Bill C-45

Income Tax Regulations

58. (1) Paragraph (b) of the definition “remuneration” in subsection 100(1) of the Income Tax Regulations is replaced by the following:

(b) a superannuation or pension benefit (including an annuity payment made pursuant to or under a superannuation or pension fund or plan) other than a distribution

(i) that is made from a pooled registered pension plan and is not required to be included in computing a taxpayer’s income under paragraph 56(1)(z.3) of the Act, or

(ii) that subsection 147.5(14) of the Act deems to have been made,

(2) Paragraph 100(3)(a) of the Regulations is replaced by the following:

(a) a contribution to or under a pooled registered pension plan, a registered pension plan or a specified pension plan, or

(3) Subsections (1) and (2) come into force or are deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.

59. (1) The Regulations are amended by adding the following after section 212:

Pooled Registered Pension Plans

213. An administrator of a PRPP must file with the Minister an information return for each calendar year in prescribed form in respect of the PRPP

(a) if an agreement concerning annual information returns has been entered into by the Minister and an authority responsible for the supervision of the PRPP under the Pooled Registered Pension Plans Act or a similar law of a province, on or before the day on which an information return required by that authority is to be filed for the calendar year; and

(b) in any other case, on or before May 1 of the following calendar year.

(2) Subsection (1) comes into force or is deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.

60. (1) Paragraph 304(1)(a) of the Regulations is replaced by the following:

(a) an annuity contract that is, or is issued pursuant to, an arrangement described in any of paragraphs 148(1)(a) to (b.3) and (d) of the Act;

(2) Subsection (1) comes into force or is deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.

61. (1) The portion of subsection 1104(13) of the Regulations before the definition “basic oxygen furnace gas” is replaced by the following:

(13) The definitions in this subsection apply for the purposes of this subsection, subsections (14) to (17) and Classes 43.1 and 43.2 in Schedule II.

(2) The definitions “eligible waste fuel” and “plant residue” in subsection 1104(13) of the Regulations are replaced by the following:

“eligible waste fuel” means biogas, bio-oil, digester gas, landfill gas, municipal waste, plant residue, pulp and paper waste and wood waste. (combustible résiduaire admissible)

“plant residue” means residue of plants (not including wood waste and waste that no longer has the chemical properties of the plants of which it is a residue) that would otherwise be waste material and that is used

(a) in a system that converts biomass into bio-oil or biogas; or

(b) as an eligible waste fuel. (résidus végétaux)

(3) Section 1104 of the Regulations is amended by adding the following after subsection (16):

(17) A property that would otherwise be eligible for inclusion in Class 43.1 or Class 43.2 in Schedule II by a taxpayer is deemed not to be eligible for inclusion in either of those classes if

(a) the property is included in Class 43.1 because of its subparagraph (c)(i) or is described in any of subparagraphs (d)(viii), (ix), (xi) and (xiii) of Class 43.1 and paragraph (a) of Class 43.2; and

(b) at the time the property becomes available for use by the taxpayer, the taxpayer has not satisfied the requirements of all environmental laws, by-laws and regulations

(i) of Canada, a province or a municipality in Canada, or

(ii) of a municipal or public body performing a function of government in Canada

applicable in respect of the property.

(4) Subsections (1) to (3) are deemed to have come into force on March 29, 2012.

62. (1) Subsection 2900(4) of the Regulations is replaced by the following:

(4) For the purposes of the definition “qual-ified expenditure” in subsection 127(9) of the Act, the prescribed proxy amount of a taxpayer for a taxation year, in respect of a business, in respect of which the taxpayer elects under clause 37(8)(a)(ii)(B) of the Act is 55% of the total of all amounts each of which is that portion of the amount incurred in the year by the taxpayer in respect of salary or wages of an employee of the taxpayer who is directly engaged in scientific research and experimental development carried on in Canada that can reasonably be considered to relate to the scientific research and experimental development having regard to the time spent by the employee on the scientific research and experimental development.

(2) Subsection (1) applies to taxation years that end after 2012, except that for taxation years that begin before 2014 the reference to “55%” in subsection 2900(4) of the Regulations, as enacted by subsection (1), is to be read as a reference to the percentage that is the total of

(a) 65% multiplied by the proportion that the number of days that are in the taxation year and before 2013 is of the number of days in the taxation year,

(b) 60% multiplied by the proportion that the number of days that are in the taxation year and in 2013 is of the number of days in the taxation year, and

(c) 55% multiplied by the proportion that the number of days that are in the taxation year and after 2013 is of the number of days in the taxation year.

63. (1) Subparagraph 2902(b)(ii) of the Regulations is replaced by the following:

(ii) the acquisition of property that is qualified property or qualified resource property within the meaning assigned by subsection 127(9) of the Act, or

(2) Paragraph 2902(b) of the Regulations, as amended by subsection (1), is replaced by the following:

(b) an expenditure incurred by a taxpayer in respect of

(i) the acquisition of property that is qualified property or qualified resource property within the meaning assigned by subsection 127(9) of the Act, or

(ii) the acquisition of property that has been used, or acquired for use or lease, for any purpose whatever before it was acquired by the taxpayer;

(3) The portion of paragraph 2902(e) of the Regulations before subparagraph (i) is replaced by the following:

(e) an expenditure of a taxpayer, to the extent that the taxpayer has received or is entitled to receive a reimbursement in respect of it from

(4) Subsection (1) applies in respect of expenditures incurred after March 28, 2012.

(5) Subsections (2) and (3) apply in respect of expenditures incurred after 2013.

64. (1) Section 2903 of the Regulations is repealed.

(2) Subsection (1) applies after 2013.

65. (1) Section 4301 of the Regulations is amended by striking out “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(b.1) subsection 17.1(1) of the Act, the prescribed rate in effect during any particular quarter is the rate that would be determined under paragraph (a) in respect of the particular quarter if the reference in subparagraph (a)(i) to “the next higher whole percentage where the mean is not a whole percentage” were read as “two decimal points”; and

(2) Subsection (1) is deemed to have come into force on March 29, 2012.

66. (1) The portion of subsection 4600(1) of the Regulations before paragraph (a) is replaced by the following:

4600. (1) Property is a prescribed building for the purposes of the definitions “qualified property” and “qualified resource property” in subsection 127(9) of the Act if it is depreciable property of the taxpayer that is a building or grain elevator and it is erected on land owned or leased by the taxpayer,

(2) The portion of subsection 4600(2) of the Regulations before paragraph (a) is replaced by the following:

(2) Property is prescribed machinery and equipment for the purposes of the definitions “qualified property” and “qualified resource property” in subsection 127(9) of the Act if it is depreciable property of the taxpayer (other than property referred to in subsection (1)) that is

(3) Section 4600 of the Regulations is amended by adding the following after subsection (2):

(3) Property is prescribed energy generation and conservation property for the purposes of the definition “qualified property” in subsection 127(9) of the Act if it is depreciable property of the taxpayer (other than property referred to in subsection (1) or (2)) that is a property included in any of subparagraph (a.1)(i) of Class 17 and Classes 43.1, 43.2 and 48 in Schedule II.

(4) Subsections (1) to (3) are deemed to have come into force on March 29, 2012.

67. (1) Subsection 4802(1) of the Regulations is amended by adding the following after paragraph (c.2):

(c.3) a pooled registered pension plan;

(2) Paragraph 4802(1.1)(e) of the Regulations is replaced by the following:

(e) each of the beneficiaries of the trust was a trust governed by a deferred profit sharing plan, a pooled registered pension plan or a registered pension plan.

(3) Subsections (1) and (2) come into force or are deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.

68. (1) The portion of section 8201 of the Regulations before paragraph (a) is replaced by the following:

8201. For the purposes of subsection 16.1(1), the definition “outstanding debts to specified non-residents” in subsection 18(5), the definition “excluded income” and “excluded revenue” in subsection 95(2.5), subsections 100(1.3), 112(2), 125.4(1) and 125.5(1), the definition “taxable supplier” in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), the definition “Canadian banking business” in subsection 248(1) and paragraph 260(5)(a) of the Act, a “permanent establishment” of a person or partnership (either of whom is referred to in this section as the “person”) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, if the person does not have any fixed place of business, the principal place at which the person’s business is conducted, and

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

69. (1) Subparagraph 8502(b)(iv) of the Regulations is replaced by the following:

(iv) is transferred to the plan in accordance with any of subsections 146(16), 146.3(14.1), 147(19), 147.3(1) to (8) and 147.5(21) of the Act, or

(2) Subsection (1) comes into force or is deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.

70. (1) Subparagraph (d)(ix) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

(ix) equipment used by the taxpayer, or by a lessee of the taxpayer, for the sole purpose of generating heat energy, primarily from the consumption of eligible waste fuel and not using any fuel other than eligible waste fuel or fossil fuel, including such equipment that consists of fuel handling equipment used to upgrade the combustible portion of the fuel and control, feedwater and condensate systems, and other ancillary equipment, but not including equipment used for the purpose of producing heat energy to operate electrical generating equipment, buildings or other structures, heat rejection equipment (such as condensers and cooling water systems), fuel storage facilities, other fuel handling equipment and property otherwise included in Class 10 or 17,

(2) Clause (d)(xv)(B) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

(B) is part of a district energy system that uses thermal energy that is primarily supplied by equipment that is described in subparagraphs (i), (iv) or (ix) or would be described in those subparagraphs if owned by the taxpayer, and

(3) Subsections (1) and (2) are deemed to have come into force on March 29, 2012.

Canada Disability Savings Regulations

71. Paragraph 4(g) of the Canada Disability Savings Regulations is replaced by the following:

(g) the issuer shall, when transferring the property of the RDSP, provide to the issuer of the new plan all information that it is required to provide in accordance with paragraph 146.4(8)(c) of the Income Tax Act; and

72. (1) Subsections 5(1) and (2) of the Regulations are replaced by the following:

5. (1) Subject to sections 5.1 and 5.2, an issuer of an RDSP shall repay to the Minister, within the period set out in the issuer agreement, the amount referred to in subsection (2) if

(a) the RDSP is terminated;

(b) the plan ceases to be an RDSP as a result of the application of paragraph 146.4(10)(a) of the Income Tax Act;

(c) the beneficiary ceases to be a DTC-eligible individual, unless they are the subject of an election made under subsection 146.4(4.1) of the Income Tax Act; or

(d) the beneficiary dies.

(2) The amount that must be repaid as a result of the occurrence of an event described in subsection (1) is the lesser of

(a) the fair market value, immediately before the occurrence, of the property held by the RDSP, and

(b) the assistance holdback amount of the RDSP immediately before the occurrence.

(2) Subsection (1) comes into force on January 1, 2014.

73. (1) The Regulations are amended by adding the following after section 5:

5.1 If an event described in paragraph 5(1)(a), (b) or (d) occurs while the beneficiary of an RDSP is the subject of an election made under subsection 146.4(4.1) of the Income Tax Act, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, the lesser of

(a) the fair market value, immediately before the occurrence of the event, of the property held by the RDSP, and

(b) the amount determined by the formula

A + B – C

where

A      is the assistance holdback amount of the RDSP immediately before the beneficiary ceased to be a DTC-eligible individual,

B      is the amount of any grant or bond that is paid into the RDSP during the period beginning on the day on which the beneficiary ceased to be a DTC-eligible individual and ending on the day on which the event occurs, and

C      is the amount of any grant or bond that has been repaid since the day on which the beneficiary ceased to be a DTC-eligible individual.

5.2 If an election made under subsection 146.4(4.1) of the Income Tax Act in respect of the beneficiary of an RDSP ceases to be valid because of paragraph 146.4(4.2)(b) of that Act, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, the lesser of

(a) the fair market value, immediately before the election ceases to be valid, of the property held by the RDSP, and

(b) the amount determined by the formula

A + B – C

where

A      is the assistance holdback amount of the RDSP immediately before the beneficiary ceased to be a DTC-eligible individual,

B      is the amount of any grant or bond that is paid into the RDSP during the period beginning on the day on which the beneficiary ceased to be a DTC-eligible individual and ending on the day on which the election ceases to be valid, and

C      is the amount of any grant or bond that has been repaid since the day on which the beneficiary ceased to be a DTC-eligible individual.

5.3 (1) Subject to section 5.4, if a disability assistance payment is made, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, the least of the following amounts:

(a) $3 for every $1 of disability assistance payment made,

(b) the fair market value, immediately before the making of the disability assistance payment, of the property held by the RDSP, and

(c) the assistance holdback amount of the RDSP immediately before the making of the disability assistance payment.

(2) An issuer that repays the amount referred to in paragraph (1)(a) is to do so from the grants and bonds that were paid into the RDSP within the 10-year period preceding the making of the disability assistance payment, in the order in which they were paid into it.

5.4 (1) If a disability assistance payment is made to a beneficiary who is the subject of an election made under subsection 146.4(4.1) of the Income Tax Act, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, the least of the following amounts:

(a) $3 for every $1 of disability assistance payment made,

(b) the fair market value, immediately before the making of the disability assistance payment, of the property held by the RDSP, and

(c) the amount determined by the formula

A + B – C

where

A      is the assistance holdback amount of the RDSP immediately before the beneficiary ceased to be a DTC-eligible individual,

B      is the amount of any grant or bond that is paid into the RDSP during the period beginning on the day on which the beneficiary ceased to be a DTC-eligible individual and ending on the day on which the disability assistance payment is made, and

C      is the amount of any grant or bond that has been repaid since the day on which the beneficiary ceased to be a DTC-eligible individual.

(2) An issuer that repays the amount referred to in paragraph (1)(a) is to do so from the grants and bonds that were paid into the RDSP within the 10-year period before the beneficiary ceased to be a DTC-eligible individual and those that were paid into the RDSP within the period referred to in the description of B in paragraph (1)(c), in the order in which they were paid into it.

(3) Subsection (1) does not apply in respect of any disability assistance payment made in the calendar year in which the beneficiary of the RDSP attains 60 years of age, or in any subsequent calendar year, if the total amount of disability assistance payments made to the beneficiary in that calendar year is less than or equal to the amount determined in accordance with paragraph 146.4(4)(l) of the Income Tax Act for that calendar year.

(2) Subsection (1) comes into force on January 1, 2014.

PART 2

MEASURES IN RESPECT OF SALES TAX

Excise Tax Act

74. (1) The definition “fiscal year” in subsection 123(1) of the Excise Tax Act is replaced by the following:

“fiscal year” of a person means

(a) if section 244.1 applies to the person, the period determined under that section,

(b) if section 244.1 does not apply to the person and the person has made an election under section 244 that is in effect, the period that the person elected to be the fiscal year of the person, and

(c) in all other cases, the taxation year of the person;

(2) Subsection 123(1) of the Act is amended by adding the following in alphabetical order:

“participating employer” of a pension plan means an employer that has made, or is required to make, contributions to the pension plan in respect of the employer’s employees or former employees, or payments under the pension plan to the employer’s employees or former employees, and includes an employer prescribed for the purposes of the definition “participating employer” in subsection 147.1(1) of the Income Tax Act;

“pension entity” of a pension plan means a person in respect of the pension plan that is

(a) a person referred to in paragraph (a) of the definition “pension plan”,

(b) a corporation referred to in paragraph (b) of that definition, or

(c) a prescribed person;

“pension plan” means a registered pension plan (as defined in subsection 248(1) of the Income Tax Act)

(a) that governs a person that is a trust or that is deemed to be a trust for the purposes of that Act,

(b) in respect of which a corporation is

(i) incorporated and operated either

(A) solely for the administration of the registered pension plan, or

(B) for the administration of the registered pension plan and for no other purpose other than acting as trustee of, or administering, a trust governed by a retirement compensation arrangement (as defined in subsection 248(1) of that Act), where the terms of the arrangement provide for benefits only in respect of individuals who are provided with benefits under the registered pension plan, and

(ii) accepted by the Minister, under subparagraph 149(1)(o.1)(ii) of that Act, as a funding medium for the purpose of the registration of the registered pension plan, or

(c) in respect of which a person is prescribed for the purposes of the definition “pension entity”;

(3) Subsection (1) is deemed to have come into force on July 1, 2009.

(4) Subsection (2) is deemed to have come into force on September 23, 2009.

75. (1) The definitions “participating employer”, “pension entity” and “pension plan” in subsection 172.1(1) of the Act are repealed.

(2) Subsection (1) is deemed to have come into force on September 23, 2009.

76. (1) Paragraph 218.1(1)(a) of the Act is replaced by the following:

(a) every person that is resident in a participating province and is the recipient of an imported taxable supply that is a supply of intangible personal property or a service that is acquired by the person for a prescribed purpose in respect of the supply or, in the absence of a prescribed purpose in respect of the supply, for consumption, use or supply in participating provinces to an extent that is prescribed, must, for each time an amount of consideration for the supply becomes due or is paid without having become due and for each participating province, pay to Her Majesty in right of Canada, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

A × B × C

where

A      is the tax rate for the participating province,

B      is the value of that consideration that is paid or becomes due at that time, and

C      is the prescribed percentage in respect of the supply or, in the absence of a prescribed percentage in respect of the supply, the extent (expressed as a percent-age) to which the person acquired the property or service for consumption, use or supply in the participating province; and

(2) Clause (B) of the description of C in paragraph 218.1(1)(b) of the Act is replaced by the following:

(B) in any other case, the prescribed percentage in respect of the supply or, in the absence of a prescribed percent-age in respect of the supply, the extent (expressed as a percentage) to which the person acquired the property or service for consumption, use or supply in the particular participating province.

(3) Subsection 218.1(1.1) of the Act is replaced by the following:

(1.1) Section 3 of Part II of Schedule IX applies for the purpose of subparagraph (1)(b)(ii).

(4) The description of A₂ in the second formula in paragraph 218.1(1.2)(a) of the Act is replaced by the following:

A₂ is the prescribed percentage in respect of the internal charge or, in the absence of a prescribed percentage in respect of the internal charge, the extent (expressed as a percentage) to which the internal charge is attributable to outlays or expenses that were made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the internal charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province, and

(5) The description of B₂ in the third formula in paragraph 218.1(1.2)(a) of the Act is replaced by the following:

B₂ is the prescribed percentage in respect of the external charge or, in the absence of a prescribed percentage in respect of the external charge, the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the external charge, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the external charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating prov-ince; and

(6) The description of D in paragraph 218.1(1.2)(b) of the Act is replaced by the following:

D      is the prescribed percentage in respect of the qualifying consideration or, in the absence of a prescribed percentage in respect of the qualifying consideration, the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the qualifying consideration, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the qualifying consideration is attribut-able, in carrying on, engaging in or conducting an activity of the qual-ifying taxpayer in the particular participating province.

(7) Subsections (1) and (2) apply in respect of any supply made on or after July 1, 2010.

(8) Subsection (3) is deemed to have come into force on July 1, 2010.

(9) Subsections (4) to (6) apply in respect of any specified year of a person that ends on or after July 1, 2010.

77. (1) The portion of subsection 220.05(3.1) of the Act before paragraph (a) is replaced by the following:

(3.1) No tax is payable under subsection (1) in respect of property if a person that is a pension entity of a pension plan is the recipient of a particular supply of the property made by a participating employer of the pension plan and

(2) Subsection (1) is deemed to have come into force on September 23, 2009.

78. (1) Subsection 220.08(1) of the Act is replaced by the following:

220.08 (1) Subject to this Part, every person that is resident in a participating province and is the recipient of a taxable supply made in a particular province of intangible personal property or a service that is acquired by the person for a prescribed purpose in respect of the supply or, in the absence of a prescribed purpose in respect of the supply, for consumption, use or supply in whole or in part in any participating province that is not the particular province must pay to Her Majesty in right of Canada, each time an amount of consideration for the supply becomes due or is paid without having become due, tax equal to the amount determined in prescribed manner.

(2) The portion of subsection 220.08(3.1) of the Act before paragraph (a) is replaced by the following:

(3.1) No tax is payable under subsection (1) in respect of a particular supply of property or a service made by a participating employer of a pension plan to a person that is a pension entity of the pension plan if

(3) Subsection (1) applies in respect of any supply made on or after July 1, 2010.

(4) Subsection (2) is deemed to have come into force on September 23, 2009.

79. (1) Subsection 225.2(1) of the Act is replaced by the following:

225.2 (1) For the purposes of this Part, a financial institution is a selected listed financial institution throughout a reporting period in a fiscal year that ends in a taxation year of the financial institution if the financial institution is

(a) a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) during the taxation year; and

(b) a prescribed financial institution throughout the reporting period.

(2) Paragraph (a) of the description of F in subsection 225.2(2) of the Act is replaced by the following:

(a) all amounts of tax (other than a prescribed amount of tax) under subsection 165(2) in respect of supplies made in the participating province to the financial institution, or under section 212.1 calculated at the tax rate for the participating province, that

(i) became payable, or were paid without having become payable, by the financial institution during

(A) the particular reporting period, or

(B) any other reporting period of the financial institution that precedes the particular reporting period, provided that

(I) the particular reporting period ends within two years after the end of the financial institution’s fiscal year that includes the other reporting period, and

(II) the financial institution was a selected listed financial institution throughout the other reporting period,

(ii) were not included in determining the positive or negative amounts that the financial institution is required to add, or may deduct, under this subsection in determining its net tax for any reporting period of the financial institution other than the particular reporting period, and

(iii) are claimed by the financial institution in a return under this Division filed by the financial institution for the particular reporting period, and

(3) Paragraph (b) of the description of F in subsection 225.2(2) of the English version of the Act is replaced by the following:

(b) all amounts each of which is an amount, in respect of a supply made during the particular reporting period of property or a service to which the financial institution and another person have elected to have paragraph (c) of the description of A apply, equal to tax payable by the other person under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 that is included in the cost to the other person of supplying the property or service to the financial institution; and

(4) Subsection 225.2(8) of the Act is repealed.

(5) Subsections (1) and (2) apply in respect of any reporting period of a person that ends on or after July 1, 2010.

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

80. (1) The Act is amended by adding the following after section 225.2:

225.3 (1) In this section, “exchange-traded fund”, “exchange-traded series”, “non-stratified investment plan” and “stratified investment plan” have the meaning prescribed by regulation.

(2) A selected listed financial institution that is an exchange-traded fund may apply to the Minister to use particular methods, for a fiscal year that ends in a taxation year of the financial institution, to determine

(a) if the financial institution is a stratified investment plan, the financial institution’s percentages for the purposes of subsection 225.2(2) for each exchange-traded series of the financial institution, for each participating province and for the taxation year; and

(b) if the financial institution is a non-stratified investment plan, the financial institution’s percentages for the purposes of subsection 225.2(2) for each participating province and for the taxation year.

(3) An application made by a selected listed financial institution under subsection (2) is to be

(a) made in prescribed form containing prescribed information, including

(i) if the financial institution is a stratified investment plan, the particular methods to be used for each exchange-traded series of the financial institution, and

(ii) if the financial institution is a non-stratified investment plan, the particular methods to be used for the financial institution; and

(b) filed by the financial institution with the Minister in prescribed manner on or before

(i) the day that is 180 days before the first day of the fiscal year for which the application is made, or

(ii) any later day that the Minister may allow.

(4) On receipt of an application made under subsection (2), the Minister must

(a) consider the application and authorize or deny the use of the particular methods; and

(b) notify the selected listed financial institution in writing of the decision on or before

(i) the later of

(A) the day that is 180 days after the receipt of the application, and

(B) the day that is 180 days before the first day of the fiscal year for which the application is made, or

(ii) any later day that the Minister may specify, if the day is set out in a written application filed by the financial institution with the Minister.

(5) If the Minister authorizes under subsection (4) the use of particular methods for a fiscal year of the selected listed financial institution,

(a) despite Part 2 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

(i) the financial institution’s percentages for any participating province and for the taxation year in which the fiscal year ends that would, in the absence of this section, be determined under that Part are to be determined in accordance with those par-ticular methods, and

(ii) the financial institution’s percentages for any exchange-traded series of the financial institution, for any participating province and for the taxation year in which the fiscal year ends that would, in the absence of this section, be determined under that Part are to be determined in accordance with those particular methods; and

(b) the financial institution must consistently, throughout the fiscal year, use those particular methods as indicated in the application to determine the percentages referred to in paragraph (a).

(6) An authorization granted under subsection (4) to a selected listed financial institution in respect of a fiscal year of the financial institution ceases to have effect on the first day of the fiscal year and, for the purposes of this Part, is deemed never to have been granted, if

(a) the Minister revokes the authorization and sends a notice of revocation to the financial institution at least 60 days before the first day of the fiscal year; or

(b) the financial institution files with the Minister in prescribed manner a notice of revocation in prescribed form containing prescribed information on or before the first day of the fiscal year.

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

“business input” has the same meaning as in subsection 141.02(1).

“Canadian activity” has the same meaning as in section 217.

“exclusive input” of a person means property or a service that is acquired or imported by the person for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration or directly and exclusively for purposes other than making taxable supplies for consideration.

(2) In this section, “exchange-traded fund”, “exchange-traded series”, “individual”, “investment plan”, “non-stratified investment plan”, “plan member”, “private investment plan”, “series”, “specified investor”, “stratified investment plan” and “unit” have the meaning prescribed by regulation.

(3) If a selected listed financial institution is a stratified investment plan and no election under subsection (6) in respect of a series of the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

(a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

(i) if the series is an exchange-traded series, all units of the series that are held, at a particular time in the fiscal year, by a person that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province,

(ii) if the series is not an exchange-traded series, all units of the series that are held, at a particular time in the fiscal year, by an individual, or a specified investor in the financial institution, that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individ-ual that is resident in Canada but not resident in any participating province, and

(iii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which the particular individual referred to in subparagraph (i) or (ii) is resident;

(b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of units of the series that are held by a person that is not resident in Canada is deemed to have been made to a person resident in Canada;

(c) for the purposes of the definitions “external charge” and “qualifying consideration” in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of units of the series that are held by a person that is not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

(d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input

(i) is acquired or imported for consumption, use or supply in the course of any activity relating to the series, or

(ii) is not an exclusive input of the financial institution.

(4) If a selected listed financial institution is a non-stratified investment plan and no election under subsection (7) made by the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

(a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

(i) if the financial institution is an exchange-traded fund, all units of the financial institution that are held, at a particular time in the fiscal year, by a person that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individual that is resident in Canada but not resident in any participating province,

(ii) if the financial institution is not an exchange-traded fund, all units of the financial institution that are held, at a particular time in the fiscal year, by an individual, or a specified investor in the financial institution, that the financial institution knows, on December 31 of the calendar year, is not resident in Canada at the particular time are deemed to be held at the particular time by a particular individ-ual that is resident in Canada but not resident in any participating province, and

(iii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which the particular individual referred to in subparagraph (i) or (ii) is resident;

(b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of units of the financial institution that are held by a person that is not resident in Canada is deemed to have been made to a person resident in Canada;

(c) for the purposes of the definitions “external charge” and “qualifying consideration” in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of units of the financial institution that are held by a person that is not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

(d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input is not an exclusive input of the financial institution.

(5) If a selected listed financial institution is an investment plan that is a pension entity of a pension plan or a private investment plan and no election under subsection (7) made by the financial institution is in effect throughout a fiscal year of the financial institution that ends in a calendar year, the following rules apply:

(a) for the purposes of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations,

(i) all plan members of the financial institution that the financial institution knows, on December 31 of the calendar year, are not resident in Canada at a particular time in the fiscal year are deemed to be resident in Canada at the particular time but not resident in any participating province, and

(ii) the financial institution is deemed to know, on December 31 of the calendar year, the province in which each of the plan members referred to in subparagraph (i) is resident;

(b) for the purposes of determining an input tax credit of the financial institution, any supply made during the fiscal year by the financial institution in respect of plan members of the financial institution that are not resident in Canada is deemed to have been made to a person resident in Canada;

(c) for the purposes of the definitions “external charge” and “qualifying consideration” in section 217, any outlay made, or expense incurred, by the financial institution during the fiscal year in respect of plan members of the financial institution that are not resident in Canada is deemed to be applicable to a Canadian activity of the financial institution; and

(d) no amount of tax in respect of a business input of the financial institution that becomes payable by the financial institution during the fiscal year or that is paid by the financial institution during the fiscal year without having become payable is to be included in determining an input tax credit of the financial institution if the business input is not an exclusive input of the financial institution.

(6) A stratified investment plan may make an election in respect of a series of the investment plan to have subsection (3) not apply to the series, and that election is to be effective from the first day of a fiscal year of the investment plan.

(7) A person that is a non-stratified investment plan, a pension entity or a private investment plan may make an election to have subsection (4) or (5), as the case may be, not apply to the person, and that election is to be effective from the first day of a fiscal year of the person.

(8) An election made under subsection (6) or (7) by a person is to

(a) be made in prescribed form containing prescribed information;

(b) set out the first fiscal year of the person during which the election is to be in effect; and

(c) be filed with the Minister in prescribed manner on or before the first day of that first fiscal year or any later day that the Minister may allow.

(9) An election made under subsection (6) or (7) by a person ceases to have effect on the earliest of

(a) the first day of the fiscal year of the person in which the person ceases to be a selected listed financial institution,

(b) in the case of an election made under subsection (6), the first day of the fiscal year of the person in which the person ceases to be a stratified investment plan,

(c) in the case of an election made under subsection (7), the first day of the fiscal year of the person in which the person ceases to be a non-stratified investment plan, a pension entity or a private investment plan, as the case may be, and

(d) the day on which a revocation of the election becomes effective.

(10) A person that has made an election under subsection (6) or (7) may revoke the election, effective on the first day of a fiscal year of the person that begins at least five years after the election becomes effective, or on the first day of any earlier fiscal year as the Minister may allow on application by the person, by filing with the Minister in prescribed manner a notice of revocation in prescribed form containing prescribed information no later than the day on which the revocation is to become effective.

(11) If a revocation of an election made under subsection (6) or (7) by a person becomes effective on a particular day, any subsequent election under that subsection is not a valid election unless the first day of the fiscal year of the person set out in the subsequent election is a day that is at least five years after the particular day or any earlier day as the Minister may allow on application by the person.

(2) Subsection (1) applies in respect of any fiscal year of a person that ends on or after July 1, 2010, except that for any fiscal year that begins before March 1, 2011, paragraph 225.4(8)(c) of the Act, as enacted by subsection (1), is to be read as follows:

(c) be filed with the Minister in prescribed manner on or before March 1, 2011 or any later day that the Minister may allow.

81. (1) Paragraph 232.01(1)(a) of the Act is replaced by the following:

(a) “employer resource” and “specified resource” have the same meanings as in section 172.l;

(2) Subsection (1) is deemed to have come into force on September 23, 2009.

82. (1) Section 240 of the Act is amended by adding the following after subsection (1.1):

(1.2) Every selected listed financial institution that is prescribed is required to be registered for the purposes of this Part.

(1.3) The following rules apply in respect of a prescribed group of selected listed financial institutions:

(a) the group is required to be registered for the purposes of this Part;

(b) a person that is prescribed in respect of the group must apply to the Minister for registration of the group before the day that is prescribed;

(c) each member of the group is deemed to be a registrant for the purposes of this Part; and

(d) despite subsections (1) to (1.2), each member of the group is not required to be separately registered.

(1.4) If a selected listed financial institution becomes, on a particular day, a member of an existing group that is required to be registered for the purposes of this Part or that is registered under this Subdivision, the following rules apply:

(a) if the group is required to be registered, the application for the registration of the group under paragraph (1.3)(b) must list the financial institution as a member of the group;

(b) if the group is registered, the financial institution or the person that is prescribed in respect of the group for the purpose of paragraph (1.3)(b) must, before the day that is 30 days after the particular day, apply to the Minister to add the financial institution to the registration of the group;

(c) the financial institution is deemed to be a registrant for the purposes of this Part as of the particular day; and

(d) despite subsections (1) to (1.2), the financial institution is not required to be separately registered as of the particular day.

(2) The portion of subsection 240(2.1) of the Act before paragraph (b) is replaced by the following:

(2.1) A person required under any of subsections (1) to (1.2) to be registered must apply to the Minister for registration before the day that is 30 days after

(a) in the case of a person required under subsection (1.1) to be registered in respect of a taxi business, the day the person first makes a taxable supply in Canada in the course of that business;

(a.1) in the case of a selected listed financial institution required under subsection (1.2) to be registered, the day that is prescribed; and

(3) Paragraph 240(2.1)(b) of the French version of the Act is replaced by the following:

(4) The portion of subsection 240(3) of the Act before paragraph (a) is replaced by the following:

(3) An application for registration for the purposes of this Part may be made to the Minister by any person that is not required under subsection (1), (1.1), (1.2), (2) or (4) to be registered, that is not required to be included in, or added to, the registration of a group under subsection (1.3) or (1.4) and that

(5) Subsection 240(5) of the Act is replaced by the following:

(5) An application for registration, or an application to be added to the registration of a group, is to be filed with the Minister in prescribed manner and is to be made in prescribed form containing prescribed information.

(6) Subsections (1) to (5) are deemed to have come into force on July 1, 2010.

83. (1) Subsection 241(1) of the Act is replaced by the following:

241. (1) The Minister may register any person that applies for registration and, upon doing so, must assign a registration number to the person and notify the person in writing of the registration number and the effective date of the registration.

(1.1) If a person applies to register a group of selected listed financial institutions that is prescribed for the purposes of subsection 240(1.3), the Minister may register the group and, upon doing so, the following rules apply:

(a) the Minister must assign a registration number to the group and notify in writing the person that is prescribed in respect of the group for the purpose of paragraph 240(1.3)(b) and each financial institution listed on the application of the registration number and the effective date of the registration of the group;

(b) for each member of the group that is registered under this Subdivision on the day preceding the effective date, that registration is cancelled as of the effective date of the registration of the group; and

(c) each member of the group is deemed, for the purposes of this Part other than section 242, to be registered under this Subdivision as of the effective date of the registration of the group and to have a registration number that is the same as the registration number of the group.

(1.2) If an application is made to add a selected listed financial institution to the registration of a group under paragraph 240(1.4)(b), the Minister may add the financial institution to the registration and, upon doing so, the following rules apply:

(a) the Minister must notify in writing the person that is prescribed in respect of the group for the purpose of paragraph 240(1.3)(b) and the financial institution of the effective date of the addition to the registration;

(b) if the financial institution is registered under this Subdivision on the day preceding the effective date, that registration of the financial institution is cancelled as of the effective date; and

(c) the financial institution is deemed, for the purposes of this Part other than section 242, to be registered under this Subdivision as of the effective date and to have a registration number that is the same as the registration number of the group.

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

84. (1) Section 242 of the Act is amended by adding the following after subsection (1):

(1.1) The Minister may, after giving reasonable written notice to each member of a group that is registered under this Subdivision and to the person that is prescribed in respect of the group for the purposes of paragraph 240(1.3)(b), cancel the registration of the group if the Minister is satisfied that the registration is not required for the purposes of this Part.

(1.2) The Minister must cancel the registration of a group in prescribed circumstances.

(1.3) The Minister may, after giving reasonable written notice to a particular person that is a member of a group that is registered under this Subdivision and to the person that is prescribed in respect of the group for the purposes of paragraph 240(1.3)(b), remove the particular person from the registration of the group if the Minister is satisfied that the particular person is not required to be included in the registration for the purposes of this Part.

(1.4) The Minister must remove a person from the registration of a group in prescribed circumstances.

(2) Subsection 242(3) of the Act is replaced by the following:

(3) If the Minister cancels or varies the registration of a person, the Minister must notify the person in writing of the cancellation or variation and its effective date.

(4) If the Minister cancels the registration of a group,

(a) the Minister must notify in writing each member of the group and the person that is prescribed in respect of the group for the purposes of paragraph 240(1.3)(b) of the cancellation and its effective date; and

(b) each member of the group is deemed, for the purposes of this Part, to no longer be registered under this Subdivision as of the effective date of the cancellation.

(5) If the Minister removes a particular person from the registration of a group,

(a) the Minister must notify in writing the particular person and the person that is prescribed in respect of the group for the purposes of paragraph 240(1.3)(b) of the removal and its effective date; and

(b) the particular person is deemed, for the purposes of this Part, to no longer be registered under this Subdivision as of the effective date of the removal.

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

85. (1) The Act is amended by adding the following after section 244:

244.1 (1) If a person is a financial institution described in subparagraph 149(1)(a)(vi) or (ix) that is a selected listed financial institution throughout a particular reporting period in a particular fiscal year of the person that begins in a particular calendar year and the person was not a selected listed financial institution throughout the reporting period immediately before the particular reporting period, the following rules apply:

(a) the particular fiscal year ends on the last day of the particular calendar year; and

(b) as of the beginning of the first day of the calendar year that is immediately after the particular calendar year, the fiscal years of the person are calendar years and any election made by the person under section 244 ceases to have effect.

(2) Despite subsection (1), if a person is a financial institution described in subparagraph 149(1)(a)(vi) or (ix) that is a selected listed financial institution throughout a particular reporting period in a particular fiscal year of the person, the following rules apply in prescribed circumstances to determine the fiscal year of the person:

(a) the particular fiscal year ends on the day immediately before the prescribed day referred to in paragraph (b); and

(b) the following fiscal year of the person begins on a prescribed day.

(3) If a person is a financial institution described in subparagraph 149(1)(a)(vi) or (ix) that is a selected listed financial institution throughout a reporting period in a particular fiscal year and the person is not a selected listed financial institution throughout a reporting period in the following fiscal year of the person, that following fiscal year ends on the day on which it would end in the absence of this section.

(2) Subsection (1) applies in respect of any fiscal year of a person that ends after 2010, except that in applying subsection 244.1(1) of the Act, as enacted by subsection (1), in respect of any fiscal year that begins before 2011, that subsection of the Act is to be read without reference to “and the person was not a selected listed financial institution throughout the reporting period immediately before the particular reporting period”.

86. (1) Subsection 246(3) of the Act is replaced by the following:

(3) An election made under this section by a person is to remain in effect until the earlier of

(a) the beginning of the day on which an election by the person under section 247 or 248 takes effect, and

(b) the day on which a revocation of the election by the person under subsection (4) becomes effective.

(4) A listed financial institution that has made an election under this section may revoke the election, effective on the first day of a fiscal year of the financial institution, by filing in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information not later than the day on which the revocation is to become effective or any later day that the Minister may allow.

(2) Subsection (1) applies to any fiscal year that ends on or after July 1, 2010.

87. (1) Subsection 247(2) 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) the day on which a revocation of the election by the person under subsection (3) becomes effective.

(2) Section 247 of the Act is amended by adding the following after subsection (2):

(3) A listed financial institution that has made an election under this section may revoke the election, effective on the first day of a fiscal year of the financial institution, by filing in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information not later than the day on which the revocation is to become effective or any later day that the Minister may allow.

(3) Subsections (1) and (2) apply to any fiscal year that ends on or after July 1, 2010.

88. (1) The definitions “participating employer”, “pension entity” and “pension plan” in subsection 261.01(1) of the Act are repealed.

(2) Subsection (1) is deemed to have come into force on September 23, 2009.

89. (1) Subsection 261.3(2) of the Act is repealed.

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

90. (1) Subsection 261.31(1) of the Act is repealed.

(2) Subsections 261.31(2) and (3) of the Act are replaced by the following:

(2) If tax under subsection 165(2), sections 212.1 or 218.1 or Division IV.1 is payable by a listed financial institution described in subparagraph 149(1)(a)(vi) or (ix), other than a selected listed financial institution, or by a prescribed person and prescribed conditions are satisfied, the Minister must, subject to section 261.4, pay a rebate to the financial institution or person equal to the amount determined in prescribed manner.

(3) An insurer and a segregated fund of the insurer may elect, in prescribed form containing prescribed information, to have the insurer pay to, or credit in favour of, the segregated fund the amount of any rebates payable to the segregated fund under subsection (2) in respect of supplies made by the insurer to the segregated fund.

(3) Subsection 261.31(5) of the Act is replaced by the following:

(5) An insurer may pay or credit to or in favour of a segregated fund of the insurer the amount of a rebate under subsection (2) in respect of a taxable supply made by the insurer to the segregated fund that, if the segregated fund complied with section 261.4 in relation to the supply, would be payable to the segregated fund if

(a) the insurer and the segregated fund have filed an election made under subsection (3) that is in effect when tax in respect of the supply becomes payable; and

(b) the segregated fund, within one year after the day on which tax becomes payable in respect of the supply, submits to the insurer an application for the rebate in prescribed form containing prescribed information.

(4) Subsections (1) to (3) apply in respect of any rebate that is in respect of tax that became payable, or was paid without having become payable, on or after July 1, 2010.

91. (1) Section 261.4 of the Act is renumbered as subsection 261.4(1) and is amended by adding the following:

(2) A rebate under any of sections 261.1 to 261.3 in respect of tax paid or payable by a listed financial institution described in subparagraph 149(1)(a)(vi) or (ix) must not be paid.

(2) Subsection (1) applies in respect of any rebate that is in respect of tax that became payable, or was paid without having become payable, on or after July 1, 2010.

92. (1) Section 263.01 of the Act is amended by adding the following after subsection (3):

(4) Despite subsection (1), a rebate under section 261.31 in respect of a prescribed amount of tax may be paid to a person that is prescribed for the purpose of subsection 261.31(2).

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

Jobs and Economic Growth Act

93. (1) Subsection 58(2) of the Jobs and Economic Growth Act is amended by striking out “and” at the end of paragraph (a) and by adding the following after paragraph (a):

(a.1) if a person that is a participating employer of a pension plan acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity of the pension plan but not for the purpose of making a supply of any part of the property or service to a pension entity of the pension plan after June 2010, the amount determined for B in the formula in paragraph 172.1(5)(c) of the Act, as enacted by subsection (1), for Nova Scotia in respect of a taxable supply of all or part of the property or service that is deemed to have been made under paragraph 172.1(5)(a) of the Act, as enacted by subsection (1), on the last day of a fiscal year of the person is to be determined as if the tax rate for Nova Scotia on the last day of the fiscal year were 8%; and

(2) The formula in the read-as text in paragraph 58(2)(b) of the Act and the descriptions in that formula are replaced by the following:

E × [(F × G/H) – (I × J/H)]

where

E      is the amount determined for C,

F      is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year,

G      is

(i) if the participating province is Ontario or British Columbia, the number of days in the particular fiscal year that are after June 2010, and

(ii) in any other case, the number of days in the particular fiscal year,

H      is the number of days in the particular fiscal year,

I      is the amount (expressed as a percentage) that would be the provincial factor in respect of the pension plan and the participating province for the particular fiscal year if the tax rate for the participating province on the last day of the fiscal year were 2%, and

J      is

(i) if the participating province is Nova Scotia, the number of days in the particular fiscal year that are before July 2010, and

(ii) in any other case, zero; and

94. Section 64 of the Act is amended by adding the following after subsection (7):

(8) Despite subsections (5) and (6), the amount of tax payable by a person under subsection 218.1(1.2) of the Act, as enacted by subsections (2) and (3), for the specified year of the person that begins before July 1, 2010 and ends on or after that day and for Nova Scotia or the Nova Scotia offshore area is equal to the amount determined by the formula

A – [0.2 × A × (B/C)]

where

A      is the amount that, in the absence of this subsection, would be tax payable under subsection 218.1(1.2) of the Act, as enacted by subsections (2) and (3), for the specified year and for Nova Scotia or the Nova Scotia offshore area, as the case may be;

B      is the number of days in the specified year that are before July 2010; and

C      is the number of days in the specified year.

95. The formula in the read-as text in subsection 75(4) of the Act and the descriptions in that formula are replaced by the following:

A × B × [(C/D) – ((2% × E/F)/D)] × [(F – G)/F]

where

A      is the pension rebate amount of the pension entity for the claim period,

B      is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),

C      is the tax rate for the participating province,

D      is the rate set out in subsection 165(1),

E      is

(i) if the participating province is Nova Scotia, the number of days in the claim period that are before July 1, 2010, and

(ii) in any other case, zero,

F      is the number of days in the claim period, and

G      is

(i) if the participating province is Ontario or British Columbia, the number of days in the claim period that are before July 1, 2010, and

(ii) in any other case, zero; and

Input Tax Credit Allocation Methods (GST/HST) Regulations

96. The Input Tax Credit Allocation Methods (GST/HST) Regulations are deemed

(a) to have been made under section 277 of the Excise Tax Act;

(b) for the purposes of subsection 5(1) of the Statutory Instruments Act, to have been transmitted to the Clerk of the Privy Council for registration; and

(c) to have met the publication requirements of subsection 11(1) of the Statutory Instruments Act.

PART 3

FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

97. (1) The Federal-Provincial Fiscal Arrangements Act is amended by adding the following after section 12.3:

PART IV.11

TRANSFER PAYMENTS — TAX IN RESPECT OF SIFT TRUSTS OR SIFT PARTNERSHIPS

12.31 The following definitions apply in this Part.

“SIFT entity” means a SIFT trust or a SIFT partnership.

“SIFT partnership” has the same meaning as in subsection 248(1) of the Income Tax Act.

“SIFT trust” has the same meaning as in subsection 248(1) of the Income Tax Act.

12.32 The definition “permanent establishment” in subsection 400(2) of the Income Tax Regulations, as it read on March 12, 2009 and as it is amended from time to time after that date, applies in determining the amount payable to a province under this Part.

12.33 Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and no permanent establishment outside the province, the amount determined by the formula

Z × Y

where

Z      is

(a) in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, 0.13, and

(b) in any other case, the amount determined under paragraph 414(3)(b) of the Income Tax Regulations in respect of the SIFT entity for the taxation year; and

Y      is

(a) for a SIFT entity that is a SIFT trust, the SIFT trust’s taxable SIFT trust distributions, as defined in subsection 122(3) of the Income Tax Act, for the taxation year, and

(b) for a SIFT entity that is a SIFT partnership, the SIFT partnership’s taxable non-portfolio earnings, as defined in subsection 197(1) of the Income Tax Act, for the taxation year.

12.34 (1) Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and a permanent establishment outside the province, the amount determined by the formula

(Z/Y) × (X × W)

where

Z      is, subject to subsection (2), the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations for the taxation year in respect of the province;

Y      is

(a) subject to subsection (2), in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, the amount that would be determined under paragaph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year if the SIFT entity had made that election, and

(b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year;

X      is

(a) in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, 0.13, and

(b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year; and

W      is

(a) for a SIFT entity that is a SIFT trust, the SIFT trust’s taxable SIFT trust distributions, as defined in subsection 122(3) of the Income Tax Act, for the taxation year, and

(b) for a SIFT entity that is a SIFT partnership, the SIFT partnership’s taxable non-portfolio earnings, as defined in subsection 197(1) of the Income Tax Act, for the taxation year.

(2) In respect of a taxation year that is after 2006 and before 2009 for which no election was made under subsection 34(4) of the Budget Implementation Act, 2008 by a SIFT entity that has a permanent establishment in the province of Quebec in that taxation year, in calculating the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations in respect of that province, paragraph (a) of the definition “general corporate income tax rate” in subsection 414(1) is to be read as follows:

(a) for Quebec, the highest percentage rate of tax imposed under the laws of Quebec on the taxable income of a public corporation earned in the taxation year in Quebec;

12.35 Payments that the Minister may make under section 12.33 or 12.34 are to be made out of the Consolidated Revenue Fund at any time that the Minister may determine.

12.36 A SIFT entity that has not made an election under subsection 34(4) of the Budget Implementation Act, 2008 in respect of a taxation year that is after 2006 and before 2009 must furnish to the Minister of National Revenue any information that that Minister may require for the purpose of determining the amount payable to a province under this Part in respect of taxes payable by the SIFT entity under subsection 122(1) or 197(2) of the Income Tax Act for that taxation year.

(2) Part IV.11 of the Act, as enacted by subsection (1), applies in respect of the 2007 and subsequent taxation years.

98. (1) The Act is amended by adding the following after section 12.5:

PART IV.3

TRANSFER PAYMENTS — TAX ON EXCESS EPSP AMOUNTS UNDER PART XI.4 OF THE INCOME TAX ACT

12.6 Subject to this Act, the Minister may, at such time as he or she determines, pay to a province, out of the Consolidated Revenue Fund in respect of tax payable under section 207.8 of the Income Tax Act for a taxation year by a person who is resident in the province at the end of the taxation year, the amount determined by the formula:

A × B

where

A      is the percentage applicable to the person for the taxation year under the description of B in the formula in subsection 207.8(2) of the Income Tax Act; and

B      is the amount determined for the person for the taxation year under the description of C in the formula in subsection 207.8(2) of the Income Tax Act.

12.7 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part XI.4 of the Income Tax Act.

PART IV.4

TRANSFER PAYMENTS WITH RESPECT TO FEDERAL TAXES — NECESSARY INFORMATION

12.8 The Minister of National Revenue shall provide to the Minister in a form and manner, and at a time, satisfactory to the Minister, any information necessary for the administration of Parts IV.01 to IV.3.

(2) Part IV.3 of the Act, as enacted by subsection (1), applies in respect of the 2012 and subsequent taxation years.

PART 4

VARIOUS MEASURES

Division 1

Financial Institutions

Trust And Loan Companies Act

99. Paragraph 164(f.1) of the Trust and Loan Companies Act is replaced by the following:

(f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of section 374.1;

100. Section 376.1 of the Act is replaced by the following:

376.1 Despite section 376, if, as a result of a transfer or issue of shares of a class of shares of a company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the company as a result of that issue or transfer of shares.

101. Section 377 of the Act is amended by adding the following after subsection (3):

(3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3).

102. Paragraph 378(1)(b) of the Act is replaced by the following:

(b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the company acquires additional shares of the company.

103. Subsection 391(2) of the Act is replaced by the following:

(2) Subject to subsections (4) and 392(2), the notice referred to in paragraph (1)(a) or (b) shall be sent by the Minister within a period of 45 days after the certified date referred to in subsection 390(1) in the following cases:

(a) the application involves the acquisition of control of a company;

(b) the application is made by an eligible agent or an entity controlled by an eligible agent; or

(c) an application is made for the approval referred to in subsection 396(3).

104. Subsection 392(2) of the English version of the Act is replaced by the following:

(2) If, after receipt of the notice sent in accordance with subsection 391(2) that the Minister is not satisfied that the transaction to which the application relates should be approved, the applicant advises the Minister that the applicant wishes to make representations, the Minister shall provide the applicant with a reasonable opportunity within a period of 45 days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter.

105. Subsection 396(4) of the Act is replaced by the following:

(4) The application for the approval referred to in subsection (3) must be made jointly by the company and the eligible agent.

(5) The Minister, in determining whether to grant the approval referred to in subsection (3), shall take into account all matters that he or she considers relevant, including those set out in paragraphs 388(1)(a) to (g).

(6) If an approval referred to in subsection (3) is revoked, the company shall delete any entry in its securities register in respect of the recording of the issuance of shares to the eligible agent.

(7) If a company or an eligible agent fails to comply with any undertaking or term or condition in relation to an approval referred to in subsection (3), or if an eligible agent ceases to be an eligible agent, the Minister may, if the Minister considers it to be in the public interest to do so, by order, direct the eligible agent or former eligible agent and any person controlled by the eligible agent or former eligible agent to dispose of any number of shares of the company beneficially owned by the eligible agent or former eligible agent or the persons controlled by the eligible agent or former eligible agent that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the eligible agent or former eligible agent and the persons controlled by the eligible agent or former eligible agent that is specified in the order.

(8) No direction shall be made under subsection (7) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction.

(9) Any person with respect to whom a direction has been made under subsection (7) may, within 30 days after the date of the direction, appeal the matter in accordance with section 530.

106. Section 399 of the Act is amended by adding the following after subsection (5):

(6) If an approval referred to in subsection 396(3) is suspended, the eligible agent shall not exercise, in person or by proxy, any voting rights attached to any share of the company that is beneficially owned by the eligible agent.

107. Subsection 402(1) of the Act is replaced by the following:

402. (1) If a person fails to comply with a direction made under subsection 396(7) or 401(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction.

108. Subsection 530(1) of the Act is replaced by the following:

530. (1) An appeal lies to the Federal Court from any direction of the Minister made under subsection 396(7) or 401(1).