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Bill C-13

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1st Session, 41st Parliament,

60 Elizabeth II, 2011

house of commons of canada

BILL C-13

An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Keeping Canada’s Economy and Jobs Growing Act.

PART 1

AMENDMENTS TO THE INCOME TAX ACT AND RELATED REGULATIONS

R.S., c. 1 (5th Supp.)

Income Tax Act

2. (1) Paragraph 18(11)(g) of the Income Tax Act is repealed.

(2) Subsection (1) applies after 2009.

3. (1) Section 34.2 of the Act is replaced by the following:

Definitions

34.2 (1) The definitions in this subsection apply in this section.

“adjusted stub period accrual”
« montant comptabilisé ajusté pour la période tampon »

“adjusted stub period accrual” of a corporation in respect of a partnership — in which the corporation has a significant interest at the end of the last fiscal period of the partnership that ends in the corporation’s taxation year in circumstances where another fiscal period (in this definition referred to as the “particular period”) of the partnership begins in the year and ends after the year — means

(a) if paragraph (b) does not apply, the amount determined by the formula

[(A – B) × C/D] – (E + F)

where

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for a fiscal period of the partnership that ends in the year (other than any amount for which a deduction is available under section 112 or 113),

B is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for a fiscal period of the partnership that ends in the year,

C is the number of days that are in both the year and the particular period,

D is the number of days in fiscal periods of the partnership that end in the year,

E is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and

F is an amount designated by the corporation in its return of income for the year (other than an amount included in the description of E) and filed with the Minister on or before its filing-due date for the year; and

(b) if a fiscal period of the partnership ends in the corporation’s taxation year and the year is the first taxation year in which the fiscal period of the partnership is aligned with the fiscal period of one or more other partnerships under a multi-tier alignment (in this paragraph referred to as the “eligible fiscal period”),

(i) where a fiscal period of the partnership ends in the year and before the eligible fiscal period, the amount determined by the formula

[(A – B) × C/D] – (E + F)

where

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the first fiscal period of the partnership that ends in the year (other than any amount for which a deduction is available under section 112 or 113),

B is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the first fiscal period of the partnership that ends in the year,

C is the number of days that are in both the year and the particular period,

D is the number of days in the first fiscal period of the partnership that ends in the year,

(ii) where the eligible fiscal period of the partnership is the first fiscal period of the partnership that ends in the corporation’s taxation year, the amount determined by the formula

(A – B – C) × D/E – (F + G)

where

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the eligible fiscal period (other than any amount for which a deduction is available under section 112 or 113),

C is the corporation’s eligible alignment income for the eligible fiscal period,

D is the number of days that are in both the year and the particular period,

E is the number of days that are in the eligible fiscal period that ends in the year,

F is the amount of the qualified resource expense in respect of the particular period of the partnership that is designated by the corporation for the year under subsection (6) in its return of income for the year filed with the Minister on or before its filing-due date for the year, and

G is an amount designated by the corporation in its return of income for the year (other than an amount included in the description of F) and filed with the Minister on or before its filing-due date for the year.

“eligible alignment income”
« revenu d’alignement admissible »

“eligible alignment income”, of a corporation, means

(a) if a partnership is subject to a single-tier alignment, the first aligned fiscal period of the partnership ends in the first taxation year of the corporation ending after March 22, 2011 (in this paragraph referred to as the “eligible fiscal period”) and the corporation is a member of the partnership at the end of the eligible fiscal period,

(i) where the eligible fiscal period is preceded by another fiscal period of the partnership that ends in the corporation’s first taxation year that ends after March 22, 2011 and the corporation is a member of the partnership at the end of that preceding fiscal period, the amount determined by the formula

A – B – C

where

C is, where an outlay or expense of the partnership is deemed by subsection 66(18) to be made or incurred by the corporation at the end of the eligible fiscal period, the total of all amounts each of which is an amount that would be deductible by the corporation for the taxation year under any of sections 66.1, 66.2, 66.21 and 66.4 determined as if each such outlay or expense were the only amount relevant in determining the amount deductible, or

(ii) where the eligible fiscal period is the first fiscal period of the partnership that ends in the corporation’s first taxation year ending after March 22, 2011, nil; and

(b) if a partnership is subject to a multi-tier alignment, the first aligned fiscal period of the partnership ends in the taxation year of the corporation (in this paragraph referred to as the “eligible fiscal period”) and the corporation is a member of the partnership at the end of the eligible fiscal period, the amount determined by the formula

A – B – C

where

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the eligible fiscal period, other than any amount

(i) for which a deduction is available under section 112 or 113, or

(ii) that would be included in computing the income of the corporation for the year if there were no multi-tier alignment,

“multi-tier alignment”
« alignement pour paliers multiples »

“multi-tier alignment”, in respect of a partnership, means the alignment under subsection 249.1(9) or (11) of the fiscal period of the partnership and the fiscal period of one or more other partnerships.

“qualified resource expense”
« dépense admissible relative à des ressources »

“qualified resource expense”, of a corporation for a taxation year in respect of a fiscal period of a partnership that begins in the year and ends after the year, means an expense incurred by the partnership in the portion of the fiscal period that is in the year and that is described in any of the following definitions:

(a) “Canadian exploration expense” in subsection 66.1(6);

(b) “Canadian development expense” in subsection 66.2(5);

(d) “Canadian oil and gas property expense” in subsection 66.4(5).

“qualifying transitional income”
« revenu admissible à l’allègement »

“qualifying transitional income”, of a corporation that is a member of a partnership on March 22, 2011, means the amount that is the total of the following amounts, computed in accordance with subsection (15),

(a) the corporation’s eligible alignment income in respect of the partnership, and

(b) the corporation’s adjusted stub period accrual in respect of the partnership for

(i) if there is a multi-tier alignment in respect of the partnership, the corporation’s taxation year during which ends the fiscal period of the partnership that is aligned with the fiscal period of one or more other partnerships under the multi-tier alignment, or

(ii) in any other case, the corporation’s first taxation year that ends after March 22, 2011.

“significant interest”
« participation importante »

“significant interest”, of a corporation in a partnership at any time, means a membership interest of the corporation in the partnership if the corporation, or the corporation together with one or more persons or partnerships related to or affiliated with the corporation, is entitled at that time to more than 10% of

(a) the income or loss of the partnership; or

(b) the assets (net of liabilities) of the partnership if it were to cease to exist.

“single-tier alignment”
« alignement pour palier unique »

“single-tier alignment”, in respect of a partnership, means the ending of a fiscal period of the partnership under subsection 249.1(8).

“specified percentage”
« pourcentage déterminé »

“specified percentage”, of a corporation for a particular taxation year in respect of a partnership, means

(a) if the first taxation year for which the corporation has qualifying transitional income ends in 2011 and the particular year ends in

(i) 2011, 100%,

(ii) 2012, 85%,

(iii) 2013, 65%,

(iv) 2014, 45%,

(v) 2015, 25%, and

(vi) 2016, 0%;

(b) if the first taxation year for which the corporation has qualifying transitional income ends in 2012 and the particular year ends in

(i) 2012, 100%,

(ii) 2013, 85%,

(iii) 2014, 65%,

(iv) 2015, 45%,

(v) 2016, 25%, and

(vi) 2017, 0%; and

(c) if the first taxation year for which the corporation has qualifying transitional income ends in 2013 and the particular year ends in

(i) 2013, 85%,

(ii) 2014, 65%,

(iii) 2015, 45%,

(iv) 2016, 25%, and

(v) 2017, 0%.

Income inclusion — adjusted stub period accrual

(2) Subject to subsections (5) and (9), a corporation (other than a professional corporation) shall include in computing its income for a taxation year its adjusted stub period accrual in respect of a partnership if

(a) the corporation has a significant interest in the partnership at the end of the last fiscal period of the partnership that ends in the year;

(b) another fiscal period of the partnership begins in the year and ends after the year; and

(c) at the end of the year, the corporation is entitled to a share of an income, loss, taxable capital gain or allowable capital loss of the partnership for the fiscal period referred to in paragraph (b).

Income inclusion — new partner designation

(3) Subject to subsection (5), if a corporation (other than a professional corporation) becomes a member of a partnership during a fiscal period of the partnership (in this subsection referred to as the “particular period”) that begins in the corporation’s taxation year and ends after the taxation year but on or before the filing-due date for the taxation year and the corporation has a significant interest in the partnership at the end of the particular period, the corporation may include in computing its income for the taxation year the lesser of

(a) the amount, if any, designated by the corporation in its return of income for the taxation year, and

(b) the amount determined by the formula

A × B/C

where

A is the corporation’s income from the partnership for the particular period (other than any amount for which a deduction is available under section 112 or 113),

B is the number of days that are both in the corporation’s taxation year and the partic-ular period, and

C is the number of days in the particular period.

Deduction in following year

(4) A corporation may deduct in computing its income for a taxation year each amount that was included in computing its income in respect of a partnership for the immediately preceding taxation year under subsection (2) or (3).

Character of amounts

(5) For the purposes of this Act, the following rules apply:

(a) in computing the income of a corporation for a taxation year,

(i) an adjusted stub period accrual included under subsection (2) in respect of a partnership for the year is deemed to be income and taxable capital gains having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for all fiscal periods of the partnership ending in the year,

(ii) an amount included under subsection (3) in respect of a partnership for the year is deemed to be income and taxable capital gains having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for the particular period referred to in that subsection,

(iii) an amount deductible under subsection (4) in respect of a partnership for the year is deemed to have the same character and to be in the same proportions as the income and taxable capital gains included in the corporation’s income for the immediately preceding taxation year under subsection (2) or (3) in respect of the partnership,

(iv) an amount deductible as a reserve under subsection (11) in respect of a partnership for the year is deemed to have the same character and to be in the same proportions as the qualifying transitional income in respect of the partnership for the year, and

(v) an amount included in income under subsection (12) in respect of the partnership for the year is deemed to have the same character and to be in the same proportions as the amount deducted under subsection (11) for the immediately preceding taxation year; and

(b) a corporation is deemed to have realized at the end of a taxation year an allowable capital loss equal to the amount determined by the formula

A – (B – C)

where

A is the amount deductible by the corporation under subsection (4) for the year in respect of taxable capital gains of a partnership,

B is the amount that is the total of

(i) all taxable capital gains allocated by the partnership to the corporation for the year,

(ii) the amount included in the corporation’s income under subsection (2) for the year in respect of taxable capital gains of the partnership, and

(iii) the amount included in the corporation’s income under subsection (12) for the year in respect of taxable capital gains of the partnership, and

C is the amount, if any, that is the lesser of

(i) the amount that is the total of all allowable capital losses allocated by the partnership to the corporation for the year, and

(ii) the amount determined under subparagraph (i) of the description of B.

Designation — qualified resource expense

(6) A corporation may designate an amount for a taxation year in respect of a qualified resource expense under the definition “adjusted stub period accrual” in subsection (1) subject to the following rules:

(a) the corporation cannot designate an amount for the year in respect of a qualified resource expense in respect of a partnership except to the extent the corporation obtains from the partnership, before the corporation’s filing-due date for the year, information in writing identifying the corporation’s qualified resource expenses described

(i) in paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year,

(ii) in paragraph (f) of the definition “Canadian development expense” in subsection 66.2(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year,

(iii) in paragraph (e) of the definition “foreign resource expense” in subsection 66.21(1), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year, and

(iv) in paragraph (b) of the definition “Canadian oil and gas property expense” in subsection 66.4(5), determined as if those expenses had been incurred by the partnership in its last fiscal period that ended in the year; and

(b) the amount designated for the year by the corporation is not to exceed the maximum amount that would be deductible by the corporation under any of sections 66.1, 66.2, 66.21 and 66.4 in computing its income for the year if

(i) the amounts referred to in paragraph (a) in respect of the partnership were the only amounts relevant in determining the maximum amount, and

(ii) the fiscal period of the partnership that begins in the year and ends after the year had ended at the end of the year and each qualified resource expense were deemed under subsection 66(18) to be incurred by the corporation at the end of the year.

No additional income — bankrupt

(7) Subsections (2) and (3) do not apply in computing a corporation’s income for a taxation year in respect of a partnership if the corporation becomes a bankrupt in the year.

Foreign affiliates

(8) This section does not apply for the purposes of computing, for a taxation year of a foreign affiliate of a corporation resident in Canada,

(a) the foreign accrual property income of the affiliate in respect of the corporation; and

(b) except to the extent that the context otherwise requires, the exempt surplus or exempt deficit and the taxable surplus or taxable deficit (as those terms are defined in subsection 5907(1) of the Income Tax Regulations) of the affiliate in respect of the corporation.

Special case — multi-tier alignment

(9) If a corporation is a member of a partnership subject to a multi-tier alignment, subsection (2) does not apply to the corporation in respect of the partnership for taxation years preceding the taxation year that includes the end of the first aligned fiscal period of the partnership under the multi-tier alignment.

Designations

(10) Once a corporation makes a designation in calculating its adjusted stub period accrual in respect of a partnership for a taxation year under any of the description of E or F of paragraph (a), the description of E or F of subparagraph (b)(i) and the description of F or G of subparagraph (b)(ii) of the definition “adjusted stub period accrual” in subsection (1), the designation cannot be amended or revoked.

Transitional reserve

(11) A corporation that has qualifying transitional income in respect of a partnership for a particular taxation year may deduct in computing its income, as a reserve, for the particular year such amount as the corporation claims not exceeding the least of

(a) the specified percentage for the particular year of the corporation’s qualifying transitional income in respect of the partnership,

(b) if, for the immediately preceding taxation year, an amount was deductible under this subsection in computing the corporation’s income in respect of the partnership, the amount that is the total of

(i) the amount included under subsection (12) in computing the corporation’s income for the particular year in respect of the partnership, and

(ii) the amount by which the corporation’s qualifying transitional income in respect of the partnership is increased in the particular year because of the application of subsections (16) and (17), and

(c) the corporation’s income for the particular year computed before deducting any amount under this subsection in respect of the partnership or under sections 61.3 and 61.4.

Inclusion of prior year reserve

(12) A corporation shall include in computing its income in respect of a partnership for a taxation year the amount, if any, deducted by it under subsection (11) in respect of the partnership for its immediately preceding taxation year.

No reserve

(13) No deduction shall be made under subsection (11) in computing a corporation’s income for a taxation year in respect of a partnership

(a) unless,

(i) in the case of a corporation that is a member of a partnership in respect of which there is a multi-tier alignment, the corporation has been a member of the partnership continuously since before March 22, 2011 to the end of the year,

(ii) in the case of a corporation that is a member of a partnership in respect of which there is no multi-tier alignment, the corporation is a member of the partnership

(A) at the end of the partnership’s fiscal period that begins before March 22, 2011 and ends in the year of the corporation that includes March 22, 2011,

(B) at the end of the partnership’s fiscal period commencing immediately after the fiscal period referred to in clause (A) and continues to be a member until after the end of the year of the corporation that includes March 22, 2011, and

(b) if at the end of the year or at any time in the following taxation year,

(i) the corporation’s income is exempt from tax under this Part, or

(ii) the corporation is non-resident and the partnership does not carry on business through a permanent establishment (as defined for the purpose of subsection 16.1(1)) in Canada; or

(i) at the beginning of which the partnership no longer principally carries on the activities to which the reserve relates,

(ii) in which the corporation becomes a bankrupt, or

(iii) in which the corporation is dissolved or wound up (other than in circumstances to which subsection 88(1) applies).

Deemed partner

(14) A corporation that cannot deduct an amount under subsection (11) for a taxation year in respect of a partnership solely because it has disposed of its interest in the partnership is deemed for the purposes of paragraph (13)(a) to be a member of the partnership continuously until the end of the taxation year if

(a) the corporation disposed of its interest to another corporation related to, or affiliated with, the corporation at the time of the disposition; and

(b) a corporation related to, or affiliated with, the corporation has the partnership interest referred to in paragraph (a) at the end of the taxation year.

Computing qualifying transitional income — special rules

(15) For the purposes of determining a corporation’s qualifying transitional income, the income or loss, as the case may be, of a partnership for a fiscal period shall be computed as if

(a) the partnership had deducted for the period the maximum amount deductible in respect of any expense, reserve, allowance or other amount;

(b) this Act were read without reference to paragraph 28(1)(b); and

Qualifying transition income adjustment — conditions for application

(16) Subsection (17) applies for a particular taxation year of a corporation and for each subsequent taxation year for which the corporation may deduct an amount under subsection (11) in respect of a partnership if the particular year is the first taxation year

(a) that is after the taxation year in which the corporation has, or would have if the partnership had income, an adjusted stub period accrual that is included in the corporation’s qualifying transitional income in respect of the partnership by reason of paragraph (b) of the definition “qualifying transitional income” in subsection (1); and

(b) in which ends the fiscal period of the partnership that began in the taxation year referred to in paragraph (a).

Adjustment of qualifying transitional income

(17) If this subsection applies in respect of a partnership for a taxation year of a corporation, the adjusted stub period accrual included in the corporation’s qualifying transitional income in respect of the partnership for the year is computed as if

(a) the descriptions in paragraph (a) and subparagraph (b)(i) of the definition “adjusted stub period accrual” in subsection (1) read as follows:

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the partnership for the particular period (other than any amount for which a deduction is available under section 112 or 113),

B is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the particular period,

C is the number of days that are in both the year and the particular period,

D is the number of days in the particular period,

F is nil; and

(b) the descriptions in subparagraph (b)(ii) of the definition “adjusted stub period accrual” in subsection (1) read as follows:

B the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss — to the extent that the total of all allowable capital losses does not exceed the total of all taxable capital gains included in the description of A — of the partnership for the particular period,

C is the corporation’s eligible alignment income for the eligible fiscal period,

D is the number of days that are in both the year and the particular period,

E is the number of days in the particular period,

G is nil.

Anti-avoidance

(18) If it is reasonable to conclude that one of the main reasons a corporation is a member of a partnership in a taxation year is to avoid the application of subsection (13), the corporation is deemed not to be a member of the partnership for the purposes of that subsection.

Definitions

34.3 (1) The definitions in this subsection and in subsection 34.2(1) apply in this section.

“actual stub period accrual”
« montant comptabilisé réel pour la période tampon »

“actual stub period accrual”, of a corporation in respect of a qualifying partnership for a taxation year, means the positive or negative amount determined by the formula

(A – B) × C/D – E

where

A is the total of all amounts each of which is the corporation’s share of an income or taxable capital gain of the qualifying partnership for the last fiscal period of the partnership that began in the base year (other than any amount for which a deduction was available under section 112 or 113);

B is the total of all amounts each of which is the corporation’s share of a loss or allowable capital loss of the qualifying partnership for the last fiscal period of the partnership that began in the base year (to the extent that the total of all allowable capital losses included under this description in respect of all qualifying partnerships for the taxation year does not exceed the corporation’s share of all taxable capital gains of all qualifying partnerships for the taxation year);

C is the number of days that are in both the base year and the fiscal period;

D is the number of days in the fiscal period; and

E is the amount of the qualified resource expense in respect of the qualifying partnership that was designated by the corporation for the base year under subsection 34.2(6) in its return of income for the base year filed with the Minister on or before its filing-due date for the base year.

“base year”
« année de base »

“base year”, of a corporation in respect of a qualifying partnership for a taxation year, means the preceding taxation year of the corporation in which began a fiscal period of the partnership that ends in the corporation’s taxation year.

“income shortfall adjustment”
« rajustement pour revenu insuffisant »

“income shortfall adjustment”, of a corporation in respect of a qualifying partnership for a taxation year, means the positive or negative amount determined by the formula

(A – B) × C × D

where

A is the amount that is the lesser of

(a) the actual stub period accrual in respect of the qualifying partnership, and

(b) the amount that would be the corporation’s adjusted stub period accrual for the base year in respect of the qualifying partnership if the value of F in paragraph (a) of the definition “adjusted stub period accrual” in subsection 34.2(1) were nil;

B is the amount included under subsection 34.2(2) in computing the corporation’s income for the base year in respect of the qualifying partnership;

C is the number of days in the period that

(a) begins on the day after the day on which the base year ends, and

(b) ends on the day on which the taxation year ends; and

D is the average daily rate of interest determined by reference to the rate of interest prescribed under paragraph 4301(a) of the Income Tax Regulations for the period referred to in the description of C.

“qualifying partnership”
« société de personnes admissible »

“qualifying partnership”, in respect of a corporation for a particular taxation year, means a partnership

(a) a fiscal period of which began in a preceding taxation year and ends in the particular taxation year; and

(b) in respect of which the corporation was required to calculate an adjusted stub period accrual for the preceding taxation year.

Application of subsection (3)

(2) Subsection (3) applies to a corporation for a taxation year if

(a) the corporation has designated an amount for the purpose of the description of F in paragraph (a) of the definition “adjusted stub period accrual” in subsection 34.2(1) in calculating its adjusted stub period accrual for the base year in respect of a qualifying partnership for the taxation year; and

(b) where the corporation has qualifying transitional income, the taxation year is after the first taxation year of the corporation to which subsection 34.2(17) applies.

Income shortfall adjustment — inclusion

(3) If this subsection applies to a corporation for a taxation year, the corporation shall include in computing its income for the taxation year the amount determined by the formula

A + 0.50 × (A – B)

where

A is the amount that is the total of all amounts each of which is the corporation’s income shortfall adjustment in respect of a qualifying partnership for the year; and

B is the amount that is the lesser of A and the total of all amounts each of which is 25% of the positive amount, if any, that would be the income shortfall adjustment in respect of a qualifying partnership for the year if the value of the description of B in the definition “income shortfall adjustment” in subsection (1) were nil.

(2) Subsection (1) applies to taxation years ending after March 22, 2011.

4. (1) The Act is amended by adding the following after section 38:

Tax-deferred transaction — flow-through shares

38.1 If a taxpayer acquires a property (in this section referred to as the “acquired property”) that is included in a flow-through share class of property in the course of a transaction or series of transactions to which any of section 51, subsections 73(1), 85(1) and (2) and 85.1(1), sections 86 and 87 and subsections 88(1) and 98(3) apply

(a) if the transfer of the acquired property is part of a gifting arrangement (within the meaning assigned by section 237.1) or of a transaction or series of transactions to which subsection 98(3) applies, or the transferor is a person with whom the taxpayer was, at the time of the acquisition, not dealing at arm’s length, there shall be added, at the time of the transfer, to the taxpayer’s exemption threshold in respect of the flow-through share class of property, and deducted from the transferor’s exemption threshold in respect of the flow-through share class of property, the amount determined by the formula

A × B

where

A is the amount by which the transferor’s exemption threshold in respect of the flow-through share class of property immediately before that time exceeds the capital gain, if any, of the transferor as a result of the transfer, and

B is the proportion that the fair market value of the acquired property immediately before the transfer is of the fair market value of all property of the transferor immediately before the transfer that is included in the flow-through share class of property; and

(b) if the transferor receives particular shares of the capital stock of the taxpayer as consideration for the acquired property and those particular shares are listed on a designated stock exchange or are shares of a mutual fund corporation, then for the purposes of this section and subsection 40(12)

(i) the particular shares are deemed to be flow-through shares of the transferor, and

(ii) there shall be added to the transferor’s exemption threshold in respect of the flow-through share class of property that includes the particular shares the amount that is determined under paragraph (a) or that would be so determined if paragraph (a) applied to the taxpayer.

(2) Subsection (1) is deemed to have come into force on March 22, 2011.

5. (1) Section 40 of the Act is amended by adding the following after subsection (11):

Donated flow-through shares

(12) If at any time a taxpayer disposes of one or more capital properties that are included in a flow-through share class of property and subparagraph 38(a.1)(i) or (iii) applies to the disposition (in this subsection referred to as the “actual disposition”), then the taxpayer is deemed to have a capital gain from a disposition at that time of another capital property equal to the lesser of

(a) the taxpayer’s exemption threshold at that time in respect of the flow-through share class of property, and

(b) the total of all amounts each of which is a capital gain from the actual disposition (for greater certainty, calculated without reference to this subsection).

(2) Subsection (1) applies to dispositions made on or after March 22, 2011.

6. (1) The portion of subsection 43.1(1) of the Act before paragraph (a) is replaced by the following:

Life estates in real property

43.1 (1) Notwithstanding any other provision of this Act, if at any time a taxpayer disposes of a remainder interest in real property (except as a result of a transaction to which subsection 73(3) would otherwise apply or by way of a gift to a donee described in the definition “total charitable gifts”, “total Crown gifts” or “total ecological gifts” in subsection 118.1(1)) to a person or partnership and retains a life estate or an estate pur autre vie (in this section referred to as the “life estate”) in the property, the taxpayer is deemed

(2) The portion of subsection 43.1(1) of the Act before paragraph (a), as enacted by subsection (1), is replaced by the following:

Life estates in real property

43.1 (1) Notwithstanding any other provision of this Act, if at any time a taxpayer disposes of a remainder interest in real property (except as a result of a transaction to which subsection 73(3) would otherwise apply or by way of a gift to a qualified donee) to a person or partnership and retains a life estate or an estate pur autre vie (in this section referred to as the “life estate”) in the property, the taxpayer is deemed

(3) Subsection (1) applies to dispositions that occur after February 27, 1995.

(4) Subsection (2) comes into force on the later of the day on which this Act receives royal assent and January 1, 2012.

7. (1) The portion of subsection 48.1(1) of the Act after paragraph (b) and before paragraph (c) is replaced by the following:

the individual is deemed, except for the purposes of sections 7 and 35, paragraph 110(1)(d.1) and subsections 120.4(4) and (5),

(2) Subsection (1) applies to dispositions that occur on or after March 22, 2011.

8. (1) Subparagraph 53(2)(c)(i.4) of the Act is replaced by the following:

(i.4) unless that time is immediately before a disposition of the interest, if the taxpayer is a member of the partnership and the taxpayer has been a specified member of the partnership at all times since becoming a member of the partnership, or the taxpayer is at that time a limited partner of the partnership for the purposes of subsection 40(3.1),

(A) where that time is in the taxpayer’s first taxation year for which the taxpayer is eligible to deduct an amount in respect of the partnership under subsection 34.2(11), the portion of the amount deducted in computing the taxpayer’s income for the taxation year under subsection 34.2(11) in respect of the partnership that would have been deductible if the definition “qualifying transitional income” in subsection 34.2(1) were read without reference to paragraph (b), and

(B) where that time is in any other taxation year, the portion of the amount deducted in computing the taxpayer’s income for the taxation year immediately preceding that other year under subsection 34.2(11) in respect of the partnership that would have been deductible if the definition “qualifying transitional income” in subsection 34.2(1) were read without reference to paragraph (b),

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

9. (1) Section 54 of the Act is amended by adding the following in alphabetical order:

“exemption threshold”
« seuil d’exonération »

“exemption threshold”, of a taxpayer at a particular time in respect of a flow-through share class of property, means the amount determined by the formula

A – B

where

A is the total of

(a) the total of all amounts, each of which is an amount that would be the cost to the taxpayer, computed without reference to subsection 66.3(3), of a flow-through share that was included at any time before the particular time in the flow-through share class of property and that was issued by a corporation to the taxpayer on or after the taxpayer’s fresh-start date in respect of the flow-through share class of property at that time, other than a flow-through share that the taxpayer was obligated, before March 22, 2011, to acquire pursuant to the terms of a flow-through share agreement entered into between the corporation and the taxpayer, and

(b) the total of all amounts, each of which is an amount that would be the adjusted cost base to the taxpayer of an interest in a partnership — computed as if subparagraph 53(1)(e)(vii.1) and clauses 53(2)(c)(ii)(C) and (D) did not apply to any amount incurred by the partnership in respect of a flow-through share held by the partnership, either directly or indi-rectly through another partnership — that was included at any time before the particular time in the flow-through share class of property, if

(i) the taxpayer

(A) acquired the interest on or after the taxpayer’s fresh-start date in respect of the flow-through share class of property at the particular time (other than an interest that the taxpayer was obligated, before August 16, 2011, to acquire pursuant to the terms of an agreement in writing entered into by the taxpayer), or

(B) made a contribution of capital to the partnership on or after August 16, 2011,

(ii) at any time after the taxpayer acquired the interest or made the contribution of capital, the taxpayer is deemed by subsection 66(18) to have made or incurred an outlay or expense in respect of a flow-through share held by the partnership, either directly or indirectly through another partnership, and

(iii) at any time between the time that the taxpayer acquired the interest or made the contribution of capital and the particular time, more than 50% of the fair market value of the assets of the partnership is attributable to property included in a flow-through share class of property, and

B is the total, if any, of all amounts, each of which is the lesser of

(a) the total of all amounts, each of which is a capital gain from a disposition of a property included in the flow-through share class of property, other than a capital gain referred to in paragraph 38.1(a), at an earlier time that is

(i) before the particular time, and

(ii) after the first time that the taxpayer acquired a flow-through share referred to in paragraph (a) of the description of A or acquired a partnership interest referred to in paragraph (b) of the description of A, and

(b) the exemption threshold of the taxpayer in respect of the flow-though share class of property immediately before that earlier time;

“flow-through share class of property”
« catégorie de biens constituée d’actions accréditives »

“flow-through share class of property” means a group of properties,

(a) in respect of a class of shares of the capital stock of a corporation, each of which is

(i) a share of the class, if any share of the class or any right described in subparagraph (ii) is, at any time, a flow-through share to any person,

(ii) a right to acquire a share of the class, if any share of that class or any right described in this subparagraph is, at any time, a flow-through share to any person, or

(iii) a property that is an identical property of a property described in subparagraph (i) or (ii), or

(b) each of which is an interest in a partnership, if at any time more than 50% of the fair market value of the partnership’s assets is attributable to property included in a flow-through share class of property;

“fresh-start date”
« date de nouveau départ »

“fresh-start date”, of a taxpayer at a particular time in respect of a flow-through share class of property, means

(a) in the case of a partnership interest that is included in the flow-through share class of property, the day that is the later of

(i) August 16, 2011, and

(ii) the last day, if any, before the partic-ular time, on which the taxpayer held an interest in the partnership, and

(b) in the case of any other property that is included in the flow-though share class of property, the day that is the later of

(i) March 22, 2011, and

(ii) the last day, if any, before the partic-ular time, on which the taxpayer disposed of all property included in the flow-through share class of property;

(2) Subsection (1) is deemed to have come into force on March 22, 2011.

10. (1) Clause 56(1)(a)(i)(C) of the Act is replaced by the following:

(2) Subsection 56(2) of the Act is replaced by the following:

Indirect payments

(2) A payment or transfer of property made pursuant to the direction of, or with the concurrence of, a taxpayer to another person for the benefit of the taxpayer or as a benefit that the taxpayer desired to have conferred on the other person (other than by an assignment of any portion of a retirement pension under section 65.1 of the Canada Pension Plan or a comparable provision of a provincial pension plan as defined in section 3 of that Act) shall be included in computing the taxpayer’s income to the extent that it would be if the payment or transfer had been made to the taxpayer.

(3) Section 56 of the Act is amended by adding the following after subsection (3):

Limitations of scholarship exemption

(3.1) For the purpose of determining the total in paragraph (3)(a) for a taxation year,

(a) a scholarship, fellowship or bursary (in this subsection referred to as an “award”) is not considered to be received in connection with the taxpayer’s enrolment in an educational program described in subparagraph (3)(a)(i) except to the extent that it is reasonable to conclude that the award is intended to support the taxpayer’s enrolment in the program, having regard to all the circumstances, including the terms and conditions that apply in respect of the award, the duration of the program and the period for which support is intended to be provided; and

(b) if an award is received in connection with an educational program in respect of which the taxpayer may deduct an amount by reason of paragraph (b) of the description of B in subsection 118.6(2) for the taxation year, for the immediately preceding taxation year or for the following taxation year (in this paragraph referred to as the “claim year”), the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the taxation year in respect of the award may not exceed the amount that is the total of amounts, each of which is the cost of materials related to the program or a fee paid to a designated educational institution in respect of the program, as defined in subsection 118.6(1), in respect of the claim year.

(4) Subsection (1) applies to payments made after 2009.

(5) Subsection (2) applies to payments and transfers made after 2010.

(6) Subsection (3) applies to the 2010 and subsequent taxation years.

11. (1) Clause 60(l)(v)(B.01) of the Act is replaced by the following:

(B.01) the amount included in computing the taxpayer’s income for the year as a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a registered pension plan or a specified pension plan as a consequence of the death of an individual of whom the taxpayer was a child or grandchild, if the taxpayer was, immediately before the death, financially dependent on the individual for support because of mental or physical infirmity,

(2) Sub-subclause 60(l)(v)(B.1)(II)1 of the Act is replaced by the following:

1. a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) received by the taxpayer out of or under a registered pension plan or a specified pension plan,

(3) Paragraph 60(v) of the Act is repealed.

(4) Subsections (1) to (3) apply to taxation years that begin after 2009.

12. (1) The definition “eligible individual” in subsection 60.02(1) of the Act is replaced by the following:

“eligible individual”
« particulier admissible »

“eligible individual” means a child or grandchild of a deceased annuitant under a registered retirement savings plan or registered retirement income fund, or of a deceased member of a registered pension plan or a specified pension plan, who was financially dependent on the deceased for support, at the time of the deceased’s death, by reason of mental or physical infirmity.

(2) Paragraph (c) of the definition “eligible proceeds” in subsection 60.02(1) of the Act is replaced by the following:

(c) a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) out of or under a registered pension plan or a specified pension plan.

(3) Subsections (1) and (2) are deemed to have come into force on March 4, 2010.

13. (1) Subparagraph (b)(ii) of the definition “Canadian resource property” in subsection 66(15) of the Act is replaced by the following:

(ii) prospect, explore, drill or mine for minerals in a mineral resource in Canada other than a bituminous sands deposit or an oil shale deposit,

(2) Paragraph (c) of the definition “Canadian resource property” in subsection 66(15) of the Act is replaced by the following:

(c) any oil or gas well in Canada or any real property or immovable in Canada the principal value of which depends on its petroleum, natural gas or related hydrocarbon content (not including any depreciable property),

(3) Paragraphs (d) and (e) of the definition “Canadian resource property” in subsection 66(15) of the Act are replaced by the following:

(d) any right to a rental or royalty computed by reference to the amount or value of production from an oil or a gas well in Canada, or from a natural accumulation of petroleum, natural gas or a related hydrocarbon in Canada, if the payer of the rental or royalty has an interest in, or for civil law a right in, the well or accumulation, as the case may be, and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the well or accumulation,

(e) any right to a rental or royalty computed by reference to the amount or value of production from a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, if the payer of the rental or royalty has an interest in, or for civil law a right in, the mineral resource and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the mineral resource,

(4) Paragraphs (f) and (g) of the definition “Canadian resource property” in subsection 66(15) of the Act are replaced by the following:

(f) any real property or immovable in Canada (not including any depreciable property) the principal value of which depends on its mineral resource content other than where the mineral resource is a bituminous sands deposit or an oil shale deposit,

(g) any right to or interest in — or, for civil law, any right to or in — any property described in any of paragraphs (a) to (e), other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or

(h) an interest in real property described in paragraph (f) or a real right in an immovable described in that paragraph, other than an interest or a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership;

(5) Subsections (1), (2) and (4) apply in respect of properties and rights acquired after March 21, 2011 except that, in respect of a property or right acquired by a person or partnership before 2012 if the person or partnership was obligated to acquire the property or right pursuant to an agreement in writing entered into by the person or partnership before March 22, 2011,

(a) subparagraph (b)(ii) of the definition “Canadian resource property” in subsection 66(15) of the Act, as enacted by subsection (1), is to be read without reference to “other than a bituminous sands deposit or an oil shale deposit”;

(b) the reference to “petroleum, natural gas or related hydrocarbon content” in paragraph (c) of the definition “Canadian resource property” in subsection 66(15) of the Act, as enacted by subsection (2), is to be read as a reference to “petroleum or natural gas content”; and

(c) paragraph (f) of the definition “Canadian resource property” in subsection 66(15) of the Act, as enacted by subsection (4), is to be read without reference to “other than where the mineral resource is a bituminous sands deposit or an oil shale deposit”.

(6) Subsection (3) applies in respect of rights acquired after December 20, 2002 except that, in respect of a right acquired before March 22, 2011 or in respect of a right that is acquired by a person or partnership after March 21, 2011 and before 2012 and that the person or partnership is obligated to acquire pursuant to an agreement in writing entered into by the person or partnership before March 22, 2011,

(a) the reference to “petroleum, natural gas or a related hydrocarbon” in paragraph (d) of the definition “Canadian resource property” in subsection 66(15) of the Act, as enacted by subsection (3), is to be read as a reference to “petroleum or natural gas”; and

(b) paragraph (e) of the definition “Canadian resource property” in subsection 66(15) of the Act, as enacted by subsection (3), is to be read without reference to “, other than a bituminous sands deposit or an oil shale deposit,”.

14. (1) Paragraph (f) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act is amended by striking out “or” at the end of subparagraph (v) and by replacing subparagraph (vi) with the following:

(v.1) any expense described in subparagraph (i), (iii) or (iv) in respect of the mineral resource, incurred before a new mine in the mineral resource comes into production in reasonable commercial quantities, that results in revenue or can reasonably be expected to result in revenue earned before the new mine comes into production in reasonable commercial quantities, except to the extent that the total of all such expenses exceeds the total of those revenues, or

(vi) any expense that may reasonably be considered to be related to a mine in the mineral resource that has come into production in reasonable commercial quantities or to be related to a potential or actual extension of the mine,

(2) Paragraph (g) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act is replaced by the following:

(g) any expense incurred by the taxpayer after November 16, 1978 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production, in reasonable commercial quantities and incurred before the new mine comes into production in such quantities, including an expense for clearing, removing overburden, stripping, sinking a mine shaft or constructing an adit or other underground entry, but not including any expense that results in revenue or can reasonably be expected to result in revenue earned before the new mine comes into production in reasonable commercial quantities, except to the extent that the total of all such expenses exceeds the total of those revenues,

(3) The definition “Canadian exploration expense” in subsection 66.1(6) of the Act is amended by adding the following after paragraph (g.1):

(g.2) any expense incurred by the taxpayer after March 21, 2011, that is

(i) a specified oil sands mine development expense, or

(ii) an eligible oil sands mine development expense,

(4) Paragraph (k.2) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act is repealed.

(5) Subsection 66.1(6) of the Act is amended by adding the following in alphabetical order:

“bitumen mine development project”
« projet de mise en valeur d’une mine de bitume »

“bitumen mine development project”, of a taxpayer, means an undertaking for the sole purpose of developing a new mine to extract and process tar sands from a mineral resource of the taxpayer to produce bitumen or a similar product;

“bitumen upgrading development project”
« projet de valorisation du bitume »

“bitumen upgrading development project”, of a taxpayer, means an undertaking for the sole purpose of constructing an upgrading facility to process bitumen or a similar feedstock (all or substantially all of which is from a mineral resource of the taxpayer) from a new mine to the crude oil stage or its equivalent;

“completion”
« achèvement »

“completion”, of a specified oil sands mine development project, means the first attainment of a level of average output, measured over a 60-day period, equal to at least 60% of the planned level of average daily output (as determined in paragraph (b) of the definition “specified oil sands mine development project”) for the specified oil sands mine development project;

“designated asset”
« bien désigné »

“designated asset”, in respect of an oil sands mine development project of a taxpayer, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

(a) in the case of a bitumen mine development project,

(i) a crusher,

(ii) a froth treatment plant,

(iii) a primary separation unit,

(iv) a steam generation plant,

(v) a cogeneration plant, or

(vi) a water treatment plant, or

(b) in the case of a bitumen upgrading development project,

(i) a gasifier unit,

(ii) a vacuum distillation unit,

(iii) a hydrocracker unit,

(iv) a hydrotreater unit,

(v) a hydroprocessor unit, or

(vi) a coker;

“eligible oil sands mine development expense”
« frais d’aménagement admissibles relatifs à une mine de sables bitumineux »

“eligible oil sands mine development expense”, of a taxpayer, means an expense incurred by the taxpayer after March 21, 2011 and before 2016, the amount of which is determined by the formula

A × B

where

A is an expense that would be a Canadian exploration expense of the taxpayer described in paragraph (g) of the definition “Canadian exploration expense” if that paragraph were read without reference to “other than a bituminous sands deposit or an oil shale deposit”, but does not include an expense that is a specified oil sands mine development expense, and

B is

(a) 100% if the expense is incurred before 2013,

(b) 80% if the expense is incurred in 2013,

(d) 30% if the expense is incurred in 2015;

“oil sands mine development project”
« projet de mise en valeur d’une mine de sables bitumineux »

“oil sands mine development project”, of a taxpayer, means a bitumen mine development project or a bitumen upgrading development project of the taxpayer;

“preliminary work activity”
« travaux préliminaires »

“preliminary work activity”, in respect of an oil sands mine development project, means activity that is preliminary to the acquisition, construction, fabrication or installation by or on behalf of a taxpayer of designated assets in respect of the taxpayer’s oil sands mine development project including, without limiting the generality of the foregoing, the following activities:

(a) obtaining permits or regulatory approvals,

(b) performing design or engineering work,

(d) conducting environmental assessments, and

(e) entering into contracts;

“specified oil sands mine development expense”
« frais d’aménagement déterminés relatifs à une mine de sables bitumineux »

“specified oil sands mine development expense”, of a taxpayer, means an expense that

(a) would be a Canadian exploration expense described in paragraph (g) of the definition “Canadian exploration expense” if that paragraph were read without reference to “other than a bituminous sands deposit or an oil shale deposit”,

(b) is incurred by the taxpayer after March 21, 2011 and before 2015, and

“specified oil sands mine development project”
« projet déterminé de mise en valeur d’une mine de sables bitumineux »

“specified oil sands mine development project”, of a taxpayer, means an oil sands mine development project (not including any preliminary work activity) in respect of which

(a) one or more designated assets was, before March 22, 2011,

(i) acquired by the taxpayer, or

(ii) in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer, and

(b) the planned level of average daily output (where that output is bitumen or a similar product in the case of a bitumen mine development project, or synthetic crude oil or a similar product in the case of a bitumen upgrading development project) that can reasonably be expected, is the lesser of

(i) the level that was the demonstrated intention of the taxpayer as of March 21, 2011 to produce from the oil sands mine development project, and

(ii) the maximum level of output associated with the design capacity, as of March 21, 2011, of the designated asset referred to in paragraph (a);

(6) Subsections (1), (2) and (4) apply to expenses incurred after November 5, 2010 except that in respect of expenses incurred before March 22, 2011 paragraph (g) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act, as enacted by subsection (2), is to be be read without reference to “, other than a bituminous sands deposit or an oil shale deposit,”.

(7) Subsection (3) applies to expenses incurred after March 21, 2011.

(8) Subsection (5) is deemed to have come into force on March 22, 2011.

15. (1) The definition “Canadian development expense” in subsection 66.2(5) of the Act is amended by adding the following after paragraph (c):

(c.1) any expense, or portion of any expense, that is not a Canadian exploration expense, incurred by the taxpayer for the purpose of bringing a new mine in a mineral resource in Canada that is a bituminous sands deposit or an oil shale deposit into production and incurred before the new mine comes into production in reasonable commercial quantities, including an expense for clearing the land, removing overburden and stripping, or building an entry ramp,

(2) The portion of the description of F in the definition “cumulative Canadian development expense” in subsection 66.2(5) of the Act before paragraph (a) is replaced by the following:

F is the total of all amounts each of which is an amount in respect of property described in paragraph (b), (e) or (f) of the definition “Canadian resource property” in subsection 66(15) or property disposed of after March 21, 2011 which was described in any of those paragraphs and the cost of which when acquired by the taxpayer was included in the Canadian development expense of the taxpayer, or any right to or interest in — or, for civil law, any right in or to — such a property, other than such a right or an interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership, (in this description referred to as “the particular property”) disposed of by the taxpayer before that time equal to the amount, if any, by which

(3) Subsection (1) applies to expenses incurred after March 21, 2011.

(4) Subsection (2) is deemed to have come into force on March 22, 2011.

16. (1) Subsection 74.1(1) of the Act is replaced by the following:

Transfers and loans to spouse or common-law partner

74.1 (1) If an individual has transferred or lent property (otherwise than by an assignment of any portion of a retirement pension under section 65.1 of the Canada Pension Plan or a comparable provision of a provincial pension plan as defined in section 3 of that Act), either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person who is the individual’s spouse or common-law partner or who has since become the individual’s spouse or common-law partner, any income or loss, as the case may be, of that person for a taxation year from the property or from property substituted therefor, that relates to the period in the year throughout which the individual is resident in Canada and that person is the individual’s spouse or common-law partner, is deemed to be income or a loss, as the case may be, of the individual for the year and not of that person.

(2) Subsection (1) applies to transfers and loans made after 2010.

17. (1) Paragraph 74.5(12)(a.1) of the Act is repealed.

(2) Subsection (1) applies to transfers made after 2010.

18. (1) The portion of subsection 81(4) of the Act after paragraph (b) is replaced by the following:

there shall not be included in computing the individual’s income derived from the perform-ance of those duties the lesser of $1,000 and the total of those amounts, other than, if the individual makes a claim under section 118.06 for the year, amounts received in respect of duties as a firefighter.

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

19. (1) Clause (a)(i)(A) of the definition “capital dividend account” in subsection 89(1) of the Act is replaced by the following:

(A) the amount of the corporation’s capital gain from the disposition (other than a disposition under subsection 40(12) or that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year (that began after the corporation last became a private corporation and that ended after 1971) and ending immediately before the particular time (in this definition referred to as “the period”)

(2) Subparagraph (a)(i) of the definition “capital dividend account” in subsection 89(1) of the Act is amended by striking out “and” at the end of clause (B) and by adding the following after that clause:

(B.1) the corporation’s taxable capital gain from a disposition in the period under subsection 40(12), and

(3) Subsections (1) and (2) apply to dispositions that occur on or after March 22, 2011.

20. (1) Subparagraphs 96(1)(d)(i) and (ii) of the Act are replaced by the following:

(i) this Act were read without reference to sections 34.1 and 34.2, subsection 59(1), paragraph 59(3.2)(c.1) and subsections 66.1(1), 66.2(1) and 66.4(1), and

(ii) no deduction were permitted under any of section 29 of the Income Tax Application Rules, subsection 65(1) and sections 66, 66.1, 66.2, 66.21 and 66.4;

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

21. (1) Paragraph 110.1(1)(a) of the Act is amended by adding the following after subparagraph (iv):

(iv.1) a municipal or public body performing a function of government in Canada,

(2) The portion of paragraph 110.1(1)(a) of the Act, as amended by subsection (1), before the formula is replaced by the following:

Charitable gifts

(a) the total of all amounts each of which is the fair market value of a gift (other than a gift described in paragraph (b), (c) or (d)) made by the corporation in the year or in any of the five preceding taxation years to a qualified donee, not exceeding the lesser of the corporation’s income for the year and the amount determined by the formula

(3) Subparagraph 110.1(3)(a)(i) of the Act is replaced by the following:

(i) capital property to a qualified donee, or

(4) Subsection 110.1(6) of the Act is replaced by the following:

Non-qualifying securities

(6) Subsections 118.1(13) to (14) and (16) to (20) apply to a corporation as if the references in those subsections to an individual were read as references to a corporation and as if a non-qualifying security of a corporation included a share (other than a share listed on a designated stock exchange) of the capital stock of the corporation.

(5) Section 110.1 of the Act is amended by adding the following after subsection (9):

Options

(10) Subject to subsections (12) and (13), if a corporation has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing an amount under any of paragraphs (1)(a) to (d) in respect of the corporation for any year.

Application of subsection (12)

(11) Subsection (12) applies if

(a) an option to acquire a property of a corporation is granted to a qualified donee;

(b) the option is exercised so that the property is disposed of by the corporation and acquired by the qualified donee at a particular time; and

(i) the amount that is 80% of the fair market value of the property at the particular time is greater than or equal to the total of

(A) the consideration received by the corporation from the qualified donee for the property, and

(B) the consideration received by the corporation from the qualified donee for the option, or

(ii) the corporation establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the corporation with the intention to make a gift to the qualified donee.

Granting of an option

(12) If this subsection applies, notwithstanding subsection 49(3),

(a) the corporation is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and

(b) there shall be included in the total referred to in paragraph (1)(a), for the corporation’s taxation year that includes the particular time, the amount by which the property’s fair market value exceeds the total described in subparagraph (11)(c)(i).

Disposition of an option

(13) If an option to acquire a particular property of a corporation is granted to a qualified donee and the option is disposed of by the qualified donee (otherwise than by the exercise of the option) at a particular time

(a) the corporation is deemed to have disposed of a property at the particular time

(i) the adjusted cost base of which to the corporation immediately before the partic-ular time is equal to the consideration, if any, paid by the qualified donee for the option, and

(ii) the proceeds of disposition of which are equal to the lesser of the fair market value of the particular property at the particular time and the fair market value of any consideration (other than a non-qualifying security of any person) received by the qualified donee for the option; and

(b) there shall be included in the total referred to in paragraph (1)(a) for the corporation’s taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the qualified donee for the option.

Returned property

(14) Subsection (15) applies if a qualified donee has issued to a corporation a receipt referred to in subsection (2) in respect of a transfer of a property (in this subsection and subsection (15) referred to as the “original property”) and a particular property that is

(a) the original property is later transferred to the corporation (unless that later transfer is reasonable consideration or remuneration for property acquired by or services rendered to a person); or

(b) any other property that may reasonably be considered compensation for or a substitute for, in whole or in part, the original property, is later transferred to the corporation.

Returned property

(15) If this subsection applies, then

(a) irrespective of whether the transfer of the original property by the corporation to the qualified donee referred to in subsection (14) was a gift, the corporation is deemed not to have disposed of the original property at the time of that transfer nor to have made a gift;

(b) if the particular property is identical to the original property, the particular property is deemed to be the original property; and

(i) the corporation is deemed to have disposed of the original property at the time that the particular property is transferred to the corporation for proceeds of disposition equal to the greater of the fair market value of the particular property at that time and the fair market value of the original property at the time that it was transferred by the corporation to the donee, and

(ii) if the transfer of the original property by the corporation would be a gift if this section were read without reference to paragraph (a), the corporation is deemed to have, at the time of that transfer, transferred to the donee a property that is the subject of a gift having a fair market value equal to the amount, if any, by which the fair market value of the original property at the time of that transfer exceeds the fair market value of the particular property at the time that it is transferred to the corporation.

Information return

(16) If subsection (15) applies in respect of a transfer of property to a corporation and that property has a fair market value greater than $50, the transferor must file an information return containing prescribed information with the Minister not later than 90 days after the day on which the property was transferred and provide a copy of the return to the corporation.

Reassessment

(17) If subsection (15) applies in respect of a transfer of property to a corporation, the Minister may reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to the transfer.

(6) Subsection (1) applies to gifts made after May 8, 2000.

(7) Subsections (2) and (3) come into force on the later of the day on which this Act receives royal assent and January 1, 2012.

(8) Subsection (4) is deemed to have come into force on March 22, 2011.

(9) Subsections 110.1(10) to (13) of the Act, as enacted by subsection (5), apply to options granted on or after March 22, 2011.

(10) Subsections 110.1(14) to (17) of the Act, as enacted by subsection (5), apply to transfers of property made on or after March 22, 2011, except that an information return required to be filed under subsection 110.1(16) of the Act, as enacted by subsection (5), that is filed before November 16, 2011 is deemed to have been filed on time.

22. (1) The portion of subsection 112(3.01) of the Act before paragraph (a) is replaced by the following:

Loss on share that is capital property — excluded dividends

(3.01) A qualified dividend shall not be included in the total determined under subparagraph (3)(a)(i) or paragraph (3)(b) if the taxpayer establishes that

(2) The portion of subsection 112(3.11) of the Act before paragraph (a) is replaced by the following:

Loss on share held by partnership — excluded dividends

(3.11) A qualified dividend shall not be included in the total determined under subparagraph (3.1)(a)(i) or paragraph (3.1)(b) or (c) if the taxpayer establishes that

(3) The portion of clause 112(3.2)(a)(ii)(C) of the Act before subclause (I) is replaced by the following:

(C) that is a qualified dividend received on the share and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that

(4) The portion of clause 112(3.3)(a)(ii)(C) of the Act before subclause (I) is replaced by the following:

(C) that is a qualified dividend received on the share after that time and designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or another trust where the trust establishes that

(5) The portion of subsection 112(3.31) of the Act before paragraph (a) is replaced by the following:

Loss on share held by trust — excluded dividends

(3.31) A qualified dividend received by a trust shall not be included under subparagraph (3.2)(a)(i) or (b)(ii) or (3.3)(a)(i) if the trust establishes that the dividend

(6) The portion of subsection 112(3.32) of the Act before paragraph (a) is replaced by the following:

Loss on share held by trust — excluded dividends

(3.32) A qualified dividend that is a taxable dividend received on the share and that is designated under subsection 104(19) by the trust in respect of a beneficiary that was a corporation, partnership or trust, shall not be included under paragraph (3.2)(b) or (3.3)(b) if the trust establishes that the dividend was received by an individual (other than a trust), or

(7) The portion of subsection 112(4.01) of the Act before paragraph (a) is replaced by the following:

Loss on share that is not capital property — excluded dividends

(4.01) A qualified dividend shall not be included in the total determined under paragraph (4)(a), (b) or (c) if the taxpayer establishes that

(8) The portion of subsection 112(4.11) of the Act before paragraph (a) is replaced by the following:

Fair market value of shares held as inventory — excluded dividends

(4.11) A qualified dividend shall not be included in the total determined under paragraph (4.1)(a), (b) or (c) if the shareholder establishes that

(9) The portion of subsection 112(4.21) of the Act before paragraph (a) is replaced by the following:

Loss on share held by trust — excluded dividends

(4.21) A qualified dividend shall not be included in the total determined under paragraph (4.2)(a) if the taxpayer establishes that

(10) The portion of subsection 112(4.22) of the Act before paragraph (a) is replaced by the following:

Loss on share held by trust — excluded dividends

(4.22) A qualified dividend shall not be included in the total determined under paragraph (4.2)(b) if the taxpayer establishes that

(11) Paragraph 112(5)(c) of the Act is replaced by the following:

(i) a dividend on the share at a time when the taxpayer and persons with whom the taxpayer was not dealing at arm’s length held in total more than 5% of the issued shares of any class of the capital stock of the corporation from which the dividend was received, or

(ii) a dividend on the share under subsection 84(3).

(12) The portion of subsection 112(5.21) of the Act before paragraph (a) is replaced by the following:

Subsection (5.2) — excluded dividends

(5.21) A dividend, other than a dividend received under subsection 84(3), shall not be included in the total determined under paragraph (b) of the description of B in subsection (5.2) unless

(13) Subsection 112 of the Act is amended by adding the following after subsection (6):

Interpretation — qualified dividend

(6.1) For the purposes of this section, a dividend on a share is a qualified dividend to the extent that

(a) it is a dividend other than a dividend received under subsection 84(3); or

(b) it is received under subsection 84(3) and,

(i) if the share is held by an individual other than a trust, the dividend is received by the individual,

(ii) if the share is held by a corporation, the dividend is received by the corporation while it is a private corporation, and is paid by another private corporation,

(iii) if the share is held by a trust,

(A) the dividend is received by the trust,

(B) the dividend is designated under subsection 104(19) by the trust in respect of a beneficiary and

(I) the beneficiary is an individual other than a trust,

(II) the beneficiary is a private corporation when the dividend is received by it and the dividend is paid by another private corporation,

(III) the beneficiary is another trust that does not designate the dividend under subsection 104(19), or

(IV) the beneficiary is a partnership all of the members of which are, when the dividend is received, a person described by any of subclauses (I) to (III), or

(C) the dividend is designated by the trust under subsection 104(19) in respect of a beneficiary that is another trust or a partnership and the trust establishes that the dividend is received by a person described by any of subclauses (B)(I) to (III), and

(iv) if the share is held by a partnership,

(A) the dividend is included in the income of a member of a partnership and

(I) the member is an individual, or

(II) the member is a private corporation when the dividend is received by it and the dividend is paid by another private corporation, or

(B) the dividend is designated under subsection 104(19) by a member of a partnership that is a trust in respect of a beneficiary described by any of subclauses (iii)(B)(I) to (IV) or is described by clause (iii)(C).

(14) Subsections (1) to (13) apply to dispositions occurring on or after March 22, 2011.

23. (1) Subparagraphs (a)(i) and (ii) of the description of B in subsection 118(1) of the Act are replaced by the following:

(i) $10,527, and

(ii) the amount determined by the formula

$10,527 + C – C.1

where

C is

(A) $2,000 if the spouse or common-law partner is dependent on the individual by reason of mental or physical infirmity, and

(B) in any other case, nil, and

C.1 is the income of the individual’s spouse or common-law partner for the year or, if the individual and the individual’s spouse or common-law partner are living separate and apart at the end of the year because of a breakdown of their marriage or common-law partnership, the spouse’s or common-law partner’s income for the year while married to, or in a common-law partnership with, the individual and not so separated,

(2) Subparagraphs (b)(iii) and (iv) of the description of B in subsection 118(1) of the Act are replaced by the following:

(iii) $10,527, and

(iv) the amount determined by the formula

$10,527 + D – D.1

where

D is

(A) $2,000 if

(I) the dependent person is, at the end of the taxation year, 18 years of age or older and is, at any time in the year, dependent on the individual by reason of mental or physical infirmity, or

(II) the dependent person is a person, other than a child of the individual in respect of whom paragraph (b.1) applies, who, at the end of the taxation year, is under the age of 18 years and who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the dependent person’s personal needs and care, when compared to persons of the same age, and is so dependent on the individual at any time in the year, and

(B) in any other case, nil, and

D.1 is the dependent person’s income for the year,

(3) Paragraph (b.1) of the description of B in subsection 118(1) of the Act is replaced by the following:

Child amount

(b.1) if

(i) a child, who is under the age of 18 years at the end of the taxation year, of the individual ordinarily resides throughout the taxation year with the individual together with another parent of the child, the total of

(A) $2,131 for each such child, and

(B) $2,000 for each such child who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assist-ance in attending to the child’s personal needs and care, when compared to children of the same age, or

(ii) except where subparagraph (i) applies, the individual may deduct an amount under paragraph (b) in respect of the individual’s child who is under the age of 18 years at the end of the taxation year, or could deduct such an amount in respect of that child if paragraph (4)(a) and the reference in paragraph (4)(b) to “or the same domestic establishment” did not apply to the individual for the taxation year and if the child had no income for the year, the total of

(A) $2,131 for each such child, and

(4) The portion of paragraph (c.1) of the description of B in subsection 118(1) of the Act after subparagraph (iii) is replaced by the following:

the amount determined by the formula

$18,906 + E – E.1

where

E is

(I) $2,000 if the particular person is dependent on the individual by reason of mental or physical infirmity, and

(II) in any other case, nil, and

E.1 is the greater of $14,624 and the particular person’s income for the year,

(5) The portion of paragraph (d) of the description of B in subsection 118(1) of the Act after subparagraph (ii) is replaced by the following:

the amount determined by the formula

$10,358 + $2,000 – F

where

F is the greater of $6,076 and the dependant’s income for the year, and

(6) Paragraph 118(4)(b) of the Act is replaced by the following:

(b) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b) of the description of B in that subsection for a taxation year in respect of the same person or the same domestic establishment and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them;

(b.1) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b.1) of the description of B in that subsection for a taxation year in respect of the same child and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them;

(7) Subparagraph (a)(i) of the definition “pension income” in subsection 118(7) of the Act is replaced by the following:

(i) a payment in respect of a life annuity out of or under a superannuation plan, a pension plan or a specified pension plan,

(8) Paragraph 118(8)(e) of the Act is replaced by the following:

(e) a payment received out of or under a salary deferral arrangement, a retirement compensation arrangement, an employee benefit plan or an employee trust; or

(9) Subsections (1) to (6) apply to the 2011 and subsequent taxation years, except that

(a) for the 2011 taxation year, the reference to “$2,000” in paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1) of the Act, as amended by subsections (1) to (5) respectively, is to be read as a reference to “nil”;

(b) for the 2011 taxation year, subsection 117.1(1) of the Act does not apply for the purposes of computing the amounts to be used under paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1) of the Act, as amended by subsections (1) to (5) respectively;

(c) for the 2012 taxation year, for the purpose of making the adjustment provided under subsection 117.1(1) of the Act as it applies to paragraph (d) of the description of B in subsection 118(1) of the Act, as amended by subsection (5), in lieu of the amounts of $10,358 and $6,076, the amounts to be used for the preceding year are $10,527 and $6,245, respectively; and

(d) for the 2012 taxation year, subsection 117.1(1) of the Act does not apply in respect of the amount of $2,000 referred to in paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1) of the Act, as amended by subsections (1) to (5) respectively.

(10) Subsections (7) and (8) apply after 2009.

24. (1) The Act is amended by adding the following after section 118.03:

Definitions

118.031 (1) The following definitions apply in this section.

“eligible expense”
« dépense admissible »

“eligible expense” in respect of a qualifying child of an individual for a taxation year means the amount of a fee paid to a qualifying entity (other than an amount paid to a person who is, at the time the amount is paid, the individual’s spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a prescribed program of artistic, cultural, recreational or developmental activity and, for the purposes of this section, that cost

(a) includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired; and

(b) does not include

(i) the cost of accommodation, travel, food or beverages,

(ii) any amount deductible in computing any person’s income for any taxation year, or

(iii) any amount included in computing a deduction from any person’s tax payable under any Part of this Act, for any taxation year.

“qualifying child”
« enfant admissible »

“qualifying child” of an individual has the meaning assigned by subsection 118.03(1).

“qualifying entity”
« entité admissible »

“qualifying entity” means a person or partnership that offers one or more programs of artistic, cultural, recreational or developmental activity prescribed for the purposes of the definition “eligible expense”.

Children’s arts tax credit

(2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount determined by the formula

A × B

where

A is the appropriate percentage for the taxation year; and

B is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $500 and the amount determined by the formula

C – D

where

C is total of all amounts each of which is an amount paid in the taxation year by the individual, or by the individual’s spouse or common-law partner, that is an eligible expense in respect of the qualifying child of the individual, and

D is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value determined for C in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person).

Children’s arts tax credit — child with disability

(3) For the purpose of computing the tax payable under this Part by an individual for a taxation year there may be deducted in respect of a qualifying child of the individual an amount equal to $500 multiplied by the appropriate percentage for the taxation year if

(a) the amount referred to in the description of B in subsection (2) is $100 or more; and

(b) an amount is deductible in respect of the qualifying child under section 118.3 in computing any person’s tax payable under this Part for the taxation year.

Apportionment of credit

(4) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a qualifying child, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to deduct an amount for the year under this section in respect of that qualifying child, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

25. (1) The Act is amended by adding the following after section 118.05:

Definition of “eligible volunteer firefighting services”

118.06 (1) In this section, “eligible volunteer firefighting services” means services provided by an individual in the individual’s capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.

Volunteer firefighter tax credit

(2) For the purpose of computing the tax payable under this Part for a taxation year by an individual, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual

(a) performs not less than 200 hours of eligible volunteer firefighting services in the taxation year for one or more fire departments; and

(b) provides the certificates referred to in subsection (3) as and when requested by the Minister.

Certificate

(3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the fire chief or a delegated official of each fire department to which the individual provided eligible volunteer firefighting services for the year, attesting to the number of hours of eligible volunteer firefighting services performed in the year by the individual for the particular fire department.

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

26. (1) Paragraph (d) of the definition “total charitable gifts” in subsection 118.1(1) of the English version of the Act is replaced by the following:

(d) a municipality in Canada,

(2) The definition “total charitable gifts” in subsection 118.1(1) of the Act is amended by adding the following after paragraph (d):

(d.1) a municipal or public body performing a function of government in Canada,

(3) The definition “total charitable gifts” in subsection 118.1(1) of the Act, as amended by subsections (1) and (2), is replaced by the following:

“total charitable gifts”
« total des dons de bienfaisance »

“total charitable gifts”, of an individual for a taxation year, means the total of all amounts each of which is the fair market value of a gift (other than a gift the fair market value of which is included in the total Crown gifts, the total cultural gifts or the total ecological gifts of the individual for the year) made by the individual in the year or in any of the five preceding taxation years (other than in a year for which a deduction under subsection 110(2) was claimed in computing the individual’s taxable income) to a qualified donee, to the extent that the amount was not included in determining an amount that was deducted under this section in computing the individual’s tax payable under this Part for a preceding taxation year;

(4) Paragraph 118.1(6)(a) of the Act is replaced by the following:

(a) capital property to a qualified donee, or

(5) Paragraph 118.1(13)(c) of the Act is replaced by the following:

(c) if the security is disposed of by the donee within 60 months after the particular time and paragraph (b) does not apply to the security, the individual is deemed to have made a gift to the donee of property at the time of the disposition and the fair market value of that gift is deemed to be the lesser of the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee for the disposition and the amount of the gift made at the particular time that would, but for this subsection, have been included in the individual’s total charitable gifts or total Crown gifts for a taxation year; and

(6) Section 118.1 of the Act is amended by adding the following after subsection (13):

Application of subsection (13.2)

(13.1) Subsection (13.2) applies if, as part of a series of transactions,

(a) an individual makes, at a particular time, a gift of a particular property to a qualified donee;

(b) a particular person holds a non-qualifying security of the individual; and

(c) the qualified donee acquires, directly or indirectly, a non-qualifying security of the individual or of the particular person.

Non-qualifying securities — third-party accommodation

(13.2) If this subsection applies,

(a) for the purposes of this section, the fair market value of the particular property is deemed to be reduced by an amount equal to the fair market value of the non-qualifying security acquired by the qualified donee; and

(b) for the purposes of subsection (13),

(i) if the non-qualifying security acquired by the qualified donee is a non-qualifying security of the particular person, it is deemed to be a non-qualifying security of the individual,

(ii) the individual is deemed to have made, at the particular time referred to in subsection (13.1), a gift of the non-qualifying security acquired by the qualified donee, the fair market value of which does not exceed the amount, if any, by which

(A) the fair market value of the partic-ular property determined without reference to paragraph (a)

exceeds

(B) the fair market value of the partic-ular property determined under paragraph (a), and

(iii) paragraph (13)(b) does not apply in respect of the gift.

Non-qualifying securities — anti-avoidance

(13.3) For the purposes of subsections (13.1) and (13.2), if, as part of a series of transactions, an individual makes a gift to a qualified donee and the qualified donee acquires a non-qualifying security of a person (other than the individual or particular person referred to in subsection (13.1)) and it may reasonably be considered, having regard to all the circumstances, that one of the purposes or results of the acquisition of the non-qualifying security by the qualified donee was to facilitate, directly or indirectly, the making of the gift by the individual, then the non-qualifying security acquired by the qualified donee is deemed to be a non-qualifying security of the individual.

(7) Section 118.1 of the Act is amended by adding the following after subsection (20):

Options

(21) Subject to subsections (23) and (24), if an individual has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing the total charitable gifts, total Crown gifts, total cultural gifts or total ecological gifts in respect of the individual for any year.

Application of subsection (23)

(22) Subsection (23) applies if

(a) an option to acquire a property of an individual is granted to a qualified donee;

(b) the option is exercised so that the property is disposed of by the individual and acquired by the qualified donee at a particular time; and

(i) the amount that is 80% of the fair market value of the property at the particular time is greater than or equal to the total of

(A) the consideration received by the individual from the qualified donee for the property, and

(B) the consideration received by the individual from the qualified donee for the option, or

(ii) the individual establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the individual with the intention to make a gift to the qualified donee.

Granting of an option

(23) If this subsection applies, notwithstanding subsection 49(3),

(a) the individual is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and

(b) there shall be included in the individual’s total charitable gifts, for the taxation year that includes the particular time, the amount by which the property’s fair market value exceeds the total described in subparagraph (22)(c)(i).

Disposition of an option

(24) If an option to acquire a particular property of an individual is granted to a qualified donee and the option is disposed of by the qualified donee (otherwise than by the exercise of the option) at a particular time

(a) the individual is deemed to have disposed of a property at the particular time

(i) the adjusted cost base of which to the individual immediately before the particular time is equal to the consideration, if any, paid by the qualified donee for the option, and

(b) there shall be included in the total charitable gifts of the individual for the individual’s taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the donee for the option.

Returned property

(25) Subsection (26) applies if a qualified donee has issued to an individual a receipt referred to in subsection (2) in respect of a transfer of a property (in this subsection and subsection (26) referred to as the “original property”) and a particular property that is

(a) the original property is later transferred to the individual (unless that later transfer is reasonable consideration or remuneration for property acquired by or services rendered to a person); or

(b) any other property that may reasonably be considered compensation for or a substitute for, in whole or in part, the original property, is later transferred to the individual.

Returned property

(26) If this subsection applies, then

(a) irrespective of whether the transfer of the original property by the individual to the qualified donee referred to in subsection (25) was a gift, the individual is deemed not to have disposed of the original property at the time of that transfer nor to have made a gift;

(b) if the particular property is identical to the original property, the particular property is deemed to be the original property; and

(i) the individual is deemed to have disposed of the original property at the time that the particular property is transferred to the individual for proceeds of disposition equal to the greater of the fair market value of the particular property at that time and the fair market value of the original property at the time that it was transferred by the individual to the donee, and

(ii) if the transfer of the original property by the individual would be a gift if this section were read without reference to paragraph (a), the individual is deemed to have, at the time of that transfer, transferred to the donee a property that is the subject of a gift having a fair market value equal to the amount, if any, by which the fair market value of the original property at the time of that transfer exceeds the fair market value of the particular property at the time that it is transferred to the individual.

Information return

(27) If subsection (26) applies in respect of a transfer of property to an individual and that property has a fair market value greater than $50, the transferor must file an information return containing prescribed information with the Minister not later than 90 days after the day on which the property was transferred and provide a copy of the return to the individual.

Reassessment

(28) If subsection (26) applies in respect of a transfer of property to an individual, the Minister may reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to the transfer.

(8) Subsections (1) and (2) apply to gifts made after May 8, 2000.

(9) Subsections (3) and (4) come into force on the later of the day on which this Act receives royal assent and January 1, 2012.

(10) Subsections (5) and (6) are deemed to have come into force on March 22, 2011.

(11) Subsections 118.1(21) to (24) of the Act, as enacted by subsection (7), apply in respect of options granted on or after March 22, 2011.

(12) Subsections 118.1(25) to (28) of the Act, as enacted by subsection (7), apply to transfers of property made on or after March 22, 2011, except that an information return required to be filed under subsection 118.1(27) of the Act, as enacted by subsection (7), that is filed before November 16, 2011 is deemed to have been filed on time.

27. (1) The portion of the description of D in subsection 118.2(1) of the Act before the formula is replaced by the following:

D is the total of all amounts each of which is, in respect of a dependant of the individual (within the meaning assigned by subsection 118(6), other than a child of the individual who has not attained the age of 18 years before the end of the taxation year), the amount determined by the formula

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

28. (1) Paragraph 118.3(2)(d) of the Act is replaced by the following:

(d) the amount of that person’s tax payable under this Part for the year computed before any deductions under this Division (other than under sections 118 to 118.06 and 118.7).

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

29. (1) The portion of paragraph 118.5(1)(a) of the Act before subparagraph (ii.1) is replaced by the following:

(a) subject to subsection (1.1), where the individual was during the year a student enrolled at an educational institution in Canada that is

(i) a university, college or other educational institution providing courses at a post-secondary school level, or

(ii) certified by the Minister of Human Resources and Skills Development to be an educational institution providing courses, other than courses designed for university credit, that furnish a person with skills for, or improve a person’s skills in, an occupation,

an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to the educational institution, except to the extent that those fees

(2) Subparagraph 118.5(1)(b)(i) of the Act is replaced by the following:

(i) paid in respect of a course of less than three consecutive weeks duration,

(3) Subsection 118.5(1) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) subject to subsection (1.1), if the individ-ual has taken an examination (in this section referred to as an “occupational, trade or professional examination”) in the year that is required to obtain a professional status recognized under a federal or provincial statute, or to be licensed or certified as a tradesperson, where that status, licence or certification allows the individual to practise the profession or trade in Canada, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees paid in respect of the occupational, trade or professional examination to an educational institution referred to in paragraph (a), a professional association, a provincial ministry or other similar institution, except to the extent that the occupational, trade or professional examination fees

(i) are paid on behalf of, or reimbursed to, the individual by the individual’s employer and the amount paid or reimbursed is not included in the individual’s income, or

(ii) are fees in respect of which the individual is or was entitled to receive a reimbursement or any form of assistance under a program of Her Majesty in right of Canada or a province designed to facilitate the entry or re-entry of workers into the labour force, where the amount of the reimbursement or assistance is not included in computing the individual’s income.

(4) Section 118.5 of the Act is amended by adding the following after subsection (1):

Minimum amount

(1.1) No amount may be deducted for a taxation year by an individual under paragraph (1)(a) or (d) in respect of any fees paid to a particular institution unless the total of the fees described in those paragraphs and paid to the particular institution in the year by the individ-ual exceeds $100.

(5) Section 118.5 of the Act is amended by adding the following after subsection (3):

Ancillary fees and charges for examinations

(4) For the purpose of this section, “fees paid in respect of the occupational, trade or professional examination” of an individual includes ancillary fees and charges, other than fees and charges included in subsection (3), that are paid to an educational institution referred to in subparagraph (1)(a)(i), a professional association, a provincial ministry or other similar institution, in respect of an occupation, trade or professional examination taken by the individual, but does not include any fee or charge to the extent that it is levied in respect of

(a) property to be acquired by an individual;

(b) the provision of financial assistance to an individual, except to the extent that, if this Act were read without reference to subsection 56(3), the financial assistance would be required to be included in computing the income, and would not be deductible in computing the taxable income, of the individual;

(d) any fee or charge for a taxation year that, but for this paragraph, would be included because of this subsection in the fees for the individual’s occupational, trade or professional examination and that is not required to be paid by all the individuals taking the occupational, trade or professional examination to the extent that the total for the year of all such fees and charges paid in respect of the individual’s fees for the occupational, trade or professional examination exceeds $250.

(6) Subsections (1) and (3) to (5) apply to the 2011 and subsequent taxation years.

(7) Subsection (2) applies to tuition fees paid for the 2011 and subsequent taxation years.

30. (1) Paragraph (b) of the definition “designated educational institution” in subsection 118.6(1) of the Act is replaced by the following:

(b) a university outside Canada at which the individual referred to in subsection (2) was enrolled in a course, of not less than three consecutive weeks duration, leading to a degree, or

(2) The portion of the definition “qualifying educational program” in subsection 118.6(1) of the Act before paragraph (a) is replaced by the following:

“qualifying educational program”
« programme de formation admissible »

“qualifying educational program” means a program of not less than three consecutive weeks duration that provides that each student taking the program spend not less than ten hours per week on courses or work in the program and, in respect of a program at an institution described in the definition “designated educational institution” (other than an institution described in subparagraph (a)(ii) of that definition), that is a program at a post-secondary school level that does not consist primarily of research (unless the program leads to a diploma from a college or a Collège d’enseignement général et professionnel, or a bachelor, masters, doctoral or equivalent degree) but, in relation to any particular student, does not include a program if the student receives, from a person with whom the student is dealing at arm’s length, any allowance, benefit, grant or reimbursement for expenses in respect of the program other than

(3) Subsection (1) applies to tuition fees paid for the 2011 and subsequent taxation years.

(4) Subsection (2) applies to the 2010 and subsequent taxation years.

31. (1) The description of C in subsection 118.61(1) of the Act is replaced by the following:

C is the lesser of the value of B and the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.06, 118.3 and 118.7);

(2) Paragraph 118.61(2)(b) of the Act is replaced by the following:

(b) the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.06, 118.3 and 118.7).

(3) Subsections (1) and (2) apply to the 2011 and subsequent taxation years.

32. (1) Paragraph (a) of the description of C in section 118.8 of the Act is replaced by the following:

(a) the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under subsection 118(1) because of paragraph (c) of the description of B in that subsection, under subsection 118(10) or under any of sections 118.01 to 118.06, 118.3, 118.61 and 118.7)

(2) Subparagraph (b)(ii) of the description of C in section 118.8 of the Act is replaced by the following:

(ii) the amount that would be the spouse’s or common-law partner’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under any of sections 118 to 118.06, 118.3, 118.61 and 118.7).

(3) Subsections (1) and (2) apply to the 2011 and subsequent taxation years.

33. (1) The description of B in paragraph 118.81(a) of the Act is replaced by the following:

B is the amount that would be the person’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under any of sections 118 to 118.06, 118.3, 118.61 and 118.7), and

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

34. (1) Section 118.92 of the Act is replaced by the following:

Ordering of credits

118.92 In computing an individual’s tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.03, 118.031, 118.04, 118.05, 118.06, 118.3, 118.61, 118.5, 118.6, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

35. (1) Section 118.94 of the Act is replaced by the following:

Tax payable by non-residents (credits restricted)

118.94 Sections 118 to 118.06 and 118.2, subsections 118.3(2) and (3) and sections 118.6, 118.8 and 118.9 do not apply for the purpose of computing the tax payable under this Part for a taxation year by an individual who at no time in the year is resident in Canada unless all or substantially all the individual’s income for the year is included in computing the individual’s taxable income earned in Canada for the year.

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

36. (1) The portion of the definition “excluded amount” in subsection 120.4(1) of the Act before paragraph (a) is replaced by the following:

“excluded amount”
« montant exclu »

“excluded amount”, in respect of an individual for a taxation year, means an amount that is the income from, or the taxable capital gain from the disposition of, a property acquired by or for the benefit of the individual as a consequence of the death of

(2) Section 120.4 of the Act is amended by adding the following after subsection (3):

Taxable capital gain

(4) If a specified individual would have for a taxation year, if this Act were read without reference to this section, a taxable capital gain (other than an excluded amount) from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, then the amount of that taxable capital gain is deemed not to be a taxable capital gain and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.

Taxable capital gain of trust

(5) If a specified individual would be, if this Act were read without reference to this section, required under paragraph 104(13)(a) or subsection 105(2) to include an amount in computing the specified individual’s income for a taxation year, then to the extent that the amount can reasonably be considered to be attributable to a taxable capital gain (other than an excluded amount) of a trust from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, paragraph 104(13)(a) and subsection 105(2) do not apply in respect of the amount and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.

(3) Subsections (1) and (2) apply to dispositions that occur on or after March 22, 2011.

37. (1) Paragraphs 122.5(3.1)(a) and (b) of the Act are replaced by the following:

(a) the amount deemed by that subsection to have been paid by the eligible individual during the particular month specified for the taxation year is less than $50; and

(b) it is reasonable to conclude that the amount deemed by that subsection to have been paid by the eligible individual during each subsequent month specified for the taxation year will be less than $50.

(2) Subsection (1) applies to amounts deemed to be paid during months specified for the 2010 and subsequent taxation years.

38. (1) Subsection 122.61(2) of the Act is replaced by the following:

Exceptions

(2) Notwithstanding subsection (1), if a particular month is the first month during which an overpayment that is less than $20 (or such other amount as is prescribed) is deemed under that subsection to have arisen on account of a person’s liability under this Part for the base taxation year in relation to the particular month, any such overpayment that would, but for this subsection, reasonably be expected at the end of the particular month to arise during another month in relation to which the year is the base taxation year is deemed to arise under that subsection during the particular month and not during the other month.

(2) Subsection (1) applies with respect to overpayments deemed to arise during months that are after June 2011.

39. (1) Subsections 122.62(5) to (7) of the Act are replaced by the following:

Death of cohabiting spouse

(5) If the cohabiting spouse or common-law partner of an eligible individual in respect of a qualified dependant dies,

(a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and

(b) subject to subsection (8), for the purpose of determining the amount deemed under subsection 122.61(1) to be an overpayment arising in that first month and any subsequent month on account of the eligible individual’s liability under this Part for the base taxation year in relation to that first month, the eligible individual’s adjusted income for the year is deemed to be equal to the eligible individ-ual’s income for the year.

Separation from cohabiting spouse

(6) If a person ceases to be an eligible individual’s cohabiting spouse or common-law partner,

(a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and

Person becoming a cohabiting spouse

(7) If a taxpayer becomes the cohabiting spouse or common-law partner of an eligible individual,

(a) the eligible individual shall notify the Minister in prescribed form of that event before the end of the first calendar month that begins after that event; and

(b) subject to subsection (8), for the purpose of determining the amount deemed under subsection 122.61(1) to be an overpayment arising in that first month and any subsequent month on account of the eligible individual’s liability under this Part for the base taxation year in relation to that first month, the taxpayer is deemed to have been the eligible individual’s cohabiting spouse or common-law partner at the end of the base taxation year in relation to that month.

Ordering of events

(8) If more than one event referred to in subsections (5) to (7) occur in a calendar month, only the subsection relating to the last of those events to have occurred applies.

(2) Subsection (1) applies in respect of events that occur after June 2011.

40. (1) Paragraph (a) of the definition “flow-through mining expenditure” in subsection 127(9) of the Act is replaced by the following:

(a) that is a Canadian exploration expense incurred by a corporation after March 2011 and before 2013 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2013) 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),

(2) Paragraphs (c) and (d) of the definition “flow-through mining expenditure” in subsection 127(9) of the Act are replaced by the following:

(c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2011 and before April 2012, and

(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2011 and before April 2012;

(3) Subsections (1) and (2) apply to expenses renounced under a flow-through share agreement made after March 2011.

41. (1) Section 127.531 of the Act is replaced by the following:

Basic minimum tax credit determined

127.531 An individual’s basic minimum tax credit for a taxation year is the total of all amounts that may be deducted in computing the individual’s tax payable for the year under this Part under any of subsections 118(1) and (2), sections 118.1 and 118.2, subsection 118.3(1) and sections 118.5 to 118.7 and 119.

(2) Section 127.531 of the Act, as enacted by subsection (1), is replaced by the following:

Basic minimum tax credit determined

127.531 An individual’s basic minimum tax credit for a taxation year is the total of all amounts each of which is

(a) an amount deducted under any of subsections 118(1) and (2) and 118.3(1) and sections 118.5 to 118.7 and 119 in computing the individual’s tax payable for the year under this Part; or

(b) the amount that was claimed under section 118.1 or 118.2 in computing the individual’s tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual’s tax payable for the year under this Part, determined without reference to this Division.

(3) Paragraph 127.531(a) of the Act, as enacted by subsection (2), is replaced by the following:

(a) an amount deducted under any of subsections 118(1) and (2), 118.01(2) and 118.3(1) and sections 118.5 to 118.7 and 119 in computing the individual’s tax payable for the year under this Part; or

(4) Paragraph 127.531(a) of the Act, as enacted by subsection (3), is replaced by the following:

(a) an amount deducted under any of subsections 118(1), (2) and (10), 118.01(2), 118.02(2) and 118.3(1) and sections 118.5 to 118.7 and 119 in computing the individ-ual’s tax payable for the year under this Part; or

(5) Paragraph 127.531(a) of the Act, as enacted by subsection (4), is replaced by the following:

(a) an amount deducted under any of subsections 118(1), (2) and (10), 118.01(2), 118.02(2), 118.03(2) and 118.3(1) and sections 118.5 to 118.7 and 119 in computing the individual’s tax payable for the year under this Part; or

(6) Paragraph 127.531(a) of the Act, as enacted by subsection (5), is replaced by the following:

(a) an amount deducted under any of subsections 118(1), (2) and (10), sections 118.01 to 118.05, subsection 118.3(1), sections 118.5 to 118.7 and 119 and subsection 127(1) in computing the individual’s tax payable for the year under this Part; or

(7) Paragraph 127.531(a) of the Act, as enacted by subsection (6), is replaced by the following:

(a) an amount deducted under any of subsections 118(1), (2) and (10), sections 118.01 to 118.06, subsection 118.3(1), sections 118.5 to 118.7 and 119 and subsection 127(1) in computing the individual’s tax payable for the year under this Part; or

(8) Subsection (1) applies to dispositions after December 23, 1998 for individuals who ceased to be resident in Canada after October 1, 1996.

(9) Subsection (2) applies to the 2002 and subsequent taxation years.

(10) Subsection (3) applies to the 2005 and subsequent taxation years.

(11) Subsection (4) applies to the 2006 and subsequent taxation years.

(12) Subsection (5) applies to the 2007 and subsequent taxation years.

(13) Subsection (6) applies to the 2009 and subsequent taxation years.

(14) Subsection (7) applies to the 2011 and subsequent taxation years.

42. (1) Clause 128(2)(e)(iii)(A) of the Act is replaced by the following:

(A) under any of sections 118 to 118.06, 118.2, 118.3, 118.5, 118.6, 118.8 and 118.9,

(2) Subsection (1) applies to the 2011 and subsequent taxation years.

43. (1) Paragraph (g) of the definition “excluded right or interest” in subsection 128.1(10) of the Act is amended by adding “or” at the end of subparagraph (ii) and by repealing subparagraph (iii).

(2) Subsection (1) applies to taxation years that begin after 2009.

44. (1) The description of G in the definition “surplus funds derived from operations” in subsection 138(12) of the Act is replaced by the following:

G is the total of all gifts made in the period by the insurer to a qualified donee, and

(2) Subsection (1) comes into force on the later of the day on which this Act receives royal assent and January 1, 2012.

45. (1) The definition “non-qualified investment” in subsection 146(1) of the Act is replaced by the following:

“non-qualified investment”
« placement non admissible »

“non-qualified investment” has the same meaning as in subsection 207.01(1);

(2) The definition “benefit” in subsection 146(1) of the Act is amended by adding the following after paragraph (b):

(b.1) an amount in respect of which the annuitant pays a tax under Part XI.01, unless the tax is waived, cancelled or refunded,

(3) The portion of subsection 146(1.1) of the Act before the formula is replaced by the following:

Restriction — financially dependent

(1.1) For the purpose of paragraph (b) of the definition “refund of premiums” in subsection (1), clause 60(l)(v)(B.01), the definition “eligible individual” in subsection 60.02(1) and subparagraph 104(27)(e)(i), it is assumed, unless the contrary is established, that an individ-ual’s child or grandchild was not financially dependent on the individual for support immediately before the individual’s death if the income of the child or grandchild for the taxation year preceding the taxation year in which the individual died exceeded the amount determined by the formula

(4) Subsection 146(2) of the Act is amended by adding “and” at the end of paragraph (c.3) and by repealing paragraph (c.4).

(5) Section 146 of the Act is amended by adding the following after subsection (5.1):

RRSP premium

(5.2) If a taxpayer’s entitlement to benefits under a defined benefit provision of a registered pension plan is transferred in accordance with subsection 147.3(4) after February 2009 and before 2011, there may be deducted in computing the taxpayer’s income for a taxation year that ends on or after the day on which the transfer was made, the amount claimed by the taxpayer in respect of premiums paid by the taxpayer in the year to a registered retirement savings plan under which the taxpayer is the annuitant, not exceeding the amount, if any, determined by the formula

A – B – C

where

A is the amount, if any, that is the lesser of

(a) the prescribed amount that would have been determined for the purpose of paragraph 147.3(4)(c) if subsection 8517(3.01) of the Regulations had applied in respect of the transfer, and

(b) the amount of the taxpayer’s entitlement to benefits under the provision commuted in connection with the transfer;

B is the prescribed amount for the purpose of paragraph 147.3(4)(c) that applied in respect of the transfer; and

C is the total of all amounts deducted by the taxpayer under this subsection for a preceding taxation year.

Transitional rule

(5.201) For the purpose of subsection (5.2), a premium paid by a taxpayer before 2013 is deemed to have been paid in the taxation year in which the transfer referred to in that subsection was made and not in the year in which it was actually paid, if the taxpayer so elects in prescribed form.

(6) Subsection 146(6) of the Act is repealed.

(7) Subparagraph 146(8.2)(b)(iii) of the Act is replaced by the following:

(iii) was not paid by way of a transfer of an amount from a specified pension plan to a registered retirement savings plan in circumstances to which subsection (21) applied,

(8) Subsection 146(10) of the Act is replaced by the following:

Property used as security for loan

(10) If at any time in a taxation year a trust governed by a registered retirement savings plan uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the taxpayer who is the annuitant under the plan at that time.

(9) Subsections 146(11) and (11.1) of the Act are repealed.

(10) Subsection 146(13.1) of the Act is repealed.

(11) The portion of subsection 146(21) of the Act before subparagraph (a)(i) is replaced by the following:

Specified pension plan

(21) Where

(a) an amount (other than an amount that is part of a series of periodic payments) is transferred directly from an individual’s account under a specified pension plan

(12) Section 146 of the Act is amended by adding the following after subsection (21):

Specified pension plan — contribution

(21.1) For the purposes of this section, paragraphs 18(11)(b), 60(j), (j.1) and (l), 74.5(12)(a), 146.01(3)(a) and 146.02(3)(a) and Parts X.1 and X.5, and for the purposes of section 214.1 of the Income Tax Regulations, a contribution made by an individual to an account of the individual, or of the individual’s spouse or common-law partner, under a specified pension plan is deemed to be a premium paid by the individual to a registered retirement savings plan under which the individual, or the individual’s spouse or common-law partner, as the case may be, is the annuitant.

Specified pension plan — account

(21.2) For the purposes of paragraph (8.2)(b), subsection (8.21), paragraphs (16)(a) and (b) and 18(1)(u), subparagraph (a)(i) of the definition “excluded right or interest” in subsection 128.1(10), paragraph (b) of the definition “excluded premium” in subsection 146.01(1), paragraph (c) of the definition “excluded premium” in subsection 146.02(1), subsections 146.3(14) and 147(19) and section 147.3, and for the purposes of any regulations made under subsection 147.1(18), an individual’s account under a specified pension plan is deemed to be a registered retirement savings plan under which the individual is the annuitant.

Specified pension plan — payment

(21.3) For the purposes of subsections (8.3) to (8.7), a payment received by an individual from a specified pension plan is deemed to be a payment received by the individual from a registered retirement savings plan.

(13) The portion of subsection 146(22) of the Act before paragraph (b) is replaced by the following:

Deemed payment of RRSP premiums

(22) If the Minister so directs,

(a) except for the purposes of subparagraphs (5)(a)(iv.1) and (5.1)(a)(iv), an amount paid by an individual in a taxation year (other than an amount paid in the first 60 days of the year) as a premium is deemed to have been paid at the beginning of the year and not at the time it was actually paid;

(14) Subsections (1), (6), (8) and (9) apply in respect of investments acquired after March 22, 2011.

(15) Subsections (2) and (10) apply to transactions occurring, income earned, capital gains accruing and investments acquired after March 22, 2011.

(16) Subsection (3) is deemed to have come into force on March 4, 2010.

(17) Subsection (4) is deemed to have come into force on March 23, 2011.

(18) Subsection (5) applies in respect of transfers made after February 2009.

(19) Subsections (7), (11) and (13) apply to taxation years that begin after 2009.

(20) Subsections 146(21.1) and (21.2) of the Act, as enacted by subsection (12), apply to taxation years that begin after 2009, except that, for taxation years that begin before 2011, subsection 146(21.1) of the Act, as enacted by subsection (12), is to be read without reference to “, and for the purposes of section 214.1 of the Income Tax Regulations,”.

(21) Subsection 146(21.3) of the Act, as enacted by subsection (12), applies to taxation years that begin after 2010.

46. (1) Paragraph (b) of the definition “excluded premium” in subsection 146.01(1) of the Act is replaced by the following:

(b) was an amount transferred directly from a registered retirement savings plan, registered pension plan, registered retirement income fund or deferred profit sharing plan,

(2) Subsection (1) applies to taxation years that begin after 2009.

47. (1) Paragraph (c) of the definition “excluded premium” in subsection 146.02(1) of the Act is replaced by the following:

(c) was an amount transferred directly from a registered retirement savings plan, registered pension plan, registered retirement income fund or deferred profit sharing plan; or

(2) Subsection (1) applies to taxation years that begin after 2009.

48. (1) Paragraph (b) of the definition “post-secondary educational institution” in subsection 146.1(1) of the Act is replaced by the following:

(b) an educational institution outside Canada that provides courses at a post-secondary school level and that is

(i) a university, college or other educational institution at which a beneficiary was enrolled in a course of not less than 13 consecutive weeks, or

(ii) a university at which a beneficiary was enrolled on a full-time basis in a course of not less than three consecutive weeks;

(2) Subsection (1) applies to educational assistance payments made after 2010.

49. (1) Subparagraph 146.3(2)(f)(vii) of the Act is replaced by the following:

(vii) a specified pension plan in circumstances to which subsection 146(21) applies;

(2) Subsection 146.3(2) of the Act is amended by adding “and” at the end of paragraph (f) and by repealing paragraph (g).

(3) Subsection 146.3(5) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) an amount in respect of which the annuitant pays a tax under Part XI.01, unless the tax is waived, cancelled or refunded.

(4) Subsections 146.3(7) and (8) of the Act are replaced by the following:

Property used as security for loan

(7) If at any time in a taxation year a trust governed by a registered retirement income fund uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the taxpayer who is the annuitant under the fund at that time.

(5) Subsection 146.3(13) of the Act is repealed.

(6) Subsection (1) applies to taxation years that begin after 2009.

(7) Subsection (2) is deemed to have come into force on March 23, 2011.

(8) Subsections (3) and (5) apply to transactions occurring, income earned, capital gains accruing and investments acquired after March 22, 2011.

(9) Subsection (4) applies in respect of investments acquired after March 22, 2011.

50. (1) Subsection 149(1) of the Act is amended by adding the following after paragraph (f):

Registered Canadian amateur athletic association

(g) a registered Canadian amateur athletic association;

(2) Subsection 149(1) of the Act is amended by striking out “or” at the end of paragraph (y) and by adding the following after paragraph (z):

Environmental Quality Act trust

(z.1) a trust

(i) that was created because of a requirement imposed by section 56 of the Environment Quality Act, R.S.Q., c. Q-2,

(ii) that is resident in Canada, and

(iii) in which the only persons that are beneficially interested are

(A) Her Majesty in right of Canada,

(B) Her Majesty in right of a province, or

(C) a municipality (as defined in section 1 of that Act) that is exempt because of this subsection from tax under this Part on all of its taxable income; or

Nuclear Fuel Waste Act trust

(z.2) a trust

(i) that was created because of a requirement imposed by subsection 9(1) of the Nuclear Fuel Waste Act, S.C. 2002, c. 23,

(ii) that is resident in Canada, and

(iii) in which the only persons that are beneficially interested are

(A) Her Majesty in right of Canada,

(B) Her Majesty in right of a province,

(C) a nuclear energy corporation (as defined in section 2 of that Act) all the shares of the capital stock of which are owned by one or more persons described in clause (A) or (B),

(D) the waste management organization established under section 6 of that Act if all the shares of its capital stock are owned by one or more nuclear energy corporations described in clause (C), or

(E) Atomic Energy of Canada Limited, being the company incorporated or acquired in accordance with subsection 10(2) of the Atomic Energy Control Act, R.S.C. 1970, c. A-19.

(3) Subsection (1) comes into force on the later of the day on which this Act receives royal assent and January 1, 2012.

(4) Subsection (2) applies to the 1997 and subsequent taxation years.

51. (1) The heading before section 149.1 of the Act is replaced by the following: