement income fund of an annuitant to a registered retirement income fund or registered retirement savings plan of the annuitant's spouse or common-law partner or former spouse or common-law partner under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the annuitant and the annuitant's spouse or common-law partner or former spouse or common-law partner in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership,

shall be deemed not to be an amount received by the annuitant out of or under a registered retirement income fund.

Clause 84: (1) The relevant portion of the definition ``money purchase limit'' in subsection 147.1(1) reads as follows:

``money purchase limit'' for a calendar year means

      . . .

      (g) for years after 1995 and before 2003, $13,500,

      (h) for 2003, $14,500,

      (i) for 2004, $15,500, and

      (j) for each year after 2004, the greater of

        (i) the product of

          (A) $15,500, and

          (B) the quotient obtained when the average wage for the year is divided by the average wage for 2004,

        rounded to the nearest multiple of $10, or, if that product is equidistant from 2 such consecutive multiples, to the higher thereof, and

        (ii) the money purchase limit for the preceding year;

Clause 85: (1) Subsections 181.1(1.1) and (1.2) are new. Subsection 181.1(1) reads as follows:

181.1 (1) Every corporation shall pay a tax under this Part for each taxation year equal to 0.225% of the amount, if any, by which

    (a) its taxable capital employed in Canada for the year

exceeds

    (b) its capital deduction for the year.

Clause 86: (1) Subsection 181.5(1.1) is new. Subsections 181.5(1) to (3) read as follows:

181.5 (1) The capital deduction of a corporation for a taxation year is $10,000,000 unless the corporation was related to another corporation at any time in the year, in which case, subject to subsection (4), its capital deduction for the year is nil.

(2) A corporation that is related to any other corporation at any time in a taxation year of the corporation ending in a calendar year may file with the Minister in prescribed form an agreement on behalf of the related group of which the corporation is a member under which an amount that does not exceed $10,000,000 is allocated among all corporations that are members of the related group for each taxation year of each such corporation ending in the calendar year and at a time when it was a member of the related group.

(3) The Minister may request a corporation that is related to any other corporation at the end of a taxation year to file with the Minister an agreement referred to in subsection (2) and, if the corporation does not file such an agreement within 30 days after receiving the request, the Minister may allocate an amount among the members of the related group of which the corporation is a member for the year not exceeding $10,000,000.

(2) New.

Clause 87: (1) The definition ``tax shelter'' in subsection 237.1(1) reads as follows:

``tax shelter'' means any property (including, for greater certainty, any right to income) in respect of which it can reasonably be considered, having regard to statements or representations made or proposed to be made in connection with the property, that, if a person were to acquire an interest in the property, at the end of a particular taxation year that ends within 4 years after the day on which the interest is acquired,

      (a) the total of all amounts each of which is

        (i) an amount, or a loss in the case of a partnership interest, represented to be deductible in computing income in respect of the interest in the property (including, where the property is a right to income, an amount or loss in respect of that right that is represented to be deductible) and expected to be incurred by or allocated to the person for the particular year or any preceding taxation year, or

        (ii) any other amount represented to be deductible in computing income or taxable income in respect of the interest in the property and expected to be incurred by or allocated to the person for the particular year or any preceding taxation year, other than any amount included in computing a loss described in subparagraph (i),

      would equal or exceed

      (b) the amount, if any, by which

        (i) the cost to the person of the interest in the property at the end of the particular year, determined without reference to section 143.2,

      would exceed

        (ii) the total of all amounts each of which is the amount of any prescribed benefit that is expected to be received or enjoyed, directly or indirectly, in respect of the interest in the property by the person or another person with whom the person does not deal at arm's length,

      but does not include property that is a flow-through share or a prescribed property.

(2) New.

Clause 88: (1) to (4) Paragraph (b.1) of the definition ``automobile'' in subsection 248(1) is new. The relevant portion of that definition reads as follows:

``automobile'' means

      (a) a motor vehicle that is designed or adapted primarily to carry individuals on highways and streets and that has a seating capacity for not more than the driver and 8 passengers,

    but does not include

      . . .

      (e) a motor vehicle of a type commonly called a van or pick-up truck or a similar vehicle

        (i) that has a seating capacity for not more than the driver and 2 passengers and that, in the taxation year in which it is acquired, is used primarily for the transportation of goods or equipment in the course of gaining or producing income, or

        (ii) the use of which, in the taxation year in which it is acquired, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income;

(5) New.

Clause 89: (1) Subsection 252(3) reads as follows:

(3) For the purposes of paragraphs 56(1)(b) and (c), section 56.1, paragraphs 60(b), (c) and (j), section 60.1, subsections 70(6) and (6.1), 73(1) and (5) and 104(4), (5.1) and (5.4), the definition ``pre-1972 spousal trust'' in subsection 108(1), subsection 146(16), subparagraph 146.3(2)(f)(iv), paragraph 146.3(14)(b), subsections 147.3(5) and (7) and 148(8.1) and (8.2), the definition ``small business property'' in subsection 206(1), subparagraph 210(c)(ii) and subsections 248(22) and (23), ``spouse'' and ``former spouse'' of a particular individual include another individual of the opposite sex who is a party to a voidable or void marriage with the particular individual.

Children's Special Allowance Act

Clause 90: (1) Paragraph 8(1)(c) is new. Subsection 8(1) reads as follows:

8. (1) the amount of special allowance to be paid in respect of a child for each month is one twelfth of the total of

    (a) the amount expressed in dollars in paragraph (a) of the description of A in subsection 122.61(1) of the Income Tax Act, and

    (b) the amount expressed in dollars in paragraph (a) of the description of F in that subsection,

each such amount being adjusted and rounded in accordance with subsections 122.61(5) and (7) of that Act.

Excise Act, 2001

Clause 91: (1) Section 165 reads as follows:

165. (1) If, at any time, the total of all unpaid amounts owing by a person to the Receiver General under this Act does not exceed a prescribed amount, the amount owing by the person is deemed to be nil.

(2) If, at any time, the total of all amounts payable by the Minister to a person under this Act does not exceed a prescribed amount, the Minister is not required to pay any of the amounts payable. The Minister may apply those amounts against a liability of the person.

Clause 92: (1) Subsections 170(3) to (5) read as follows:

(3) The Minister may serve or send to a person who is required under this Act to pay an amount that may consist of principal and interest a notice specifying the amount owed by the person and a date by which the payment must be made.

(4) If the person to whom a notice referred to in subsection (3) is served or sent pays in full the specified amount within the specified time, interest is not payable, despite subsection (1), on the amount for the period beginning on the date of the notice and ending on the day on which the amount is paid.

(5) If at any time a person has paid all amounts, other than interest, owed to Her Majesty under this Act and, immediately before that time, the total amount of interest owed by the person under this Act is less than the prescribed amount, the Minister may write off and cancel the interest owed.

Clause 93: (1) Section 171 reads as follows:

171. Interest shall be compounded daily at the prescribed rate on amounts owed by Her Majesty to a person and computed for the period beginning on the first day after the day on which the amount is required to be paid by Her Majesty and ending on the day on which the amount is paid or is applied against an amount owed by the person to Her Majesty.

Excise Tax Act

Clause 94: (1) Subsection 7(1) reads as follows:

7. (1) Every person who refuses or neglects to make a return as required by subsection 5(1) or neglects to pay some or all of the tax imposed by section 4 is liable to a penalty of five per cent of the amount of tax unpaid at the expiration of the time for filing the return together with interest on the amount unpaid calculated at the prescribed rate from April 30 in the year in which that amount is payable to the day of payment.

Clause 95: (1) New.

Clause 96: New.

Clause 97: (1) The relevant portion of subsection 68.5(7) reads as follows:

(7) If the Minister has, under subsection (6), extended the time required by subsection (5) for filing a reconciliation report

    . . .

    (c) any interest or penalty payable under this section shall be calculated on the basis that the person has until the expiry of the period so extended to file the reconciliation report.

(2) The relevant portion of subsection 68.5(9) reads as follows:

(9) If the rebate paid to a person for a rebate period is determined on the basis of an estimate referred to in paragraph (3)(a) and the amount paid exceeds the amount referred to in paragraph (5)(b) in respect of the period, the person shall pay to the Receiver General

    . . .

    (b) interest at the prescribed rate, in respect of each month or fraction of a month in the period that begins on the first day following the day on which the rebate is paid to the person and that ends on the earlier of the day the total of the excess rebate and all interest under this paragraph is paid and the day on or before which the reconciliation report is required to be filed, calculated on the total of the amount of the excess rebate that has not been paid to the Receiver General, and of the amount of interest that is outstanding, in the month or fraction of a month.

(3) Subsections 68.5(11) to (13) read as follows:

(11) A person who is in default in paying an amount of tax referred to in subsection (10) shall pay to the Receiver General interest at the prescribed rate, and penalty of one-half of one percent, in respect of each month or fraction of a month in the period that begins on the first day following the day on or before which the reconciliation report is required to be filed and that ends on the day the total of that tax is paid, calculated on the total of the tax, penalty and interest outstanding in that month or fraction of a month.

(12) Any interest under paragraph (9)(b) or subsection (11) and any penalty under that subsection shall be paid not later than the last day of the month in respect of which the interest or penalty was calculated.

(13) No interest under paragraph (9)(b) or subsection (11) and no penalty under that subsection is required to be paid if the person who would otherwise be liable to pay the interest or the penalty pays all taxes under this section payable by the person and, on the payment, the total interest and penalty otherwise payable by the person under those provisions is less than ten dollars.

(4) The relevant portion of subsection 68.5(14) reads as follows:

(14) The Minister shall not, at a particular time, pay an amount to a person under this section unless the person has

    . . .

    (b) paid all excess rebates in respect of rebate periods ending before that time and all interest and penalty under this section that have accrued to that time.

Clause 98: (1) Subsections 72(7) and (8) read as follows:

(7) If an amount is paid to an applicant under subsection (6), interest at the prescribed rate shall be paid in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the payment is sent, and compounded monthly on the total amount of the payment and interest outstanding.

(8) No interest of less than one dollar is payable pursuant to subsection (7).

Clause 99: (1) Subsections 74(3) and (4) read as follows:

(3) Where a deduction is authorized under subsection (1), interest at the prescribed rate shall be authorized as a deduction in accordance with that subsection, calculated in respect of each day between the day that is sixty days after the day on which the application for the payment in respect of which the deduction was authorized was received by the Minister and the day on which the notice of determination was sent, and compounded monthly on the total amount of the deduction and interest outstanding.

(4) No interest of less than one dollar shall be authorized as a deduction under subsection (3).

Clause 100: (1) Sections 78 and 79 read as follows:

78. (1) Every person who is required to pay tax under Part III or IV shall make each month a return in the prescribed form containing prescribed information of all amounts that became payable by the person on account of that tax in the preceding month.

(2) Every person who holds a licence granted under or in respect of Part III or IV and whose tax payable under Parts III and IV in the preceding month is nil shall make a return as required by subsection (1) reporting that fact.

(3) Notwithstanding subsections (1) and (2), the Minister may, by regulation,

    (a) authorize any person to make a return in respect of any accounting period of not less than twenty-one days and not more than thirty-five days;

    (b) authorize any person to make a return in respect of any period longer than one month but not longer than six months, if the tax payable by that person under Part II.1 or Parts III, IV and VI, as the case may be, for the last preceding calendar year did not exceed four thousand eight hundred dollars; or

    (c) authorize any person whose activities that give rise to tax payable by the person under Part III or IV are predominantly limited to a seasonal period of operation to make a return in respect of any period longer than one month but not longer than six months, if the total tax payable by the person under Parts III and IV for the equivalent period in the preceding calendar year did not exceed an average of four hundred dollars per month throughout that equivalent period.

(4) Subject to subsection 79(2) and sections 79.1 and 79.2, the return required by this section shall be filed and the tax payable shall be paid

    (a) in a case where the return is required to be made in a month in accordance with subsection (1) or (2), not later than the last day of that month;

    (b) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(a), not later than the last day of the first authorized accounting period following the end of the accounting period to which the return relates; and

    (c) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(b) or (c), not later than the last day of the first month following the end of the period to which the return relates.

79. (1) Subject to subsections (1.1) to (3), a person who defaults in paying tax within the time prescribed by subsection 78(4), in addition to the amount in default, shall pay

    (a) in the case of tax required to be paid not later than the last day of a month, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between that day and the day on which the total tax, penalty and interest outstanding is paid, calculated on the total tax, penalty and interest outstanding in that month or fraction of a month; and

    (b) in the case of tax required to be paid not later than the last day of an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each accounting period or fraction of an accounting period between that day and the day on which the total tax, penalty and interest outstanding is paid, calculated on the total tax, penalty and interest outstanding in that accounting period or fraction of an accounting period.

(1.1) No penalty or interest is payable under subsection (1) if the person liable to pay the tax pays all taxes payable by him under Parts II.1, III, IV or VI and, at the time of the payment, the total penalty and interest payable in respect of all such taxes is less than ten dollars.

(1.2) A person who is liable to pay penalty or interest under subsection (1) shall pay the penalty or interest not later than the last day of the month or accounting period in respect of which the penalty or interest was calculated.

(2) The Minister may, before or after the expiration of the time prescribed by subsection 78(4), extend in writing the time for filing a return or paying any tax, and where the Minister so extends the time,

    (a) the return shall be filed or the tax shall be paid within the time as so extended;

    (b) interest accrues under subsection (1) in respect of the tax as if the time had not been so extended;

    (c) no penalty accrues or shall be deemed to have accrued under subsection (1) in respect of the tax before the expiration of the time as so extended; and

    (d) penalty accrues under subsection (1) in respect of a default in paying the tax or any portion thereof within the time as so extended as if the default were a default referred to in that subsection.

(3) Where the Minister holds security under section 80.1 for the payment of any tax that is not paid within the time prescribed by subsection 78(4),

    (a) interest accrues under subsection (1) in respect of the tax from the expiration of that time; and

    (b) penalty accrues under subsection (1) only if the total tax, penalty and interest outstanding, as calculated in respect of each month or accounting period or fraction of a month or accounting period during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

Clause 101: (1) and (2) The relevant portion of subsection 79.1(1) reads as follows:

79.1 (1) For the purposes of this section,

    (a) a person's ``instalment base''

      (i) for a month is the lesser of

        (A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that month, and

        (B) the tax so payable in the last preceding month,

      (ii) for an accounting period is the lesser of

        (A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that accounting period, and

        (B) the tax so payable in the last preceding accounting period, and

      (iii) for any other period to which a return relates is the lesser of

        (A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that period, and

        (B) the tax so payable in the last preceding period multiplied by the ratio that the number of days in the period to which the return relates is to the number of days in the last preceding period; and

    (b) a person is a ``large taxpayer'' at any particular time if

    . . .

      (ii) the person

        (A) was, at any time in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time, a member of a group of associated corporations (within the meaning of section 256 of the Income Tax Act) and the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under Parts II and II.2 by the group in that year exceeded twelve million dollars, and

        (B) is not, at that time, authorized to make a return in accordance with a regulation made under paragraph 78(3)(b) or (c).

(3) Subsections 79.1(2) to (8) read as follows:

(2) A large taxpayer who is required to file a return and pay tax within the time prescribed by subsection 78(4) shall pay instalments on account of the tax in accordance with the following rules:

    (a) in the case where the return is required to be made in accordance with subsection 78(1), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the month in which the tax became payable or the sales were made, as the case may be, the first to be paid not later than the last day of that month and the second not later than the fifteenth day of the next following month; and

    (b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(a), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the accounting period to which the return relates, the first to be paid not later than the last day of that accounting period and the second not later than the fifteenth day of the next following accounting period.

(3) A person, other than a large taxpayer, who is required to file a return and pay tax within the time prescribed by subsection 78(4) shall pay an instalment on account of the tax in accordance with the following rules:

    (a) in the case where the return is required to be made in accordance with subsection 78(1), the person shall pay an instalment, equal to the person's instalment base for the month in which the tax became payable or the sales were made, as the case may be, not later than the twenty-first day of the next following month;

    (b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(a), the person shall pay an instalment, equal to the person's instalment base for the accounting period to which the return relates, not later than the twenty-first day of the next following accounting period; and

    (c) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(b) or (c), the person shall pay an instalment, equal to the person's instalment base for the period to which the return relates, not later than the twenty-first day of the month next following the end of that period.

(4) Subject to subsections (6) to (8), a large taxpayer who defaults in paying an instalment within the time prescribed by subsection (2) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for payment of the tax on account of which the instalment was payable

    (a) in the case of an instalment required to be paid not later than the last day of a month or an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, calculated on the amount by which

      (i) one-half of the taxpayer's instalment base for that month or accounting period

    exceeds

      (ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day; and

    (b) in the case of an instalment required to be paid not later than the fifteenth day of a month or an accounting period, a penalty of one-quarter of one per cent and interest at one-half of the prescribed rate, calculated on the amount by which

      (i) one-half of the taxpayer's instalment base for the last preceding month or accounting period

    exceeds

      (ii) the amount by which the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day exceeds the lesser of

        (A) the aggregate of all taxes on account of which the instalment was payable that were paid not later than the last day of the last preceding month or accounting period, and

        (B) one-half of the taxpayer's instalment base for the last preceding month or accounting period.

(5) Subject to subsections (6) to (8), a person who defaults in paying an instalment within the time prescribed by subsection (3) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for payment of the tax on account of which the instalment was payable

    (a) in the case of an instalment required by paragraph (3)(a) or (b) to be paid not later than the twenty-first day of a month or an accounting period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

      (i) the person's instalment base for the last preceding month or accounting period

    exceeds

      (ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day; and

    (b) in the case of an instalment required by paragraph (3)(c) to be paid not later than the twenty-first day of a month next following the end of a period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

      (i) the person's instalment base for that period

    exceeds

      (ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day.

(6) No penalty or interest is payable under subsection (4) or (5) if the large taxpayer or other person liable to pay the instalment pays all taxes payable by the taxpayer or other person under Parts II.1, III, IV or VI and, at the time of the payment, the total penalty and interest payable in respect of the instalment is less than five dollars and in respect of all those taxes is less than ten dollars.

(7) A large taxpayer or other person who is liable to pay penalty or interest under subsection (4) or (5) in respect of a default in paying an instalment shall pay the penalty or interest within the time prescribed by subsection 78(4) for the payment of the tax on account of which the instalment is payable.

(8) The Minister may, before or after the expiration of the time prescribed by subsection (2) or (3), extend in writing the time for paying an instalment, for any period within the time prescribed by subsection 78(4) for the payment of the tax on account of which the instalment is payable, and where the Minister so extends the time

    (a) the instalment shall be paid within the time as so extended;

    (b) interest accrues under subsection (4) or (5), as the case may be, in respect of the instalment as if the time had not been so extended;

    (c) no penalty accrues or shall be deemed to have accrued under subsection (4) or (5), as the case may be, in respect of the instalment before the expiration of the time as so extended; and

    (d) penalty accrues under subsection (4) or (5), as the case may be, in respect of a default in paying an instalment within the time as so extended as if the default were a default referred to in that subsection.

Clause 102: (1) Section 79.2 reads as follows:

79.2 (1) A person who is required by this Act, other than Part I, to file a return or to pay or remit an amount shall file the return with the Minister or pay or remit the amount to the Receiver General at such office of the Agency as the Governor in Council may, by regulation, prescribe.

(2) If a person is required by this Act, other than Part I, to file a return or to pay or remit an amount not later than a day and that day falls on a day when the office of the Agency at which the person is required by the regulations to file the return or pay or remit the amount is normally closed for business, that person shall file the return or pay or remit the amount at that office not later than the day last preceding that day when that office is open for business.

(3) Where a person who is required by this section to file a return with the Minister does so by mailing the return, the return shall be deemed to have been filed with the Minister on the day on which the return was mailed and the date of the postmark is evidence of that day.

(4) A person who is required by this section to pay or remit an amount to the Receiver General shall not be considered as having paid or remitted the amount until it is received by the Receiver General.

Clause 103: (1) Subsection 80(2) reads as follows:

(2) Any person making a return under paragraph 78(3)(b) or (c) may, in lieu of submitting a report under subsection (1), include in the return a report in the prescribed form containing details of the person's sales, taxes paid under this Act and deductions under subsection 69(2) in the period to which the return relates and any other prescribed information.

Clause 104: (1) Subsections 81.16(4) to (6) read as follows:

(4) Subject to subsection (5), where an amount is paid pursuant to subsection (1), interest at the prescribed rate shall be paid, in respect of each day between the date of the notice of the assessment that is the subject of the objection and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

(5) Where a person has paid an amount on account of the amount owing as set out in a notice of assessment and a payment is made to that person pursuant to subsection (1) on an objection to the assessment, interest at the prescribed rate shall be paid, in respect of each day between the day on which the amount was paid by that person and the day on which the payment was sent to that person, and compounded monthly on the total amount of the payment to that person and interest outstanding.

(6) No interest of less than one dollar is payable pursuant to this section.

Clause 105: (1) Subsections 81.18(3) to (5) read as follows:

(3) Where an amount is paid pursuant to subsection (1), interest at the prescribed rate shall be paid, in respect of each day between the day that is sixty days after the day on which the application that is the subject of the reconsideration was received by the Minister and the day on which the payment is sent, and compounded monthly on the total amount of the payment and interest outstanding.

(4) Where a deduction is authorized pursuant to subsection (2), interest at the prescribed rate shall be authorized as a deduction in accordance with subsection 74(1), calculated in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the notice of decision was sent, and compounded monthly on the total amount of the deduction and interest outstanding.

(5) No interest of less than one dollar is payable pursuant to subsection (3) or shall be authorized as a deduction under subsection (4).

Clause 106: (1) Subsections 81.38(6) to (9) read as follows:

(6) Subject to subsection (7), where a payment is made pursuant to subsection (1) or (4) in respect of an assessment, interest at the prescribed rate shall be paid, in respect of each day between the date of the notice of assessment and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

(7) Where a person has paid an amount on account of the amount owing as set out in a notice of assessment or a notice of decision and a payment is made to that person pursuant to subsection (1) or (4) in respect of the assessment, interest at the prescribed rate shall be paid, in respect of each day between the day on which the amount was paid by that person and the day on which the payment was sent to that person, and compounded monthly on the total amount of the payment to that person and interest outstanding.

(8) If a payment is made under subsection (1) or (4) in respect of an application under any of sections 68 to 69, interest at the prescribed rate shall be paid, in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

(9) No interest of less than one dollar is payable pursuant to this section.

Clause 107: (1) Section 81.39 reads as follows:

81.39 (1) Subject to subsection (4), where a person has

    (a) received a drawback under section 70,

    (b) received a payment under subsection 72(6) or (7), 81.14(1), 81.16(1), (4) or (5), 81.18(1) or (3) or 120(7), or

    (c) made a deduction under subsection 69(2), 73(1), (2) or (3), 74(1) or (3) or 81.18(2) or (4)

to which that person was not entitled or in excess of the drawback, payment or deduction to which he was entitled, the amount of the drawback, payment or deduction or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the drawback, payment or deduction was made.

(2) Where a person has received a payment under subsection 81.38(1), (6), (7) or (8) and, on the final disposition of the appeal by further appeal or otherwise, it is determined that the person was not entitled to the payment or that the payment was in excess of the payment to which he was entitled, the amount of the payment or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the appeal was finally disposed of.

(3) Where a person has received a payment under subsection 81.38(4), (6), (7) or (8) and, on the final disposition by further appeal or otherwise of the appeal referred to in subsection 81.38(1) on the basis of which the payment was made, it is determined that the person was not entitled to the payment or that the payment was in excess of the payment to which he was entitled, the amount of the payment or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the appeal was finally disposed of.

(4) Where a person is liable to pay an amount under subsection 68.15(3), 68.16(4) or 68.21(3), that amount is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the liability arose.

(5) On default of payment of any tax payable under subsection (1) or (4) within the time prescribed therefor, the person liable to pay the tax shall pay, in addition to the amount of the default, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the expiration of that time and the day on which the total tax, penalty and interest is paid, calculated on the total tax, penalty and interest outstanding in that month.

(6) A person liable to pay tax under subsection (2) or (3), in addition to the amount of the tax, shall pay, not later than the last day on which the tax is payable, interest at the prescribed rate, in respect of each month or fraction of a month beginning with the first month succeeding that in which the amount constituting the tax was sent to that person and ending with the month in which the appeal was finally disposed of, calculated on the total tax and interest outstanding in that month.

(7) On default of payment of any tax payable under subsection (2) or (3) or interest payable under subsection (6) within the time prescribed therefor, the person liable to pay the tax or interest shall pay, in addition to the amount of the default, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the expiration of that time and the day on which the total tax, penalty and interest is paid, calculated on the total tax, penalty and interest outstanding in that month.

(8) Any penalty or interest that accrues under subsection (5) or (7) shall be paid not later than the last day of the month in respect of which the penalty or interest was calculated.

(9) Where the Minister holds security under section 80.1 for the payment of any tax under this section or interest under subsection (6) that is not paid within the time prescribed by this section,

    (a) interest accrues under subsection (5) or (7), as the case may be, in respect of the tax or interest from the expiration of that time; and

    (b) penalty accrues under subsection (5) or (7), as the case may be, only if the total tax, penalty and interest outstanding, as calculated in respect of each month or fraction of a month during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

(10) No penalty or interest is payable under subsection (5), (6) or (7) if the person otherwise liable to pay the penalty or interest pays all taxes payable by him under this section and, at the time of the payment, the total penalty and interest otherwise payable by that person under this section is less than ten dollars.

Clause 108: (1) Subsections 84(5) to (9) read as follows:

(5) Any person liable to pay an amount under subsection (4) shall pay, in addition to that amount, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the first day of the month following the month in which the default occurs and the day on which the total amount, penalty and interest is paid, calculated on the total amount, penalty and interest outstanding in that month or fraction of a month.

(6) A person who is liable to pay penalty or interest under subsection (5) shall pay the penalty or interest not later than the last day of the month in respect of which the penalty or interest was calculated.

(7) Any moneys paid by a person pursuant to subsection (4) or (5) shall, in addition to being applied to that person's liability under this section, be applied on account of the tax debtor's liability under this Act.

(8) The receipt of the Minister for moneys paid as required by subsection (1) or, in default thereof, by subsection (4) or (5) is a good and sufficient discharge of the liability to the tax debtor to the extent of the amount set out in the receipt.

(9) In this section, ``tax debtor'' means a person by whom any tax, penalty, interest or other sum is payable under this Act.

Clause 109: (1) Section 88 reads as follows:

88. The Minister may waive or cancel any amount otherwise payable to the Receiver General under this Act that is interest or a penalty calculated in the same manner as interest.

Clause 110: (1) and (2) The relevant portion of subsection 116(4) reads as follows:

(4) Where a manufacturer or wholesaler holding a licence granted under or in respect of Part III or VI has purchased goods from another such licensed manufacturer or licensed wholesaler and has incorrectly stated or certified that the goods were being purchased for a use or under conditions rendering the sale of the goods exempt from any tax imposed by Part III or VI,

    (a) the purchaser and not the manufacturer or wholesaler from whom the goods were purchased is liable to pay the tax and any penalty or interest under subsection 79(1), if

. . .

    (b) in any other case, the purchaser and the manufacturer or wholesaler from whom the goods were purchased are jointly and severally liable to pay the tax and any penalty or interest under subsection 79(1).

Income Tax Act

Clause 111: (1) The relevant portion of subsection 129(2.1) reads as follows:

(2.1) Where a dividend refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of

    . . .

    (b) the day on which the corporation's return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed,

and ending on the day on which the refund is paid or applied.

Clause 112: (1) The relevant portion of subsection 131(3.1) reads as follows:

(3.1) Where a capital gains refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of

    . . .

    (b) the day on which the corporation's return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed,

and ending on the day the refund is paid or applied.

Clause 113: (1) The relevant portion of subsection 132(2.1) reads as follows:

(2.1) Where a capital gains refund for a taxation year is paid to, or applied to a liability of, a mutual fund trust, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is 45 days after the later of

Clause 114: (1) The relevant portion of subsection 133(7.01) reads as follows:

(7.01) Where an allowable refund for a taxation year is paid to, or applied to a liability of, a non-resident-owned investment corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of

    . . .

    (b) the day on which the corporation's return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed,

and ending on the day the refund is paid or applied.

Clause 115: (1) Subsection 157(2) reads as follows:

(2) Where in a taxation year a corporation

    (a) has held out the prospect that it will make allocations in proportion to patronage as described in section 135, or

    (b) is a credit union,

and for the year or the preceding taxation year

    (c) its taxable income (determined before taking into consideration the specified future tax consequences for the year or that preceding year, as the case may be) was not more than $10,000, and

    (d) no tax was payable by it under any of Parts I.3, VI and VI.1 (determined before taking into consideration the specified future tax consequences for the year or that preceding year, as the case may be),

it may, instead of paying the instalments required by subsection (1), pay to the Receiver General at the end of the third month following the end of the year the total of the taxes payable by it under this Part and Parts I.3, VI and VI.1 for the year.

Clause 116: (1) Subsection 161(2.1) reads as follows:

(2.1) Where the total of all amounts each of which is an amount of interest payable under subsection (2) by a taxpayer, including any interest payable under subsection (2) because of its application under section 36 of the Canada Pension Plan to any amount paid or payable under that Act, or under any provision of an Act of a province with which the Minister of Finance has entered into an agreement for the collection of the taxes payable to the province under that Act that is similar to subsection (2) does not exceed $25 for a taxation year, the Minister shall not assess the interest.

(2) The relevant portion of subsection 161(7) reads as follows:

(7) For the purpose of computing interest under subsection (1) or (2) on tax or a part of an instalment of tax for a taxation year, and for the purpose of section 163.1,

    . . .

    (b) the amount by which the tax payable under this Part and Parts I.3, VI and VI.1 by the taxpayer for the year is reduced as a consequence of the deduction or exclusion of amounts described in paragraph (a) is deemed to have been paid on account of the taxpayer's tax payable under this Part for the year on the day that is the latest of

Clause 117: (1) New.

Clause 118: (1) Subsection 164(3) reads as follows:

(3) Where under this section an amount in respect of a taxation year (other than an amount or portion thereof that can reasonably be considered to arise from the operation of section 122.5, 122.61 or 126.1) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period beginning on the day that is the latest of

    (a) where the taxpayer is an individual, the day that is 45 days after the individual's balance-due day for the year,

    (b) where the taxpayer is a corporation, the day that is 120 days after the end of the year,

    (c) where the taxpayer is

      (i) a corporation, the day on which its return of income for the year was filed under section 150, unless the return was filed on or before the corporation's filing-due date for the year, and

      (ii) an individual, the day that is 45 days after the day on which the individual's return of income for the year was filed under section 150,

    (d) in the case of a refund of an overpayment, the day the overpayment arose, and

    (e) in the case of a repayment of an amount in controversy, the day an overpayment equal to the amount of the repayment would have arisen if the total of all amounts payable on account of the taxpayer's liability under this Part for the year were the amount by which

      (i) the lesser of the total of all amounts paid on account of the taxpayer's liability under this Part for the year and the total of all amounts assessed by the Minister as payable under this Part by the taxpayer for the year

    exceeds

      (ii) the amount repaid,

and ending on the day the amount is refunded, repaid or applied, unless the amount of the interest so calculated is less than $1, in which event no interest shall be paid or applied under this subsection.

(2) Subsection 164(3.2) reads as follows:

(3.2) Notwithstanding subsection (3), where the amount of an overpayment of a taxpayer for a taxation year is determined because of an assessment made under subsection 152(4.2) or 220(3.1) or (3.4) and an amount in respect thereof is refunded to, or applied to another liability of, the taxpayer under subsection (1.5) or (2), the Minister shall pay or apply interest thereon at the prescribed rate for the period beginning on the day the Minister received the application therefor, in a form satisfactory to the Minister, and ending on the day the amount is refunded or applied, unless the amount of the interest so calculated is less than $1, in which case no interest shall be paid or applied under this subsection.

(3) The relevant portion of subsection 164(5) reads as follows:

(5) For the purpose of subsection (3), the portion of any overpayment of the tax payable by a taxpayer for a taxation year that arose as a consequence of

. . .

shall be deemed to have arisen on the day that is the latest of

Clause 119: (1) The relevant portion of subsection 183.1(2) reads as follows:

(2) Where, as a part of a transaction or series of transactions or events,

. . .

the corporation shall, on or before the day on or before which it is required to file its return of income under Part I for its taxation year that includes that time, pay a tax of 45% of that amount or portion thereof, as the case may be.

Clause 120: (1) The relevant portion of subsection 186(1) reads as follows:

186. (1) Every corporation (in this section referred to as the ``particular corporation'') that is at any time in a taxation year a private corporation or a subject corporation shall, on or before the last day of the third month after the end of the year, pay a tax under this Part for the year equal to the amount, if any, by which the total of

Clause 121: (1) Section 187.2 reads as follows:

187.2 Every corporation shall, on or before the last day of the second month after the end of each taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the corporation in the year on a taxable preferred share (other than a share of a class in respect of which an election under subsection 191.2(1) has been made) to the extent that an amount in respect of the dividend was deductible under section subsection 112 or 113 or 138(6) in computing its taxable income for the year or under subsection 115(1) in computing its taxable income earned in Canada for the year.

Clause 122: (1) Subsection 187.3(1) reads as follows:

187.3 (1) Every restricted financial institution shall, on or before the last day of the second month after the end of each taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the institution at any time in the year on a share acquired by any person before that time and after 8:00 p.m. Eastern Daylight Saving Time, June 18, 1987 that was, at the time the dividend was paid, a taxable RFI share to the extent that an amount in respect of the dividend was deductible under section subsection 112 or 113 or 138(6) in computing its taxable income for the year or under subsection 115(1) in computing its taxable income earned in Canada for the year.

Clause 123: (1) The relevant portion of subsection 196(3) reads as follows:

(3) Where a corporation is liable to pay tax for a taxation year under this Part, the corporation shall pay in respect of the year, to the Receiver General

    . . .

    (b) the remainder, if any, of the tax payable by it under this Part for the year, on or before the end of the second month following the end of the year.

Clause 124: (1) The relevant portion of subsection 204.86(1) reads as follows:

204.86 (1) Every registered labour-sponsored venture capital corporation and every revoked corporation shall

    . . .

    (c) within 90 days after the end of the year, pay to the Receiver General the amount of tax and penalties, if any, payable under this Part by it for the year.

(2) The relevant portion of subsection 204.86(2) reads as follows:

(2) Where tax is payable under this Part for a taxation year by a corporation because of subsection 204.82(5) or 204.85(2), the corporation shall

    . . .

    (c) within 90 days after the end of the year, pay to the Receiver General the amount of tax payable under this Part by it for the year.

Clause 125: (1) The relevant portion of subsection 208(2) reads as follows:

(2) A person liable to pay a tax under this Part in respect of a year shall, within 3 months from the end of the year,

Clause 126: (1) The relevant portion of subsection 209(4) reads as follows:

(4) Where a person is liable to pay tax for a taxation year under this Part, the person shall pay in respect of the year, to the Receiver General

    . . .

    (b) the remainder, if any, of the tax payable by the person under this Part for the year, on or before the end of the second month following the end of the year.

Clause 127: (1) Section 211.4 reads as follows:

211.4 Every life insurer shall pay, on or before the last day of the second month ending after the end of a taxation year, the remainder, if any, of the tax payable under this Part by the insurer for the year.

Clause 128: (1) The relevant portion of subsection 219(1) reads as follows:

219. (1) Every corporation that is non-resident in a taxation year shall, on or before its filing-due date for the year, pay a tax under this Part for the year equal to 25% of the amount, if any, by which the total of

Clause 129: (1) Subsection 220(3) reads as follows:

(3) The Minister may at any time extend the time for making a return under this Act.

Previous Page Table of Contents Next Page