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Bill C-13

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Qualified Donees

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

52. (1) The definitions “qualified donee”, “related business” and “taxation year” in subsection 149.1(1) of the Act are replaced by the following:

“qualified donee”
« donataire reconnu »

“qualified donee”, at any time, means a person that is

(a) registered by the Minister and that is

(i) a housing corporation resident in Can-ada and exempt from tax under this Part because of paragraph 149(1)(i) that has applied for registration,

(ii) a municipality in Canada,

(iii) a municipal or public body performing a function of government in Canada that has applied for registration,

(iv) a university outside Canada that is prescribed to be a university the student body of which ordinarily includes students from Canada, or

(v) a charitable organization outside Can-ada to which Her Majesty in right of Canada has made a gift in the 36-month period that begins 24 months before that time,

(b) a registered charity,

(d) Her Majesty in right of Canada or a province, the United Nations or an agency of the United Nations;

“related business”
« activité commerciale complémentaire »

“related business”, in relation to a charity or Canadian amateur athletic association, includes a business that is unrelated to the purposes of the charity or association if substantially all persons employed by the charity or association in the carrying on of that business are not remunerated for that employment;

“taxation year”
« année d’imposition »

“taxation year” means, in the case of a registered charity or registered Canadian amateur athletic association, a fiscal period;

(2) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:

“Canadian amateur athletic association”
« association canadienne de sport amateur »

“Canadian amateur athletic association” means an association that

(a) was created under any law in force in Canada,

(b) is resident in Canada,

(c) has no part of its income payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder of the association unless the proprietor, member or shareholder was a club, society or association the primary purpose and primary function of which was the promotion of amateur athletics in Canada,

(d) has the promotion of amateur athletics in Canada on a nationwide basis as its exclusive purpose and exclusive function, and

(e) devotes all its resources to that purpose and function;

“ineligible individual”
« particulier non admissible »

“ineligible individual”, at any time, means an individual who has been

(a) convicted of a relevant criminal offence unless it is a conviction for which a pardon has been granted or issued and the pardon has not been revoked or ceased to have effect,

(b) convicted of a relevant offence in the five-year period preceding that time,

(c) a director, trustee, officer or like official of a registered charity or a registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that can reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which the registration of the charity or association was revoked in the five-year period preceding that time,

(d) an individual who controlled or managed, directly or indirectly, in any manner whatever, a registered charity or a registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that can reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which its registration was revoked in the five-year period preceding that time, or

(e) a promoter in respect of a tax shelter that involved a registered charity or a registered Canadian amateur athletic association, the registration of which was revoked in the five-year period preceding that time for reasons that included or were related to participation in the tax shelter;

“promoter”
« promoteur »

“promoter” has the meaning assigned by section 237.1;

“relevant criminal offence”
« infraction criminelle pertinente »

“relevant criminal offence” means a criminal offence under the laws of Canada, and an offence that would be a criminal offence if it were committed in Canada, that

(a) relates to financial dishonesty, including tax evasion, theft and fraud, or

(b) in respect of a charity or Canadian amateur athletic association, is relevant to the operation of the charity or association;

“relevant offence”
« infraction pertinente »

“relevant offence” means an offence, other than a relevant criminal offence, under the laws of Canada or a province, and an offence that would be such an offence if it took place in Canada, that

(a) relates to financial dishonesty, including an offence under charitable fundraising legislation, consumer protection legislation and securities legislation, or

(b) in respect of a charity or Canadian amateur athletic association, is relevant to the operation of the charity or association;

(3) Subsection 149.1(4.1) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) of a registered charity, if an ineligible individual is a director, trustee, officer or like official of the charity, or controls or manages the charity, directly or indirectly, in any manner whatever.

(4) Section 149.1 of the Act is amended by adding the following after subsection (4.1):

Revocation of registration of Canadian amateur athletic association

(4.2) The Minister may, in the manner described in section 168, revoke the registration of a registered Canadian amateur athletic association

(a) for any reason described in subsection 168(1);

(b) if the association carries on a business that is not a related business of that association; or

(c) if an ineligible individual is a director, trustee, officer or like official of the association, or controls or manages the association, directly or indirectly, in any manner whatever.

Revocation of a qualified donee

(4.3) The Minister may, in the manner described in section 168, revoke the registration of a qualified donee referred to in paragraph (a) of the definition “qualified donee” in subsection (1) for any reason described in subsection 168(1).

(5) Section 149.1 of the Act is amended by adding the following after subsection (6):

Devoting resources to purpose and function

(6.01) A Canadian amateur athletic association is considered to devote its resources to its exclusive purpose and exclusive function to the extent that it carries on

(a) a related business; or

(b) activities involving the participation of professional athletes, if those activities are ancillary and incidental to its exclusive purpose and exclusive function.

(6) Section 149.1 of the Act is amended by adding the following after subsection (6.2):

Political activities of Canadian amateur athletic association

(6.201) For the purpose of the definition “Canadian amateur athletic association” in subsection (1), an association that devotes part of its resources to political activities is considered to devote those resources to its exclusive purpose and exclusive function if

(a) it devotes substantially all its resources to its purpose and function; and

(b) those political activities

(i) are ancillary and incidental to its purpose and function, and

(ii) do not include the direct or indirect support of, or opposition to, any political party or candidate for public office.

(7) Subsection 149.1(14) of the Act is replaced by the following:

Information returns

(14) Every registered charity and registered Canadian amateur athletic association shall, within six months from the end of each taxation year of the charity or association and without notice or demand, file with the Minister both an information return and a public information return for the year in prescribed form and containing prescribed information.

(8) Paragraph 149.1(15)(b) of the Act is replaced by the following:

(b) the Minister may make available to the public in any manner that the Minister considers appropriate, in respect of each registered, or previously registered, charity, Canadian amateur athletic association and qualified donee referred to in paragraph (a) of the definition “qualified donee” in subsection (1),

(i) its name, address and date of registration,

(ii) in the case of a registered, or previously registered, charity or Canadian amateur athletic association, its registration number, and

(iii) the effective date of any revocation, annulment or termination of registration;

(9) Subsection 149.1(22) of the Act is replaced by the following:

Refusal to register

(22) The Minister may, by registered mail, give notice to a person that the application of the person for registration as a registered charity, registered Canadian amateur athletic association or qualified donee referred to in subparagraph (a)(i) or (iii) of the definition “qualified donee” in subsection (1) is refused.

(10) Section 149.1 of the Act is amended by adding the following after subsection (24):

Refusal to register — ineligible individual

(25) The Minister may refuse to register a charity or Canadian amateur athletic association that has applied for registration as a registered charity or registered Canadian amateur athletic association if

(a) the application for registration is made on its behalf by an ineligible individual; or

(b) an ineligible individual is a director, trustee, officer or like official of the charity or association, or controls or manages the charity or association, directly or indirectly, in any manner whatever.

(11) Subsections (1) to (6) and (8) to (10) come into force on the later of the day on which this Act receives royal assent and January 1, 2012.

(12) Subsection (7) applies to fiscal periods that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.

53. (1) Subsection 168(1) of the Act is replaced by the following:

Notice of intention to revoke registration

168. (1) The Minister may, by registered mail, give notice to a person described in any of paragraphs (a) to (c) of the definition “qualified donee” in subsection 149.1(1) that the Minister proposes to revoke its registration if the person

(a) applies to the Minister in writing for revocation of its registration;

(b) ceases to comply with the requirements of this Act for its registration;

(c) in the case of a registered charity or registered Canadian amateur athletic association, fails to file an information return as and when required under this Act or a regulation;

(d) issues a receipt for a gift otherwise than in accordance with this Act and the regulations or that contains false information;

(e) fails to comply with or contravenes any of sections 230 to 231.5; or

(f) in the case of a registered Canadian amateur athletic association, accepts a gift the granting of which was expressly or implicitly conditional on the association making a gift to another person, club, society or association.

(2) Subsection 168(4) of the Act is replaced by the following:

Objection to proposal or designation

(4) A person may, on or before the day that is 90 days after the day on which the notice was mailed, serve on the Minister a written notice of objection in the manner authorized by the Minister, setting out the reasons for the objection and all the relevant facts, and the provisions of subsections 165(1), (1.1) and (3) to (7) and sections 166, 166.1 and 166.2 apply, with any modifications that the circumstances require, as if the notice were a notice of assessment made under section 152, if

(a) in the case of a person that is or was registered as a registered charity or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(2) to (4.1), (6.3), (22) and (23);

(b) in the case of a person that is or was registered as a registered Canadian amateur athletic association or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(4.2) and (22); or

(c) in the case of a person described in any of subparagraphs (a)(i) to (v) of the definition “qualified donee” in subsection 149.1(1), that is or was registered by the Minister as a qualified donee or is an applicant for such registration, it objects to a notice under any of subsections (1) and 149.1(4.3) and (22).

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

54. (1) Paragraph 172(3)(a) of the Act is replaced by the following:

(a) confirms a proposal or decision in respect of which a notice was issued under any of subsections 149.1(4.2) and (22) and 168(1) by the Minister, to a person that is or was registered as a registered Canadian amateur athletic association or is an applicant for registration as a registered Canadian amateur athletic association, or does not confirm or vacate that proposal or decision within 90 days after service of a notice of objection by the person under subsection 168(4) in respect of that proposal or decision,

(2) Subsection 172(3) of the Act is amended by adding the following after paragraph (a.1):

(a.2) confirms a proposal or decision in respect of which a notice was issued under any of subsections 149.1(4.3), (22) and 168(1) by the Minister, to a person that is a person described in any of subparagraphs (a)(i) to (v) of the definition “qualified donee” in subsection 149.1(1) that is or was registered by the Minister as a qualified donee or is an applicant for such registration, or does not confirm or vacate that proposal or decision within 90 days after service of a notice of objection by the person under subsection 168(4) in respect of that proposal or decision,

(3) Paragraph 172(3)(d) of the Act is repealed.

(4) The portion of subsection 172(3) of the Act after paragraph (g) is replaced by the following:

the person in a case described in paragraph (a), (a.1) or (a.2), the applicant in a case described in paragraph (b), (e) or (g), a trustee under the plan or an employer of employees who are beneficiaries under the plan, in a case described in paragraph (c), the promoter in a case described in paragraph (e.1), or the administrator of the plan or an employer who participates in the plan, in a case described in paragraph (f) or (f.1), may appeal from the Minister’s decision, or from the giving of the notice by the Minister, to the Federal Court of Appeal.

(5) Paragraph 172(4)(c) of the Act is repealed.

(6) Subsections (1) to (5) come into force on the later of the day on which this Act receives royal assent and January 1, 2012.

55. (1) Paragraph 180(1)(b) of the Act is repealed.

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

56. (1) Subsection 180.01(2) of the Act is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (e):

(f) subparagraph 127.52(1)(h)(ii) is to be read as “the amount deducted under paragraph 110(1)(d)” for the year in respect of the particular securities; and

(g) notwithstanding subsection 152(4) and as the circumstances require, the Minister shall re-determine the taxpayer’s additional tax under subsection 120.2(3) for the taxation year and reassess any taxation year in which an amount has been deducted under subsection 120.2(1).

(2) Subsection (1) is deemed to have come into force on March 4, 2010.

57. (1) The heading of Part V of the Act is replaced by the following:

TAX AND PENALTIES IN RESPECT OF QUALIFIED DONEES

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

58. (1) Section 188 of the Act is amended by adding the following after subsection (1.3):

Eligible donee

(1.4) In this Part, an eligible donee in respect of a particular Canadian amateur athletic association is a registered Canadian amateur athletic association

(a) of which more than 50% of the members of the board of directors or trustees of the registered Canadian amateur athletic association deal at arm’s length with each member of the board of directors or trustees of the particular Canadian amateur athletic association;

(b) that is not the subject of a suspension under subsection 188.2(1);

(d) that has filed all information returns required by subsection 149.1(14).

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

59. (1) Subsections 188.1(1) and (2) of the Act are replaced by the following:

Penalty — carrying on business

188.1 (1) Subject to subsection (2), a person is liable to a penalty under this Part equal to 5% of its gross revenue for a taxation year from any business that it carries on in the taxation year, if

(a) the person is a registered charity that is a private foundation;

(b) the person is a registered charity that is not a private foundation and the business is not a related business in relation to the charity; or

(c) the person is a registered Canadian amateur athletic association and the business is not a related business in relation to the association.

Increased penalty for subsequent assessment

(2) A person that, less than five years before a particular time, was assessed a liability under subsection (1) or this subsection, for a taxation year, is liable to a penalty under this Part equal to its gross revenue for a subsequent taxation year from any business that, after that assessment and in the subsequent taxation year, it carries on at the particular time if

(a) the person is a registered charity that is a private foundation;

(b) the person is a registered charity that is not a private foundation and the business is not a related business in relation to the charity; or

(c) the person is a registered Canadian amateur athletic association and the business is not a related business in relation to the association.

(2) Subsections 188.1(4) to (9) of the Act are replaced by the following:

Undue benefits

(4) A registered charity or registered Canadian amateur athletic association that, at a particular time in a taxation year, confers on a person an undue benefit is liable to a penalty under this Part for the taxation year equal to

(a) 105% of the amount of the benefit, except if the charity or association is liable under paragraph (b) for a penalty in respect of the benefit; or

(b) if the Minister has, less than five years before the particular time, assessed a liability under paragraph (a) or this paragraph for a preceding taxation year of the charity or association and the undue benefit was conferred after that assessment, 110% of the amount of the benefit.

Meaning of undue benefits

(5) For the purposes of this Part, an undue benefit conferred on a person (referred to in this Part as the “beneficiary”) by a registered charity or registered Canadian amateur athletic association includes a disbursement by way of a gift or the amount of any part of the income, rights, property or resources of the charity or association that is paid, payable, assigned or otherwise made available for the personal benefit of any person who is a proprietor, member, shareholder, trustee or settlor of the charity or association, who has contributed or otherwise paid into the charity or association more than 50% of the capital of the charity or association, or who deals not at arm’s length with such a person or with the charity or association, as well as any benefit conferred on a beneficiary by another person, at the direction or with the consent of the charity or association, that would, if it were not conferred on the beneficiary, be an amount in respect of which the charity or association would have a right, but does not include a disbursement or benefit to the extent that it is

(a) an amount that is reasonable consideration or remuneration for property acquired by or services rendered to the charity or association;

(b) a gift made, or a benefit conferred,

(i) in the case of a registered charity, in the course of a charitable act in the ordinary course of the charitable activities carried on by the charity, unless it can reasonably be considered that the eligibility of the beneficiary for the benefit relates solely to the relationship of the beneficiary to the charity, and

(ii) in the case of a registered Canadian amateur athletic association, in the ordi-nary course of promoting amateur athletics in Canada on a nationwide basis; or

Failure to file information returns

(6) Every registered charity and registered Canadian amateur athletic association that fails to file a return for a taxation year as and when required by subsection 149.1(14) is liable to a penalty equal to $500.

Incorrect information

(7) Except where subsection (8) or (9) applies, every registered charity and registered Canadian amateur athletic association that issues, in a taxation year, a receipt for a gift otherwise than in accordance with this Act and the regulations is liable for the taxation year to a penalty equal to 5% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3).

Increased penalty for subsequent assessment

(8) Except where subsection (9) applies, if the Minister has, less than five years before a particular time, assessed a penalty under subsection (7) or this subsection for a taxation year of a registered charity or registered Canadian amateur athletic association and, after that assessment and in a subsequent taxation year, the charity or association issues, at the particular time, a receipt for a gift otherwise than in accordance with this Act and the regulations, the charity or association is liable for the subsequent taxation year to a penalty equal to 10% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3).

False information

(9) If at any time a person makes or furnishes, participates in the making of or causes another person to make or furnish a statement that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct (within the meaning assigned by subsection 163.2(1)), is a false statement (within the meaning assigned by subsection 163.2(1)) on a receipt issued by, on behalf of or in the name of another person for the purposes of subsection 110.1(2) or 118.1(2), the person (or, where the person is an officer, employee, official or agent of a registered charity or registered Canadian amateur athletic association, the charity or association) is liable for their taxation year that includes that time to a penalty equal to 125% of the amount reported on the receipt as representing the amount in respect of which a taxpayer may claim a deduction under subsection 110.1(1) or a credit under subsection 118.1(3).

(3) Subsections (1) and (2) apply to taxation years that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.

60. (1) Subsections 188.2(1) to (4) of the Act are replaced by the following:

Notice of suspension with assessment

188.2 (1) The Minister shall, with an assessment referred to in this subsection, give notice by registered mail to a registered charity or registered Canadian amateur athletic association that the authority of the charity or association to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed, if the Minister has assessed the charity or association for a taxation year for

(a) a penalty under subsection 188.1(2);

(b) a penalty under paragraph 188.1(4)(b) in respect of an undue benefit, other than an undue benefit conferred by the charity or association by way of a gift; or

Notice of suspension — general

(2) The Minister may give notice by registered mail to a person referred to in any of paragraphs (a) to (c) of the definition “qualified donee” in subsection 149.1(1) that the authority of the person to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed

(a) if the person contravenes any of sections 230 to 231.5;

(b) if it may reasonably be considered that the person has acted, in concert with another person that is the subject of a suspension under this section, to accept a gift or transfer of property on behalf of that other person;

(c) in the case of a person referred to in paragraph (a) of the definition “qualified donee” in subsection 149.1(1), if the person has issued a receipt for a gift otherwise than in accordance with this Act and the regulations; or

(d) in the case of a person that is a registered charity or registered Canadian amateur athletic association, if an ineligible individual is a director, trustee, officer or like official of the person, or controls or manages the person, directly or indirectly, in any manner whatever.

Effect of suspension

(3) If the Minister has issued a notice to a qualified donee under subsection (1) or (2), subject to subsection (4),

(a) the qualified donee is deemed, in respect of gifts made and property transferred to the qualified donee within the one-year period that begins on the day that is seven days after the day on which the notice is mailed, not to be a qualified donee for the purposes of subsections 110.1(1) and 118.1(1) and Part XXXV of the Income Tax Regulations; and

(b) if the qualified donee is, during that period, offered a gift from any person, the qualified donee shall, before accepting the gift, inform that person that

(i) it has received the notice,

(ii) no deduction under subsection 110.1(1) or credit under subsection 118.1(3) may be claimed in respect of a gift made to it in the period, and

(iii) a gift made to it in the period is not a gift to a qualified donee.

Application for postponement

(4) If a notice of objection to a suspension under subsection (1) or (2) has been filed by a qualified donee, the qualified donee may file an application to the Tax Court of Canada for a postponement of that portion of the period of suspension that has not elapsed until the time determined by the Court.

(2) Subsection (1) applies to taxation years that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.

61. (1) The portion of subsection 189(6.3) of the Act before paragraph (b) is replaced by the following:

Reduction of liability for penalties

(6.3) If the Minister has assessed a particular person in respect of the particular person’s liability for penalties under section 188.1 for a taxation year, and that liability exceeds $1,000, that liability is, at any particular time, reduced by the total of all amounts, each of which is an amount, in respect of a property transferred by the particular person after the day on which the Minister first assessed that liability and before the particular time to another person that was at the time of the transfer an eligible donee in respect of the particular person, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the total of

(a) the consideration given by the other person for the transfer, and

(2) Subsection 189(7) of the Act is replaced by the following:

Minister may assess

(7) Without limiting the authority of the Minister to revoke the registration of a registered charity or registered Canadian amateur athletic association, the Minister may also at any time assess a taxpayer in respect of any amount that a taxpayer is liable to pay under this Part.

(3) Subsections (1) and (2) apply to taxation years that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.

62. (1) Subparagraph 204.9(5)(c)(ii) of the Act is replaced by the following:

(ii) a parent of a beneficiary under the transferee plan was a parent of an individ-ual who was, immediately before the particular time, a beneficiary under the transferor plan and

(A) the transferee plan is a plan that allows more than one beneficiary under the plan at any one time, or

(B) in any other case, the beneficiary under the transferee plan had not attained 21 years of age at the time the transferee plan was entered into;

(2) Subsection (1) applies in respect of property transferred after 2010.

63. (1) The heading of Part XI.01 of the Act is replaced by the following:

TAXES IN RESPECT OF RRIFs, RRSPs and TFSAs

(2) Subsection (1) is deemed to have come into force on March 23, 2011.

64. (1) The portion of subsection 207.01(1) of the Act before the definition “advantage” is replaced by the following:

Definitions

207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition “benefit”), 146.2(1) and 146.3(1) apply in this Part and in Parts XLIX and L of the Income Tax Regulations.

(2) The definitions “advantage”, “non-qualified investment”, “specified non-qualified investment income” and “swap transaction” in subsection 207.01(1) of the Act are replaced by the following:

“advantage”
« avantage »

“advantage”, in relation to a registered plan, means

(a) any benefit, loan or indebtedness that is conditional in any way on the existence of the registered plan, other than

(i) a benefit derived from the provision of administrative or investment services in respect of the registered plan,

(ii) a loan or an indebtedness (including, in the case of a TFSA, the use of the TFSA as security for a loan or an indebtedness) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into,

(iii) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan, and

(iv) the payment or allocation of any amount to the registered plan by the issuer or carrier;

(b) a benefit that is an increase in the total fair market value of the property held in connection with the registered plan if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to

(i) a transaction or event or a series of transactions or events that

(A) would not have occurred in an open market in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and

(B) had as one of its main purposes to enable a person or a partnership to benefit from the exemption from tax under Part I of any amount in respect of the registered plan,

(ii) a payment received as, on account or in lieu of, or in satisfaction of, a payment

(A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or

(B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than property held in connection with the registered plan) held by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan,

(iii) a swap transaction, or

(iv) specified non-qualified investment income that has not been paid from the registered plan to its controlling individual within 90 days of receipt by the controlling individual of a notice issued by the Minister under subsection 207.06(4);

(i) a prohibited investment in respect of the registered plan or any other registered plan of the controlling individual,

(ii) in the case of a RRIF or RRSP, an amount received by the controlling individ-ual of the registered plan, or by a person who does not deal at arm’s length with the controlling individual (if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, property held in connection with the registered plan) and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment

(A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or

(B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, or

(iii) a deliberate over-contribution;

(d) an RRSP strip in respect of the registered plan; and

(e) a prescribed benefit.

“non-qualified investment”
« placement non admissible »

“non-qualified investment” for a trust governed by a registered plan means property that is not a qualified investment for the trust.

“specified non-qualified investment income”
« revenu de placement non admissible déterminé »

“specified non-qualified investment income”, in respect of a registered plan and its controlling individual, means income (including a capital gain) that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the registered plan or by any other registered plan of the controlling individual.

“swap transaction”
« opération de swap »

“swap transaction”, in respect of a registered plan, means a transfer of property between the registered plan and its controlling individual or a person with whom the controlling individual does not deal at arm’s length, but does not include

(a) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan;

(b) a payment into the registered plan that is a contribution, a premium, or an amount transferred in accordance with paragraph 146.3(2)(f);

(c) a transfer of a prohibited investment or a non-qualified investment from the registered plan, in circumstances where the controlling individual is entitled to a refund under subsection 207.04(4) on the transfer; or

(d) a transfer of property from one registered plan of a controlling individual to another registered plan of the controlling individual if

(i) both registered plans are RRIFs or RRSPs, or

(ii) both registered plans are TFSAs.

(3) The portion of the definition “prohibited investment” in subsection 207.01(1) of the Act before paragraph (c) is replaced by the following:

“prohibited investment”
« placement interdit »

“prohibited investment”, at any time, for a trust governed by a registered plan, means property (other than prescribed excluded property) that is at that time

(a) a debt of the controlling individual of the registered plan;

(b) a share of the capital stock of, an interest in, or a debt of

(i) a corporation, partnership or trust in which the controlling individual has a significant interest, or

(ii) a person or partnership that does not deal at arm’s length with the controlling individual or with a person or partnership described in subparagraph (i);

(4) Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:

“controlling individual”
« particulier contrôlant »

“controlling individual”, of a registered plan, means the holder of a TFSA or the annuitant of a RRIF or RRSP, as the case may be.

“registered plan”
« régime enregistré »

“registered plan” means a RRIF, RRSP or TFSA.

“RRSP strip”
« somme découlant d’un dépouillement de REER »

“RRSP strip”, in respect of a RRIF or RRSP, means an amount used or obtained by the controlling individual of the RRIF or RRSP, or a person who does not deal at arm’s length with the controlling individual, as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable the controlling individual, or a person who does not deal at arm’s length with the controlling individual, to use or obtain the benefit of property held in connection with the RRIF or RRSP, but does not include an amount that is

(a) included in the income of the controlling individual or their spouse or common-law partner under section 146 or 146.3;

(b) an excluded withdrawal under section 146.01 or 146.02;

(d) the principal amount of a debt obligation that is a prescribed excluded property.

“transitional prohibited investment benefit”
« bénéfice transitoire provenant d’un placement interdit »

“transitional prohibited investment benefit”, of a controlling individual for a taxation year, means the amount determined by the formula

A – B

where

A is the total of all amounts each of which is income earned, or a capital gain realized, in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

(a) is attributable to a property that was, on March 23, 2011, a prohibited investment for a trust governed by a RRIF or RRSP of the controlling individual, and

(b) in the case of income, is earned after March 22, 2011 and before 2022 and, in the case of a capital gain, accrues after March 22, 2011 and is realized before 2022; and

B is the total of all amounts each of which is a capital loss, determined without reference to subparagraph 40(2)(g)(i) and subsection 40(3.4), realized in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

(a) is attributable to a property that was, on March 23, 2011, a prohibited investment for a trust governed by a RRIF or RRSP of the controlling individual, and

(b) accrues after March 22, 2011 and is realized before 2022.

(5) Subsection 207.01(5) of the Act is replaced by the following:

Obligation of issuer

(5) The issuer or carrier of a registered plan shall exercise the care, diligence and skill of a reasonably prudent person to minimize the possibility that a trust governed by the registered plan holds a non-qualified investment.

(6) Subsections (1) and (2) apply to transactions occurring, income earned, capital gains accruing and investments acquired, after March 22, 2011, except that the definition “swap transaction” in subsection 207.01(1) of the Act, as enacted by subsection (2), applies

(a) after 2021 in relation to a swap transaction undertaken to remove a property from a RRIF or RRSP if it is reasonable to conclude that the retention of the property in the RRIF or RRSP would result in a tax being payable under Part XI.01 of the Act, and

(b) in any other case, after June 2011.

(7) Subsection (3) applies after March 22, 2011 in respect of investments acquired at any time.

(8) Subsections (4) and (5) are deemed to have come into force on March 23, 2011.

65. (1) The portion of subsection 207.04(1) of the Act before paragraph (a) is replaced by the following:

Tax payable on prohibited or non-qualified investment

207.04 (1) The controlling individual of a registered plan that governs a trust shall pay a tax under this Part for a calendar year if, at any time in the year,

(2) Subsection 207.04(3) of the Act is replaced by the following:

Both prohibited and non-qualified investment

(3) For the purposes of this section and subsections 146(10.1), 146.2(6) and 146.3(9), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.

(3) The portion of subsection 207.04(4) of the Act before paragraph (a) is replaced by the following:

Refund of tax on disposition of investment

(4) If in a calendar year a trust governed by a registered plan disposes of a property in respect of which a tax is imposed under subsection (1) on the controlling individual of the registered plan, the controlling individual is entitled to a refund for the year of an amount equal to

(4) Subparagraph 207.04(4)(b)(i) of the Act is replaced by the following:

(i) if it is reasonable to consider that the controlling individual knew, or ought to have known, at the time the property was acquired by the trust, that it was, or would become, a property described in subsection (1), or

(5) Subsections (1) to (4) apply

(a) in respect of any investment acquired after March 22, 2011, except that those subsections do not apply in the case of a prohibited investment acquired after that date by a RRIF or RRSP of an annuitant if the investment was a prohibited investment for another RRIF or RRSP of the same annuitant on March 23, 2011; and

(b) in respect of any investment acquired before March 23, 2011 that first becomes

(i) a prohibited investment after the day on which this Act has been tabled in Parliament, or

(ii) a non-qualified investment after March 22, 2011.

66. (1) Subsection 207.05(1) of the Act is replaced by the following:

Tax payable in respect of advantage

207.05 (1) A tax is payable under this Part for a calendar year if, in the year, an advantage in relation to a registered plan is extended to, or is received or receivable by, the controlling individual of the registered plan, a trust governed by the registered plan, or any other person who does not deal at arm’s length with the controlling individual.

(2) Subsection 207.05(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(3) Subsection 207.05(3) of the Act is replaced by the following:

Liability for tax

(3) The controlling individual of a registered plan in connection with which a tax is imposed under subsection (1) is liable to pay the tax except that, if the advantage is extended by the issuer or carrier of the registered plan or by a person with whom the issuer or carrier is not dealing at arm’s length, the issuer or carrier, and not the controlling individual, is liable to pay the tax.

Transitional rule

(4) If an individual so elects before July 2012 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit

(a) is paid to the individual, from a RRIF or RRSP of the individual, within 90 days after the end of the taxation year; and

(b) is not paid by way of transfer to another RRIF or RRSP of the individual.

(4) Subsections (1) to (3) are deemed to have come into force on March 23, 2011.

67. (1) Paragraph 207.06(2)(b) of the Act is replaced by the following:

(b) the extent to which the transaction or series of transactions that gave rise to the tax also gave rise to another tax under this Act.

(2) Subsections 207.06(3) and (4) of the Act are replaced by the following:

Waiver of tax payable — advantage

(3) The Minister shall not waive or cancel a liability imposed under subsection 207.05(3) on an individual in respect of a registered plan unless one or more payments are made without delay from the registered plan to the individual, the total amount of which is not less than the amount of the liability waived or cancelled.

Other powers of Minister

(4) The Minister may notify the controlling individual of a registered plan that the controlling individual must cause a payment to be made from the registered plan to the controlling individual within 90 days of receipt of the notice, the amount of which is not less than the amount of specified non-qualified investment income in respect of the registered plan.

(3) Subsections (1) and (2) are deemed to have come into force on March 23, 2011.

68. (1) Subsection 207.1(1) of the Act is repealed.

(2) Subsection 207.1(4) of the Act is repealed.

(3) Subsections (1) and (2) apply in respect of

(a) any investment acquired after March 22, 2011; and

(b) any investment acquired before March 23, 2011 that first becomes a non-qualified investment after March 22, 2011.

69. (1) Subsection 211.6(1) of the Act is replaced by the following:

Charging provision

211.6 (1) Every trust that is a qualifying environmental trust at the end of a taxation year (other than a trust that is at that time described in paragraph 149(1)(z.1) or (z.2)) shall pay a tax under this Part for the year equal to 28% of its income under Part I for the year.

(2) Subsection 211.6(1) of the Act, as enacted by subsection (1), is replaced by the following:

Definitions

211.6 (1) The definitions in this section apply for the purposes of this Part.

“excluded trust”
« fiducie exclue »

“excluded trust”, at any time, means a trust that

(a) relates at that time to the reclamation of a well;

(b) is not maintained at that time to secure the reclamation obligations of one or more persons or partnerships that are beneficiaries under the trust;

(d) if the trust is not a trust to which paragraph (e) applies, acquires at that time any property that is not described by any of paragraphs (a), (b) and (f) of the definition “qualified investment” in section 204;

(e) if the trust is created after 2011 (or if the trust was created before 2012, it elects in writing filed with the Minister on or before its filing-due date for a particular taxation year to have subparagraphs (i) and (ii) apply to it for the particular taxation year and all subsequent taxation years, and that election is made jointly with Her Majesty in right of Canada or a particular province, depending upon the qualifying law or qualifying contract in respect of the trust),

(i) acquires at that time any property that is not described by any of paragraphs (a), (b), (c), (c.1), (d) and (f) of the definition “qualified investment” in section 204, or

(ii) holds at that time a prohibited investment;

(f) elected in writing filed with the Minister, before 1998 or before April of the year following the year in which the first contribution to the trust was made, never to have been a qualifying environmental trust; or

(g) was at any previous time during its existence not a qualifying environmental trust (as determined under the definition “qualifying environmental trust” in subsection 248(1) as it applied at that previous time).

“prohibited investment”
« placement interdit »

“prohibited investment”, of a trust at any time, means a property that

(a) at the time it was acquired by the trust, was described by any of paragraphs (c), (c.1) or (d) of the definition “qualified investment” in section 204; and

(b) was issued by

(i) a person or partnership that has contributed property to, or that is a beneficiary under, the trust,

(ii) a person that is related to, or a partnership that is affiliated with, a person or partnership that has contributed property to, or that is a beneficiary under, the trust, or

(iii) a particular person or partnership if

(A) another person or partnership holds a significant interest (within the meaning assigned by subsection 207.01(4) with any modifications that the circumstances require) in the particular person or partnership, and

(B) the holder of that significant interest has contributed property to, or is a beneficiary under, the trust.

“QET income tax rate”
« taux d’impôt sur le revenu des FEA »

“QET income tax rate”, for a trust’s taxation year, means the amount, expressed as a decimal fraction, by which

(a) the percentage rate of tax provided under paragraph 123(1)(a) for the taxation year

exceeds

(b) the total of

(i) the percentage that would, if the trust were a corporation, be its general rate reduction percentage, within the meaning assigned by subsection 123.4(1), for the taxation year, and

(ii) the percentage deduction from tax provided under subsection 124(1) for the taxation year.

“qualifying contract”
« contrat admissible »

“qualifying contract”, in respect of a trust, means a contract entered into with Her Majesty in right of Canada or a province on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created.

“qualifying environmental trust”
« fiducie pour l’environnement admissible »

“qualifying environmental trust” means a trust

(a) each trustee of which is

(i) Her Majesty in right of Canada or a province, or

(ii) a corporation resident in Canada that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee;

(b) that is maintained for the sole purpose of funding the reclamation of a qualifying site;

(i) the terms of a qualifying contract, or

(ii) a qualifying law; and

(d) that is not an excluded trust.

“qualifying law”
« loi admissible »

“qualifying law”, in respect of a trust, means

(a) a law of Canada or a province that was enacted on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created; and

(b) if the trust was created after 2011, an order made

(i) by a tribunal constituted under a law described by paragraph (a), and

(ii) on or before the day that is one year after the day on which the trust was created.

“qualifying site”
« site admissible »

“qualifying site”, in respect of a trust, means a site in Canada that is or has been used primarily for, or for any combination of,

(a) the operation of a mine,

(b) the extraction of clay, peat, sand, shale or aggregates (including dimension stone and gravel),

(d) if the trust was created after 2011, the operation of a pipeline.

(3) Subsection 211.6(2) of the Act is replaced by the following:

Charging provision

(2) Every trust that is a qualifying environmental trust at the end of a taxation year (other than a trust that is at that time described by paragraph 149(1)(z.1) or (z.2)) shall pay a tax under this Part for the year equal to the amount determined by the formula

A × B

where

A is the trust’s income (computed as if this Act were read without reference to subsections 104(4) to (31) and sections 105 to 107) under Part I for the year; and

B is the QET income tax rate for the year.

(4) Subsection (1) applies to the 1997 to 2011 taxation years.

(5) Subsections (2) and (3) apply to the 2012 and subsequent taxation years.

70. (1) The portion of subsection 230(2) of the Act before paragraph (a) is replaced by the following:

Records and books

(2) Every qualified donee referred to in paragraphs (a) to (c) of the definition “qualified donee” in subsection 149.1(1) shall keep records and books of account — in the case of a qualified donee referred to in any of subparagraphs (a)(i) and (iii) and paragraphs (b) and (c) of that definition, at an address in Canada recorded with the Minister or designated by the Minister — containing

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

71. (1) Paragraph 241(3.2)(h) of the Act is replaced by the following:

(h) an application by the charity, and information filed in support of the application, for a designation, determination or decision by the Minister under subsection 149.1(5), (6.3), (7), (8) or (13).

(2) Subsection 241(3.2) of the Act, as amended by subsection (1), is replaced by the following:

Registered charities and registered Canadian amateur athletic associations

(3.2) An official may provide to any person the following taxpayer information relating to another person (in this subsection referred to as the “registrant”) that was at any time a registered charity or registered Canadian amateur athletic association:

(a) a copy of the registrant’s governing documents, including its statement of purpose, and function in the case of a Canadian amateur athletic association;

(b) any information provided in prescribed form to the Minister by the registrant on applying for registration under this Act;

(c) the names of the persons who at any time were the registrant’s directors and the periods during which they were its directors;

(d) a copy of the notification of the registrant’s registration, including any conditions and warnings;

(e) if the registration of the registrant has been revoked or annulled, a copy of the entirety of or any part of any letter sent by or on behalf of the Minister to the registrant relating to the grounds for the revocation or annulment;

(f) financial statements required to be filed with an information return referred to in subsection 149.1(14);

(g) a copy of the entirety of or any part of any letter or notice by the Minister to the registrant relating to a suspension under section 188.2 or an assessment of tax or penalty under this Act (other than the amount of a liability under subsection 188(1.1)); and

(h) in the case of a registrant that is a charity, an application by the registrant, and information filed in support of the application, for a designation, determination or decision by the Minister under any of subsections 149.1(5), (6.3), (7), (8) and (13).

(3) Subsection (1) applies in respect of documents that, after May 13, 2005,

(a) are sent by the Minister of National Revenue; or

(b) are filed or required to be filed with that Minister.

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

72. (1) The definitions “net income stabilization account”, “qualifying environmental trust”, “registered Canadian amateur athletic association”, “registered retirement income fund” and “registered retirement savings plan” in subsection 248(1) of the Act are replaced by the following:

“net income stabilization account”
« compte de stabilisation du revenu net »

“net income stabilization account” means an account of a taxpayer

(a) under the net income stabilization account program under the Farm Income Protection Act, or

(b) that is a prescribed account;

“qualifying environmental trust”
« fiducie pour l’environnement admissible »

“qualifying environmental trust” has the meaning assigned by subsection 211.6(1);

“registered Canadian amateur athletic association”
« association canadienne enregistrée de sport amateur »

“registered Canadian amateur athletic association” means a Canadian amateur athletic association within the meaning assigned by subsection 149.1(1) that has applied to the Minister in prescribed form for registration, that has been registered and whose registration has not been revoked;

“registered retirement income fund” or “RRIF”
« fonds enregistré de revenu de retraite » ou « FERR »

“registered retirement income fund” or “RRIF” have the same meaning as “registered retirement income fund” in subsection 146.3(1);

“registered retirement savings plan” or “RRSP”
« régime enregistré d’épargne-retraite » ou « REER »

“registered retirement savings plan” or “RRSP” have the same meaning as “registered retirement savings plan” in subsection 146(1);

(2) The definition “compte d’épargne libre d’impôt” in subsection 248(1) of the French version of the Act is replaced by the following:

« compte d’épargne libre d’impôt » ou « CELI »
“TFSA”

« compte d’épargne libre d’impôt » ou « CELI » S’entend au sens du paragraphe 146.2(5).

(3) Paragraph (a) of the definition “NISA Fund No. 2” in subsection 248(1) of the Act is replaced by the following:

(a) that is described in paragraph 8(2)(b) of the Farm Income Protection Act or is a prescribed fund, and

(4) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:

“foreign accrual property income”
« revenu étranger accumulé, tiré de biens »

“foreign accrual property income” has the meaning assigned by section 95;

“specified pension plan”
« régime de pension déterminé »

“specified pension plan” means a prescribed arrangement;

(5) Subsection 248(3.1) of the Act is replaced by the following:

Gift of bare ownership of immovables

(3.1) Subsection (3) does not apply in respect of a usufruct or a right of use of an immovable in circumstances where a taxpayer disposes of the bare ownership of the immovable by way of a gift to a qualified donee and retains, for life, the usufruct or the right of use.

(6) The definition “net income stabilization account” in subsection 248(1) of the Act, as enacted by subsection (1), and subsection (3) apply to the 2011 and subsequent taxation years.

(7) The definition “qualifying environmental trust” in subsection 248(1) of the Act, as enacted by subsection (1), applies to the 2012 and subsequent taxation years.

(8) The definition “registered Canadian amateur athletic association” in subsection 248(1) of the Act, as enacted by subsection (1), and subsection (5) come into force on the later of the day on which this Act receives royal assent and January 1, 2012.

(9) The definitions “registered retirement income fund” or “RRIF” and “registered retirement savings plan” or “RRSP” in subsection 248(1) of the Act, as enacted by subsection (1), and subsection (2) are deemed to have come into force on March 23, 2011.

(10) The definition “foreign accrual property income” in subsection 248(1) of the Act, as enacted by subsection (4), applies to taxation years that begin after 2006.

(11) The definition “specified pension plan” in subsection 248(1) of the Act, as enacted by subsection (4), applies after 2009.

73. (1) Paragraph 249.1(1)(c) of the Act is replaced by the following:

(c) in the case of a partnership (other than a partnership to which subparagraph (b)(ii) or subsection (9) applies) that is a member of a partnership or has a member that is a partnership, after the end of the calendar year in which it began, if at the end of the calendar year

(i) a corporation has a significant interest, as defined in section 34.2, in the partnership,

(ii) the partnership is a member of another partnership in which a corporation has a significant interest as defined in section 34.2,

(iii) a membership interest in the partnership is held directly, or indirectly through one or more partnerships, by a partnership described in subparagraph (i) or (ii), or

(iv) the partnership holds directly, or indirectly through one or more partnerships, a membership interest in a partnership described in any of subparagraphs (i) to (iii), or

(d) in any other case, more than 12 months after the period began,

(2) Section 249.1 of the Act is amended by adding the following after subsection (7):

Single-tier fiscal period alignment

(8) The members of a partnership that has a fiscal period that begins before March 22, 2011 and that would, if this Act were read without reference to this subsection and subsection (10), end on a day after March 22, 2011, may elect to end that fiscal period on a particular day that is before the day on which the fiscal period would otherwise end (in this subsection and subsection (10) referred to as a “single-tier alignment election”) if

(a) each member of the partnership is, on the particular day, a corporation that is not a professional corporation;

(b) the partnership is not, on the particular day, a member of another partnership;

(c) at least one member of the partnership is, on the particular day, a corporation that has a significant interest, as defined in section 34.2, in the partnership;

(d) at least one member of the partnership referred to in paragraph (c) has a taxation year that ends on a day that differs from the day on which the fiscal period of the partnership would end if this Act were read without reference to this subsection and subsection (10);

(e) the particular day is after March 22, 2011 and no later than the latest day that is the last day of the first taxation year that ends after March 22, 2011 of any corporation that has been a member of the partnership continuously since March 21, 2011; and

(f) subsection (10) applies to the single-tier alignment election.

Multi-tier fiscal period alignment — one-time election

(9) The members of a partnership to which paragraph (1)(c) would apply if it were read without reference to this subsection may elect (in this subsection and subsections (10) and (11) referred to as a “multi-tier alignment election”) to end a fiscal period of the partnership on a particular day if

(a) as a consequence of the multi-tier alignment election, the fiscal period of the partnership, and of each other partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), ends on the particular day;

(b) the particular day is before March 22, 2012; and

Conditions to align a partnership fiscal period

(10) This subsection applies to a single-tier alignment election or a multi-tier alignment election, as the case may be, for a partnership if

(a) the election is filed in writing and in prescribed form with the Minister

(i) in the case of a single-tier alignment election, by a corporation that is a member of the partnership on or before the day that is the earliest filing-due date of any corporation that is a member of the partnership for its first taxation year ending after March 22, 2011, and

(ii) in the case of a multi-tier alignment election,

(A) by a corporation that is a member of the partnership, or of a partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), and

(B) on or before the day that is the earliest filing-due date of any corporation that is a member of a partnership referred to in clause (A) for the first taxation year of the corporation ending after March 22, 2011;

(b) as a consequence of the election, the fiscal period of each partnership to which the election applies is 12 months or less;

(c) the election was made by a corporation that has the authority to act for the members of the partnership and each member of any other partnership described in relation to the partnership in subparagraph (1)(c)(ii) to (iv); and

(d) no other election is filed with the Minister to end the fiscal period of the partnership, or of any other partnership described in relation to the partnership in subparagraph (1)(c)(ii) to (iv), on a day other than the particular day referred to in subsection (8) or (9), as the case may be.

Deemed multi-tier alignment election

(11) For the purposes of this Act, if paragraph (1)(c) applies to end the fiscal period of a partnership on December 31, 2011, a multi-tier alignment election under subsection (9) is deemed to have been made to end the fiscal period of the partnership on December 31, 2011.

(3) Subsections (1) and (2) apply to the 2011 and subsequent fiscal periods.

74. (1) Subsection 250(7) of the Act is repealed.

(2) Subsection (1) applies to the 2012 and subsequent taxation years.

75. (1) The portion of subsection 259(1) of the Act before paragraph (a) is replaced by the following:

Proportional holdings in trust property

259. (1) For the purposes of designated provisions, if at any time a specified taxpayer acquires, holds or disposes of a particular unit in a qualified trust and the qualified trust elects for any period that includes that time to have this subsection apply,

(2) Subsection 259(5) of the Act is amended by adding the following in alphabetical order:

“designated provisions”
« dispositions désignées »

“designated provisions” means sections 146 and 146.1 to 146.4 and Parts X and XI to XI.1, as they apply in respect of investments that are not qualified investments for a trust, and Part X.2;

“specified taxpayer”
« contribuable déterminé »

“specified taxpayer” means a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u) to (u.2) and (x).

(3) Subsections (1) and (2) apply after 1999, except that

(a) the definition “designated provisions” in subsection 259(5) of the Act, as enacted by subsection (2),

(i) in its application to taxation years that begin before 2005, is to be read as follows:

“designated provisions” means subsections 146(6), (10) and (10.1), 146.1(2.1), 146.3(7), (8) and (9), and Parts X, X.2, XI and XI.1;

(ii) in its application to taxation years that begin after 2004 and before 2008, is to be read as follows:

“designated provisions” means subsections 146(6), (10) and (10.1), 146.1(2.1), 146.3(7), (8) and (9), and Parts X, X.2 and XI.1;

(iii) in its application to taxation years that begin after 2007 and before 2009, is to be read as follows:

“designated provisions” means subsections 146(6), (10) and (10.1), 146.1(2.1), 146.3(7), (8) and (9), and 146.4(5), and Parts X, X.2, XI and XI.1;

(iv) in its application to taxation years that begin after 2008 and end before March 23, 2011, is to be read as follows:

“designated provisions” means subsections 146(6), (10) and (10.1), 146.1(2.1), 146.2(6), 146.3(7), (8) and (9), and 146.4(5), and Parts X, X.2 and XI to XI.1;

(b) the definition “specified taxpayer” in subsection 259(5) of the Act, as enacted by subsection (2),

(i) in its application to taxation years that begin before 2005, is to be read as follows:

“specified taxpayer” means a taxpayer described in section 205.

(ii) in its application to taxation years that begin after 2004 and before 2008, is to be read as follows:

“specified taxpayer” means a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u) and (x).

(iii) in its application to taxation years that begin after 2007 and before 2009, is to be read as follows:

“specified taxpayer” means a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u), (u.1) and (x).

C.R.C., c. 945

Income Tax Regulations

76. (1) Subsection 214(2) of the Income Tax Regulations is replaced by the following:

(2) If, in a taxation year, subsection 146(7), (9) or (10) of the Act or, in relation to a non-qualified investment, subsection 207.04(1) or (4) of the Act applies in respect of a trust governed by a registered retirement savings plan, the trustee of the plan shall make an information return in prescribed form.

(2) Subsection (1) applies in respect of investments acquired after March 22, 2011.

77. (1) Subsection 215(3) of the Regulations is replaced by the following:

(3) If subsection 146.3(4), (7) or (10) of the Act or, in relation to a non-qualified investment, subsection 207.04(1) or (4) of the Act applies in respect of any transaction or event with respect to property of a registered retirement income fund, the carrier of the fund shall make an information return in prescribed form in respect of the transaction or event.

(2) Subsection (1) applies in respect of investments acquired after March 22, 2011.

78. (1) Section 216 of the Regulations and the heading before it are repealed.

(2) Subsection (1) applies to fiscal periods of registered Canadian amateur athletic associations that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.

79. (1) The definition “thermal waste” in subsection 1104(13) of the Regulations is replaced by the following:

“thermal waste” means waste heat energy extracted from a distinct point of rejection in an industrial process that would otherwise

(a) be vented to the atmosphere or transferred to a liquid; and

(b) not be used for a useful purpose. (déchets thermiques)

(2) Subsection (1) applies in respect of property acquired on or after March 22, 2011.

80. (1) The heading “RECEIPTS FOR DONATIONS AND GIFTS” before section 3500 of the Regulations is replaced by the following:

GIFTS

(2) Subsection (1) is deemed to have come into force on March 23, 2011.

81. (1) The definition “other recipient of a gift” in section 3500 of the Regulations is replaced by the following:

“other recipient of a gift” means a person, to whom a gift is made by a taxpayer, referred to in any of paragraphs (a) and (d) of the definition “qualified donee” in subsection 149.1(1), paragraph 110.1(1)(c) and subparagraph 110.1(3)(a)(ii) of the Act; (autre bénéficiaire d’un don)

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

82. (1) The Regulations are amended by adding the following after section 3501:

Contents of Information Returns

3501.1 Every information return required to be filed under subsection 110.1(16) or 118.1(27) of the Act in respect of a transfer of property must contain

(a) a description of the transferred property;

(b) the fair market value of the transferred property at the time of the transfer;

(d) the name and address of the transferee of the property including, in the case of an individual, their first name and initial; and

(e) if the transferor of the property, or a person not dealing at arm’s length with the transferor, issued the receipt referred to in subsection 110.1(14) or 118.1(25) of the Act, the information contained in that receipt.

(2) Subsection (1) is deemed to have come into force on March 23, 2011.

83. (1) Section 3503 of the Regulations is replaced by the following:

3503. For the purposes of subparagraph (a)(iv) of the definition “qualified donee” in subsection 149.1(1) of the Act, the universities outside Canada named in Schedule VIII are prescribed to be universities the student body of which ordinarily includes students from Canada.

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

84. (1) The portion of subsection 4900(6) of the Regulations before paragraph (b) is replaced by the following:

(6) Subject to subsections (8) and (9), for the purposes of paragraph (d) of the definition “qualified investment” in subsection 146(1) of the Act, paragraph (e) of the definition “qualified investment” in subsection 146.1(1) of the Act and paragraph (c) of the definition “qualified investment” in subsection 146.3(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered retirement savings plan, a registered education savings plan and a registered retirement income fund at any time if at that time the property is not a prohibited investment for the trust and is

(a) a share of the capital stock of an eligible corporation (as defined in subsection 5100(1)) unless, in the case of a registered education savings plan, a beneficiary or subscriber under the plan is a designated shareholder of the corporation;

(2) Subsection 4900(8) of the Regulations is replaced by the following:

(8) For the purposes of subsection (6), a property that is held by a trust governed by a registered education savings plan ceases to be a qualified investment for the trust immediately before an amount is received if

(a) the property is a share referred to in paragraph (6)(a), an interest in a small business investment limited partnership that holds a small business security, or an interest in a small business investment trust that holds a small business security;

(b) a person who is a beneficiary or subscriber under the plan provides services to or for the issuer of the share or small business security, or to or for a person related to that issuer;

(d) it can reasonably be considered, having regard to all the circumstances (including the terms and conditions of the share or small business security or of any related agreement, and the rate of interest or the dividend provided on the share or small business security), that the amount is on account, in lieu or in satisfaction of payment for the services.

(3) Subsection 4900(10) of the Regulations is repealed.

(4) Subsection 4900(12) of the Regulations is replaced by the following:

(12) For the purposes of paragraph (e) of the definition “qualified investment” in subsection 146.1(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered education savings plan at any time if

(a) at the time the property was acquired by the trust,

(i) the property was a share of the capital stock of a specified small business corporation,

(ii) the property was a share of the capital stock of a venture capital corporation described in any of sections 6700 to 6700.2, or

(iii) the property was a qualifying share in respect of a specified cooperative corporation and the plan; and

(b) immediately after the time the property was acquired by the trust, each person who is a beneficiary or a subscriber under the plan was not a connected shareholder of the corporation.

(5) Paragraph 4900(13)(a) of the Regulations is replaced by the following:

(a) a share that is otherwise a qualified investment for the purposes of paragraph (e) of the definition “qualified investment” in subsection 146.1(1) of the Act solely because of subsection (12) is held by a trust governed by a registered education savings plan,

(6) The portion of subsection 4900(14) of the Regulations before paragraph (a) is replaced by the following:

(14) For the purposes of paragraph (d) of the definition “qualified investment” in subsection 146(1) of the Act, paragraph (c) of the definition “qualified investment” in subsection 146.3(1) of the Act and paragraph (c) of the definition “qualified investment” in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a RRIF, RRSP or TFSA at any time if, at the time the property was acquired by the trust, the property

(7) Subparagraph 4900(14)(a)(iii) of the Regulations is replaced by the following:

(iii) a qualifying share in respect of a specified cooperative corporation and the RRIF, RRSP or TFSA; and

(8) Subsections (1), (2) and (4) to (7) apply in respect of investments acquired after March 22, 2011.

85. (1) Sections 5000 and 5001 of the Regulations are replaced by the following:

Non-prohibited investment

5000. For the purpose of the definition “prohibited investment” in subsection 207.01(1) of the Act, an investment is prescribed excluded property at any time if it is

(a) property described in paragraph 4900(1)(j.1); or

(b) a share of a mutual fund corporation or a unit of a mutual fund trust where

(i) the corporation or trust is a mutual fund that is subject to, and substantially complies with, the requirements of National Instrument 81-102 Mutual Funds, as amended from time to time, of the Canadian Securities Administrators, and

(ii) the time is before the end of the second taxation year of the corporation or trust.

Prohibited investment

5001. For the purpose of the definition “prohibited investment” in subsection 207.01(1) of the Act, property that is a qualified investment for a trust governed by a RRIF, RRSP or TFSA solely because of subsection 4900(14) is prescribed property for the trust at any time if, at that time, it is not described in any of subparagraphs 4900(14)(a)(i) to (iii).

(2) Subsection (1) applies after March 22, 2011 in respect of investments acquired at any time.

86. (1) The Regulations are amended by adding the following after section 5502: