;

Bill C-48

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

Complete Document Bilingual view XML PDF

Cost of Tax Shelter Investments and Limited-recourse Debt in Respect of Gifting Arrangements

(2) Subsection (1) is deemed to have come into force on February 19, 2003.

293. (1) Section 143.2 of the Act is amended by adding the following after subsection (6):

Limited-recourse debt in respect of a gift or monetary contribution

(6.1) The limited-recourse debt in respect of a gift or monetary contribution of a taxpayer, at the time the gift or monetary contribution is made, is the total of

(a) each limited-recourse amount at that time, of the taxpayer and of all other taxpayers not dealing at arm’s length with the taxpayer, that can reasonably be considered to relate to the gift or monetary contribution,

(b) each limited-recourse amount at that time, determined under this section when this section is applied to each other taxpayer who deals at arm’s length with and holds, directly or indirectly, an interest in the taxpayer, that can reasonably be considered to relate to the gift or monetary contribution, and

(c) each amount that is the unpaid amount at that time of any other indebtedness, of any taxpayer referred to in paragraph (a) or (b), that can reasonably be considered to relate to the gift or monetary contribution if there is a guarantee, security or similar indemnity or covenant in respect of that or any other indebtedness.

(2) The portion of subsection 143.2(13) of the Act before paragraph (a) is replaced by the following:

Information located outside Canada

(13) For the purpose of this section, if it can reasonably be considered that information relating to indebtedness that relates to a taxpayer’s expenditure, gift or monetary contribution is available outside Canada and the Minister is not satisfied that the unpaid principal of the indebtedness is not a limited-recourse amount, the unpaid principal of the indebtedness relating to the taxpayer’s expenditure, gift or monetary contribution is deemed to be a limited-recourse amount relating to the expend-iture, gift or monetary contribution unless

(3) Subsections (1) and (2) apply in respect of expenditures, gifts and monetary contributions made after February 18, 2003.

294. (1) The Act is amended by adding the following after section 143.2:

Expenditure — Limitations

Definitions

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

“expenditure”
« dépense »

“expenditure” of a taxpayer means an expense, expenditure or outlay made or incurred by the taxpayer, or a cost or capital cost of property acquired by the taxpayer.

“option”
« option »

“option” means

(a) a security that is issued or sold by a taxpayer under an agreement referred to in subsection 7(1); or

(b) an option, warrant or similar right, issued or granted by a taxpayer, giving the holder the right to acquire an interest in the taxpayer or in another taxpayer with whom the taxpayer does not, at the time the option, warrant or similar right is issued or granted, deal at arm’s length.

“taxpayer”
« contribuable »

“taxpayer” includes a partnership.

Options — limitation

(2) In computing a taxpayer’s income, taxable income or tax payable or an amount considered to have been paid on account of the taxpayer’s tax payable, an expenditure of the taxpayer is deemed not to include any portion of the expenditure that would — if this Act were read without reference to this subsection — be included in determining the expenditure because of the taxpayer having granted or issued an option on or after November 17, 2005.

Corporate shares — limitation

(3) In computing a corporation’s income, taxable income or tax payable or an amount considered to have been paid on account of the corporation’s tax payable, an expenditure of the corporation that would — if this Act were read without reference to this subsection — include an amount because of the corporation having issued a share of its capital stock at any particular time on or after November 17, 2005 is reduced by

(a) if the issuance of the share is not a consequence of the exercise of an option, the amount, if any, by which the fair market value of the share at the particular time exceeds

(i) if the transaction under which the share is issued is a transaction to which section 85, 85.1 or 138 applies, the amount determined under that section to be the cost to the issuing corporation of the property acquired in consideration for issuing the share, or

(ii) in any other case, the amount of the consideration that is the fair market value of the property transferred or issued to, or the services provided to, the issuing corporation for issuing the share; and

(b) if the issuance of the share is a consequence of the exercise of an option, the amount, if any, by which the fair market value of the share at the particular time exceeds the amount paid, pursuant to the terms of the option, by the holder to the issuing taxpayer for issuing the share.

Non-corporate interests — limitation

(4) In computing a taxpayer’s (other than a corporation’s) income, taxable income or tax payable or an amount considered to have been paid on account of the taxpayer’s tax payable, an expenditure of the taxpayer that would — if this Act were read without reference to this subsection — include an amount because of the taxpayer having issued an interest, or because of an interest being created, in itself at any particular time on or after November 17, 2005 is reduced by

(a) if the issuance or creation of the interest is not a consequence of the exercise of an option, the amount, if any, by which the fair market value of the interest at the particular time exceeds

(i) if the transaction under which the interest is issued is a transaction to which paragraph 70(6)(b) or 73(1.01)(c), subsection 97(2) or section 107.4 or 132.2 applies, the amount determined under that provision to be the cost to the taxpayer of the property acquired for the interest, or

(ii) in any other case, the amount of the consideration that is the fair market value of the property transferred or issued to, or the services provided to, the taxpayer for the interest; and

(b) if the issuance or creation of the interest is a consequence of the exercise of an option, the amount, if any, by which the fair market value of the interest at the particular time exceeds the amount paid, pursuant to the terms of the option, by the holder to the taxpayer for the interest.

Clarification

(5) For greater certainty,

(a) subsection (2) does not apply to reduce an expenditure that is a commission, fee or other amount for services rendered by a person as a salesperson, agent or dealer in securities in the course of the issuance of an option;

(b) subsections (3) and (4) do not apply to reduce an expenditure of a taxpayer to the extent that the expenditure does not include an amount determined to be an excess under those subsections;

(c) this section does not apply to determine the cost or capital cost of property determined under subsection 70(6), section 73, 85 or 85.1, subsection 97(2) or section 107.4, 132.2 or 138; and

(d) this section does not apply to determine the amount of a taxpayer’s expenditure if the amount of the expenditure as determined under section 69 is less than the amount that would, if this subsection were read without reference to this paragraph, be the amount of the expenditure as determined under this section.

(2) Subsection (1) is deemed to have come into force on November 17, 2005, except that for securities issued or sold before October 24, 2012, the definition “option” in subsection 143.3(1) of the Act, as enacted by subsection (1), is to be read without reference to its paragraph (a).

295. (1) The Act is amended by adding the following after section 143.3 of the Act, as enacted by subsection 294(1):

Expenditure — Limit for Contingent Amount

Definitions

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

“contingent amount”
« montant éventuel »

“contingent amount”, of a taxpayer at any time (other than a time at which the taxpayer is a bankrupt), includes an amount to the extent that the taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce the amount at that time.

“expenditure”
« dépense »

“expenditure”, of a taxpayer, means an expense, expenditure or outlay made or incurred by the taxpayer, or a cost or capital cost of property acquired by the taxpayer.

“right to reduce”
« droit de réduire »

“right to reduce” means a right to reduce or eliminate an amount in respect of an expenditure at any time, including, for greater certainty, a right to reduce that is contingent upon the occurrence of an event, or in any other way contingent, if it is reasonable to conclude, having regard to all the circumstances, that the right will become exercisable.

“taxpayer”
« contribuable »

“taxpayer” includes a partnership.

Limitation of amount of expenditure

(2) For the purposes of this Act, if in a taxation year of a taxpayer an expenditure of the taxpayer occurs, the amount of the expenditure at any time is the lesser of

(a) the amount of the expenditure at the time calculated under this Act without reference to this section, and

(b) the least amount of the expenditure calculated by reducing the amount of the expenditure determined under paragraph (a) by the amount that is the amount, if any, by which

(i) the total of all amounts each of which is a contingent amount of the taxpayer in the year in respect of the expenditure

exceeds

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

(A) an amount paid by the taxpayer to obtain a right to reduce an amount in respect of the expenditure, or

(B) a limited-recourse amount for the purposes of paragraph 143.2(6)(b) that reduces the expenditure under subsection 143.2(6) to the extent that the amount is also a contingent amount described in subparagraph (i) in respect of the expenditure.

Payment of contingent amount

(3) For the purposes of this Act, if in a particular taxation year, a taxpayer pays all or a portion of a contingent amount referred to in paragraph (2)(b) that reduces the amount of the taxpayer’s expenditure referred to in paragraph (2)(a), the portion of the contingent amount paid by the taxpayer in the particular year for the purpose of earning income, and to that extent only, is deemed

(a) to have been incurred by the taxpayer in the particular year;

(b) to have been incurred for the same purpose and to have the same character as the expenditure so reduced; and

Subsequent years

(4) Subject to subsection (6), if at any time in a taxation year that is after a taxation year in which an expenditure of the taxpayer occurred, the taxpayer, or another taxpayer not dealing at arm’s length with the taxpayer, has a right to reduce an amount in respect of the expenditure (in this subsection and subsection (5) referred to as the “prior expenditure”) that would, if the taxpayer or the other taxpayer had had the right to reduce in a particular taxation year that ended before the time, have resulted in subsection (2) applying in the particular taxation year to reduce or eliminate the amount of the prior expenditure, the taxpayer’s subsequent contingent amount in respect of the prior expenditure, as determined under subsection (5), is deemed, to the extent subsection (2) and this subsection have not previously applied in respect of the expenditure,

(a) to be an amount received by the taxpayer at the time in the course of earning income from a business or property from a person described in subparagraph 12(1)(x)(i); and

(b) to be an amount referred to in subparagraph 12(1)(x)(iv).

Subsequent contingent amount

(5) For the purposes of subsection (4), a taxpayer’s subsequent contingent amount in respect of a prior expenditure of the taxpayer is the amount, if any, by which

(a) the maximum amount by which the amount (in this subsection referred to as the “particular amount”) in respect of the prior expenditure may be reduced pursuant to a right to reduce the particular amount

exceeds

(b) the amount, if any, paid to obtain the right to reduce the particular amount.

Anti-avoidance

(6) If a taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce an amount in respect of an expenditure of the taxpayer in a taxation year that is after the taxation year in which the expenditure otherwise occurred, determined without reference to subsection (3), the taxpayer is deemed to have the right to reduce in the taxation year in which that expenditure otherwise occurred if it is reasonable to conclude having regard to all the circumstances that one of the purposes for having the right to reduce after the end of the year in which the expenditure otherwise occurred was to avoid the application of subsection (2) to the amount of the expenditure.

Assessments

(7) Notwithstanding subsections 152(4) to (5), such assessments, determinations and redeterminations may be made as are necessary to give effect to this section.

(2) Subsection (1) applies in respect of taxation years that end on or after March 16, 2011.

296. (1) Paragraph (d) of the definition “revenu gagné” in subsection 146(1) of the French version of the Act is replaced by the following:

d) soit, dans le cas d’un contribuable visé au paragraphe 115(2), le total qui serait calculé en application de l’alinéa 115(2)e) à son égard pour l’année compte non tenu du renvoi à l’alinéa 56(1)n) au sous-alinéa 115(2)e)(ii), ni du sous-alinéa 115(2)e)(iv), à l’exception de toute partie de ce total qui est incluse, en application de l’alinea c), dans le total calculé selon la présente définition ou qui est exonérée de l’impôt sur le revenu au Canada par l’effet d’une disposition d’un accord ou convention fiscal conclu avec un autre pays et ayant force de loi au Canada,

(2) Subparagraph (d)(i) of the definition “earned income” in subsection 146(1) of the English version of the Act is replaced by the following:

(i) that paragraph were read without ref-erence to subparagraph 115(2)(e)(iv), and

(3) Paragraph (f) of the definition “earned income” in subsection 146(1) of the Act is replaced by the following:

(f) an amount deductible under paragraph 60(b), or deducted under paragraph 60(c.2), in computing the taxpayer’s income for the year,

(4) Paragraph (h) of the definition “earned income” in subsection 146(1) of the Act is replaced by the following:

(h) the portion of an amount included under subparagraph (a)(ii) or (c)(ii) in determining the taxpayer’s earned income for the year because of paragraph 14(1)(b)

(5) Subsection 146(8.1) of the Act is replaced by the following:

Deemed receipt of refund of premiums

(8.1) If a payment out of or under a registered retirement savings plan of a deceased annuitant to the annuitant’s legal representative would have been a refund of premiums if it had been paid under the plan to an individual who is a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, the payment is, to the extent it is so designated jointly by the legal representative and the individual in prescribed form filed with the Minister, deemed to be received by the individual (and not by the legal representative) at the time it was so paid as a benefit that is a refund of premiums.

(6) Subparagraph 146(10.1)(b)(ii) of the Act is replaced by the following:

(ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”.

(7) Subsections (1) and (2) apply to the 1993 and subsequent taxation years.

(8) Subsection (3) applies to the 1997 and subsequent taxation years.

(9) Subsection (4) applies to amounts included in computing income for taxation years in respect of business fiscal periods that end after February 27, 2000.

(10) Subsection (5) is deemed to have come into force on January 1, 1989, except that, before 1999, subsection 146(8.1) of the Act, as enacted by subsection (5), is to be read as follows:

(8.1) Such portion of an amount paid in a taxation year out of or under a registered retirement savings plan of a deceased annuitant to the annuitant’s legal representative as, had that portion been paid under the plan to an individual who is a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, would have been a refund of premiums is, to the extent it is so designated jointly by the legal representative and the individual in prescribed form filed with the Minister, deemed to be received by the individual in the year as a benefit that is a refund of premiums.

297. (1) The definition “quarter” in subsection 146.01(1) of the Act is repealed.

(2) Subsection 146.01(8) of the Act is repealed.

(3) Subsections (1) and (2) apply in respect of the 2002 and subsequent taxation years.

298. (1) Subsection 146.1(2) of the Act is amended by adding the following after paragraph (g.2):

(g.3) the plan provides that an individual is permitted to be designated as a beneficiary under the plan, and that a contribution to the plan in respect of an individual who is a beneficiary under the plan is permitted to be made, only if

(i) in the case of a designation, the individual’s Social Insurance Number is provided to the promoter before the designation is made and either

(A) the individual is resident in Canada when the designation is made, or

(B) the designation is made in conjunction with a transfer of property into the plan from another registered education savings plan under which the individual was a beneficiary immediately before the transfer, and

(ii) in the case of a contribution, either

(A) the individual’s Social Insurance Number is provided to the promoter before the contribution is made and the individual is resident in Canada when the contribution is made, or

(B) the contribution is made by way of transfer from another registered education savings plan under which the individual was a beneficiary immediately before the transfer;

(2) Section 146.1 of the Act is amended by adding the following after subsection (2.2):

Social Insurance Number not required

(2.3) Notwithstanding paragraph (2)(g.3), an education savings plan may provide that an individual’s Social Insurance Number need not be provided in respect of

(a) a contribution to the plan, if the plan was entered into before 1999; and

(b) a designation of a non-resident individual as a beneficiary under the plan, if the individual was not assigned a Social Insurance Number before the designation is made.

(3) Subsections (1) and (2) are deemed to have come into force on January 1, 2004.

299. (1) The definition “holder” in subsection 146.2(1) 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):

(c) at and after the death of a holder described in paragraph (b) or in this paragraph, the holder’s survivor, if the survivor acquires

(i) all of the holder’s rights as the holder of the arrangement, and

(ii) to the extent it is not included in the rights described in subparagraph (i), the unconditional right to revoke any beneficiary designation made, or similar direction imposed, by the holder under the arrangement or relating to property held in connection with the arrangement.

(2) Subsection (1) applies to the 2009 and subsequent taxation years.

300. (1) Paragraph (b) of the definition “annuitant” in subsection 146.3(1) of the Act is replaced by the following:

(b) after the death of the first individual, a spouse or common-law partner (in this definition referred to as the “survivor”) of the first individual to whom the carrier has undertaken to make payments described in the definition “retirement income fund” out of or under the fund after the death of the first individual, if the survivor is alive at that time and the undertaking was made

(i) pursuant to an election that is described in that definition and that was made by the first individual, or

(ii) with the consent of the legal represent-ative of the first individual, and

(2) The portion of paragraph 146.3(2)(c) of the English version of the Act before subparagraph (i) is replaced by the following:

(3) Paragraph 146.3(2)(f) of the Act is amended by adding the following after subparagraph (iv):

(iv.1) a deferred profit sharing plan in accordance with subsection 147(19);

(4) The portion of subsection 146.3(5.1) of the English version of the Act before paragraph (a) is replaced by the following:

Amount included in income

(5.1) If at any time in a taxation year a particular amount in respect of a registered retirement income fund that is a spousal or common-law partner plan (within the meaning assigned by subsection 146(1)) in relation to a taxpayer is required to be included in the income of the taxpayer’s spouse or common-law partner and the taxpayer is not living separate and apart from the taxpayer’s spouse or common-law partner at that time by reason of the breakdown of their marriage or common-law partnership, there shall be included at that time in computing the taxpayer’s income for the year an amount equal to the least of

(5) The portion of subsection 146.3(9) of the Act before paragraph (a) is replaced by the following:

Tax payable on income from non-qualified investment

(9) If a trust that is governed by a registered retirement income fund holds, at any time in a taxation year, a property that is not a qualified investment,

(6) Subparagraph 146.3(9)(b)(ii) of the Act is replaced by the following:

(ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”.

(7) Subsections (1) and (4) apply to the 2001 and subsequent taxation years, except that, if a taxpayer and a person have jointly elected under section 144 of the Modernization of Benefits and Obligations Act, in respect of the 1998, 1999 or 2000 taxation years, subsections (1) and (4) apply to the taxpayer and the person in respect of the applicable taxation year and subsequent taxation years.

(8) Subsection (2) is deemed to have come into force on January 1, 2002.

(9) Subsection (3) is deemed to have come into force on March 21, 2003.

(10) Subsection (5) applies to the 2003 and subsequent taxation years.

301. (1) Paragraph 147(2)(e) of the Act is replaced by the following:

(e) the plan includes a provision stipulating that no right of a person under the plan is capable of any surrender or assignment other than

(i) an assignment under a decree, an order or a judgment of a competent tribunal, or under a written agreement, that relates to a division of property between an individual and the individual’s spouse or common-law partner, or former spouse or common-law partner, in settlement of rights that arise out of, or on a breakdown of, their marriage or common-law partnership,

(ii) an assignment by a deceased individ-ual’s legal representative on the distribution of the individual’s estate, and

(iii) a surrender of benefits to avoid revocation of the plan’s registration;

(2) Subsection 147(5.11) of the Act is repealed.

(3) Subparagraph 147(19)(b)(ii) of the Act is replaced by the following:

(ii) who is a spouse or common-law partner, or former spouse or common-law partner, of an employee or former employee referred to in subparagraph (i) and who is entitled to the amount

(A) as a consequence of the death of the employee or former employee, or

(B) under a decree, an order or a judgment of a competent tribunal, or under a written agreement, that relates to a division of property between the employee or former employee and the individual in settlement of rights that arise out of, or on a breakdown of, their marriage or common-law partnership;

(4) The portion of paragraph 147(19)(d) of the French version of the Act before subparagraph (i) is replaced by the following:

d) le montant est transféré directement à l’un des régimes ou fonds ci-après au profit du particulier :

(5) Paragraph 147(19)(d) of the Act is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

(iv) a registered retirement income fund under which the individual is the annuitant (within the meaning assigned by subsection 146.3(1)).

(6) Subsection (1) is deemed to have come into force on March 21, 2003.

(7) Subsection (2) applies to cessations of employment that occur after 2002.

(8) Subsections (3) to (5) apply to transfers that occur after March 20, 2003.

302. (1) The portion of paragraph (a) of the definition “compensation” in subsection 147.1(1) of the Act that is after subparagraph (ii) and before subparagraph (iii) is replaced by the following:

that is required (or that would be required but for paragraph 81(1)(a) as it applies with respect to the Indian Act or the Foreign Missions and International Organizations Act) by section 5 or 6 to be included in computing the individual’s income for the year, except such portion of the amount as

(2) Subsection (1) is deemed to have come into force on January 1, 1991.

303. (1) The portion of subsection 147.2(7) of the Act before paragraph (a) is replaced by the following:

Letter of credit

(7) For the purposes of this section and any regulations made under subsection 147.1(18) in respect of eligible contributions, an amount paid to a registered pension plan by the issuer of a letter of credit issued in connection with an employer’s funding obligations under a defined benefit provision of the plan is deemed to be an eligible contribution made to the plan in respect of the provision by the employer with respect to the employer’s employees or former employees, if

(2) Section 147.2 of the Act is amended by adding the following after subsection (7):

Former employee of predecessor employer

(8) For the purposes of this section and any regulations made under subsection 147.1(18) in respect of eligible contributions, a former employee of a predecessor employer (as defined by regulation) of a participating employer in relation to a pension plan is deemed to be a former employee of the participating employer in relation to the plan if

(a) the former employee would not otherwise be an employee or former employee of the participating employer; and

(b) benefits are provided to the former employee under a defined benefit provision of the plan in respect of periods of employment with the predecessor employer.

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

(4) Subsection (2) applies to contributions made after 1990.

304. (1) Paragraph 147.3(6)(b) of the Act is replaced by the following:

(b) is transferred on behalf of a member who is entitled to the amount as a return of contributions made (or deemed by regulation to have been made) by the member under a defined benefit provision of the plan before 1991, or as interest (computed at a rate not exceeding a reasonable rate) in respect of those contributions; and

(2) Subsection (1) applies to transfers that occur after 1999.

305. (1) Paragraph 148(1)(e) of the Act is replaced by the following:

(e) an annuity contract

(i) the payment for which was deductible in computing the policyholder’s income by virtue of paragraph 60(l), or

(ii) that is a qualifying trust annuity with respect to a taxpayer, the payment for which was deductible under paragraph 60(l) in computing the taxpayer’s income,

(2) Paragraph 148(1)(e) of the Act, as enacted by subsection (1), is replaced by the following:

(e) an annuity contract if

(i) the payment for the annuity contract was deductible under paragraph 60(l) in computing the policyholder’s income,

(i.1) the annuity contract is a qualifying trust annuity with respect to a taxpayer and the amount paid to acquire it was deduct-ible under paragraph 60(l) in computing the taxpayer’s income, or

(ii) the policyholder acquired the annuity contract in circumstances to which subsection 146(21) applied,

(3) Subsection 148(8.2) of the French version of the Act is replaced by the following:

Transfert à l’époux ou au conjoint de fait au décès

(8.2) Malgré les autres dispositions du présent article, l’intérêt d’un titulaire de police dans une police d’assurance-vie (sauf une police qui est un régime ou un contrat visé à l’un des alinéas (1)a) à e) ou qui est établie aux termes d’un tel régime ou contrat) qui est transféré ou distribué à l’époux ou au conjoint de fait du titulaire par suite du décès de ce dernier est réputé, si le titulaire et son époux ou conjoint de fait résidaient au Canada immédiatement avant ce décès, avoir fait l’objet d’une disposition par le titulaire immédiatement avant son décès pour un produit égal au coût de base rajusté de l’intérêt pour lui immédiatement avant le transfert et avoir été acquis par l’époux ou le conjoint de fait à un coût égal à ce produit; toutefois, un choix peut être fait dans la déclaration de revenu du titulaire produite en vertu de la présente partie pour l’année d’imposition au cours de laquelle le titulaire est décédé pour que le présent paragraphe ne s’applique pas.

(4) Subsection (1) is deemed to have come into force on January 1, 1989.

(5) Subsection (2) is deemed to have come into force on September 1, 1992.

306. (1) The definition “versement admissible” in subsection 148.1(1) of the French version of the Act is replaced by the following:

« versement admissible »
“relevant contribution”

« versement admissible » Est un versement admissible effectué pour un particulier dans le cadre d’un arrangement donné :

a) le versement effectué dans le cadre de l’arrangement donné en vue du financement de services de funérailles ou de cimetière relatifs au particulier, à l’exception d’un versement effectué au moyen d’un transfert d’un arrangement de services funéraires;

b) la partie d’un versement effectué dans le cadre d’un arrangement de services funéraires (à l’exception d’un tel versement effectué au moyen d’un transfert d’un arrangement de services funéraires) qu’il est raisonnable de considérer comme ayant ultérieurement servi à effectuer un versement dans le cadre de l’arrangement donné au moyen d’un transfert d’un arrangement de services funéraires en vue du financement de services de funérailles ou de cimetière relatifs au particulier.

(2) The description of C in subsection 148.1(3) of the Act is replaced by the following:

C is the amount determined by the formula

D – E

where

D is the total of all relevant contributions made before the particular time in respect of the individual under the arrangement (other than contributions in respect of the individual that were in a cemetery care trust), and

E is the total of all amounts each of which is the amount, if any, by which

(a) an amount relating to the balance in respect of the individual under the arrangement that is deemed by subsection (4) to have been distributed before the particular time from the arrangement

exceeds

(b) the portion of the amount referred to in paragraph (a) that is added, because of this subsection, in computing a taxpayer’s income.

(3) Section 148.1 of the Act is amended by adding the following after subsection (3):

Deemed distribution on transfer

(4) If at a particular time an amount relating to the balance in respect of an individual (referred to in this subsection and in subsection (5) as the “transferor”) under an eligible funeral arrangement (referred to in this subsection and in subsection (5) as the “transferor arrangement”) is transferred, credited or added to the balance in respect of the same or another individual (referred to in this subsection and in subsection (5) as the “recipient”) under the same or another eligible funeral arrangement (referred to in this subsection and in subsection (5) as the “recipient arrangement”),

(a) the amount is deemed to be distributed to the transferor (or, if the transferor is deceased at the particular time, to the recipient) at the particular time from the transferor arrangement and to be paid from the balance in respect of the transferor under the transferor arrangement; and

(b) the amount is deemed to be a contribution made (other than by way of a transfer from an eligible funeral arrangement) at the particular time under the recipient arrangement for the purpose of funding funeral or cemetery services with respect to the recipient.

Non-application of subsection (4)

(5) Subsection (4) does not apply if

(a) the transferor and the recipient are the same individual;

(b) the amount that is transferred, credited or added to the balance in respect of the individual under the recipient arrangement is equal to the balance in respect of the individual under the transferor arrangement immediately before the particular time; and

(4) Subsections (2) and (3) apply to amounts that are transferred, credited or added after December 20, 2002.

307. (1) Paragraph 149(1)(d.5) of the Act is replaced by the following:

Income within boundaries of entities

(d.5) subject to subsections (1.2) and (1.3), a corporation, commission or association not less than 90% of the capital of which was owned by one or more entities each of which is a municipality in Canada, or a municipal or public body performing a function of government in Canada, if the income for the period of the corporation, commission or association from activities carried on outside the geographical boundaries of the entities does not exceed 10% of its income for the period;

(2) Subparagraphs 149(1)(d.6)(i) and (ii) of the Act are replaced by the following:

(i) if paragraph (d.5) applies to the other corporation, commission or association, the geographical boundaries of the entities referred to in that paragraph in its application to that other corporation, commission or association, or

(ii) if this paragraph applies to the other corporation, commission or association, the geographical boundaries of the entities referred to in subparagraph (i) in its application to that other corporation, commission or association,

(3) Paragraph 149(1)(d.6) of the Act, as amended by subsection (2), is replaced by the following:

Subsidiaries of municipal corporations

(d.6) subject to subsections (1.2) and (1.3), a particular corporation all of the shares (except directors’ qualifying shares) or of the capital of which was owned by one or more entities (referred to in this paragraph as “qualifying owners”) each of which is, for the period, a corporation, commission or association to which paragraph (d.5) applies, a corporation to which this paragraph applies, a municipality in Canada, or a municipal or public body performing a function of government in Canada, if no more than 10% of the particular corporation’s income for the period is from activities carried on outside

(i) if a qualifying owner is a municipality in Canada, or a municipal or public body performing a function of government in Canada, the geographical boundaries of each such qualifying owner,

(ii) if paragraph (d.5) applies to a qualifying owner, the geographical boundaries of the municipality, or municipal or public body, referred to in that paragraph in its application to each such qualifying owner, and

(iii) if this paragraph applies to a qualifying owner, the geographical boundaries of the municipality, or municipal or public body, referred to in subparagraph (i) or paragraph (d.5), as the case may be, in their respective applications to each such qualifying owner;

(4) Clause 149(1)(o.2)(iii)(B) of the Act is replaced by the following:

(B) that had not accepted deposits or issued bonds, notes, debentures or similar obligations, and

(5) Section 149 of the Act is amended by adding the following after subsection (1.11):

Deemed election

(1.12) If at any time there is an amalgamation (within the meaning assigned by subsection 87(1)) of a corporation (in this subsection referred to as the “parent”) and one or more other corporations (each of which in this subsection is referred to as the “subsidiary”) each of which is a subsidiary wholly-owned corporation of the parent, and immediately before that time the parent is a person to which subsection (1) does not apply by reason of the application of subsection (1.11), the new corporation is deemed, for the purposes of subsection (1.11), to be the same corporation as, and a continuation of, the parent.

(6) The portion of subsection 149(1.2) of the Act before paragraph (b) is replaced by the following:

Income test

(1.2) For the purposes of paragraphs (1)(d.5) and (d.6), income of a corporation, a commission or an association from activities carried on outside the geographical boundaries of a municipality or of a municipal or public body does not include income from activities carried on

(a) under an agreement in writing between

(i) the corporation, commission or association, and

(ii) a person who is Her Majesty in right of Canada or of a province, a municipality, a municipal or public body or a corporation to which any of paragraphs (1)(d) to (d.6) applies and that is controlled by Her Majesty in right of Canada or of a province, by a municipality in Canada or by a municipal or public body in Canada

within the geographical boundaries of,

(iii) if the person is Her Majesty in right of Canada or a corporation controlled by Her Majesty in right of Canada, Canada,

(iv) if the person is Her Majesty in right of a province or a corporation controlled by Her Majesty in right of a province, the province,

(v) if the person is a municipality in Canada or a corporation controlled by a municipality in Canada, the municipality, and

(vi) if the person is a municipal or public body performing a function of government in Canada or a corporation controlled by such a body, the area described in subsection (11) in respect of the person; or

(7) Subsection 149(1.3) of the Act is replaced by the following:

Votes or de facto control

(1.3) Paragraphs (1)(d) to (d.6) do not apply in respect of a person’s taxable income for a period in a taxation year if at any time during the period

(a) the person is a corporation shares of the capital stock of which are owned by one or more other persons that, in total, give them more than 10% of the votes that could be cast at a meeting of shareholders of the corporation, other than shares that are owned by one or more persons each of which is

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

(ii) a municipality in Canada,

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

(iv) a corporation, a commission or an association, to which any of paragraphs (1)(d) to (d.6) apply; or

(b) the person is, or would be if the person were a corporation, controlled, directly or indirectly in any manner whatever, by a person, or by a group of persons that includes a person, who is not

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

(ii) a municipality in Canada,

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

(iv) a corporation, a commission or an association, to which any of paragraphs (1)(d) to (d.6) apply.

(8) Paragraph 149(10)(c) of the Act is replaced by the following:

(c) for the purposes of applying sections 37, 65 to 66.4, 66.7, 111 and 126, subsections 127(5) to (36) and section 127.3 to the corporation, the corporation is deemed to be a new corporation the first taxation year of which began at that time; and

(9) Section 149 of the Act is amended by adding the following after subsection (10):

Geographical boundaries — body performing government functions

(11) For the purpose of this section, the geographical boundaries of a municipal or public body performing a function of government are

(a) the geographical boundaries that encompass the area in respect of which an Act of Parliament or an agreement given effect by an Act of Parliament recognizes or grants to the body a power to impose taxes; or

(b) if paragraph (a) does not apply, the geographical boundaries within which that body has been authorized by the laws of Canada or of a province to exercise that function.

(10) Subsections (1), (2), (6), (7) and (9) apply to taxation years that begin after May 8, 2000, except that, for those taxation years that began before December 21, 2002, subsection 149(1.3) of the Act, as enacted by subsection (7), is to be read as follows:

(1.3) For the purposes of paragraph (1)(d.5) and subsection (1.2), 90% of the capital of a corporation that has issued share capital is owned by one or more entities, each of which is a municipality or a municipal or public body, only if the entities own shares of the capital stock of the corporation that give the entities 90% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation.

(11) Subsection (3) applies in respect of taxation years that end after April 2004.

(12) Subsection (4) applies to taxation years that end after February 21, 1994.

(13) Subsection (5) applies to amalgamations that occur after October 4, 2004.

(14) Subsection (8) applies to each corporation that after 2006 becomes or ceases to be exempt from tax on its taxable income under Part I of the Act.

(15) Notwithstanding subsections 152(4) to (5) of the Act, any assessment of a taxpayer’s tax payable under the Act for any taxation year that began before October 24, 2012 is to be made that is necessary to give effect to the provisions of the Act enacted by subsections (1), (2), (6), (7) and (9).

308. (1) The definition “public foundation” in subsection 149.1(1) of the Act is replaced by the following:

“public foundation”
« fondation publique »

“public foundation”, at a particular time, means a charitable foundation

(a) more than 50% of the directors, trustees, officers or like officials of which deal at arm’s length with each other and with

(i) each of the other directors, trustees, officers and like officials of the foundation,

(ii) each person described by subparagraph (b)(i) or (ii), and

(iii) each member of a group of persons (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)) who do not deal with each other at arm’s length, if the group would, if it were a person, be a person described by subparagraph (b)(i), and

(b) that is not, at the particular time, and would not at the particular time be, if the foundation were a corporation, controlled directly or indirectly in any manner whatever

(i) by a person (other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l)),

(A) who immediately after the particular time, has contributed to the foundation amounts that are, in total, greater than 50% of the capital of the foundation immediately after the particular time, and

(B) who immediately after the person’s last contribution at or before the partic-ular time, had contributed to the foundation amounts that were, in total, greater than 50% of the capital of the foundation immediately after the making of that last contribution, or

(ii) by a person, or by a group of persons that do not deal at arm’s length with each other, if the person or any member of the group does not deal at arm’s length with a person described in subparagraph (i);

(2) The portion of the definition “charitable organization” in subsection 149.1(1) of the Act before paragraph (a) is replaced by the following:

“charitable organization”
« oeuvre de bienfaisance »

“charitable organization”, at any particular time, means an organization, whether or not incorporated,

(3) Paragraphs (c) and (d) of the definition “charitable organization” in subsection 149.1(1) of the Act are replaced by the following:

(c) more than 50% of the directors, trustees, officers or like officials of which deal at arm’s length with each other and with

(i) each of the other directors, trustees, officers and like officials of the organization,

(ii) each person described by subparagraph (d)(i) or (ii), and

(d) that is not, at the particular time, and would not at the particular time be, if the organization were a corporation, controlled directly or indirectly in any manner whatever

(A) who immediately after the particular time, has contributed to the organization amounts that are, in total, greater than 50% of the capital of the organization immediately after the particular time, and

(B) who immediately after the person’s last contribution at or before the partic-ular time, had contributed to the organization amounts that were, in total, greater than 50% of the capital of the organization immediately after the making of that last contribution, or

(4) Paragraph (d) of the definition “enduring property” in subsection 149.1(1) of the English version of the Act, as it read immediately before its repeal by subsection 37(1) of the Sustaining Canada’s Economic Recovery Act, is replaced by the following:

(d) a gift received by the registered charity as a transferee from an original recipient charity or another transferee of a property that was, before that gift was so received, an enduring property of the original recipient charity or of the other transferee because of paragraph (a) or (c) or this paragraph, or property substituted for the gift, if, in the case of a property that was an enduring property of an original recipient charity because of paragraph (c), the gift is subject to the same terms and conditions under the trust or direction as applied to the original recipient charity;

(5) Subsection 149.1(2) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

(i) in the course of charitable activities carried on by it, or

(ii) to a donee that is a qualified donee at the time of the gift.

(6) Subsection 149.1(3) of the Act is amended by adding the following after paragraph (b):

(b.1) makes a disbursement by way of a gift, other than a gift made

(i) in the course of charitable activities carried on by it, or

(ii) to a donee that is a qualified donee at the time of the gift;

(7) Subsection 149.1(4) of the Act is amended by adding the following after paragraph (b):

(b.1) makes a disbursement by way of a gift, other than a gift made

(i) in the course of charitable activities carried on by it, or

(ii) to a donee that is a qualified donee at the time of the gift;

(8) The portion of subsection 149.1(9) of the Act after paragraph (b), as it read immediately before its repeal by subsection 37(8) of the Sustaining Canada’s Economic Recovery Act, is replaced by the following:

is, notwithstanding subsection (8), deemed to be income of the charity for, and the eligible amount of a gift for which it issued a receipt described in subsection 110.1(2) or 118.1(2) in, its taxation year in which the period referred to in paragraph (a) expires or the time referred to in paragraph (b) occurs, as the case may be.

(9) Subsection (1) is deemed to have come into force on January 1, 2000, except that, in respect of a foundation that has not been designated before 2000 as a private foundation or a charitable organization under subsection 149.1(6.3) of the Act or under subsection 110(8.1) or (8.2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and that has not applied after February 15, 1984 for registration under paragraph 110(8)(c) of that Act or under the definition “registered charity” in subsection 248(1) of the Act, subparagraph (a)(iii) and paragraph (b) of the definition “public foundation” in subsection 149.1(1) of the Act, as enacted by subsection (1), are, in their application before the earlier of the day, if any, on which the foundation is designated after 1999 as a private foundation or a charitable organization under subsection 149.1(6.3) of the Act and January 1, 2005, to be read

(a) without reference to “(other than Her Majesty in right of Canada or of a province, a municipality, another registered charity that is not a private foundation, and any club, society or association described in paragraph 149(1)(l))”; and

(b) as if the references to “50%” in paragraph (b) of that definition were references to “75%”.

(10) Subsections (2) and (3) are deemed to have come into force on January 1, 2000, except that, in respect of a charitable organization that has not been designated before 2000 as a private foundation or a public foundation under subsection 149.1(6.3) of the Act or under subsection 110(8.1) or (8.2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and that has not applied after February 15, 1984 for registration under paragraph 110(8)(c) of that Act or under the definition “registered charity” in subsection 248(1) of the Act, subparagraphs (c)(ii) and (iii) of the definition “charitable organization” in subsection 149.1(1) of the Act, as enacted by subsection (3), apply after the earlier of the day, if any, on which the organization is designated after 1999 as a private foundation or a public foundation under subsection 149.1(6.3) of the Act and December 31, 2004.

(11) Subsection (4) applies to taxation years that begin after March 22, 2004 but that end before March 4, 2010. For greater certainty, paragraph (d) of the definition “enduring property” in subsection 149.1(1) of the English version of the Act, as enacted by subsection (4), is deemed to have been repealed in respect of taxation years that end on or after March 4, 2010.

(12) Subsections (5) to (7) apply to gifts made after December 20, 2002.

(13) Subsection (8) is deemed to have come into force on December 21, 2002 but it applies only to taxation years that end before March 4, 2010. For greater certainty, subsection 149.1(9) of the Act, as amended by subsection (8), is deemed to have been repealed in respect of taxation years that end on or after March 4, 2010.

(14) In its application to gifts made after December 20, 2002 but in a taxation year that begins before March 23, 2004, the portion of the description of A in the definition “disbursement quota” in subsection 149.1(1) of the Act before paragraph (a) is to be read as follows:

A is 80% of the total of all amounts each of which is the eligible amount of a gift for which the foundation issued a receipt described in subsection 110.1(2) or 118.1(2) in its immediately preceding taxation year, other than

(15) In its application to gifts made after December 20, 2002 but in a taxation year that begins before March 23, 2004, the portion of the description of A.1 in the definition “disbursement quota” in subsection 149.1(1) of the Act before paragraph (a) is to be read as follows:

A.1 is 80% of the total of all amounts each of which is the eligible amount of a gift received in a preceding taxation year, to the extent that the eligible amount

(16) An application referred to in subsection 149.1(6.3) of the Act, in respect of one or more taxation years after 1999, may be made after 1999 and before the 90th day after the day on which this Act receives royal assent. If a designation referred to in that subsection for any of those taxation years is made in response to the application, the charity is deemed to be registered as a charitable organization, a public foundation or a private foundation, as the case may be, for the taxation years that the Minister of National Revenue specifies.

309. (1) Subsections 152(3.4) and (3.5) of the Act are repealed.

(2) Subsection 152(4.1) of the Act is replaced by the following:

If waiver revoked

(4.1) If the Minister would, but for this subsection, be entitled to reassess, make an additional assessment or assess tax, interest or penalties by virtue only of the filing of a waiver under subparagraph (4)(a)(ii) or paragraph (4)(c), the Minister may not make such a reassessment, additional assessment or assessment after the day that is six months after the date on which a notice of revocation of the waiver in prescribed form is filed.

(3) Subsection 152(4.3) of the Act is replaced by the following:

Consequential assessment

(4.3) Notwithstanding subsections (4), (4.1) and (5), if the result of an assessment or a decision on an appeal is to change a particular balance of a taxpayer for a particular taxation year, the Minister may, or if the taxpayer so requests in writing, shall, before the later of the expiration of the normal reassessment period in respect of a subsequent taxation year and the end of the day that is one year after the day on which all rights of objection and appeal expire or are determined in respect of the particular year, reassess the tax, interest or penalties payable by the taxpayer, redetermine an amount deemed to have been paid or to have been an overpayment by the taxpayer or modify the amount of a refund or other amount payable to the taxpayer, under this Part in respect of the subsequent taxation year, but only to the extent that the reassessment, redetermination or modification can reasonably be considered to relate to the change in the particular balance of the taxpayer for the particular year.

(4) Paragraph 152(6)(c.1) of the Act is repealed.

(5) Paragraph 152(6)(e) of the Act is repealed.

(6) Section 152 of the Act is amended by adding the following after subsection (6.2):

Reassessment for section 119 credit

(6.3) If a taxpayer has filed for a particular taxation year the return of income required by section 150 and an amount is subsequently claimed by the taxpayer, or on the taxpayer’s behalf, for the particular year as a deduction under section 119 in respect of a disposition in a subsequent taxation year, and the taxpayer files with the Minister a prescribed form amending the return on or before the filing-due date of the taxpayer for the subsequent taxation year, the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular taxation year) in order to take into account the deduction claimed.

(7) Subsection (1) applies in respect of forms filed after March 20, 2003.

(8) Subsection (3) applies to reassessments, redeterminations and modifications in respect of taxation years that relate to changes in balances for other taxation years as a result of assessments made, or decisions on appeal rendered, after November 5, 2010.

(9) Subsection (4) applies to taxation years that end after October 1, 1996.

(10) Subsection (5) applies to taxation years that begin after October 31, 2011.

(11) Subsection (6) applies in respect of particular taxation years that end after October 1, 1996. However, if a prescribed form referred to in subsection 152(6.3) of the Act, as enacted by subsection (6), is filed with the Minister on or before the filing-due date of the taxpayer for the taxation year that includes the day on which this Act receives royal assent, the form is deemed to have been filed with the Minister on a timely basis.

310. (1) Paragraph 153(1)(d.1) of the Act is replaced by the following:

(d.1) an amount described in subparagraph 56(1)(a)(iv) or (vii),

(2) Subsection (1) applies to the 2006 and subsequent taxation years.

311. (1) Paragraphs 157(1.4)(a) and (b) of the Act are replaced by the following:

(a) if the corporation is not associated with another corporation in the particular taxation year, the amount that is the corporation’s taxable capital employed in Canada (for the purpose of this subsection, within the meaning assigned by section 181.2 or 181.3, as the case may be) for the particular taxation year; or

(b) if the corporation is associated with another corporation in the particular taxation year, the amount that is the total of all amounts each of which is the taxable capital employed in Canada of the corporation for the particular taxation year or the taxable capital employed in Canada of a corporation with which it is associated in the particular taxation year for a taxation year of that other corporation that ends in the particular taxation year.

(2) Paragraph 157(3)(c) of the Act is replaced by the following:

(i) the corporation’s capital gains refund (within the meaning assigned by section 131) for the year, and

(ii) the amount that, because of subsection 131(5) or (11), is the corporation’s dividend refund (within the meaning assigned by section 129) for the year,

(3) Subsection (1) applies to taxation years that begin after 2007.

(4) Subsection (2) applies to the 1999 and subsequent taxation years.

312. (1) Subsection 159(3) of the Act is replaced by the following:

Personal liability

(3) If a legal representative (other than a trustee in bankruptcy) of a taxpayer distributes to one or more persons property in the possession or control of the legal representative, acting in that capacity, without obtaining a certificate under subsection (2) in respect of the amounts referred to in that subsection,

(a) the legal representative is personally liable for the payment of those amounts to the extent of the value of the property distributed;

(b) the Minister may at any time assess the legal representative in respect of any amount payable because of this subsection; and

(c) the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, to an assessment made under this subsection as though it had been made under section 152 in respect of taxes payable under this Part.

(2) Subsection (1) applies to assessments made after December 20, 2002.

313. (1) The portion of subsection 160(1) of the Act after subparagraph (e)(i) is replaced by the following:

(ii) the total of all amounts each of which is an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) in or in respect of the taxation year in which the property was transferred or any preceding taxation year,

but nothing in this subsection limits the liability of the transferor under any other provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection.

(2) The portion of subsection 160(1.1) of the Act after the description of B is replaced by the following:

but nothing in this subsection limits the liability of the other taxpayer under any other provision of this Act or of any person for the interest that the person is liable to pay under this Act on an assessment in respect of the amount that the person is liable to pay because of this subsection.

(3) Paragraphs 160(1.2)(a) and (b) of the Act are replaced by the following:

(a) carried on a business that was provided property or services by a partnership or trust all or a portion of the income of which partnership or trust is directly or indirectly included in computing the individual’s split income for the year,

(b) was a specified shareholder of a corporation that was provided property or services by a partnership or trust all or a portion of the income of which partnership or trust is directly or indirectly included in computing the individual’s split income for the year,

(4) Paragraph 160(1.2)(d) of the Act is replaced by the following:

(d) was a shareholder of a professional corporation that was provided property or services by a partnership or trust all or a portion of the income of which partnership or trust is directly or indirectly included in computing the individual’s split income for the year, or

(5) Subsection 160(1.2) of the Act is amended by adding the following after paragraph (e):

but nothing in this subsection limits the liability of the specified individual under any other provision of this Act or of the parent for the interest that the parent is liable to pay under this Act on an assessment in respect of the amount that the parent is liable to pay because of this subsection.

(6) Subsection 160(2) of the Act is replaced by the following:

Assessment

(2) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

(7) Subsections (1), (2), (5) and (6) apply in respect of assessments made after December 20, 2002.

(8) Subsections (3) and (4) are deemed to have come into force on December 21, 2002.

314. (1) Subsection 160.1(3) of the Act is replaced by the following:

Assessment

(3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of subsection (1) or (1.1) or for which the taxpayer is liable because of subsection (2.1) or (2.2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.5 or 122.61.

(2) Subsection (1) applies to assessments made after December 20, 2002.

315. (1) The portion of subsection 160.2(1) of the Act after paragraph (b) is replaced by the following:

the taxpayer and the last annuitant under the plan are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146(8.8) that the total of all amounts each of which is an amount determined under paragraph (b) in respect of the taxpayer is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

(2) The portion of subsection 160.2(2) of the Act after paragraph (b) is replaced by the following:

the taxpayer and the annuitant are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146.3(6) that the amount determined under paragraph (b) is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

(3) Section 160.2 of the Act is amended by adding the following after subsection (2):

Joint and several liability in respect of a qualifying trust annuity

(2.1) If a taxpayer is deemed by section 75.2 to have received at any time an amount out of or under an annuity that is a qualifying trust annuity with respect to the taxpayer, the taxpayer, the annuitant under the annuity and the policyholder are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for the taxation year of the taxpayer that includes that time that is equal to the amount, if any, determined by the formula

A – B

where

A is the amount of the taxpayer’s tax under this Part for that taxation year; and

B is the amount that would be the taxpayer’s tax under this Part for that taxation year if no amount were deemed by section 75.2 to have been received by the taxpayer out of or under the annuity in that taxation year.

No limitation on liability

(2.2) Subsection (2.1) limits neither

(a) the liability of the taxpayer referred to in that subsection under any other provision of this Act; nor

(b) the liability of an annuitant or policyholder referred to in that subsection for the interest that the annuitant or policyholder is liable to pay under this Act on an assessment in respect of the amount that the annuitant or policyholder is liable to pay because of that subsection.

(4) Subsection 160.2(3) of the Act is replaced by the following:

Assessment

(3) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

(5) Section 160.2 of the Act is amended by adding the following after subsection (4):

Rules applicable — qualifying trust annuity

(5) If an annuitant or policyholder has, because of subsection (2.1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:

(a) a payment by the annuitant on account of the annuitant’s liability, or by the policyholder on account of the policyholder’s liability, shall to the extent of the payment discharge their liability, but

(b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the annuitant’s and the policyholder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the annuitant and the policyholder were, by subsection (2.1), made liable.

(6) Subsections (1), (2) and (4) apply to assessments made after December 20, 2002.

(7) Subsections (3) and (5) apply to assessments made after 2005.

316. (1) Subsections 160.3(1) and (2) of the Act are replaced by the following:

Liability in respect of amounts received out of or under RCA trust

160.3 (1) If an amount required to be included in the income of a taxpayer because of paragraph 56(1)(x) is received by a person with whom the taxpayer is not dealing at arm’s length, that person is jointly and severally, or solidarily, liable with the taxpayer to pay a part of the taxpayer’s tax under this Part for the taxation year in which the amount is received equal to the amount by which the taxpayer’s tax for the year exceeds the amount that would be the taxpayer’s tax for the year if the amount had not been received, but nothing in this subsection limits the liability of the taxpayer under any other provision of this Act or of the person for the interest that the person is liable to pay under this Act on an assessment in respect of the amount that the person is liable to pay because of this subsection.

Assessment

(2) The Minister may at any time assess a person in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

(2) Subsection (1) applies to assessments made after December 20, 2002.

317. (1) Subsection 160.4(1) of the Act is replaced by the following:

Liability in respect of transfers by insolvent corporations

160.4 (1) If property is transferred at any time by a corporation to a taxpayer with whom the corporation does not deal at arm’s length at that time and the corporation is not entitled because of subsection 61.3(3) to deduct an amount under section 61.3 in computing its income for a taxation year because of the transfer or because of the transfer and one or more other transactions, the taxpayer is jointly and severally, or solidarily, liable with the corporation to pay the lesser of the corporation’s tax payable under this Part for the year and the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given for the property, but nothing in this subsection limits the liability of the corporation under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

(2) The portion of subsection 160.4(2) of the Act after paragraph (c) is replaced by the following:

the transferee is jointly and severally, or solidarily, liable with the transferor and the debtor to pay an amount of the debtor’s tax under this Part equal to the lesser of the amount of that tax that the transferor was liable to pay at that time and the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given for the property, but nothing in this subsection limits the liability of the debtor or the transferor under any provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection.

(3) Subsection 160.4(3) of the Act is replaced by the following:

Assessment

(3) The Minister may at any time assess a person in respect of any amount payable by the person because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it had been made under section 152 in respect of taxes payable under this Part.

(4) Subsections (1) to (3) apply to assessments made after December 20, 2002.

318. (1) Subparagraph 161(7)(a)(vi) of the Act is repealed.

(2) Paragraph 161(11)(b.1) of the Act is replaced by the following:

(b.1) in the case of a penalty under subsection 237.1(7.4) or 237.3(8), from the day on which the taxpayer became liable to the penalty to the day of payment; and

(3) Subsection (1) applies to taxation years that begin after October 31, 2011.

(4) Subsection (2) applies in respect of avoidance transactions that are entered into after 2010 or that are part of a series of transactions that began before 2011 and is completed after 2010.

319. (1) Subsection 162(6) of the French version of the Act is replaced by the following:

Défaut de fournir son numéro d’identification

(6) Toute personne ou société de personnes qui ne fournit pas son numéro d’assurance sociale ou son numéro d’entreprise à la personne — tenue par la présente loi ou par une disposition réglementaire de remplir une déclaration de renseignements devant comporter ce numéro — qui lui enjoint de le fournir est passible d’une pénalité de 100 $ pour chaque défaut à moins que, dans les 15 jours après avoir été enjoint de fournir ce numéro, elle ait demandé qu’un numéro d’assurance sociale ou un numéro d’entreprise lui soit attribué et qu’elle l’ait fourni à cette personne dans les 15 jours après qu’elle l’a reçu.

(2) Subsection (1) is deemed to have come into force on June 19, 1998.

320. (1) Paragraph 163(2)(c.1) of the Act is replaced by the following:

(c.1) the amount, if any, by which

(i) the total of all amounts each of which is an amount that would be deemed by section 122.5 to be paid by that person during a month specified for the year or, where that person is the qualified relation of an individual in relation to that specified month (within the meaning assigned by subsection 122.5(1)), by that individual, if that total were calculated by reference to the information provided in the person’s return of income (within the meaning assigned by subsection 122.5(1)) for the year

exceeds

(ii) the total of all amounts each of which is an amount that is deemed by section 122.5 to be paid by that person or by an individual of whom the person is the qualified relation in relation to a month specified for the year (within the meaning assigned to subsection 122.5(1)),

(2) Subsection 163(2.9) of the Act is replaced by the following:

Partnership liable to penalty

(2.9) If a partnership is liable to a penalty under subsection (2.4) or section 163.2, 237.1 or 237.3, sections 152, 158 to 160.1, 161 and 164 to 167 and Division J apply, with any changes that the circumstances require, in respect of the penalty as if the partnership were a corporation.

(3) Subsection (1) applies to amounts deemed to be paid during months specified for the 2001 and subsequent taxation years.

(4) Subsection (2) applies in respect of avoidance transactions that are entered into after 2010 or that are part of a series of transactions that began before 2011 and is completed after 2010.

321. (1) Section 164 of the Act is amended by adding the following after subsection (1.5):

When subsection (1.52) applies

(1.51) Subsection (1.52) applies to a taxpayer for a taxation year if, at any time after the beginning of the year

(a) the taxpayer has, in respect of the tax payable by the taxpayer under this Part (and, if the taxpayer is a corporation, Parts I.3, VI, VI.1 and XIII.1) for the year, paid under any of sections 155 to 157 one or more instalments of tax;

(b) it is reasonable to conclude that the total amount of those instalments exceeds the total amount of taxes that will be payable by the taxpayer under those Parts for the year; and

(c) the Minister is satisfied that the payment of the instalments has caused or will cause undue hardship to the taxpayer.

Instalment refund

(1.52) If this subsection applies to a taxpayer for a taxation year, the Minister may refund to the taxpayer all or any part of the excess referred to in paragraph (1.51)(b).

Penalties, interest not affected

(1.53) For the purpose of the calculation of any penalty or interest under this Act, an instalment is deemed not to have been paid to the extent that all or any part of the instalment can reasonably be considered to have been refunded under subsection (1.52).

(2) Subsection 164(1.6) of the Act is repealed.

(3) The portion of subsection 164(3) of the Act before paragraph (a) is replaced by the following:

Interest on refunds and repayments

(3) If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.5 or 122.61) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied:

(4) Paragraph 164(5)(g) of the Act is repealed.

(5) Subsection (2) is deemed to have come into force on March 21, 2003.

(6) Subsection (3) applies in respect of forms filed after March 20, 2003.

(7) Subsection (4) applies to taxation years that begin after October 31, 2011.

322. Subsection 170(2) of the Act is repealed.

323. Section 176 of the Act is repealed.

324. (1) Paragraph (g) of the definition “financial institution” in subsection 181(1) of Act is replaced by the following:

(g) a corporation

(i) listed in the schedule, or

(ii) all or substantially all of the assets of which are shares or indebtedness of financial institutions to which the corporation is related;

(2) Subsection (1) is deemed to have come into force on December 23, 1997, but in applying paragraph (g) of the definition “financial institution” in subsection 181(1) of the Act, as enacted by subsection (1), in respect of taxation years that end before December 20, 2002, that paragraph is to be read as follows:

(g) prescribed, or listed in the schedule;

325. (1) Subparagraph 181.2(3)(g)(i) of the Act is replaced by the following:

(i) the total of all amounts (other than amounts owing to the member or to other corporations that are members of the partnership) that would, if this paragraph and paragraphs (b) to (d) and (f) applied to partnerships in the same way that they apply to corporations, be determined under those paragraphs in respect of the partnership at the end of its last fiscal period that ends at or before the end of the year

(2) Paragraph 181.2(3)(g) of the Act, as amended by subsection (1), is replaced by the following:

(g) the total of all amounts, each of which is the amount, if any, in respect of a partnership in which the corporation held a membership interest at the end of the year, either directly or indirectly through another partnership, determined by the formula

(A – B) × C/D

where

A is the total of all amounts that would be determined under paragraphs (b) to (d) and (f) in respect of the partnership for its last fiscal period that ends at or before the end of the year if

(a) those paragraphs applied to partnerships in the same manner that they apply to corporations, and

(b) those amounts were computed without reference to amounts owing by the partnership

(i) to any corporation that held a membership interest in the partnership either directly or indirectly through another partnership, or

(ii) to any partnership in which a corporation described in subparagraph (i) held a membership interest either directly or indirectly through another partnership,

B is the partnership’s deferred unrealized foreign exchange losses at the end of the period,

C is the share of the partnership’s income or loss for the period to which the corporation is entitled either directly or indirectly through another partnership, and

D is the partnership’s income or loss for the period

(3) Paragraph 181.2(3)(i) of the Act is replaced by the following:

(i) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year,

(4) Paragraph 181.2(4)(d.1) of the Act is replaced by the following:

(d.1) a loan or advance to, or a bond, debenture, note, mortgage, hypothecary claim or similar obligation of, a partnership each member of which was, throughout the year,

(i) another corporation (other than a financial institution) that was not exempt from tax under this Part (otherwise than because of paragraph 181.1(3)(d)), or

(ii) another partnership described in this paragraph,

(5) Subsection 181.2(5) of the Act is replaced by the following:

Value of interest in partnership

(5) For the purposes of subsection (4) and this subsection, the carrying value at the end of a taxation year of an interest of a corporation or of a partnership (each of which is referred to in this subsection as the “member”) in a particular partnership is deemed to be the member’s specified proportion, for the particular partnership’s last fiscal period that ends at or before the end of the taxation year, of the amount that would, if the particular partnership were a corporation, be the particular partnership’s investment allowance at the end of that fiscal period.

(6) Subsections (1) and (5) apply to taxation years that begin after December 20, 2002.

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

(8) Subsection (3) applies to taxation years that begin after 1995.

(9) Subsection (4) applies to the 2004 and subsequent taxation years.

(10) In applying paragraphs 181.2(4)(b), (c) and (d.1) of the Act to a particular corporation in respect of an asset that is a loan or an advance to, or an obligation of, another corporation or partnership that the particular corporation holds at the end of a taxation year of the particular corporation that began before December 20, 2002, those paragraphs are to be read without reference to “(other than a financial institution)” and to “(other than financial institutions)” if, at the end of the taxation year,

(a) the particular corporation deals at arm’s length with the other corporation or the partnership, as the case may be; and

(b) the other corporation is a financial institution, or the partnership is not a partnership described in paragraph 181.2(4)(d.1) of the Act, as the case may be, solely because of section 324 and subsections 366(1) and (3) of this Act.

326. (1) Subparagraph 181.3(3)(a)(v) of the Act is replaced by the following:

(v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year, and

(2) Subparagraph 181.3(3)(b)(iv) of the Act is replaced by the following:

(iv) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year;

(3) Subparagraph 181.3(3)(c)(v) of the Act is replaced by the following:

(4) Paragraph 181.3(3)(c) of the Act is amended by striking out “and” at the end of subparagraph (v), by adding “and” at the end of subparagraph (vi) and by adding the following after subparagraph (vi):

(vii) any amount recoverable through reinsurance, to the extent that it can reasonably be regarded as being included in the amount determined under subparagraph (iii) in respect of a claims reserve;

(5) Subparagraph 181.3(3)(d)(iv) of the Act is amended by striking out “and” at the end of clause (D) and by adding the following after clause (E):

(F) the total of all amounts each of which is an amount recoverable through reinsurance, to the extent that it can reasonably be regarded as being included in the amount determined under clause (A) in respect of a claims reserve; and

(6) Subsections (1) to (5) apply to taxation years that begin after 1995.

327. (1) Subsections 184(2) to (5) of the Act are replaced by the following:

Tax on excessive elections

(2) If a corporation has elected in accordance with subsection 83(2), 130.1(4) or 131(1) in respect of the full amount of any dividend payable by it on shares of any class of its capital stock (in this section referred to as the “original dividend”) and the full amount of the original dividend exceeds the portion of the original dividend deemed by that subsection to be a capital dividend or capital gains dividend, as the case may be, the corporation shall, at the time of the election, pay a tax under this Part equal to 3/5 of the excess.

Election to treat excess as separate dividend

(3) If, in respect of an original dividend payable at a particular time, a corporation would, but for this subsection, be required to pay a tax under this Part in respect of an excess referred to in subsection (2), and the corporation elects in prescribed manner on or before the day that is 90 days after the day of sending of the notice of assessment in respect of the tax that would otherwise be payable under this Part, the following rules apply:

(a) the portion of the original dividend deemed by subsection 83(2), 130.1(4) or 131(1) to be a capital dividend or capital gains dividend, as the case may be, is deemed for the purposes of this Act to be the amount of a separate dividend that became payable at the particular time;

(b) if the corporation identifies in its election any part of the excess, that part is, for the purposes of any election under subsection 83(2), 130.1(4) or 131(1) in respect of that part, and, where the corporation has so elected, for all purposes of this Act, deemed to be the amount of a separate dividend that became payable immediately after the partic-ular time;

(c) the amount by which the excess exceeds any portion deemed by paragraph (b) to be a separate dividend for all purposes of this Act is deemed to be a separate taxable dividend that became payable at the particular time; and

(d) each person who held any of the issued shares of the class of shares of the capital stock of the corporation in respect of which the original dividend was paid is deemed

(i) not to have received any portion of the original dividend, and

(ii) to have received, at the time that any separate dividend determined under any of paragraphs (a) to (c) became payable, the proportion of that dividend that the number of shares of that class held by the person at the particular time is of the number of shares of that class outstanding at the particular time except that, for the purpose of Part XIII, the separate dividend is deemed to be paid on the day that the election in respect of this subsection is made.

Concurrence with election

(4) An election under subsection (3) is valid only if

(a) it is made with the concurrence of the corporation and all its shareholders

(i) who received or were entitled to receive all or any portion of the original dividend, and

(ii) whose addresses were known to the corporation; and

(b) either

(i) it is made on or before the day that is 30 months after the day on which the original dividend became payable, or

(ii) each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account.

Exception for non-taxable shareholders

(5) If each person who, in respect of an election made under subsection (3), is deemed by subsection (3) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I,

(a) subsection (4) does not apply to the election; and

(b) the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend became payable.

(2) Subsection (1) applies to original dividends paid by a corporation after its 1999 taxation year, except that,

(a) the reference to “sending” in subsection 184(3) of the Act, as enacted by subsection (1), is to be read as a reference to “mailing” for notices of assessments sent before December 15, 2010; and

(b) for the purpose of subsection 184(5) of the Act, as enacted by subsection (1), an election made before the 90th day after the day on which this Act receives royal assent is deemed to have been made in a timely manner.

328. In applying the description of B in paragraph 188(1)(a) of the Act in respect of gifts made to a charity after December 20, 2002, to the extent that those gifts are relevant in respect of notices of intention to revoke the registration of the charity and certificates under subsection 5(1) of the Charities Registration (Security Information) Act that are issued by the Minister of National Revenue before June 13, 2005, that description is to be read as follows:

B is the total of all amounts each of which is the eligible amount of a gift for which it issued a receipt described in subsection 110.1(2) or 118.1(2) in the period (in this section referred to as the “winding-up period”) that begins on the valuation day and ends immediately before the payment day, or an amount received by it in the winding-up period from a registered charity,

329. (1) Paragraph 190.1(3)(a) of the Act is replaced by the following:

(a) the corporation’s tax payable under Part I for the year; and

(2) The definition “unused Part I tax credit” in subsection 190.1(5) of the Act is replaced by the following:

“unused Part I tax credit”
« crédit d’impôt de la partie I inutilisé »

“unused Part I tax credit”, of a corporation for a taxation year, means the amount, if any, by which

(a) the corporation’s tax payable under Part I for the year

exceeds

(b) the amount that would, but for subsection (3), be its tax payable under this Part for the year;

(3) Subsections (1) and (2) apply to taxation years that begin after 2007.

330. (1) Subparagraph 190.13(a)(v) of the Act is replaced by the following:

(v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares);

(2) Subparagraph 190.13(b)(iv) of the Act is replaced by the following:

(iv) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares);

(3) Subsections (1) and (2) apply to taxation years that begin after 1995.

331. (1) Section 190.16 of the Act and the heading before it are repealed.

(2) Subsection (1) applies to taxation years that begin after October 31, 2011.

332. (1) Section 191 of the Act is amended by adding the following after subsection (5):

Excluded dividend — partner

(6) If at any time a corporation pays a dividend to a partnership, the corporation is, for the purposes of this subsection and paragraph (a) of the definition “excluded dividend” in subsection (1), deemed to have paid at that time to each member of the partnership a dividend equal to the amount determined by the formula

A × B

where

A is the amount of the dividend paid to the partnership; and

B is the member’s specified proportion for the last fiscal period of the partner-ship that ended before that time (or, if the partnership’s first fiscal period includes that time, for that first fiscal period).

(2) Subsection (1) applies to dividends paid after December 20, 2002.

333. (1) Subparagraph 191.1(1)(a)(i) of the Act is replaced by the following:

(i) the amount determined by multiplying the amount by which the total of all taxable dividends (other than excluded dividends) paid by the corporation in the year and after 1987 on short-term preferred shares exceeds the corporation’s dividend allowance for the year, by

(A) 50% for dividends paid in a taxation year that ends before 2010,

(B) 45% for dividends paid in a taxation year that ends after 2009 and before 2012,

(2) Subsection (1) applies to the 2003 and subsequent taxation years.

334. Section 200 of the French version of the Act is replaced by the following:

Distribution assimilée à une disposition

200. Pour l’application de la présente partie, la distribution par une fiducie d’un placement non admissible à un bénéficiaire de la fiducie est réputée être une disposition du placement, et le produit de disposition du placement est réputé être sa juste valeur marchande au moment de la distribution.

335. (1) The definition “reserve” in subsection 204.8(1) of the Act is replaced by the following:

“reserve”
« réserve »

“reserve” means

(a) property described in any of paragraphs (a), (b), (c), (f) and (g) of the definition “qualified investment” in section 204, and

(b) deposits with a credit union that is a “member institution” in relation to a deposit insurance corporation (within the meaning assigned by subsection 137.1(5));

(2) Subsection 204.8(1) of the Act is amended by adding the following in alphabetical order:

“terminating corporation”
« société sortante »

“terminating corporation” in respect of a particular corporation means a predecessor corporation in circumstances where

(a) subsection 204.85(3) applies to a merger of the particular corporation and the pred-ecessor corporation,

(b) Class A shares of the particular corporation have been issued to the predecessor corporation in exchange for property of the predecessor corporation, and

(c) within a reasonable period of time after the exchange, Class A shareholders of the predecessor corporation receive all of the Class A shares of the particular corporation issued to the predecessor corporation in the course of a wind-up of the predecessor corporation.

(3) Paragraph 204.8(2)(b) of the Act is replaced by the following:

(b) at the time it begins to wind-up, and for the purpose of this paragraph a corporation is not to be considered to have begun to wind up solely because it discontinues its venture capital business under prescribed wind-up rules;

(4) Subsection (1) applies to taxation years that end after 2006.

(5) Subsection (2) is deemed to have come into force on January 1, 2005.

(6) Subsection (3) is deemed to have come into force on October 24, 2012.

336. (1) The portion of clause 204.81(1)(c)(ii)(A) of the Act before subclause (I) is replaced by the following:

(A) Class A shares that are issuable only to individuals (other than trusts), terminating corporations in respect of the corporation and trusts governed by registered retirement savings plans or by TFSAs and that entitle their holders

(2) Subparagraph 204.81(1)(c)(iv) of the Act is replaced by the following:

(iv) the corporation shall not reduce its paid-up capital in respect of a class of shares (other than Class B shares) otherwise than by way of

(A) a redemption of shares of the corporation, or

(B) a reduction in its paid-up capital attributable to a class of shares for which no shares have been issued in the eight-year period ending at the time of the reduction,

(3) Clause 204.81(1)(c)(v)(E) of the Act is replaced by the following:

(E) the redemption occurs

(I) more than eight years after the day on which the share was issued, or

(II) if the day that is eight years after that issuance is in February or March of a calendar year, in February or on March 1st of that calendar year but not more than 31 days before that day, or

(4) Subparagraph 204.81(1)(c)(vii) of the Act is amended by adding the following after clause (A):

(B) the transfer occurs more than eight years after the day on which the share was issued,

(5) Section 204.81 of the Act is amended by adding the following after subsection (1):

Corporations incorporated before March 6, 1996

(1.1) In applying clause (1)(c)(v)(E) in relation to any time before 2004 in respect of a corporation incorporated before March 6, 1996, the references in that clause to “eight” are replaced with references to “five” if, at that time, the relevant statements in the corporation’s articles refer to “five”.

Deemed provisions in articles

(1.2) In applying subsection (1) in relation to any time before 2004, to a corporation incorporated before February 7, 2000, if the articles of the corporation comply with subclause (1)(c)(v)(E)(I) (as modified, where relevant, by subsection (1.1)), those articles are deemed to provide the statement required by subclause (1)(c)(v)(E)(II).

(6) Section 204.81 of the Act is amended by adding the following after subsection (8.2):

Discontinuance of provincial program

(8.3) If a corporation is a prescribed labour-sponsored venture capital corporation because of the laws of a province, which province has discontinued its labour-sponsored venture capital corporation credit program, notifies the Minister in writing of its intent to revoke its registration under this Part, and meets the requirements under prescribed wind-up rules, then the following rules apply:

(a) the corporation shall not, on or after the day the notice is provided to the Minister (referred to in this subsection and subsection (8.4) as the “notification date”), issue any tax credit certificates, other than duplicate certif-icates to replace certificates issued before that day;

(b) section 204.841 does not apply on the discontinuance of its venture capital business;

(c) subsections 204.82(1) to (4) do not apply to taxation years of the corporation that begin on or after the notification date; and

(d) subsection 204.83(1) does not apply in respect of a period, referred to in that subsection as the “second period”, that ends after the notification date.

Discontinuance of provincial program

(8.4) Subsection (8.3) applies to a corporation only if,

(a) on the notification date, the percentage determined in respect of the corporation by the following formula is less than 20 per cent:

A/(B – C) × 100

where

A is the amount of equity capital received by the corporation on the issue of Class A shares that were issued in the 24 months immediately preceding the notification date and are still outstanding on that date,

B is the total amount of equity capital received by the corporation on the issue of Class A shares that are still outstanding on the notification date, and

C is the amount of equity capital received by the corporation on the issue of Class A shares that, as of the notification date, have been outstanding for at least eight years.

(b) the corporation has revoked its registration before the third anniversary of the notification date.

(7) Subsection (1) is deemed to have come into force on January 1, 2005.

(8) Subsections (2) and (6) are deemed to have come into force on October 24, 2012.

(9) Subsection (3) applies after February 6, 2000 to corporations incorporated at any time.

(10) Subsection (4) applies as of October 24, 2012 to corporations incorporated after March 5, 1996.

(11) Subsection (5) is deemed to have come into force on February 7, 2000.

337. (1) The portion of subsection 204.9(5) of the French version of the Act before paragraph (b) is replaced by the following:

Transferts entre régimes

(5) Pour l’application de la présente partie, dans le cas où un bien détenu par une fiducie régie par un régime enregistré d’épargne-études (appelé « régime cédant » au présent paragraphe) est distribué, à un moment donné, à une fiducie régie par un autre semblable régime (appelé « régime cessionnaire » au présent paragraphe), les règles ci-après s’appliquent :

a) sauf disposition contraire énoncée aux alinéas b) et c), le montant de la distribution est réputé ne pas avoir été versé au régime cessionnaire;

(2) The portion of paragraph 204.9(5)(c) of the French version of the Act before subparagraph (i) is replaced by the following:

c) sauf pour l’application du présent paragraphe à une distribution effectuée après le moment donné, du paragraphe (4) à un remplacement de bénéficiaire effectué après ce moment et du paragraphe 204.91(3) à des faits s’étant produits après ce moment, l’alinéa b) ne s’applique pas par suite de la distribution si, selon le cas :

(3) Paragraph 204.9(5)(d) of the French version of the Act is replaced by the following:

d) dans le cas où les sous-alinéas c)(i) ou (ii) s’appliquent à la distribution, le montant de la distribution est réputé ne pas avoir été retiré du régime cédant;

338. (1) The portion of subsection 204.94(2) of the Act before the formula is replaced by the following:

Charging provision

(2) Every person (other than a public primary caregiver that is exempt from tax under Part I) shall pay a tax under this Part for each taxation year equal to the amount determined by the formula

(2) Subsection (1) applies to the 2007 and subsequent taxation years.

339. (1) The definition “specified proportion” in subsection 206(1) of the Act, as it read before 2005, is repealed.

(2) In their application to months that end after December 20, 2002 and before 2005, subparagraphs (b)(i) to (iii) of the definition “cost amount” in subsection 206(1) of the Act are to be read as follows:

(i) after 2000 and at or before the end of the taxation year, by the trust in respect of the interest (otherwise than as proceeds of disposition of the interest), and

(ii) that has not been satisfied at or before that time by the issue of new units of the trust or by a payment of an amount by the trust;

(3) In its application to months that end after October 2003 and before 2005, paragraph (d.1) of the definition “foreign property” in subsection 206(1) of the Act, as it read immediately before it was repealed by S.C. 2005, c. 30, s. 14, is to be read as follows:

(d.1) any share (other than an excluded share) of the capital stock of, or any debt obligation (other than a debt obligation described in subparagraph (g)(iii)) issued by, a corporation (other than an investment corporation, a mutual fund corporation or a registered investment) that is a Canadian corporation, if shares of the corporation can reasonably be considered to derive their value, directly or indirectly, primarily from foreign property,

(4) In its application to months that end after October 2003 and before 2005, paragraph (g) of the definition “foreign property” in subsection 206(1) of the Act is to be read as follows:

(g) indebtedness of a non-resident person, other than

(i) indebtedness issued by an authorized foreign bank and payable at a branch in Canada of the bank,

(ii) indebtedness issued or guaranteed by

(A) the International Bank for Reconstruction and Development,

(B) the International Finance Corporation,

(D) the Asian Development Bank,

(E) the Caribbean Development Bank,

(F) the European Bank for Reconstruction and Development,

(G) the African Development Bank, or

(H) a prescribed person, or

(iii) a debt obligation that is fully secured by a mortgage, charge, hypothec or similar instrument in respect of real or immovable property situated in Canada or that would be fully secured were it not for a decline in the fair market value of the property after the debt obligation was issued,

(5) In its application to months that end after 1997 and before 2005, the portion of subsection 206(3.1) of the French version of the Act before paragraph (a) is to be read as follows:

(3.1) Pour ce qui est de l’application du sous-alinéa (2)a)(ii) à un moment donné ou postérieurement, lorsqu’un titre déterminé par rapport à un autre titre est acquis au moment donné par le contribuable mentionné au paragraphe (3.2) relativement au titre et que le titre est un bien étranger à ce moment, les règles ci-après s’appliquent :

(6) Subsection (1) is deemed to have come into force on December 21, 2002.

340. (1) Section 207.31 of the Act is replaced by the following:

Tax payable by recipient of an ecological gift

207.31 Any charity, municipality in Canada or municipal or public body performing a function of government in Canada (referred to in this section as the “recipient”) that at any time in a taxation year, without the authorization of the Minister of the Environment or a person designated by that Minister, disposes of or changes the use of a property described in paragraph 110.1(1)(d) or in the definition “total ecological gifts” in subsection 118.1(1) and given to the recipient shall, in respect of the year, pay a tax under this Part equal to 50% of the amount that would be determined for the purposes of section 110.1 or 118.1, if this Act were read without reference to subsections 110.1(3) and 118.1(6), to be the fair market value of the property if the property were given to the recipient immediately before the disposition or change.

(2) Subsection (1) applies in respect of dispositions of or changes of use of property after July 18, 2005.

341. (1) Sections 210 and 210.1 of the Act are replaced by the following:

Definitions

210. (1) The following definitions apply in this Part.

“designated beneficiary”
« bénéficiaire étranger ou assimilé »

“designated beneficiary”, under a particular trust at any time, means a beneficiary, under the particular trust, who is at that time

(a) a non-resident person;

(b) a non-resident-owned investment corporation;

(c) a person who is, because of subsection 149(1), exempt from tax under Part I on all or part of their taxable income and who acquired an interest as a beneficiary under the particular trust after October 1, 1987 directly or indirectly from a beneficiary under the particular trust except if

(i) the interest was, at all times after the later of October 1, 1987 and the day on which the interest was created, held by persons who were exempt from tax under Part I on all of their taxable income because of subsection 149(1), or

(ii) the person is a trust, governed by a registered retirement savings plan or a registered retirement income fund, who acquired the interest, directly or indirectly, from an individual or the spouse or common-law partner, or former spouse or common-law partner, of the individual who was, immediately after the interest was acquired, a beneficiary under the trust governed by the fund or plan;

(d) another trust (referred to in this paragraph as the “other trust”) that is not a testamentary trust, a mutual fund trust or a trust that is exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income, if any beneficiary under the other trust is at that time

(i) a non-resident person,

(ii) a non-resident-owned investment corporation,

(iii) a trust that is not

(A) a testamentary trust,

(B) a mutual fund trust,

(D) a trust

(I) whose interest, at that time, in the other trust was held, at all times after the day on which the interest was created, either by it or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, and

(II) none of the beneficiaries under which is, at that time, a designated beneficiary under it, or

(iv) a person or partnership that

(A) is a designated beneficiary under the other trust because of paragraph (c) or (e), or

(B) would be a designated beneficiary under the particular trust because of paragraph (c) or (e) if, instead of being a beneficiary under the other trust, the person or partnership were at that time a beneficiary, under the particular trust, whose interest as a beneficiary under the particular trust were

(I) identical to its interest (referred to in this clause as the “particular interest”) as a beneficiary under the other trust,

(II) acquired from each person or partnership from whom it acquired the particular interest, and

(III) held, at all times after the later of October 1, 1987 and the day on which the particular interest was created, by the same persons or partnerships that held the particular interest at those times; or

(e) a particular partnership any of the members of which is at that time

(i) another partnership, except if

(A) each such other partnership is a Canadian partnership,

(B) the interest of each such other partnership in the particular partnership is held, at all times after the day on which the interest was created, by the other partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income,

(C) the interest of each member, of each such other partnership, that is a person exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income was held, at all times after the day on which the interest was created, by that member or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income, and

(D) the interest of the particular partnership in the particular trust was held, at all times after the day on which the interest was created, by the particular partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income,

(ii) a non-resident person,

(iii) a non-resident-owned investment corporation,

(iv) another trust that is, under paragraph (d), a designated beneficiary of the partic-ular trust or that would, under paragraph (d), be a designated beneficiary of the particular trust if the other trust were at that time a beneficiary under the particular trust whose interest as a beneficiary under the particular trust were

(A) acquired from each person or partnership from whom the particular partnership acquired its interest as a beneficiary under the particular trust, and

(B) held, at all times after the later of October 1, 1987 and the day on which the particular partnership’s interest as a beneficiary under the particular trust was created, by the same persons or partnerships that held that interest of the particular partnership at those times, or

(v) a person exempt because of subsection 149(1) from tax under Part I on all or part of its taxable income except if the interest of the particular partnership in the partic-ular trust was held, at all times after the day on which the interest was created, by the particular partnership or by persons who were exempt because of subsection 149(1) from tax under Part I on all of their taxable income.

“designated income”
« revenu de distribution »

“designated income”, of a trust for a taxation year, means the amount that would be the income of the trust for the year determined under section 3 if

(a) this Act were read without reference to subsections 104(6), (12) and (30);

(b) the trust had no income other than taxable capital gains from dispositions described in paragraph (c) and incomes from

(i) real or immovable properties in Canada (other than Canadian resource properties),

(ii) timber resource properties,

(iii) Canadian resource properties (other than properties acquired by the trust before 1972), and

(iv) businesses carried on in Canada;

(i) dispositions of taxable Canadian property, and

(ii) dispositions of particular property (other than property described in any of subparagraphs 128.1(4)(b)(i) to (iii)), or property for which the particular property is substituted, that was transferred at any particular time to a particular trust in circumstances in which subsection 73(1) or 107.4(3) applied, if

(A) it is reasonable to conclude that the property was so transferred in anticipation that a person beneficially interested at the particular time in the particular trust would subsequently cease to reside in Canada, and a person beneficially interested at the particular time in the particular trust did subsequently cease to reside in Canada, or

(B) when the property was so transferred, the terms of the particular trust satisfied the conditions in subparagraph 73(1.01)(c)(i) or (iii), and it is reasonable to conclude that the transfer was made in connection with the cessation of residence, on or before the transfer, of a person who was, at the time of the transfer, beneficially interested in the particular trust and a spouse or common-law partner, as the case may be, of the transferor of the property to the partic-ular trust; and

(d) the only losses referred to in paragraph 3(d) were losses from sources described in any of subparagraphs (b)(i) to (iv).

Tax not payable

(2) No tax is payable under this Part for a taxation year by a trust that was throughout the year

(a) a testamentary trust;

(b) a mutual fund trust;

(d) a trust to which paragraph (a), (a.1) or (c) of the definition “trust” in subsection 108(1) applies; or

(e) non-resident.

(2) Subsection (1) applies to the 1996 and subsequent taxation years, except that paragraph (c) of the definition “designated income” in subsection 210(1) of the Act, as enacted by subsection (1), is to be read

(a) in respect of dispositions that occur after October 1, 1996 and before December 21, 2002, as follows:

(c) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from dispositions of taxable Canadian property; and

(b) in respect of dispositions that occur in a 1996 taxation year and before October 2, 1996, as follows:

(c) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from dispositions of property that would have been taxable Canadian property if, at no time in the year, the trust had been resident in Canada; and

342. (1) Subsections 210.2(1.1) and (2) of the Act are replaced by the following:

Amateur athlete trusts

(2) Notwithstanding subsection 210(2), a trust shall pay a tax under this Part in respect of a particular taxation year of the trust equal to 56.25% of the amount that is required by subsection 143.1(2) to be included in computing the income under Part I for a taxation year of a beneficiary under the trust, if

(a) the beneficiary is at any time in the particular taxation year a designated beneficiary under the trust; and

(b) the particular taxation year ends in that taxation year of the beneficiary.

(2) The portion of subsection 210.2(3) of the French version of the Act before the formula is replaced by the following:

Crédit d’impôt remboursable aux bénéficiaires résidant au Canada

(3) Dans le cas où une partie du revenu d’une fiducie pour une année d’imposition est incluse, en application du paragraphe 104(13) ou 105(2), dans le calcul du revenu en vertu de la partie I d’une personne qui n’a été bénéficiaire étranger ou assimilé de la fiducie à aucun moment de l’année ou dans la partie du revenu d’une personne non-résidente qui est soumise, par application du paragraphe 2(3), à l’impôt payable en vertu de la partie I et n’en est pas exonérée par un traité fiscal — sauf s’il s’agit d’une personne qui, à un moment de l’année, serait un bénéficiaire étranger ou assimilé de la fiducie si l’article 210 s’appliquait compte non tenu de l’alinéa a) de la définition de « bénéficiaire étranger ou assimilé » à cet article —, le montant, calculé selon la formule ci-après, attribué à la personne par la fiducie dans sa déclaration pour l’année en vertu de la présente partie est réputé payé le quatre-vingt-dixième jour suivant la fin de l’année d’imposition de la fiducie au titre de l’impôt payable en vertu de la partie I par cette personne pour l’année d’imposition de celle-ci au cours de laquelle l’année d’imposition de la fiducie se termine :

(3) Paragraph 210.2(3)(b) of the English version of the Act is replaced by the following:

(b) the income of a non-resident person (other than a person who, at any time in the year, would be a designated beneficiary under the trust if section 210 were read without reference to paragraph (a) of the definition “designated beneficiary” in that section) that is subject to tax under Part I by reason of subsection 2(3) and is not exempt from tax under Part I by reason of a provision contained in a tax treaty,

(4) Subsections (1) to (3) apply to the 1996 and subsequent taxation years, except that

(a) in applying the portion of subsection 210.2(3) of the French version of the Act before the formula, as enacted by subsection (2), for the 1996 and 1997 taxation years, the reference to “un traité fiscal” is to be read as a reference to “un accord ou une convention fiscal ayant force de loi au Canada et conclu entre le gouvernement du Canada et le gouvernement d’un pays étranger”; and

(b) in applying paragraph 210.2(3)(b) of the English version of the Act, as enacted by subsection (3), for the 1996 and 1997 taxation years the reference to “treaty” is to be read as a reference to “convention or agreement with another country that has the force of law in Canada”.

343. (1) Subsection 211.7(1) of the Act is amended by adding the following in alphabetical order:

“qualifying exchange”
« échange admissible »

“qualifying exchange” means an exchange by a taxpayer of an approved share, that is part of a series of Class A shares of the capital stock of a corporation, for another approved share, that is part of another series of Class A shares of the capital stock of the corporation, if

(a) the only consideration received by the taxpayer on the exchange is the other share; and

(b) the rights in respect of the series are identical except for the portion of the reserve (within the meaning assigned by subsection 204.8(1)) of the corporation that is attribut-able to each series.

(2) Section 211.7 of the Act is amended by adding the following after subsection (2):

Exchangeable shares

(3) For the purposes of this Part and Part X.3, if an approved share of the capital stock of a corporation (referred to in this subsection as the “new share”) has been issued in exchange for another approved share (referred to in this subsection as the “original share”) in a qualifying exchange, the new share is deemed not to have been issued on the exchange and is deemed to have been issued at the time the corporation issued the original share.

(3) Subsections (1) and (2) are deemed to have come into force on January 1, 2004.

344. (1) The portion of subsection 211.8(1) of the Act before paragraph (a) is replaced by the following:

Disposition of approved share

211.8 (1) If an approved share of the capital stock of a registered labour-sponsored venture capital corporation or a revoked corporation is, before the first discontinuation of its venture capital business, redeemed, acquired or cancelled by the corporation less than eight years after the day on which the share was issued (other than in circumstances described in subclause 204.81(1)(c)(v)(A)(I) or (III) or clause 204.81(1)(c)(v)(B) or (D) or other than if the share is a Class A share of the capital stock of the corporation that is exchanged for another Class A share of the capital stock of the corporation as part of a qualifying exchange) or any other share that was issued by any other labour-sponsored venture capital corporation is disposed of, the person who was the shareholder immediately before the redemption, acquisition, cancellation or disposition shall pay a tax under this Part equal to the lesser of

(2) Subparagraph (i) of the description of B in paragraph 211.8(1)(a) of the Act is amended by striking out “or” at the end of clause (A) and by replacing clause (B) with the following:

(B) more than five years after its issuance, or

(C) if the day that is five years after its issuance is in February or March of a calendar year, in February or on March 1st of that calendar year but not more than 31 days before that day,

(3) The description of B in paragraph 211.8(1)(a) of the Act is amended by adding the following after subparagraph (i):

(i.1) nil, where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, the original acquisition of the share was after March 5, 1996 and the redemption, acquisition or cancellation is in February or on March 1st of a calendar year but is not more than 31 days before the day that is eight years after the day on which the share was issued,

(4) Subsection (1) applies in respect of shares redeemed, acquired or cancelled after 2003.

(5) Subsections (2) and (3) apply to redemptions, acquisitions, cancellations and dispositions that occur after November 15, 1995.

345. (1) The Act is amended by adding the following after section 211.8:

Tax for failure to re-acquire certain shares

211.81 If a particular amount is payable under a prescribed provision of a provincial law for a taxation year of an individual as determined for the purposes of that provincial law (referred to in this section as the “relevant provincial year”), and an amount has been included in the computation of the labour-sponsored funds tax credit of the individual under subsection 127.4(6) in respect of an approved share that has been disposed of by a qualifying trust in respect of the individual, the individual shall pay a tax for the taxation year in which the relevant provincial year ends equal to the particular amount.

Return

211.82 (1) Every person that is liable to pay tax under this Part for a taxation year shall, not later than the day on or before which the person is required by section 150 to file a return of income for the year under Part I, file with the Minister a return for the year under this Part in prescribed form containing an estimate of the tax payable by the person for the year.

Provisions applicable to this Part

(2) Subsections 150(2) and (3), sections 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require.

(2) Section 211.81 of the Act, as enacted by subsection (1), is deemed to have come into force on October 24, 2012.

(3) Section 211.82 of the Act, as enacted by subsection (1), applies to taxation years that end after October 24, 2012.

346. (1) Section 211.9 of the Act is repealed.

(2) Subsection (1) applies to taxation years that end after October 24, 2012.

347. (1) Subparagraph 212(1)(b)(iv) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is replaced by the following:

(iv) interest payable to a person with whom the payer is dealing at arm’s length and to whom a certificate of exemption that is in force on the day the amount is paid or credited was issued under subsection (14),

(2) The portion of subparagraph 212(1)(b)(xii) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), before clause (A) is replaced by the following:

(xii) interest payable by a lender under a securities lending arrangement, if the lender and the borrower deal with each other at arm’s length and the lender is a financial institution prescribed for the purpose of clause (iii)(D), or a registered securities dealer resident in Canada, on money provided to the lender either as collateral or as consideration for the particular security lent or transferred under the arrangement where

(3) Paragraph 212(1)(b) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is amended by striking out “and” at the end of subparagraph (xi), by adding “and” at the end of subparagraph (xii) and by adding the following after subparagraph (xii):

(xiii) an amount paid or credited under a securities lending arrangement that is deemed by subparagraph 260(8)(c)(i) to be a payment made by a borrower to a lender of interest if

(A) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and

(B) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer;

(4) Paragraph 212(1)(b) of the Act, as amended by subsections (1) to (3), is replaced by the following:

Interest

(b) interest that

(i) is not fully exempt interest, and is paid or payable to a person with whom the payer is not dealing at arm’s length, or

(ii) is participating debt interest;

(5) Subparagraph 212(1)(b)(i) of the Act, as enacted by subsection (4), is replaced by the following:

(i) is not fully exempt interest and is paid or payable

(A) to a person with whom the payer is not dealing at arm’s length, or

(B) in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length, or

(6) Subparagraph 212(1)(c)(ii) of the French version of the Act is replaced by the following:

(ii) peut raisonnablement être considérée, compte tenu des circonstances, y compris les modalités de la succession ou de l’acte de fiducie, comme la distribution d’un montant reçu par la succession ou la fiducie, ou comme une somme provenant d’un tel montant, au titre d’un dividende non imposable sur une action du capital-actions d’une société résidant au Canada;

(7) Subparagraph 212(1)(d)(iv) of the Act is replaced by the following:

(iv) unless paragraph (i) applies to the amount, made pursuant to an agreement between a person resident in Canada and a non-resident person under which the non-resident person agrees not to use or not to permit any other person to use any thing referred to in subparagraph (i) or any information referred to in subparagraph (ii), or

(8) Subparagraph 212(1)(d)(xi) of the Act is amended by striking out “or” at the end of clause (B) and by adding the following after clause (C):

(D) air navigation equipment utilized in the provision of services under the Civil Air Navigation Services Commercialization Act or computer software the use of which is necessary for the operation of that equipment that is used by the payer for no other purpose; or

(9) Paragraph 212(1)(d) of the Act is amended by striking out “or” at the end of subparagraph (x), by adding “or” at the end of subparagraph (xi) and by adding the following after subparagraph (xi):

(xii) an amount to which subsection (5) would apply if that subsection were read without reference to “to the extent that the amount relates to that use or reproduction”;

(10) Subsection 212(1) of the Act is amended by adding the following after paragraph (h):

Restrictive covenant amount

(i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year;

(11) Section 212 of the Act is amended by adding the following after subsection (2):

Exempt dividends

(2.1) Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement if

(a) the amount is deemed by subparagraph 260(8)(c)(i) to be a dividend;

(b) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada; and

(c) the security that is transferred or lent to the borrower under the securities lending arrangement is a share of a class of the capital stock of a non-resident corporation.

(12) Subsection 212(3) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(3), is amended by adding “and” at the end of paragraph (a) and by repealing paragraph (b).

(13) Subsection 212(3) of the Act, as amended by subsection (12), is replaced by the following:

Interest — definitions

(3) The following definitions apply for the purpose of paragraph (1)(b).

“fully exempt interest”
« intérêts entièrement exonérés »

“fully exempt interest” means

(a) interest that is paid or payable on a bond, debenture, note, mortgage, hypothecary claim or similar debt obligation

(i) of, or guaranteed (otherwise than by being insured by the Canada Deposit Insurance Corporation) by, the Government of Canada,

(ii) of the government of a province,

(iii) of an agent of a province,

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

(v) of a corporation, commission or association to which any of paragraphs 149(1)(d) to (d.6) applies, or

(vi) of an educational institution or a hospital if repayment of the principal amount of the obligation and payment of the interest is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province;

(b) interest that is paid or payable on a mortgage, hypothecary claim or similar debt obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property, or to immovables situated outside Canada or a real right in any such immovable, except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real or immovable property situated outside Canada;

(d) an amount paid or payable or credited under a securities lending arrangement that is deemed by subparagraph 260(8)(c)(i) to be a payment made by a borrower to a lender of interest, if

(i) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and

(ii) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer.

“participating debt interest”
« intérêts sur des créances participatives »

“participating debt interest” means interest (other than interest described in any of paragraphs (b) to (d) of the definition “fully exempt interest”) that is paid or payable on an obligation, other than a prescribed obligation, all or any portion of which interest is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation.

(14) Subsection 212(5) of the French version of the Act is replaced by the following:

Films cinématographiques

(5) Toute personne non-résidente doit payer un impôt sur le revenu de 25 % sur toute somme qu’une personne résidant au Canada lui verse ou porte à son crédit, ou est réputée, en vertu de la partie I, lui verser ou porter à son crédit, au titre ou en paiement intégral ou partiel d’un droit sur les oeuvres ci-après qui ont été ou doivent être utilisées ou reproduites au Canada, ou d’un droit d’utilisation de telles oeuvres, dans la mesure où la somme se rapporte à cette utilisation ou reproduction :

a) un film cinématographique;

b) un film, une bande magnétoscopique ou d’autres procédés de reproduction à utiliser pour la télévision, sauf ceux utilisés uniquement pour une émission d’information produite au Canada.

(15) The portion of subsection 212(5) of the English version of the Act after paragraph (b) is replaced by the following:

that has been, or is to be, used or reproduced in Canada to the extent that the amount relates to that use or reproduction.

(16) Subsection 212(9) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) a dividend or interest is received by a trust that is created under a reinsurance trust agreement

(i) to which a regulatory authority — being the Superintendent of Financial Institutions or a provincial regulatory authority having powers similar to those of the Superintendent — is a party, and

(ii) that accords with guidelines issued by the regulatory authority relating to reinsurance arrangements with unregistered insurers

(17) Subsection 212(13) of the Act is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):

(g) an amount to which paragraph (1)(i) would apply if the amount paid or credited were paid or credited by a person resident in Canada, and that amount affects, or is intended to affect, in any way whatever,

(i) the acquisition or provision of property or services in Canada,

(ii) the acquisition or provision of property or services outside Canada by a person resident in Canada, or

(iii) the acquisition or provision outside Canada of a taxable Canadian property,

(18) Subsection 212(13.2) of the Act is replaced by the following:

Application of Part XIII tax — non-resident operates in Canada

(13.2) For the purposes of this Part, a particular non-resident person, who in a taxation year pays or credits to another non-resident person an amount other than an amount to which subsection (13) applies, is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing the particular non-resident person’s taxable income earned in Canada for any taxation year from a source that is neither a treaty-protected business nor a treaty-protected property.

(19) Subparagraph (b)(i) of the description of B in subsection 212(19) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(6), is replaced by the following:

(i) 10 times the greatest amount determined, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be the capital employed by the taxpayer at the end of the day, and

(20) Subsection (1) applies to the 1998 and subsequent taxation years.

(21) Subsection (2) applies to arrangements made after 2002.

(22) Subsections (3) and (11) apply to securities lending arrangements entered into after May 1995, except that, in their application to arrangements made before 2002, each reference to “subparagraph 260(8)(c)(i)” in subparagraph 212(1)(b)(xiii) and paragraph 212(2.1)(a) of the Act, as respectively enacted by subsections (3) and (11), is to be read as a reference to “subparagraph 260(8)(a)(i)”.

(23) Subsections (4) and (13) are deemed to have come into force on January 1, 2008.

(24) Subsection (5) applies to interest that is paid or payable by a person or partnership (referred to in this subsection as the “payer”) to a person or partnership (referred to in this subsection as the “recipient”) on or after March 16, 2011, unless

(a) the interest is paid in respect of a debt or obligation incurred by the payer before March 16, 2011; and

(b) the recipient acquired the entitlement to the interest as a consequence of an agreement or other arrangement entered into by the recipient, and evidenced in writing, before March 16, 2011.

(25) Subsection (7) applies to amounts paid or credited after October 7, 2003.

(26) Subsection (8) applies to payments made after July 2003.

(27) Subsections (9), (14) and (15) apply to the 2000 and subsequent taxation years.

(28) Subsections (10) and (17) apply to amounts paid or credited after October 7, 2003, except that the portion of paragraph 212(13)(g) of the Act before subparagraph (i), as enacted by subsection (17), is to be read as follows before July 16, 2010:

(g) an amount to which paragraph (1)(i) applies if that amount affects, or is intended to affect, in any way whatever,

(29) Subsection (12) applies to replacement obligations issued after 2000.

(30) Subsection (16) applies to amounts paid or credited after 2000.

(31) A written application made under subsection 227(6) of the Act in respect of a particular amount that has been paid to the Receiver General is deemed to be filed on time if

(a) the application is filed with the Minister of National Revenue within 180 days after the day on which this Act receives royal assent; and

(b) the particular amount is an amount on which tax would not be payable because of the application of subsection 212(9) of the Act, as amended by subsection (16), if that subsection 212(9) were read without ref-erence to its paragraphs (a) to (c).

(32) Subsection (18) applies to amounts paid or credited under obligations entered into after December 20, 2002.

(33) Subsection (19) applies to securities lending arrangements entered into after May 28, 1993.

348. Paragraph 214(3)(k) of the French version of the Act is replaced by the following:

k) le montant distribué par une fiducie au profit d’un athlète amateur à un moment donné, qui serait à inclure, en application du paragraphe 143.1(2), dans le calcul du revenu d’un particulier si la partie I s’appliquait est réputé avoir été payé au particulier à ce moment à titre de paiement relatif à une fiducie au profit d’un athlète amateur;

349. (1) The portion of subsection 216(1) of the Act before paragraph (a) is replaced by the following:

Alternatives re rents and timber royalties

216. (1) If an amount has been paid during a taxation year to a non-resident person or to a partnership of which that person was a member as, on account of, in lieu of payment of or in satisfaction of, rent on real or immovable property in Canada or a timber royalty, that person may, within two years (or, if that person has filed an undertaking described in subsection (4) in respect of the year, within six months) after the end of the year, file a return of income under Part I for that year in prescribed form. On so filing and without affecting the liability of the non-resident person for tax otherwise payable under Part I, the non-resident person is, in lieu of paying tax under this Part on that amount, liable to pay tax under Part I for the year as though

(2) The portion of subsection 216(5) of the Act before paragraph (a) is replaced with the following:

Disposition by non-resident

(5) If a person or a trust under which a person is a beneficiary has filed a return of income under Part I for a taxation year as permitted by this section or as required by section 150 and, in computing the amount of the person’s income under Part I an amount has been deducted under paragraph 20(1)(a), or is deemed by subsection 107(2) to have been allowed under that paragraph, in respect of property that is real property in Canada — or an interest therein — or an immovable in Canada — or a real right therein —, a timber resource property or a timber limit in Canada, the person shall file a return of income under Part I in prescribed form on or before the person’s filing-due date for any subsequent taxation year in which the person is non-resident and in which the person, or a partnership of which the person is a member, disposes of that property or any interest, or for civil law any right, in it. On so filing and without affecting the person’s liability for tax otherwise payable under Part I, the person is, in lieu of paying tax under this Part on any amount paid, or deemed by this Part to have been paid, in that subsequent taxation year in respect of any interest in, or for civil law any right in, that property to the person or to a partnership of which the person is a member, liable to pay tax under Part I for that subsequent taxation year as though

(3) Subsection 216(7) of the Act is repealed.

(4) Subsections (1) and (2) apply to taxation years that end after December 20, 2002.

350. (1) Section 220 of the Act is amended by adding the following after subsection (2.1):

Exception

(2.2) Subsection (2.1) does not apply in respect of a prescribed form, receipt or document, or prescribed information, that is filed with the Minister on or after the day specified, in respect of the form, receipt, document or information, in subsection 37(11) or paragraph (m) of the definition “investment tax credit” in subsection 127(9).

(2) Paragraph 220(4.6)(a) of the French version of the Act is replaced by the following:

a) par le seul effet du paragraphe 107(5), les alinéas 107(2)a) à c) ne s’appliquent pas à une distribution de biens canadiens imposables effectuée par une fiducie au cours d’une année d’imposition (appelée « année de la distribution » au présent article);

(3) Paragraph 220(4.6)(c) of the French version of the Act is replaced by the following:

c) le ministre accepte, jusqu’à la date d’exigibilité du solde applicable à la fiducie pour une année d’imposition ultérieure, une garantie suffisante fournie par la fiducie, ou en son nom, au plus tard à la date d’exigibilité du solde qui lui est applicable pour l’année de la distribution pour le moins élevé des montants suivants :

(i) le montant obtenu par la formule suivante :

A – B – [((A – B)/A) × C]

où :

A représente le total des impôts prévus par les parties I et I.1 qui seraient payables par la fiducie pour l’année de la distribution s’il n’était pas tenu compte de l’exclusion ou de la déduction de chaque montant visé à l’alinéa 161(7)a),

B le total des impôts prévus par ces parties qui auraient été ainsi payables si les règles énoncées au paragraphe 107(2) (sauf celle portant sur le choix prévu à ce paragraphe) s’étaient appliquées à chaque distribution, effectuée par la fiducie au cours de l’année de la distribution, de biens auxquels s’applique l’alinéa a) (sauf les biens dont il est disposé ultérieurement avant le début de l’année ultérieure),

C le total des montants réputés par la présente loi ou une autre loi avoir été payés au titre de l’impôt de la fiducie en vertu de la présente partie pour l’année de la distribution,

(ii) si l’année ultérieure suit immédiatement l’année de la distribution, le montant déterminé selon le sous-alinéa (i); sinon, le montant déterminé selon le présent alinéa relativement à la fiducie pour l’année d’imposition précédant l’année ultérieure;

(4) The portion of subsection 220(4.61) of the French version of the Act before paragraph (a) is replaced by the following:

Restriction

(4.61) Malgré le paragraphe (4.6), le ministre est réputé, à un moment donné, ne pas avoir accepté de garantie aux termes de ce paragraphe pour l’année de la distribution d’une fiducie pour un montant supérieur à l’excédent du total visé à l’alinéa a) sur le total visé à l’alinéa b) :

(5) Paragraph 220(4.61)(b) of the French version of the Act is replaced by the following:

b) le total des impôts qui seraient déterminés selon l’alinéa a) si les alinéas 107(2)a) à c) s’étaient appliqués à chaque distribution effectuée par la fiducie au cours de l’année de biens auxquels s’applique l’alinéa (1)a).

(6) Subsection (1) applies in respect of a prescribed form, receipt and document, and prescribed information, filed with the Minister of National Revenue on or after November 17, 2005 other than a prescribed form, receipt or document, or prescribed information, in respect of which the Minister of National Revenue has received, before November 17, 2005, a request made in writing with the Minister that the Minister waive the filing requirements in subsection 37(11) of the Act and paragraph (m) of the definition “investment tax credit” in subsection 127(9) of the Act that apply, but for any waiver, to the expenditures to which the prescribed form, receipt or document, or prescribed information, relates.

351. (1) The portion of subsection 227(8) of the Act before paragraph (a) is replaced by the following:

Penalty

(8) Subject to subsection (9.5), every person who in a calendar year has failed to deduct or withhold any amount as required by subsection 153(1) or section 215 is liable to a penalty of

(2) Paragraph 227(10)(b) of the Act is replaced by the following:

(b) subsection 237.1(7.4) or (7.5) or 237.3(8) by a person or partnership,

352. (1) Paragraph 230(2)(a) of the French version of the Act is replaced by the following:

a) des renseignements sous une forme qui permet au ministre de déterminer s’il existe des motifs de révocation de l’enregistrement de l’organisme ou de l’association en vertu de la présente loi;

(2) Subsection 230(3) of the French version of the Act is replaced by the following:

Ordre du ministre quant à la tenue de registres

(3) Le ministre peut exiger de la personne qui n’a pas tenue les registres et livres de compte voulus pour l’application de la présente loi qu’elle tienne ceux qu’il spécifie. Dès lors, la personne doit tenir les registres et livres de compte qui sont ainsi exigés d’elle.

353. The portion of subsection 231.2(1) of the Act before paragraph (a) is replaced by the following:

Requirement to provide documents or information

231.2 (1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice served personally or by registered or certified mail, require that any person provide, within such reasonable time as is stipulated in the notice,

354. Subparagraph 233.4(1)(c)(ii) of the Act is replaced by the following:

(ii) of which a non-resident corporation or trust is a foreign affiliate at any time in the fiscal period.

355. (1) Paragraph (b) of the definition “gifting arrangement” in subsection 237.1(1) of the Act is replaced by the following:

(b) incur a limited-recourse debt, determined under subsection 143.2(6.1), that can reasonably be considered to relate to a gift to a qualified donee or a monetary contribution referred to in subsection 127(4.1);

(2) Subsection (1) applies in respect of gifts and monetary contributions made after 6:00 p.m. (Eastern Standard Time) on December 5, 2003.

356. (1) The Act is amended by adding the following after section 237.2:

Definitions

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

“advisor”
« conseiller »

“advisor”, in respect of a transaction or series of transactions, means each person who provides, directly or indirectly in any manner whatever, any contractual protection in respect of the transaction or series, or any assistance or advice with respect to creating, developing, planning, organizing or implementing the transaction or series, to another person (including any person who enters into the transaction for the benefit of another person).

“avoidance transaction”
« opération d’évitement »

“avoidance transaction” has the meaning assigned by subsection 245(3).

“confidential protection”
« droit à la confidentialité »

“contractual protection”
« protection contractuelle »

“contractual protection”, in respect of a transaction or series of transactions, means

(a) any form of insurance (other than stand-ard professional liability insurance) or other protection, including, without limiting the generality of the foregoing, an indemnity, compensation or a guarantee that, either immediately or in the future and either absolutely or contingently,

(i) protects a person against a failure of the transaction or series to achieve any tax benefit from the transaction or series, or

(ii) pays for or reimburses any expense, fee, tax, interest, penalty or similar amount that may be incurred by a person in the course of a dispute in respect of a tax benefit from the transaction or series; and

(b) any form of undertaking provided by a promoter, or by any person who does not deal at arm’s length with a promoter, that provides, either immediately or in the future and either absolutely or contingently, assistance, directly or indirectly in any manner whatever, to a person in the course of a dispute in respect of a tax benefit from the transaction or series.

“fee”
« honoraires »

“fee”, in respect of a transaction or series of transactions, means any consideration that is, or could be, received or receivable, directly or indirectly in any manner whatever, by an advisor or a promoter, or any person who does not deal at arm’s length with an advisor or promoter, for

(a) providing advice or an opinion with respect to the transaction or series;

(b) creating, developing, planning, organizing or implementing the transaction or series;

(d) preparing documents supporting the transaction or series, including tax returns or any information returns to be filed under this Act; or

(e) providing contractual protection.

“person”
« personne »

“person” includes a partnership.

“promoter”
« promoteur »

“promoter”, in respect of a transaction or series of transactions, means each person who

(a) promotes or sells (whether as principal or agent and whether directly or indirectly) an arrangement, plan or scheme (referred to in this definition as an “arrangement”), if it may reasonably be considered that the arrangement includes or relates to the transaction or series;

(b) makes a statement or representation (whether as principal or agent and whether directly or indirectly) that a tax benefit could result from an arrangement, if it may reasonably be considered that

(i) the statement or representation was made in furtherance of the promoting or selling of the arrangement, and

(ii) the arrangement includes or relates to the transaction or series; or

(c) accepts (whether as principal or agent and whether directly or indirectly) consideration in respect of an arrangement referred to in paragraph (a) or (b).

“reportable transaction”
« opération à déclarer »

“reportable transaction”, at any time, means an avoidance transaction that is entered into by or for the benefit of a person, and each transaction that is part of a series of transactions that includes the avoidance transaction, if at the time any two of the following paragraphs apply in respect of the avoidance transaction or series:

(a) an advisor or a promoter, or any person who does not deal at arm’s length with the advisor or promoter, has or had an entitlement, either immediately or in the future and either absolutely or contingently, to a fee that to any extent

(i) is based on the amount of a tax benefit that results, or would result but for section 245, from the avoidance transaction or series,

(ii) is contingent upon the obtaining of a tax benefit that results, or would result but for section 245, from the avoidance transaction or series, or may be refunded, recovered or reduced, in any manner whatever, based upon the failure of the person to obtain a tax benefit from the avoidance transaction or series, or

(iii) is attributable to the number of persons

(A) who participate in the avoidance transaction or series, or in a similar avoidance transaction or series, or

(B) who have been provided access to advice or an opinion given by the advisor or promoter regarding the tax consequences from the avoidance transaction or series, or from a similar avoidance transaction or series;

(b) an advisor or promoter in respect of the avoidance transaction or series, or any person who does not deal at arm’s length with the advisor or promoter, obtains or obtained confidential protection in respect of the avoidance transaction or series,

(i) in the case of an advisor, from a person to whom the advisor has provided any assistance or advice with respect to the avoidance transaction or series under the terms of an engagement of the advisor by that person to provide such assistance or advice, or

(ii) in the case of a promoter, from a person

(A) to whom an arrangement, plan or scheme has been promoted or sold in the circumstances described in paragraph (a) of the definition “promoter”,

(B) to whom a statement or representation described in paragraph (b) of the definition “promoter” has been made, or

(i) the person (in this subparagraph referred to as the “particular person”), another person who entered into the avoidance transaction for the benefit of the particular person or any other person who does not deal at arm’s length with the particular person or with a person who entered into the avoidance transaction for the benefit of the particular person, has or had contractual protection in respect of the avoidance transaction or series, otherwise than as a result of a fee described in paragraph (a), or

(ii) an advisor or promoter in respect of the avoidance transaction or series, or any person who does not deal at arm’s length with the advisor or promoter, has or had contractual protection in respect of the avoidance transaction or series, otherwise than as a result of a fee described in paragraph (a).

“solicitor-client privilege”
« privilège des communications entre client et avocat »

“solicitor-client privilege” has the meaning assigned by subsection 232(1).

“tax benefit”
« avantage fiscal »

“tax benefit” has the meaning assigned by subsection 245(1).

“transaction”
« opération »

“transaction” has the meaning assigned by subsection 245(1).

Application

(2) An information return in prescribed form and containing prescribed information in respect of a reportable transaction must be filed with the Minister by

(a) every person for whom a tax benefit results, or would result but for section 245, from the reportable transaction, from any other reportable transaction that is part of a series of transactions that includes the reportable transaction or from the series of transactions;

(b) every person who has entered into, for the benefit of a person described in paragraph (a), an avoidance transaction that is a reportable transaction;

(c) every advisor or promoter in respect of the reportable transaction, or in respect of any other transaction that is part of a series of transactions that includes the reportable transaction, who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee in respect of any of those transactions that is

(i) described in paragraph (a) of the definition “reportable transaction” in subsection (1), or

(ii) in respect of contractual protection provided in circumstances described in paragraph (c) of the definition “reportable transaction” in subsection (1); and

(d) every person who is not dealing at arm’s length with an advisor or promoter in respect of the reportable transaction and who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee that is referred to in paragraph (c).

Clarification of reporting transactions in series

(3) For greater certainty, and subject to subsection (11), if subsection (2) applies to a person in respect of each reportable transaction that is part of a series of transactions that includes an avoidance transaction, the filing of a prescribed form by the person that reports each transaction in the series is deemed to satisfy the obligation of the person under subsection (2) in respect of each transaction so reported.

Application

(4) For the purpose of subsection (2), if any person is required to file an information return in respect of a reportable transaction under that subsection, the filing by any such person of an information return with full and accurate disclosure in prescribed form in respect of the transaction is deemed to have been made by each person to whom subsection (2) applies in respect of the transaction.

Time for filing return

(5) An information return required by subsection (2) to be filed by a person for a reportable transaction is to be filed with the Minister on or before June 30 of the calendar year following the calendar year in which the transaction first became a reportable transaction in respect of the person.

Tax benefits disallowed

(6) Notwithstanding subsection 245(4), subsection 245(2) is deemed to apply at any time to any reportable transaction in respect of a person described in paragraph (2)(a) in relation to the reportable transaction if, at that time,

(a) the obligation under subsection (2) of the person in respect of the reportable transaction, or any other reportable transaction that is part of a series of transactions that includes the reportable transaction, has not been satisfied;

(b) a person is liable to a penalty under subsection (8) in respect of the reportable transaction or any other reportable transaction that is part of a series of transactions that includes the reportable transaction; and

(c) the penalty under subsection (8) or interest on the penalty has not been paid, or has been paid but an amount on account of the penalty or interest has been repaid under subsection 164(1.1) or applied under subsection 164(2).

Assessments

(7) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (8).

Penalty

(8) Every person who fails to file an information return in respect of a reportable transaction as required under subsection (2) on or before the day required under subsection (5) is liable to a penalty equal to the total of each amount that is a fee to which an advisor or a promoter (or any person who does not deal at arm’s length with the advisor or the promoter) in respect of the reportable transaction is or was entitled, either immediately or in the future and either absolutely or contingently, to receive in respect of the reportable transaction, any transaction that is part of the series of transactions that includes the reportable transaction or the series of transactions that includes the reportable transaction, if the fee is

(a) described in paragraph (a) of the definition “reportable transaction” in subsection (1); or

(b) in respect of contractual protection provided in circumstances described in paragraph (c) of the definition “reportable transaction” in subsection (1).

Joint and several liability

(9) If more than one person is liable to a penalty under subsection (8) in respect of a reportable transaction, each of those persons are jointly and severally, or solidarily, liable to pay the penalty.

Joint and several liability — special cases

(10) Notwithstanding subsections (8) and (9), the liability of an advisor or a promoter, or a person with whom the advisor or promoter does not deal at arm’s length, to a penalty under those subsections in respect of a reportable transaction shall not exceed the total of each amount that is a fee referred to in subsection (8) to which that advisor or promoter, or a person with whom the advisor or promoter does not deal at arm’s length, is or was entitled, either immediately or in the future and either absolutely or contingently, to receive in respect of the reportable transaction.

Due diligence

(11) A person required to file an information return in respect of a reportable transaction is not liable for a penalty under subsection (8) if the person has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances.

Reporting not an admission

(12) The filing of an information return under this section by a person in respect of a reportable transaction is not an admission by the person that

(a) section 245 applies in respect of any transaction; or

(b) any transaction is part of a series of transactions.

Application of sections 231 to 231.3

(13) Without restricting the generality of sections 231 to 231.3, even if a return of income has not been filed by a taxpayer under section 150 for the taxation year of the taxpayer in which a tax benefit results, or would result but for section 245, from a reportable transaction, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of that transaction.

Tax shelters and flow-through shares

(14) For the purpose of this section, a reportable transaction does not include a transaction that is, or is part of a series of transactions that includes,

(a) the acquisition of a tax shelter for which an information return has been filed with the Minister under subsection 237.1(7); or

(b) the issuance of a flow-through share for which an information return has been filed with the Minister under subsection 66(12.68).

Tax shelters and flow-through shares — penalty

(15) Notwithstanding subsection (8), the amount of the penalty, if any, that applies on a person under that subsection in respect of a reportable transaction shall not exceed the amount determined by the formula

A – B

where

A is the amount of the penalty imposed on the person under subsection (8), determined without reference to this subsection; and

B is

(a) if the reportable transaction is the acquisition of a tax shelter, the amount of the penalty, if any, that applies on the person under subsection 237.1(7.4) in respect of the tax shelter,

(b) if the reportable transaction is the issuance of a flow-through share, the amount of the penalty, if any, that applies on the person under subsection 66(12.74) in respect of the issuance of the flow-through share, and

Anti-avoidance

(16) Subsection (14) does not apply to a reportable transaction if it is reasonable, having regard to all of the circumstances, to conclude that one of the main reasons for the acquisition of a tax shelter, or the issuance of a flow-through share, is to avoid the application of this section.

Solicitor-client privilege

(17) For greater certainty, for the purpose of this section, a lawyer who is an advisor in respect of a reportable transaction is not required to disclose in an information return in respect of the transaction any information in respect of which the lawyer, on reasonable grounds, believes that a client of the lawyer has solicitor-client privilege.

(2) Subsection (1) applies in respect of avoidance transactions that are entered into after 2010 or that are part of a series of transactions that began before 2011 and is completed after 2010, except that, in its application to an avoidance transaction that is part of a series that began before 2011, the definition “confidential protection” in subsection 237.3(1) of the Act, as enacted by subsection (1), is to be read as follows:

“confidential protection”, in respect of a transaction or series of transactions, means anything that prohibits the disclosure to any person or to the Minister of the details or structure of the transaction or series under which a tax benefit results, or would result but for section 245, but does not include a prohibition on disclosure that relates to an agreement entered into before March 4, 2010 between an advisor and his or her client for the provision of accounting, legal or similar tax advisory services, and for greater certainty, the disclaiming or restricting of an advisor’s liability shall not be considered confidential protection if it does not prohibit the disclosure of the details or structure of the transaction or series.

(3) If the filing of an information return under section 237.3 of the Act, as enacted by subsection (1), would be required before July 1, 2012, the information return is deemed to be filed before that day if it is filed before the day that is 120 days after the day on which this Act receives royal assent.

357. (1) Subparagraph 241(4)(e)(xii) of the Act is replaced by the following:

(xii) a provision contained in a tax treaty with another country or in a listed international agreement;

(2) Subsection 241(11) of the Act is replaced by the following:

References to “this Act”

(11) The references in subsections (1), (3), (4) and (10) to “this Act” shall be read as references to “this Act or the Federal-Provincial Fiscal Arrangements Act”.

358. (1) The definition “common-law partner” in subsection 248(1) of the Act is replaced by the following:

“common-law partner”
« conjoint de fait »

“common-law partner”, with respect to a taxpayer at any time, means a person who cohabits at that time in a conjugal relationship with the taxpayer and

(a) has so cohabited throughout the 12-month period that ends at that time, or

(b) would be the parent of a child of whom the taxpayer is a parent, if this Act were read without reference to paragraphs 252(1)(c) and (e) and subparagraph 252(2)(a)(iii),

and, for the purpose of this definition, where at any time the taxpayer and the person cohabit in a conjugal relationship, they are, at any particular time after that time, deemed to be cohabiting in a conjugal relationship unless they were living separate and apart at the particular time for a period of at least 90 days that includes the particular time because of a breakdown of their conjugal relationship;

(2) The definition “controlled foreign affiliate” in subsection 248(1) of the Act is replaced by the following:

“controlled foreign affiliate”
« société étrangère affiliée contrôlée »

“controlled foreign affiliate” has, except as expressly otherwise provided in this Act, the meaning assigned by subsection 95(1);

(3) The definition “dividend rental arrangement” in subsection 248(1) of the Act, as amended by subsection (13), is replaced by the following:

“dividend rental arrangement”
« mécanisme de transfert de dividendes »

“dividend rental arrangement”, of a person or a partnership (each of which is referred to in this definition as the “person”),

(a) means any arrangement entered into by the person where it can reasonably be considered that

(i) the main reason for the person entering into the arrangement was to enable the person to receive a dividend on a share of the capital stock of a corporation, other than a dividend on a prescribed share or on a share described in paragraph (e) of the definition “term preferred share” in this subsection or an amount deemed by subsection 15(3) to be received as a dividend on a share of the capital stock of a corporation, and

(ii) under the arrangement someone other than that person bears the risk of loss or enjoys the opportunity for gain or profit with respect to the share in any material respect, and

(b) includes, for greater certainty, any arrangement under which

(i) a corporation at any time receives on a particular share a taxable dividend that would, if this Act were read without reference to subsection 112(2.3), be deductible in computing its taxable income or taxable income earned in Canada for the taxation year that includes that time, and

(ii) the corporation or a partnership of which the corporation is a member is obligated to pay to another person or partnership an amount

(A) that is compensation for

(I) the dividend described in subparagraph (i),

(II) a dividend on a share that is identical to the particular share, or

(III) a dividend on a share that, during the term of the arrangement, can reasonably be expected to provide to a holder of the share the same or substantially the same proportionate risk of loss or opportunity for gain as the particular share, and

(B) that, if paid, would be deemed by subsection 260(5.1) to have been received by that other person or partnership, as the case may be, as a taxable dividend;

(4) The definition “eligible relocation” in subsection 248(1) of the Act is replaced by the following:

“eligible relocation”
« réinstallation admissible »

“eligible relocation” means a relocation of a taxpayer in respect of which the following apply:

(a) the relocation occurs to enable the taxpayer

(i) to carry on a business or to be employed at a location (in section 62 and this definition referred to as “the new work location”) that is, except if the taxpayer is absent from but resident in Canada, in Canada, or

(ii) to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and this definition referred to as “the new work location”),

(b) the taxpayer ordinarily resided before the relocation at a residence (in section 62 and this definition referred to as “the old residence”) and ordinarily resided after the relocation at a residence (in section 62 and this definition referred to as “the new residence”),

(c) except if the taxpayer is absent from but resident in Canada, both the old residence and the new residence are in Canada, and

(d) the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location;

(5) The definition “share” in subsection 248(1) of the Act is replaced by the following:

“share”
« action »

“share”, except as the context otherwise requires, means a share or a fraction of a share of the capital stock of a corporation and, for greater certainty, a share of the capital stock of a corporation includes a share of the capital of a cooperative corporation (within the meaning assigned by subsection 136(2)), a share of the capital of an agricultural cooperative corporation (within the meaning assigned by subsection 135.1(1)) and a share of the capital of a credit union;

(6) The definition “amount” in subsection 248(1) of the Act is amended by striking out “and” at the end of paragraph (b) and by adding the following after that paragraph:

(b.1) if a taxpayer files an election in writing with the Minister of National Revenue on or before the taxpayer’s filing-due date for the 2012 taxation year, then in the case of each stock dividend declared after July 17, 2005 and paid to the taxpayer before 2013 by a corporation that is, when the dividend is paid, a non-resident corporation, the “amount” of the stock dividend is, except where subsection 95(7) applies to the dividend, the greater of

(i) the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and

(ii) the fair market value of the share or shares paid as a stock dividend at the time of payment, and

(7) The definition “amount” in subsection 248(1) of the Act, as amended by subsection (6), is amended by adding “and” at the end of paragraph (b) and by repealing paragraph (b.1).

(8) Paragraph (d) of the definition “Canadian real, immovable or resource property” in subsection 248(1) of the Act is replaced by the following:

(d) a share of the capital stock of a corporation, an income or a capital interest in a trust or an interest in a partnership — other than a taxable Canadian corporation, a SIFT trust (determined without reference to subsection 122.1(2)), a SIFT partnership (determined without reference to subsection 197(8)) or a real estate investment trust (as defined in subsection 122.1(1)) — if more than 50% of the fair market value of the share or interest is derived directly or indirectly from one or any combination of properties described in paragraphs (a) to (c), or

(9) Subparagraph (b)(i) of the definition “disposition” in subsection 248(1) of the Act is replaced by the following:

(i) where the property is a share, bond, debenture, note, certificate, mortgage, hypothecary claim, agreement of sale or similar property, or interest, or for civil law a right, in it, the property is in whole or in part redeemed, acquired or cancelled,

(10) The definition “disposition” in subsection 248(1) of the Act is amended by adding the following after paragraph (b):

(b.1) where the property is an interest in a life insurance policy, a disposition within the meaning of section 148,

(11) Subparagraphs (f)(i) and (ii) of the definition “disposition” in subsection 248(1) of the Act are replaced by the following:

(i) the transferor and the transferee are trusts that are, at the time of the transfer, resident in Canada,

(12) The definition “disposition” in subsection 248(1) of the Act is amended by striking out “and” at the end of paragraph (l), by adding “and” at the end of paragraph (m) and by adding the following after paragraph (m):

(n) a redemption, an acquisition or a cancellation of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this paragraph as the “security”) of the capital stock of a corporation (referred to in this paragraph as the “issuing corporation”) held by another corporation (referred to in this paragraph as the “disposing corporation”) if

(i) the redemption, acquisition or cancellation occurs as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this paragraph as the “new corporation”),

(ii) the merger or combination

(A) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) does not apply,

(B) is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) as the parent and the subsidiary, respectively,

(D) would be a foreign merger (within the meaning assigned by subsection 87(8.1)) if subparagraph 87(8.1)(c)(ii) were read without reference to the words “that was resident in a country other than Canada”, and

(iii) either

(A) the disposing corporation receives no consideration for the security, or

(B) in the case where the merger or combination is described by clause (ii)(C) or (D), the disposing corporation receives no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, becomes property of the new corporation;

(13) The portion of paragraph (d) of the definition “dividend rental arrangement” in subsection 248(1) of the Act after subparagraph (iii) is replaced by the following:

that, if paid, would be deemed by subsection 260(5.1) to have been received by that other person as a taxable dividend;

(14) The portion of the definition “employee benefit plan” in subsection 248(1) of the Act before paragraph (a) is replaced by the following:

“employee benefit plan”
« régime de prestations aux employés »

“employee benefit plan” means an arrangement under which contributions are made by an employer or by any person with whom the employer does not deal at arm’s length to another person (in this Act referred to as the “custodian” of an employee benefit plan) and under which one or more payments are to be made to or for the benefit of employees or former employees of the employer or persons who do not deal at arm’s length with any such employee or former employee (other than a payment that, if section 6 were read without reference to subparagraph 6(1)(a)(ii) and paragraph 6(1)(g), would not be required to be included in computing the income of the recipient or of an employee or former employee), but does not include any portion of the arrangement that is

(15) Paragraphs (d) and (e) of the definition “foreign resource property” in subsection 248(1) of the Act are replaced by the following:

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

(e) any right to a rental or royalty computed by reference to the amount or value of production from a mineral resource in that country, if the payer of the rental or royalty has an interest in, or for civil law a right in, the mineral resource and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the mineral resource,

(16) The portion of the definition “former business property” in subsection 248(1) of the Act before paragraph (a) is replaced by the following:

“former business property”
« ancien bien d’entreprise »

“former business property”, in respect of a taxpayer, means a capital property of the taxpayer that was used by the taxpayer or a person related to the taxpayer primarily for the purpose of gaining or producing income from a business, and that was real or immovable property of the taxpayer, an interest of the taxpayer in real property, a right of the taxpayer in an immovable or a property that is the subject of an election under subsection 13(4.2), but does not include

(17) Paragraph (f) of the definition “short-term preferred share” in subsection 248(1) of the Act is replaced with the following:

(f) if a share of the capital stock of a corporation was issued after December 15, 1987 and at the time the share was issued the existence of the corporation was, or there was an arrangement under which it could be, limited to a period that was within five years from the date of its issue, the share is deemed to be a short-term preferred share of the corporation unless

(i) the share is a grandfathered share and the arrangement is a written arrangement entered into before December 16, 1987, or

(ii) the share is issued to an individual after April 14, 2005 under an agreement referred to in subsection 7(1), if when the individual last acquired a right under the agreement to acquire a share of the capital stock of the corporation, the existence of the corporation was not, and no arrangement was in effect under which it could be, limited to a period that was within five years from the date of that last acquisition,

(18) The portion of paragraph (d) of the definition “taxable Canadian property” in subsection 248(1) of the Act before subparagraph (i) is replaced by the following:

(d) a share of the capital stock of a corporation (other than a mutual fund corporation) that is not listed on a designated stock exchange, an interest in a partnership or an interest in a trust (other than a unit of a mutual fund trust or an income interest in a trust resident in Canada), if, at any particular time during the 60-month period that ends at that time, more than 50% of the fair market value of the share or interest, as the case may be, was derived directly or indirectly (otherwise than through a corporation, partnership or trust the shares or interests in which were not themselves taxable Canadian property at the particular time) from one or any combination of

(19) Paragraph (d) of the definition “activités de recherche scientifique et de développement expérimental” in subsection 248(1) of the French version of the Act is replaced by the following:

d) les travaux entrepris par le contribuable ou pour son compte relativement aux travaux de génie, à la conception, à la recherche opérationnelle, à l’analyse mathématique, à la programmation informatique, à la collecte de données, aux essais et à la recherche psychologique, lorsque ces travaux sont proportionnels aux besoins des travaux visés aux alinéas a), b) ou c) qui sont entrepris au Canada par le contribuable ou pour son compte et servent à les appuyer directement.

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

“listed international agreement”
« accord international désigné »

“listed international agreement” means

(a) the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada, or

(b) a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction;

“qualifying trust annuity”
« rente admissible de fiducie »

“qualifying trust annuity” has the meaning assigned by subsection 60.011(2);

“relevant factor”
« facteur de référence »

“relevant factor” means

(a) for taxation years that end before 2010, 3, and

(b) for taxation years that end after 2009, the amount determined by the formula

1/(A – B)

where

A is the percentage set out in paragraph 123(1)(a), and

B is the percentage that is the corporation’s general rate reduction percentage (as defined by section 123.4) for the taxation year;

“specified proportion”
« proportion déterminée »

“specified proportion”, of a member of a partnership for a fiscal period of the partnership, means the proportion that the member’s share of the total income or loss of the partnership for the partnership’s fiscal period is of the partnership’s total income or loss for that period and, for the purpose of this definition, where that income or loss for a period is nil, that proportion shall be computed as if the partnership had income for that period in the amount of $1,000,000;

(21) Section 248 of the Act is amended by adding the following after subsection (1):

Non-disposition before December 24, 1998

(1.1) A redemption, an acquisition or a cancellation, at any particular time after 1971 and before December 24, 1998, of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this subsection as the “security”) of the capital stock of a corporation (referred to in this subsection as the “issuing corporation”) held by another corporation (referred to in this subsection as the “disposing corporation”) is not a disposition (within the meaning of the definition “disposition” in section 54 as that section read in its application to transactions and events that occurred at the particular time) of the security if

(a) the redemption, acquisition or cancellation occurred as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this subsection as the “new corporation”);

(b) the merger or combination

(i) is an amalgamation (within the meaning assigned by subsection 87(1) as it read at the particular time) to which subsection 87(11) if in force, and as it read, at the particular time did not apply,

(ii) is an amalgamation (within the meaning assigned by subsection 87(1) as it read at the particular time) to which subsection 87(11) if in force, and as it read, at the particular time applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) (if in force, and as it read, at the particular time) as the parent and the subsidiary, respectively,

(iii) occurred before November 13, 1981 and is a merger of corporations that is described by subsection 87(8) (as it read in respect of the merger or combination), or

(iv) occurred after November 12, 1981 and

(A) is a foreign merger (within the meaning assigned by subsection 87(8.1) as it read in respect of the merger or combination), or

(B) all of the following conditions are met:

(I) the merger or combination is not a foreign merger (within the meaning assigned by subsection 87(8.1) as it read in respect of the merger or combination),

(II) subsection 87(8.1), as it read in respect of the merger or combination, contained a subparagraph (c)(ii), and

(III) the merger or combination would be a foreign merger (within the meaning of subsection 87(8.1), as it read in respect of the merger or combination) if that subparagraph 87(8.1)(c)(ii) were read as follows:

“(ii) if, immediately after the merger, the new foreign corporation was controlled by another foreign corporation (in this subsection referred to as the “parent corporation”), shares of the capital stock of the parent corporation,”;

and

(i) the disposing corporation received no consideration for the security, or

(ii) in the case where the merger or combination is described by subparagraph (b)(iv), the disposing corporation received no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, became property of the new corporation.

(22) Paragraphs 248(8)(a) and (b) of the French version of the Act are replaced by the following:

a) un transfert, une distribution ou une acquisition de biens effectué en vertu du testament ou autre acte testamentaire d’un contribuable ou de son époux ou conjoint de fait, par suite d’un tel testament ou acte ou par l’effet de la loi en cas de succession ab intestat du contribuable ou de son époux ou conjoint de fait, est considéré comme un transfert, une distribution ou une acquisition de biens effectué par suite du décès du contribuable ou de son époux ou conjoint de fait, selon le cas;

b) un transfert, une distribution ou une acquisition de biens effectué par suite d’une renonciation ou d’un abandon par une personne qui était bénéficiaire en vertu du testament ou autre acte testamentaire d’un contribuable ou de son époux ou conjoint de fait, ou qui était héritier ab intestat de l’un ou l’autre, est considéré comme un transfert, une distribution ou une acquisition de biens effectué par suite du décès du contribuable ou de son époux ou conjoint de fait, selon le cas;

(23) Subsection 248(16) of the Act is replaced by the following:

Goods and services tax — input tax credit and rebate

(16) For the purposes of this Act, other than this subsection and subsection 6(8), an amount claimed by a taxpayer as an input tax credit or rebate with respect to the goods and services tax in respect of a property or service is deemed to be assistance from a government in respect of the property or service that is received by the taxpayer

(a) where the amount was claimed by the taxpayer as an input tax credit in a return under Part IX of the Excise Tax Act for a reporting period under that Act,

(i) at the particular time that is the earlier of the time that the goods and services tax in respect of the input tax credit was paid and the time that it became payable,

(A) if the particular time is in the reporting period, or

(B) if,

(I) the taxpayer’s threshold amount, determined in accordance with subsection 249(1) of the Excise Tax Act, is greater than $500,000 for the taxpayer’s fiscal year (within the meaning assigned by that Act) that includes the particular time, and

(II) the taxpayer claimed the input tax credit at least 120 days before the end of the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer in respect of the taxation year that includes the particular time,

(ii) at the end of the reporting period, if

(A) subparagraph (i) does not apply, and

(B) the taxpayer’s threshold amount, determined in accordance with subsection 249(1) of the Excise Tax Act, is $500,000 or less for the fiscal year (within the meaning assigned by that Act) of the taxpayer that includes the particular time, and

(iii) in any other case, on the last day of the taxpayer’s earliest taxation year

(A) that begins after the taxation year that includes the particular time, and

(B) for which the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer ends at least 120 days after the time that the input tax credit was claimed; or

(b) where the amount was claimed as a rebate with respect to the goods and services tax, at the time the amount was received or credited.

(24) Section 248 of the Act is amended by adding the following after subsection (16):

Quebec input tax refund and rebate

(16.1) For the purpose of this Act, other than this subsection and subsection 6(8), an amount claimed by a taxpayer as an input tax refund or a rebate with respect to the Quebec sales tax in respect of a property or service is deemed to be assistance from a government in respect of the property or service that is received by the taxpayer

(a) where the amount was claimed by the taxpayer as an input tax refund in a return under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, for a reporting period under that Act,

(i) at the particular time that is the earlier of the time that the Quebec sales tax in respect of the input tax refund was paid and the time that it became payable,

(A) if the particular time is in the reporting period, or

(B) if,

(I) the taxpayer’s threshold amount, determined in accordance with section 462 of that Act is greater than $500,000 for the taxpayer’s fiscal year (within the meaning assigned by that Act) that includes the partic-ular time, and

(II) the taxpayer claimed the input tax refund at least 120 days before the end of the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer in respect of the taxation year that includes the particular time,

(ii) at the end of the reporting period, if

(A) subparagraph (i) does not apply, and

(B) the taxpayer’s threshold amount, determined in accordance with section 462 of that Act is $500,000 or less for the fiscal year (within the meaning assigned by that Act) of the taxpayer that includes the particular time, and

(iii) in any other case, on the last day of the taxpayer’s earliest taxation year

(A) that begins after the taxation year that includes the particular time, and

(B) for which the normal reassessment period, as determined under subsection 152(3.1), for the taxpayer ends at least 120 days after the time that the input tax refund was claimed; or

(b) where the amount was claimed as a rebate with respect to the Quebec sales tax, at the time the amount was received or credited.

(25) The portion of subsection 248(17) of the Act before the portion enclosed by quotation marks is replaced by the following:

Application of subsection (16) to passenger vehicles and aircraft

(17) If the input tax credit of a taxpayer under Part IX of the Excise Tax Act in respect of a passenger vehicle or aircraft is determined with reference to subsection 202(4) of that Act, subparagraphs (16)(a)(i) to (iii) are to be read as they apply in respect of the passenger vehicle or aircraft, as the case may be, as follows:

(26) Section 248 of the Act is amended by adding the following after subsection (17):

Application of subsection (16.1) to passenger vehicles and aircraft

(17.1) If the input tax refund of a taxpayer under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, in respect of a passenger vehicle or aircraft is determined with reference to section 252 of that Act, subparagraphs (16.1)(a)(i) to (iii) are to be read as they apply in respect of the passenger vehicle or aircraft, as the case may be, as follows:

“(i) at the beginning of the first taxation year or fiscal period of the taxpayer that begins after the end of the taxation year or fiscal period, as the case may be, in which the Quebec sales tax in respect of such property was considered for the purposes of determining the input tax refund to be payable, if the tax was considered for the purposes of determining the input tax refund to have become payable in the reporting period, or

(ii) if no such tax was considered for the purposes of determining the input tax refund to have become payable in the reporting period, at the end of the reporting period; or”.

Input tax credit on assessment

(17.2) An amount in respect of an input tax credit that is deemed by subsection 296(5) of the Excise Tax Act to have been claimed in a return or application filed under Part IX of that Act is deemed to have been so claimed for the reporting period under that Act that includes the time when the Minister makes the assessment referred to in that subsection.

Quebec input tax refund on assessment

(17.3) An amount in respect of an input tax refund that is deemed by section 30.5 of the Tax Administration Act, R.S.Q., c. A-6.002, to have been claimed is deemed to have been so claimed for the reporting period under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, that includes the day on which an assessment is issued to the taxpayer indicating that the refund has been allocated under that section 30.5.

(27) Section 248 of the Act is amended by adding the following after subsection (18):

Repayment of Quebec input tax refund

(18.1) For the purposes of this Act, if an amount is added at a particular time in determining the net tax of a taxpayer under An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, in respect of an input tax refund relating to property or service that had been previously deducted in determining the net tax of the taxpayer, that amount is deemed to be assistance repaid at the particular time in respect of the property or service under a legal obligation to repay all or part of that assistance.

(28) Paragraphs 248(23.1)(a) and (b) of the French version of the Act are replaced by the following:

a) soit transféré ou distribué à la personne qui était l’époux ou le conjoint de fait du contribuable au moment du décès de celui-ci, ou acquis par cette personne, le bien est réputé avoir été ainsi transféré, distribué ou acquis, selon le cas, par suite de ce décès;

b) soit transféré ou distribué à la succession du contribuable, ou acquis par celle-ci, le bien est réputé avoir été ainsi transféré, distribué ou acquis, selon le cas, immédiatement avant le moment immédiatement avant le décès.

(29) Subparagraph 248(25.3)(c)(i) of the Act is replaced by the following:

(i) the particular unit is capital property and the amount is not proceeds of disposition of a capital interest in the trust, or

(30) Section 248 of the Act is amended by adding the following after subsection (29):

Intention to give

(30) The existence of an amount of an advantage in respect of a transfer of property does not in and by itself disqualify the transfer from being a gift to a qualified donee if

(a) the amount of the advantage does not exceed 80% of the fair market value of the transferred property; or

(b) the transferor of the property establishes to the satisfaction of the Minister that the transfer was made with the intention to make a gift.

Eligible amount of gift or monetary contribution

(31) The eligible amount of a gift or monetary contribution is the amount by which the fair market value of the property that is the subject of the gift or monetary contribution exceeds the amount of the advantage, if any, in respect of the gift or monetary contribution.

Amount of advantage

(32) The amount of the advantage in respect of a gift or monetary contribution by a taxpayer is the total of

(a) the total of all amounts, other than an amount referred to in paragraph (b), each of which is the value, at the time the gift or monetary contribution is made, of any property, service, compensation, use or other benefit that the taxpayer, or a person or partnership who does not deal at arm’s length with the taxpayer, has received, obtained or enjoyed, or is entitled, either immediately or in the future and either absolutely or contingently, to receive, obtain, or enjoy

(i) that is consideration for the gift or monetary contribution,

(ii) that is in gratitude for the gift or monetary contribution, or

(iii) that is in any other way related to the gift or monetary contribution, and

(b) the limited-recourse debt, determined under subsection 143.2(6.1), in respect of the gift or monetary contribution at the time the gift or monetary contribution is made.

Cost of property acquired by donor

(33) The cost to a taxpayer of a property, acquired by the taxpayer in circumstances where subsection (32) applies to include the value of the property in computing the amount of the advantage in respect of a gift or monetary contribution, is equal to the fair market value of the property at the time the gift or monetary contribution is made.

Repayment of limited-recourse debt

(34) If at any time in a taxation year a taxpayer has paid an amount (in this subsection referred to as the “repaid amount”) on account of the principal amount of an indebtedness which was, before that time, an unpaid principal amount that was a limited-recourse debt referred to in subsection 143.2(6.1) (in this subsection referred to as the “former limited-recourse debt”) in respect of a gift or monetary contribution (in this subsection referred to as the “original gift” or “original monetary contribution”, respectively, as the case may be) of the taxpayer (otherwise than by way of an assignment or transfer of a guarantee, security or similar indemnity or covenant, or by way of a payment in respect of which any taxpayer referred to in subsection 143.2(6.1) has incurred an indebtedness that would be a limited-recourse debt referred to in that subsection if that indebtedness were in respect of a gift or monetary contribution made at the time that that indebtedness was incurred), the following rules apply:

(a) if the former limited-recourse debt is in respect of the original gift, for the purposes of sections 110.1 and 118.1, the taxpayer is deemed to have made in the taxation year a gift to a qualified donee, the eligible amount of which deemed gift is the amount, if any, by which

(i) the amount that would have been the eligible amount of the original gift, if the total of all such repaid amounts paid at or before that time were paid immediately before the original gift was made,

exceeds

(ii) the total of

(A) the eligible amount of the original gift, and

(B) the eligible amount of all other gifts deemed by this paragraph to have been made before that time in respect of the original gift; and

(b) if the former limited-recourse debt is in respect of the original monetary contribution, for the purposes of subsection 127(3), the taxpayer is deemed to have made in the taxation year a monetary contribution referred to in that subsection, the eligible amount of which is the amount, if any, by which

(i) the amount that would have been the eligible amount of the original monetary contribution, if the total of all such repaid amounts paid at or before that time were paid immediately before the original monetary contribution was made,

exceeds

(ii) the total of

(A) the eligible amount of the original monetary contribution, and

(B) the eligible amount of all other monetary contributions deemed by this paragraph to have been made before that time in respect of the original monetary contribution.

Deemed fair market value

(35) For the purposes of subsection (31), paragraph 69(1)(b) and subsections 110.1(2.1) and (3) and 118.1(5.4) and (6), the fair market value of a property that is the subject of a gift made by a taxpayer to a qualified donee is deemed to be the lesser of the fair market value of the property otherwise determined and the cost or, in the case of capital property, the adjusted cost base or, in the case of a life insurance policy in respect of which the taxpayer is a policyholder, the adjusted cost basis (as defined in subsection 148(9)), of the property to the taxpayer immediately before the gift is made if

(a) the taxpayer acquired the property under a gifting arrangement that is a tax shelter as defined in subsection 237.1(1); or

(b) except where the gift is made as a consequence of the taxpayer’s death,

(i) the taxpayer acquired the property less than three years before the day that the gift is made, or

(ii) the taxpayer acquired the property less than 10 years before the day that the gift is made and it is reasonable to conclude that, at the time the taxpayer acquired the property, one of the main reasons for the acquisition was to make a gift of the property to a qualified donee.

Non-arm’s length transaction

(36) If a taxpayer acquired a property, otherwise than by reason of the death of an individual, that is the subject of a gift to which subsection (35) applies because of subparagraph (35)(b)(i) or (ii) and the property was, at any time within the 3-year or 10-year period, respectively, that ends when the gift was made, acquired by a person or partnership with whom the taxpayer does not deal at arm’s length, for the purpose of applying subsection (35) to the taxpayer, the cost, or in the case of capital property, the adjusted cost base, of the property to the taxpayer immediately before the gift is made is deemed to be equal to the lowest amount that is the cost, or in the case of capital property, the adjusted cost base, to the taxpayer or any of those persons or partnerships immediately before the property was disposed of by that person or partnership.

Non-application of subsection (35)

(37) Subsection (35) does not apply to a gift

(a) of inventory;

(b) of real property or an immovable situated in Canada;

(d) of property to which paragraph 38(a.1) or (a.2) applies;

(e) of a share of the capital stock of a corporation if

(i) the share was issued by the corporation to the donor,

(ii) immediately before the gift, the corporation was controlled by the donor, a person related to the donor or a group of persons each of whom is related to the donor, and

(iii) subsection (35) would not have applied in respect of the consideration for which the share was issued had that consideration been donated by the donor to the qualified donee when the share was so donated;

(f) by a corporation of property if

(i) the property was acquired by the corporation in circumstances to which subsection 85(1) or (2) applied,

(ii) immediately before the gift, the shareholder from whom the corporation acquired the property controlled the corporation or was related to a person or each member of a group of persons that controlled the corporation, and

(iii) subsection (35) would not have applied in respect of the property had the property not been transferred to the corporation and had the shareholder made the gift to the qualified donee when the corporation so made the gift; or

(g) of a property that was acquired in circumstances where subsection 70(6) or (9) or 73(1), (3) or (4) applied, unless subsection (36) would have applied if this subsection were read without reference to this paragraph.

Artificial transactions

(38) The eligible amount of a particular gift of property by a taxpayer is nil if it can reasonably be concluded that the particular gift relates to a transaction or series of transactions

(a) one of the purposes of which is to avoid the application of subsection (35) to a gift of any property; or

(b) that would, if this Act were read without reference to this paragraph, result in a tax benefit to which subsection 245(2) applies.

Substantive gift

(39) If a taxpayer disposes of a property (in this subsection referred to as the “substantive gift”) that is a capital property or an eligible capital property of the taxpayer, to a recipient that is a registered party, a registered association or a candidate, as those terms are defined in the Canada Elections Act, or that is a qualified donee, subsection (35) would have applied in respect of the substantive gift if it had been the subject of a gift by the taxpayer to a qualified donee, and all or a part of the proceeds of disposition of the substantive gift are (or are substituted, directly or indirectly in any manner whatever, for) property that is the subject of a gift or monetary contribution by the taxpayer to the recipient or any person dealing not at arm’s length with the recipient, the following rules apply:

(a) for the purpose of subsection (31), the fair market value of the property that is the subject of the gift or monetary contribution made by the taxpayer is deemed to be that proportion of the lesser of the fair market value of the substantive gift and the cost, or if the substantive gift is capital property of the taxpayer, the adjusted cost base, of the substantive gift to the taxpayer immediately before the disposition to the recipient, that the fair market value otherwise determined of the property that is the subject of the gift or monetary contribution is of the proceeds of disposition of the substantive gift;

(b) if the substantive gift is capital property of the taxpayer, for the purpose of the definitions “proceeds of disposition” of property in subsection 13(21) and section 54, the sale price of the substantive gift is to be reduced by the amount by which the fair market value of the property that is the subject of the gift (determined without reference to this section) exceeds the fair market value determined under paragraph (a); and

(c) if the substantive gift is eligible capital property of the taxpayer, the amount determined under paragraph (a) in the description of E in the definition “cumulative eligible capital” in subsection 14(5) in respect of the substantive gift is to be reduced by the amount by which the fair market value of the property that is the subject of the gift (determined without reference to this section) exceeds the fair market value determined under paragraph (a).

Inter-charity gifts

(40) Subsection (30) does not apply in respect of a gift received by a qualified donee from a registered charity.

Information not provided

(41) Notwithstanding subsection (31), the eligible amount of a gift or monetary contribution made by a taxpayer is nil if the taxpayer does not — before a receipt referred to in subsection 110.1(2), 118.1(2) or 127(3), as the case may be, is issued in respect of the gift or monetary contribution — inform the qualified donee or the recipient, as the case may be, of any circumstances in respect of which subsection (31), (35), (36), (38) or (39) requires that the eligible amount of the gift or monetary contribution be less than the fair market value, determined without reference to subsections (35), 110.1(3) and 118.1(6), of the property that is the subject of the gift or monetary contribution.

(31) The portion of subsection 248(35) of the Act before paragraph (a), as enacted by subsection (30), is replaced by the following:

Deemed fair market value

(35) For the purposes of subsection (31), paragraph 69(1)(b) and subsections 110.1(2.1) and (3) and 118.1(5.4), (6) and (13.2), the fair market value of a property that is the subject of a gift made by a taxpayer to a qualified donee is deemed to be the lesser of the fair market value of the property otherwise determined and the cost or, in the case of capital property, the adjusted cost base or, in the case of a life insurance policy in respect of which the taxpayer is a policyholder, the adjusted cost basis (as defined in subsection 148(9)), of the property to the taxpayer immediately before the gift is made if

(32) Subsection (1) applies in determining whether a person is, for the 2001 and subsequent taxation years, a common-law partner of a taxpayer, except that subsection does not apply to so determine whether a person is a common-law partner of a taxpayer for a taxation year to which an election, made under section 144 of the Modernization of Benefits and Obligations Act, applied before February 27, 2004. However, on and after February 27, 2004, no such election may be made to affect a current or subsequent taxation year.

(33) Subsections (2), (5) and (10) apply to taxation years that begin after 2006.

(34) Subsection (3) applies

(a) to arrangements made after December 20, 2002; and

(b) to an arrangement made after November 2, 1998 and before December 21, 2002 if the parties to the arrangement jointly so elect in writing and file the election with the Minister of National Revenue within 90 days after the day on which this Act receives royal assent, except that the reference to “subsection 260(5.1)” in clause (b)(ii)(B) of the definition “dividend rental arrangement” in subsection 248(1) of the Act, as enacted by subsection (3), is to be, in the application of that definition to any of those arrangements made before 2002, read as a reference to “subsection 260(5)”.

(35) Subsection (4) applies to taxation years that end after October 31, 2011.

(36) Subsection (6) is deemed to have come into force on July 17, 2005 and, if a taxpayer files an election referred to in paragraph (b.1) of the definition “amount” in subsection 248(1) of the Act, as enacted by subsection (6), on or before the taxpayer’s filing-due date for the taxation year in which this Act receives royal assent, the election is deemed to have been filed on time.

(37) Subsection (7) applies to taxation years that begin after 2012.

(38) Subsection (8) applies to taxation years to which subsections 258(1) to (10) of this Act apply.

(39) Subsections (9) and (12) apply to redemptions, acquisitions and cancellations that occur after December 23, 1998.

(40) Subsection (11) applies to transfers that occur after February 27, 2004.

(41) Subsection (13) applies to arrangements made after 2001 and before December 21, 2002, other than an arrangement to which paragraph (34)(b) applies.

(42) Subsection (14) is deemed to have come into force on November 1, 2011.

(43) Subsection (15) applies to property acquired after December 20, 2002.

(44) Subsection (16) applies in respect of dispositions and terminations that occur after December 20, 2002.

(45) Subsection (17) applies to shares issued after April 14, 2005.

(46) Subsection (18) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.

(47) The definition “qualifying trust annuity” in subsection 248(1) of the Act, as enacted by subsection (20), is deemed to have come into force on January 1, 1989.

(48) The definition “relevant factor” in subsection 248(1) of the Act, as enacted by subsection (20), applies to the 2003 and subsequent taxation years.

(49) The definition “specified proportion” in subsection 248(1) of the Act, as enacted by subsection (20), applies after December 20, 2002.

(50) Subsections (23) and (25) and subsection 248(17.2) of the Act, as enacted by subsection (26), apply in respect of input tax credits that become eligible to be claimed in taxation years that begin after December 20, 2002.

(51) Subsection (24) and subsections 248(17.1) and (17.3) of the Act, as enacted by subsection (26), apply in respect of input tax refunds and rebates that become eligible to be claimed in taxation years that begin after February 27, 2004, except that, before April 1, 2011, the reference to “the Tax Administration Act, R.S.Q., c. A-6.002” in subsection 248(17.3) of the Act, as enacted by subsection (26), is to be read as a reference to “An Act respecting the Ministère du Revenu, R.S.Q., c. M-31”.

(52) Subsection (27) is deemed to have come into force on February 28, 2004.

(53) Subsection (29) applies to units issued after December 20, 2002.

(54) Subsection (30) applies in respect of gifts and monetary contributions made after December 20, 2002, except that

(a) subsection 248(32) of the Act, as enacted by subsection (30), is to be read without reference to

(i) its paragraph (b) in respect of gifts and monetary contributions made before February 19, 2003, and

(ii) its subparagraph (a)(iii) in respect of gifts and monetary contributions made before 6:00 p.m. (Eastern Standard Time) on December 5, 2003;

(b) subsection 248(34) of the Act, as enacted by subsection (30), does not apply in respect of gifts and monetary contributions made before February 19, 2003;

(c) subsections 248(35), (37) and (38) of the Act, as enacted by subsection (30), apply only in respect of gifts made on or after 6:00 p.m. (Eastern Standard Time) on December 5, 2003 but

(i) in respect of gifts made after that time but before March 18, 2007, paragraph 248(37)(d) of the Act, as enacted by subsection (30), is to be read as follows:

(d) of property to which paragraph 38(a.1) or (a.2) would apply, if those paragraphs were read without reference to “other than a private foundation”;

(ii) in respect of gifts made after that time but before July 18, 2005, subsection 248(38) of the Act, as enacted by subsection (30), is to be read as follows:

(38) If it can reasonably be concluded that one of the reasons for a series of transactions, that includes a disposition or acquisition of a property of a taxpayer that is the subject of a gift by the taxpayer, is to increase the amount that would be deemed by subsection (35) to be the fair market value of the property, the cost of the property for the purpose of that subsection is deemed to be the lowest cost to the taxpayer to acquire that property or an identical property at any time.

(d) subsection 248(36) of the Act, as enacted by subsection (30), does not apply in respect of gifts or monetary contributions made before July 18, 2005;

(e) subsection 248(39) of the Act, as enacted by subsection (30), does not apply in respect of gifts or monetary contributions made before February 27, 2004;

(f) subsection 248(40) of the Act, as enacted by subsection (30), does not apply in respect of gifts made before November 9, 2006; and

(g) subsection 248(41) of the Act, as enacted by subsection (30), does not apply in respect of gifts and monetary contributions made before 2006.

(55) Subsection (31) is deemed to have come into force on October 24, 2012.

359. (1) Subsection 249(1) of the Act is replaced by the following:

Definition of “taxation year”

249. (1) In this Act, except as expressly otherwise provided, a “taxation year” is

(a) in the case of a corporation or Canadian resident partnership, a fiscal period;

(b) in the case of an individual (other than a testamentary trust), a calendar year; and

(c) in the case of a testamentary trust, the period for which the accounts of the trust are made up for purposes of assessment under this Act.

References to calendar year

(1.1) When a taxation year is referred to by reference to a calendar year, the reference is to the taxation year or taxation years that coincide with, or that end in, that calendar year.

(2) Subsection 249(3) of the Act is replaced by the following:

Fiscal period exceeding 365 days

(3) If a fiscal period of a corporation exceeds 365 days and for that reason the corporation does not have a taxation year that ends in a particular calendar year, for the purposes of this Act,

(a) the corporation’s first taxation year that would otherwise end in the immediately following calendar year is deemed to end on the last day of the particular calendar year and its next taxation year is deemed to commence on the first day of the immediately following calendar year; and

(b) the corporation’s first fiscal period that would otherwise end in the immediately following calendar year is deemed to end on the last day of the particular calendar year and its next fiscal period is deemed to commence on the first day of the immediately following calendar year.

(3) Section 249 of the Act is amended by adding the following after subsection (4):

Testamentary trusts

(5) The period for which the accounts of a testamentary trust are made up for the purposes of an assessment under this Act may not exceed 12 months, and no change in the time when such a period ends may be made for the purposes of this Act without the concurrence of the Minister.

Loss of testamentary trust status

(6) If at a particular time after December 20, 2002 a transaction or event, described in any of paragraphs (b) to (d) of the definition “testamentary trust” in subsection 108(1), occurs and as a result of that occurrence a trust or estate is not a testamentary trust, the following rules apply:

(a) the fiscal period for a business or property of the trust or estate that would, if this Act were read without reference to this subsection and those paragraphs, have included the particular time is deemed to have ended immediately before the particular time;

(b) the taxation year of the trust or estate that would, if this Act were read without reference to this subsection and those paragraphs, have included the particular time is deemed to have ended immediately before the particular time;

(d) in determining the fiscal period for a business or property of the trust or estate after the particular time, the trust or estate is deemed not to have established a fiscal period before that time.

(4) Subsection (1) and subsection 249(5) of the Act, as enacted by subsection (3), are deemed to have come into force on December 21, 2002, except that paragraph 249(1)(a) of the Act, as enacted by subsection (1), is to be read before October 31, 2006 without reference to “or Canadian resident partnership”.

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

(6) Subsection 249(6) of the Act, as enacted by subsection (3), is deemed to have come into force on July 19, 2005 and, if a trust or estate so elects in writing by filing the election with the Minister of National Revenue on or before its filing-due date for its taxation year in which this Act receives royal assent, it also applies to that trust or estate, as the case may be, after December 20, 2002.

(7) Subsection (8) applies to a trust or estate (referred to in this subsection and subsection (8) as the “trust”) for a particular taxation year of the trust that ends in the period that begins on December 21, 2002 and ends on October 24, 2012 (in this subsection referred to as the “relevant period”), if

(a) the particular taxation year would have — if paragraph (d) of the definition “testamentary trust”, as contained in section 100 of Bill C-10 of the second session of the 39th Parliament as passed by the House of Commons on October 29, 2007, had applied to the particular taxation year — been deemed by paragraph 249(6)(b) of the Act, as enacted by subsection (3), to have ended on a day (in subsection (8) referred to as the “deemed year-end day”) in the relevant period; and

(b) the trust filed, before October 24, 2012, a return of income for the particular taxation year.

(8) If this subsection applies to a trust for a particular taxation year, for purposes of the Act

(a) the particular taxation year is deemed to have ended on the deemed year-end day and not at any other time;

(b) the trust is deemed to be an inter vivos trust for the purpose of determining each of the trust’s taxation years that ends

(i) after the particular taxation year and in the relevant period, and

(ii) unless the trust elects under paragraph (c), after October 24, 2012; and

(c) if the trust so elects — by filing an election in writing with the Minister of National Revenue on or before its filing-due date for its taxation year in which this Act receives royal assent — for each of the trust’s taxation years that ends after October 24, 2012, the period for which the accounts of the trust are made up for purposes of assessment under the Act is deemed to be the period for which the accounts of the trust were made up for purposes of the Act for the trust’s last taxation year that ended before the partic-ular taxation year.

360. (1) The portion of paragraph 249.1(1)(b) of the Act after subparagraph (iii) is replaced by the following:

after the end of the calendar year in which the period began unless, in the case of a business, the business is not carried on in Canada,

(2) Paragraph 249.1(9)(b) of the French version of the Act is replaced by the following:

b) la date donnée est antérieure au 22 mars 2012;

(3) Subsection (1) applies to fiscal periods that begin after the day on which this Act receives royal assent.

(4) Subsection (2) applies to fiscal periods that end in or after 2011.

361. (1) Paragraph 251(1)(c) of the Act is replaced by the following:

(c) in any other case, it is a question of fact whether persons not related to each other are, at a particular time, dealing with each other at arm’s length.

(2) Subsection (1) is deemed to have come into force on December 24, 1998.

362. (1) Subsection 252(3) of the Act is amended by replacing “subparagraph 210(c)(ii) and subsections 248(22) and (23)” with “and subsections 210(1) and 248(22) and (23)”.

(2) Subsection (1) applies to the 1996 and subsequent taxation years.

363. (1) Section 253.1 of the Act is replaced by the following:

Investments in limited partnerships

253.1 For the purposes of subparagraph 108(2)(b)(ii), paragraphs 130.1(6)(b), 131(8)(b), 132(6)(b) and 146.1(2.1)(c), subsection 146.2(6), paragraphs 146.4(5)(b) and 149(1)(o.2), the definition “private holding corporation” in subsection 191(1) and regulations made for the purposes of paragraphs 149(1)(o.3) and (o.4), if a trust or corporation holds an interest as a member of a partnership and, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business or other activity of the partnership.

(2) Subsection (1) is deemed to have come into force on January 1, 1998, except that

(a) for taxation years that end after December 16, 1999 and before 2003, section 253.1 of the Act, as enacted by subsection (1), is to be read as follows:

253.1 For the purposes of subparagraph 108(2)(b)(ii), paragraphs 130.1(6)(b), 131(8)(b), 132(6)(b), 146.1(2.1)(c) and 149(1)(o.2), the definition “private holding corporation” in subsection 191(1) and regulations made for the purposes of paragraphs 149(1)(o.3) and (o.4), if a trust or corporation is a member of a partnership and, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, the member is deemed

(a) to undertake an investing of its funds because of its acquisition and holding of its interest as a member of the partnership; and

(b) not to carry on any business or other activity of the partnership.

(b) for taxation years that end after 2002 and before 2008, section 253.1 of the Act, as enacted by subsection (1), is to be read without reference to “146.4(5)(b)”; and

(c) for taxation years that end after 2002 and before 2009, section 253.1 of the Act, as enacted by subsection (1), is to be read without reference to “subsection 146.2(6), paragraphs”.

364. (1) Subparagraph 256(6)(b)(ii) of the French version of the Act is replaced by the following:

(ii) soit à des actions du capital-actions de la société contrôlée qui appartenaient à l’entité dominante au moment donné et qui, selon la convention ou l’arrangement, devaient être rachetées par la société contrôlée ou achetées par la personne ou le groupe de personnes visé au sous-alinéa a)(ii).

(2) Subparagraph 256(7)(a)(i) of the Act is amended by striking out “or” at the end of clause (C) and by adding the following after clause (D):

(E) a corporation on a distribution (within the meaning assigned by subsection 55(1)) by a specified corporation (within the meaning assigned by that subsection) if a dividend, to which subsection 55(2) does not apply because of paragraph 55(3)(b), is received in the course of the reorganization in which the distribution occurs,

(3) Paragraph 256(7)(a) of the Act is amended by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

(iii) the acquisition at any time of shares of the particular corporation if

(A) the acquisition of those shares would otherwise result in the acquisition of control of the particular corporation at that time by a related group of persons, and

(B) each member of each group of persons that controls the particular corporation at that time was related (otherwise than because of a right referred to in paragraph 251(5)(b)) to the particular corporation immediately before that time;

(4) Subsection 256(7) of the Act is amended by adding the following after paragraph (c):

(c.1) subject to paragraph (a), if, at any particular time, as part of a series of transactions or events, two or more persons acquire shares of a corporation (in this paragraph referred to as the “acquiring corporation”) in exchange for or upon a redemption or surrender of interests in, or as a consequence of a distribution from, a SIFT trust (determined without reference to subsection 122.1(2)), SIFT partnership (determined without reference to subsection 197(8)) or real estate investment trust (as defined in subsection 122.1(1)), control of the acquiring corporation and of each corporation controlled by it immediately before the particular time is deemed to have been acquired by a person or group of persons at the particular time unless

(i) in respect of each of the corporations, a person (in this subparagraph referred to as a “relevant person”) affiliated (within the meaning assigned by section 251.1 read without reference to the definition “controlled” in subsection 251.1(3)) with the SIFT trust, SIFT partnership or real estate investment trust owned shares of the particular corporation having a total fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the particular corporation at all times during the period that

(A) begins on the latest of July 14, 2008, the date the particular corporation came into existence and the time of the last acquisition of control, if any, of the particular corporation by a relevant person, and

(B) ends immediately before the partic-ular time,

(ii) if all the securities (in this subparagraph as defined in subsection 122.1(1)) of the acquiring corporation that were acquired as part of the series of transactions or events at or before the particular time were acquired by one person, the person would

(A) not at the particular time control the acquiring corporation, and

(B) have at the particular time acquired securities of the acquiring corporation having a fair market value of not more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation, or

(iii) this paragraph previously applied to deem an acquisition of control of the acquiring corporation upon an acquisition of shares that was part of the same series of transactions or events;

(5) Paragraph 256(7)(e) of the Act is replaced by the following:

(e) control of a particular corporation and of each corporation controlled by it immediately before a particular time is deemed not to have been acquired at the particular time by a corporation (in this paragraph referred to as the “acquiring corporation”) if at the partic- ular time, the acquiring corporation acquires shares of the particular corporation’s capital stock for consideration that consists solely of shares of the acquiring corporation’s capital stock, and if

(i) immediately after the particular time

(A) the acquiring corporation owns all the shares of each class of the particular corporation’s capital stock (determined without reference to shares of a specified class, within the meaning assigned by paragraph 88(1)(c.8)),

(B) the acquiring corporation is not controlled by any person or group of persons, and

(C) the fair market value of the shares of the particular corporation’s capital stock that are owned by the acquiring corporation is not less than 95% of the fair market value of all of the assets of the acquiring corporation, or

(ii) any of clauses (i)(A) to (C) do not apply and the acquisition occurs as part of a plan of arrangement that, on completion, results in

(A) the acquiring corporation (or a new corporation that is formed on an amalgamation of the acquiring corporation and a subsidiary wholly-owned corporation of the acquiring corporation) owning all the shares of each class of the particular corporation’s capital stock (determined without reference to shares of a specified class, within the meaning assigned by paragraph 88(1)(c.8)),

(B) the acquiring corporation (or the new corporation) not being controlled by any person or group of persons, and

(C) the fair market value of the shares of the particular corporation’s capital stock that are owned by the acquiring corporation (or the new corporation) being not less than 95% of the fair market value of all of the assets of the acquiring corporation (or the new corporation);

(6) Subsection 256(7) of the Act is amended by adding “and” at the end of paragraph (f) and by adding the following after that paragraph:

(g) a corporation (in this paragraph referred to as the “acquiring corporation”) that acquires shares of another corporation on a distribution that is a SIFT trust wind-up event of a SIFT wind-up entity is deemed not to acquire control of the other corporation because of that acquisition if the following conditions are met:

(i) the SIFT wind-up entity is a trust whose only beneficiary immediately before the distribution is the acquiring corporation,

(ii) the SIFT wind-up entity controlled the other corporation immediately before the distribution,

(iii) as part of a series of transactions or events under which the acquiring corporation became the only beneficiary under the trust, two or more persons acquired shares in the acquiring corporation in exchange for their interests as beneficiaries under the trust, and

(iv) if all the shares described in subparagraph (iii) had been acquired by one person, the person would

(A) control the acquiring corporation, and

(B) have acquired shares of the acquiring corporation having a fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation.

(7) Subsections (2) and (3) apply to acquisitions of shares that occur after 2000.

(8) Subsections (4) and (6) apply to transactions undertaken after 4:00 p.m. Eastern Standard Time March 4, 2010, other than transactions the parties to which are obligated to complete pursuant to the terms of an agreement in writing between the parties entered into before that time. However, the parties to a transaction shall be considered not to be obligated to complete the transaction if one or more of those parties may be excused from completing the transaction as a result of amendments to the Act.

(9) Subsections (4) and (6) also apply to transactions completed or agreed to in writing in the period that begins on July 14, 2008 and ends at 4:00 pm Eastern Standard Time March 4, 2010 if the parties to the transactions jointly elect in writing to the Minister of National Revenue on or before

(a) if a party to the transactions is a partnership, the day that is the later of

(i) the day that is the latest on which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the partnership’s fiscal period that includes the day on which this Act receives royal assent, and

(ii) the day that is the latest filing-due date of any party for its taxation year that includes the day on which this Act receives royal assent, and

(b) if none of the parties to the transaction is a partnership, the day that is the latest filing-due date of any party for its taxation year that includes the day on which this Act receives royal assent.

For the purposes of this subsection, the parties shall be considered to be the relevant SIFT trust, SIFT partnership, real estate investment trust and acquiring corporation described in paragraph 256(7)(c.1) or (g) of the Act, as the case may be.

(10) Subsection (5) applies in respect of shares acquired after 1999.

365. (1) The definition “qualified secu-rity” in subsection 260(1) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) a qualified trust unit;

(2) Paragraph (a) of the definition “securities lending arrangement” in subsection 260(1) of the Act is replaced by the following:

(a) a person (in this section referred to as the “lender”) transfers or lends at any particular time a qualified security to another person (in this section referred to as the “borrower”),

(3) Paragraph (c) of the definition “securities lending arrangement” in subsection 260(1) of the Act is replaced by the following:

(c) the borrower is obligated to pay to the lender amounts equal to and as compensation for all amounts, if any, paid on the security that would have been received by the borrower if the borrower had held the security throughout the period that begins after the particular time and that ends at the time an identical security is transferred or returned to the lender,

(4) The definition “securities lending arrangement” in subsection 260(1) of the Act is amended by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) if the lender and the borrower do not deal with each other at arm’s length, it is intended that neither the arrangement nor any series of securities lending arrangements, loans or other transactions of which the arrangement is a part be in effect for more than 270 days,

(5) Subsection 260(1) of the Act is amended by adding the following in alphabetical order:

“dealer compensation payment”
« paiement compensatoire (courtier) »

“dealer compensation payment” means an amount received by a taxpayer as compensation, for an underlying payment,

(a) from a registered securities dealer resident in Canada who paid the amount in the ordinary course of a business of trading in securities, or

(b) in the ordinary course of the taxpayer’s business of trading in securities, where the taxpayer is a registered securities dealer resident in Canada;

“qualified trust unit”
« unité de fiducie déterminée »

“qualified trust unit” means an interest, as a beneficiary under a trust, that is listed on a stock exchange;

“security distribution”
« paiement de titre »

“security distribution” means an amount that is

(a) an underlying payment, or

(b) an SLA compensation payment, or a dealer compensation payment, that is deemed by subsection (5.1) to be an amount received as an amount described by any of paragraphs (5.1)(a) to (c);

“SLA compensation payment”
« paiement compensatoire (MPVM) »

“SLA compensation payment” means an amount paid pursuant to a securities lending arrangement as compensation for an underlying payment;

“underlying payment”
« paiement sous-jacent »

“underlying payment” means an amount paid on a qualified security by the issuer of the security.

(6) The portion of subsection 260(1.1) of the Act before paragraph (a) is replaced by the following:

Eligible dividend

(1.1) This subsection applies to an amount if the amount is received by a person who is resident in Canada, the amount is deemed under subsection (5.1) to be a taxable dividend, and the amount is either

(7) Subsections 260(5) and (6) of the Act are replaced by the following:

Where subsection (5.1) applies

(5) Subsection (5.1) applies to a taxpayer for a taxation year in respect of a particular amount (other than an amount received as proceeds of disposition or an amount received by a person under an arrangement where it may reasonably be considered that one of the main reasons for the person entering into the arrangement was to enable the person to receive an SLA compensation payment or a dealer compensation payment that would be deductible in computing the taxable income, or not included in computing the income, for any taxation year of the person) received by the taxpayer in the taxation year

(a) as an SLA compensation payment,

(i) from a person resident in Canada, or

(ii) from a non-resident person who paid the particular amount in the course of carrying on business in Canada through a permanent establishment as defined by regulation; or

(b) as a dealer compensation payment.

Deemed character of compensation payments

(5.1) If this subsection applies in respect of a particular amount received by a taxpayer in a taxation year as an SLA compensation payment or as a dealer compensation payment, the particular amount is deemed, to the extent of the underlying payment to which the amount relates, to have been received by the taxpayer in the taxation year as,

(a) where the underlying payment is a taxable dividend paid on a share of the capital stock of a public corporation (other than an underlying payment to which paragraph (b) applies), a taxable dividend on the share and, if subsection (1.1) applies to the particular amount, an eligible dividend on the share;

(b) where the underlying payment is paid by a trust on a qualified trust unit issued by the trust,

(i) an amount of the trust’s income that was, to the extent that subsection 104(13) applied to the underlying payment,

(A) paid by the trust to the taxpayer as a beneficiary under the trust, and

(B) designated by the trust in respect of the taxpayer to the extent of a valid designation, if any, by the trust under this Act in respect of the recipient of the underlying payment, and

(ii) to the extent that the underlying payment is a distribution of a property from the trust, a distribution of that property from the trust; or

Deductibility

(6) In computing the income of a taxpayer under Part I from a business or property for a taxation year, there may be deducted a particular amount, paid by the taxpayer in the year as an SLA compensation payment or as a dealer compensation payment, that is equal to

(a) if the taxpayer is a registered securities dealer and the particular amount is deemed by subsection (5.1) to have been received as a taxable dividend, no more than 2/3 of the particular amount; or

(b) if the particular amount is in respect of an amount other than an amount that is, or is deemed by subsection (5.1) to have been, received as a taxable dividend,

(i) where the taxpayer disposes of the borrowed security and includes the gain or loss, if any, from the disposition in computing its income from a business, the particular amount, or

(ii) in any other case, the lesser of

(A) the particular amount, and

(B) the amount, if any, in respect of the security distribution to which the SLA compensation payment or dealer compensation payment relates that is included in computing the income, and not deducted in computing the taxable income, for any taxation year of the taxpayer or of any person to whom the taxpayer is related.

(8) Paragraph 260(6.1)(a) of the Act is replaced by the following:

(a) the total of all amounts each of which is an amount that the corporation becomes obligated in the taxation year to pay to another person under an arrangement described in paragraph (b) of the definition “dividend rental arrangement” in subsection 248(1) that, if paid, would be deemed by subsection (5.1) to have been received by another person as a taxable dividend, and

(9) Subsections 260(7) and (8) of the Act are replaced by the following:

Dividend refund

(7) For the purpose of section 129, if a corporation pays an amount for which no deduction in computing the corporation’s income may be claimed under subsection (6.1) and subsection (5.1) deems the amount to have been received by another person as a taxable dividend,

(a) the corporation is deemed to have paid the amount as a taxable dividend, where the corporation is not a registered securities dealer; and

(b) the corporation is deemed to have paid 1/3 of the amount as a taxable dividend, where the corporation is a registered securities dealer.

Non-resident withholding tax

(8) For the purpose of Part XIII, any amount paid or credited under a securities lending arrangement by or on behalf of the borrower to the lender

(a) as an SLA compensation payment is, subject to paragraph (b) or (c), deemed to be a payment of interest made by the borrower to the lender;

(b) as an SLA compensation payment in respect of a security that is a qualified trust unit, is deemed, to the extent of the amount of the underlying payment to which the SLA compensation payment relates, to be an amount paid by the trust and having the same character and composition as the underlying payment;

(c) as an SLA compensation payment, if the security is not a qualified trust unit and throughout the term of the securities lending arrangement, the borrower has provided the lender under the arrangement with money in an amount of, or securities described in paragraph (c) of the definition “qualified security” in subsection (1) that have a fair market value of, not less than 95% of the fair market value of the security and the borrower is entitled to enjoy, directly or indirectly, the benefits of all or substantially all income derived from, and opportunity for gain with respect of, the money or securities,

(i) is, to the extent of the amount of the interest or dividend paid in respect of the security, deemed to be a payment made by the borrower to the lender of interest or a dividend, as the case may be, payable on the security, and

(ii) is, to the extent of the amount of the interest, if any, paid in respect of the security, deemed to have been payable on a security described in paragraph (a) of the definition “fully exempt interest” in subsection 212(3) if the security is described in paragraph (c) of the definition “qualified security” in subsection (1); and

(d) as, on account of, in lieu of payment of or in satisfaction of, a fee for the use of the security is deemed to be a payment of interest made by the borrower to the lender.

Deemed fee for borrowed security

(8.1) For the purpose of paragraph (8)(d), if under a securities lending arrangement the borrower has at any time provided the lender with money, either as collateral or consideration for the security, and the borrower does not, under the arrangement, pay or credit a reasonable amount to the lender as, on account of, in lieu of payment of or in satisfaction of, a fee for the use of the security, the borrower is deemed to have, at the time that an identical security is or can reasonably be expected to be transferred or returned to the lender, paid to the lender under the arrangement an amount as a fee for the use of the security equal to the amount, if any, by which

(a) the interest on the money computed at the prescribed rates in effect during the term of the arrangement

exceeds

(b) the amount, if any, by which any amount that the lender pays or credits to the borrower under the arrangement exceeds the amount of the money.

Effect for tax treaties

(8.2) In applying subsection (8), any amount, paid or credited under a securities lending arrangement by or on behalf of the borrower to the lender, that is deemed by paragraph (8)(a), (b) or (d) to be a payment of interest, is deemed for the purposes of any tax treaty not to be payable on or in respect of the security.

(10) Subsection 260(10) of the Act is renumbered as subsection 260(9.1).

(11) Section 260 of the Act is amended by adding the following in numerical order:

Partnerships

(10) For the purpose of this section,

(a) a person includes a partnership; and

(b) a partnership is deemed to be a registered securities dealer if each member of the partnership is a registered securities dealer.

Corporate members of partnerships

(11) A corporation that is, in a taxation year, a member of a partnership is deemed

(a) for the purpose of applying subsection (5) in respect of the taxation year,

(i) to receive its specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount received by the partnership in that fiscal period, and

(ii) in respect of the receipt of its specified proportion of that amount, to be the same person as the partnership;

(b) for the purpose of applying paragraph (6.1)(a) in respect of the taxation year, to become obligated to pay its specified proportion, for each fiscal period of the partnership that ends in the taxation year, of the amount the partnership becomes, in that fiscal period, obligated to pay to another person under the arrangement described in that paragraph; and

(i) if the partnership is not a registered securities dealer, the corporation’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount paid by the partnership (other than an amount for which a deduction in computing income may be claimed under subsection (6.1) by the corporation), and

(ii) if the partnership is a registered securities dealer, 1/3 of the corporation’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount paid by the partnership (other than an amount for which a deduction in computing income may be claimed under subsection (6.1) by the corporation).

Individual members of partnerships

(12) An individual that is, in a taxation year, a member of a partnership is deemed

(a) for the purpose of applying subsection (5) in respect of the taxation year,

(i) to receive the individual’s specified proportion, for each fiscal period of the partnership that ends in the taxation year, of each amount received by the partnership in that fiscal period, and

(ii) in respect of the receipt of the individual’s specified proportion of that amount, to be the same person as the partnership; and

(b) for the purpose of subsection 82(1), to have paid the individual’s specified proportion, for each fiscal period of the partnership that ends in the year, of each amount paid by the partnership in that fiscal period that is deemed by subsection (5.1) to have been received by another person as a taxable dividend.

(12) Subsections (1), (3), (5), (7) and (9) apply to arrangements made after 2001, except that,

(a) the definition “qualified trust unit” in subsection 260(1) of the Act, as enacted by subsection (5), is to be read,

(i) in its application to arrangements made before October 24, 2012, as follows:

“qualified trust unit” means a unit of a mutual fund trust that is listed on a stock exchange;

and

(ii) before December 14, 2007 as though the reference to “stock exchange” in the read-as text in subparagraph (i) were a reference to “prescribed stock exchange”;

(b) if the parties to an arrangement jointly so elect in writing and file the election with the Minister of National Revenue within 90 days after the day on which this Act receives royal assent, subsection 260(5.1) of the Act, as enacted by subsection (7), is to be read, in its application to SLA compensation payments or dealer compensation payments received under the arrangement before February 28, 2004, without reference to paragraph 260(5.1)(b) or (c), or to both of those paragraphs, as specified by the parties in the election;

(c) for amounts received as compensation for dividends paid before 2006, paragraph 260(5.1)(a) of the Act, as enacted by subsection (7), is to be read without reference to “and, if subsection (1.1) applies to the amount, an eligible dividend on the share from the corporation”; and

(d) before 2008, subparagraph 260(8)(c)(ii) of the Act, as enacted by subsection (9), is to be read as follows:

(ii) is, to the extent of the amount of the interest, if any, paid in respect of the security, deemed

(A) for the purpose of subparagraph 212(1)(b)(vii) to have been payable by the issuer of the security, and

(B) to have been payable on a security that is a security described in subparagraph 212(1)(b)(ii) where the security is a security described in paragraph (c) of the definition “qualified security” in subsection (1); and

(13) Subsections (2) and (4) apply to arrangements made after 2002.

(14) Subsection (6) applies to amounts received as compensation for dividends paid after 2005.

(15) Subsection (8) applies to

(a) arrangements made after December 20, 2002;

(b) an arrangement made after November 2, 1998 and before December 21, 2002 if the parties to the arrangement have made the election referred to in paragraph 358(34)(b), except that, in its application to an arrangement made before 2002, the reference to “subsection (5.1)” in paragraph 260(6.1)(a) of the Act, as enacted by subsection (8), is to be read as a reference to “subsection (5)”; and

(c) an arrangement, other than an arrangement to which paragraph (b) applies, made after 2001 and before December 21, 2002, except that, in its application before December 21, 2002, paragraph 260(6.1)(a) of the Act, as enacted by subsection (8), is to be read as follows:

(a) the amount that the corporation is obligated to pay to another person under an arrangement described in paragraphs (c) and (d) of the definition “dividend rental arrangement” in subsection 248(1) that, if paid, would be deemed by subsection (5.1) to have been received by another person as a taxable dividend, and

(16) Subsection (10) is deemed to have come into force on January 1, 2008.

(17) Subsection (11) applies to

(a) arrangements made after December 20, 2002; and

(b) an arrangement made after November 2, 1998 and before December 21, 2002 if the parties to the arrangement have made the election referred to in paragraph 358(34)(b), except that, in its application to an arrangement made before 2002, the reference to “subsection (5.1)” in paragraph 260(12)(b) of the Act, as enacted by subsection (11), is to be read as a reference to “subsection (5)”.

366. (1) The Act is amended by adding, after section 262, the schedule set out in the schedule to this Act.

(2) Subject to subsection (3), subsection (1) is deemed to have come into force on December 20, 2002.

(3) Subsection (1) is deemed to have come into force to enact the schedule set out in that subsection so as to, as of the dates set out below, list each of the following corporations in the schedule:

(a) 2419726 Canada Inc., January 1, 1998, except that, in its application

(i) after May 1999 and before April 2002, the reference in the schedule to that corporation is to be read as a reference to “CitiFinancial Canada, Inc./CitiFinancière Canada, Inc.”, and

(ii) after 1997 and before June 1999, the reference in the schedule to that corporation is to be read as a reference to “Commercial Credit Corporation CCC Limited/Corporation De Credit Commerciale CCC Limitee”;

(b) Ally Credit Canada Limited/Ally Crédit Canada Limitée, January 1, 1991, except that, in its application after 1990 and before August 23, 2010, the reference in the schedule to that corporation is to be read as a reference to “General Motors Acceptance Corporation of Canada Limited”;

(d) Canaccord Capital Credit Corporation/Corporation de crédit Canaccord capital, September 25, 2000;

(e) Canaccord Financial Holdings Inc./Corporation financière Canaccord Inc., January 1, 2004;

(f) Citibank Canada Investment Funds Limited, December 31, 2001;

(g) Citicapital Commercial Corporation/Citicapital Corporation Commerciale, January 1, 2000, except that, in its application after 1999 and before July 2001, the reference in the schedule to that corporation is to be read as a reference to “Associates Commercial Corporation of Canada Ltd./Les Associés, Corporation Commerciale du Canada Ltee”;

(h) Citi Cards Canada Inc./Cartes Citi Canada Inc., September 25, 2003;

(i) Citi Commerce Solutions of Canada Ltd., January 1, 2003;

(j) CitiFinancial Canada East Company/CitiFinancière, corporation du Canada Est, December 23, 1997, except that, in its application

(i) after April 2001 and before April 2002, the reference in the schedule to that corporation is to be read as a reference to “CitiFinancial Services of Canada East Company/CitiFinancière, compagnie de services du Canada Est”,

(ii) after September 26, 1999 and before May 2001, the reference in the schedule to that corporation is to be read as a reference to “Associates Financial Serv-ices of Canada East Company/Les Associés, Compagnie de Services Financiers du Canada Est”,

(iii) after February 12, 1998 and before September 27, 1999, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Canada East Company/Compagnie Services Financiers Avco Canada Est”,

(iv) after December 29, 1997 and before February 13, 1998, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Canada East Company/Services Financiers Avco Canada Est Compagnie”, and

(v) after December 22, 1997 and before December 30, 1997, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Canada East Company”;

(k) CitiFinancial Canada, Inc./CitiFinancière Canada, Inc., March 2, 1998, except that, in its application

(i) after April 2001 and before April 2002, the reference in the schedule to that corporation is to be read as a reference to “CitiFinancial Services of Canada, Ltd./CitiFinancière, services du Canada, Ltée”, and

(ii) after March 1, 1998 and before May 2001, the reference in the schedule to that corporation is to be read as a reference to “Associates Financial Serv-ices of Canada Ltd./Les Associés, Services Financières du Canada Ltée”;

(l) CitiFinancial Mortgage Corporation/CitiFinancière, corporation de prêts hypothécaires, March 2, 1998, except that, in its application after March 1, 1998 and before May 2001, the reference in the schedule to that corporation is to be read as a reference to “Associates Mortgage Corporation/Les Associés, Corporation de Prêts Hypothécaires”;

(m) CitiFinancial Mortgage East Corporation/CitiFinancière, corporation de prêts hypothécaires de l’Est, December 23, 1997, except that, in its application

(i) after November 2, 1999 and before May 2001, the reference in the schedule to that corporation is to be read as a reference to “Associates Mortgage East Corporation/Les Associés, Corporation de Prêts Hypothécaires de l’Est”,

(ii) after September 27, 1999 and before November 3, 1999, the reference in the schedule to that corporation is to be read as a reference to “Associates Mortgage East Corporation/Les Associés, Corporation de Financiers du Prêts Hypothécaires de l’Est”,

(iii) after February 12, 1998 and before September 28, 1999, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Realty East Company/Compagnie Services Financiers Immobiliers Avco Est”,

(iv) after December 29, 1997 and before February 13, 1998, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Realty East Company/Services Financiers Immobiliers Avco Est Compagnie”, and

(v) after December 22, 1997 and before December 30, 1997, the reference in the schedule to that corporation is to be read as a reference to “Avco Financial Serv-ices Realty East Company”;

(n) Citigroup Finance Canada Inc., January 1, 1998, except that, in its application after 1997 and before June 11, 2003, the reference in the schedule to that corporation is to be read as a reference to “Associates Capital Corporation of Canada/Corporation de capital associés du Canada”;

(o) Ford Credit Canada Limited, December 23, 1997;

(p) GE Card Services Canada Inc./GE Services de Cartes du Canada Inc., August 2, 2000;

(q) GMAC Residential Funding of Canada, Limited, January 1, 2003;

(r) John Deere Credit Inc./Crédit John Deere Inc., January 1, 1999;

(s) PACCAR Financial Ltd./Compagnie Financière Paccar Ltée, January 1, 2003;

(t) Paradigm Fund Inc./Le Fonds Paradigm Inc., January 1, 2002;

(u) Prêts étudiants Atlantique Inc./Atlantic Student Loans Inc., January 1, 1998, except that, in its application after 1997 and before June 13, 2002, the reference in the schedule to that corporation is to be read as a reference to “Prêts étudiants Acadie Inc./Acadia Student Loans Inc.”;

(v) State Farm Finance Corporation of Canada/ Corporation de Crédit State Farm du Canada, January 1, 2002, except that, in its application after 2001 and before May 2002, the reference in the schedule to that corporation is to be read as a reference to “VNB Financial Services Inc./Services financiers VNB, Inc.”;

(w) Trans Canada Retail Services Company/Société de services de détails trans Canada, January 1, 1999, except that, in its application after 1998 and before January 15, 2002, the reference in the schedule to that corporation is to be read as a reference to “National Retail Credit Services Company/Société de services de crédit aux détaillants national”; and

(x) Wells Fargo Financial Canada Corporation, January 1, 1999, except that, in its application after 1998 and before September 7, 2001, the reference in the schedule to that corporation is to be read as a reference to “Norwest Financial Canada Company”.

(4) Ford Credit Canada Limited is deemed to have been, from July 1, 1989 to December 22, 1997, prescribed by a regulation made under paragraph 181(1)(g) of the Act.

(5) The schedule, as enacted by subsection (1), is amended by removing from the list, as of the dates set out below, the following corporations:

(a) GE Card Services Canada Inc./ GE Services Cartes du Canada Inc., January 1, 2003;

(b) 2419726 Canada Inc., March 31, 2002;

(d) CitiFinancial Mortgage East Corporation/CitiFinancière, corporation de prêts hypothécaires de l’Est, April 1, 2002.

367. If a provision of this Part applies or comes into force before the day on which this Act receives royal assent, for the purpose of and to the extent necessary to take into account that provision, in applying subsection 152(4.2) of the Act to a taxation year that ends before that day, that subsection is to be read as follows:

(4.2) Notwithstanding subsections (4), (4.1) and (5), for the purpose of determining, at any time after the end of the normal reassessment period of a taxpayer in respect of a taxation year, an amount payable under this Part by the taxpayer for the taxation year, the Minister may, if the taxpayer makes an application for that determination,

(a) reassess tax, interest or penalties payable under this Part by the taxpayer in respect of that taxation year; and

(b) redetermine the amount, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 125.4(3), 125.5(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the taxation year.