Bill C-48

AMENDMENTS IN RESPECT OF TAX AGREEMENTS

Federal-Provincial Fiscal Arrangements Act

417. (1) The definition “administration agreement” in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

“administration agreement” means

(a) an agreement between the Government of Canada and the government of a province or an aboriginal government under which

(i) the Government of Canada will administer and enforce an Act of the legislature of the province, or legislation made by an aboriginal government, that imposes a tax and will make payments to the province or the aboriginal government in respect of the taxes collected, in accordance with the terms and conditions of the agreement, or

(ii) the government of the province will administer and enforce an Act of Parliament that imposes a tax and will make payments to the Government of Canada in respect of the taxes collected, in accord-ance with the terms and conditions of the agreement, or

(b) an agreement between the Government of Canada and the government of a province under which the government of the province will administer and enforce a First Nation law that imposes a tax and will make payments to the Government of Canada in respect of the taxes collected, in accordance with the terms and conditions of the agreement;

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

“First Nation law” has the meaning assigned by subsection 11(1) or 12(1) of the First Nations Goods and Services Tax Act.

418. (1) Section 7 of the Act is amended by adding the following after subsection (1):

(1.1) An administration agreement referred to in paragraph (b) of the definition “administration agreement” in subsection 2(1) can only be entered into if the government of the province that is to administer and enforce the First Nation law also administers and enforces Part IX of the Excise Tax Act under an administration agreement referred to in paragraph (a) of that definition.

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

(2.1) Subsection (2) does not apply to an amendment made to an administration agreement if the agreement authorizes the Minister or the Minister of National Revenue to make the amendment and the amendment does not fundamentally alter the terms and conditions of the agreement.

(2.2) Amendments that were made to an administration agreement before the day on which the Technical Tax Amendments Act, 2012 received royal assent and that, if subsection (2.1) had been in force on the date those amendments were made, would have been authorized under that subsection are, for greater certainty, ratified and confirmed and all actions taken and payments made as a result of those amendments are ratified and confirmed.

419. The Act is amended by adding the following after section 7.3:

7.31 If an administration agreement has been entered into in respect of a First Nation law, any amount that is payable by a person under the First Nation law shall, despite the First Nation law or any Act of Parliament, be remitted by that person to the government of the province that is a party to the administration agreement.

420. The Act is amended by adding the following after section 7.4:

7.5 Despite any other enactment, if an administration agreement has been entered into in respect of a First Nation law, the government of the province that is a party to the administration agreement may, in accordance with the terms and conditions of the administration agreement, reduce the remittance to the Government of Canada of any amount it has collected on account of the tax imposed under the First Nation law by any amount it has paid to a person under that law.

First Nations Goods and Services Tax Act

421. The definition “administration agreement” in subsection 2(1) of the First Nations Goods and Services Tax Act is replaced by the following:

“administration agreement”, in Part 1, means an agreement referred to in subsection 5(2) and entered into with the authorized body of a first nation and, in Part 2, means an agreement referred to in section 22 and entered into with a council of the band.

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

(1.1) A first nation law, as defined in subsection 11(1) or 12(1), or an obligation to pay an amount that arises from the application of section 14, may, despite section 89 of the Indian Act, be administered and enforced by Her Majesty in right of Canada, by an agent of the first nation or, if the first nation law is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, by Her Majesty in right of the province.

423. Subsection 4(9) of the Act is replaced by the following:

(9) Tax that is imposed under a law of a first nation enacted under subsection (1) in respect of the bringing of property onto the lands of the first nation shall become payable by the person who brings it onto the lands at the time it is brought onto the lands and

(a) if the person is a registrant who acquired the property for consumption, use or supply primarily in the course of commercial activities of the person, the person shall, on or before the day on or before which the person’s return in respect of net tax is required to be filed under the law of the first nation for the reporting period in which the tax became payable,

(i) report the tax in that return, and

(ii) pay the tax to the Receiver General, or, if the law of the first nation is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, to the appropriate minister for that province; and

(b) in any other case, the person shall, on or before the last day of the month following the calendar month in which the tax became payable,

(i) file with the Minister of National Revenue or, if the law of the first nation is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, with the appropriate minister for that province a return in respect of the tax, in the manner and in the form authorized by the Minister of National Revenue and containing information specified by that Minister, and

(ii) pay the tax to the Receiver General or to the appropriate minister for that prov- ince, as the case may be.

424. (1) Paragraphs 5(2)(e) and (f) of the Act are replaced by the following:

(e) for the administration and enforcement of the first nation law by the Government of Canada or, if the first nation law is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, by the government of the province and for the collection, by the Government of Canada or the government of the province, as the case may be, of amounts imposed under that law;

(f) for the provision by the Government of Canada or, if the first nation law is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, by the government of the province to the first nation of information acquired in the administration and enforcement of the first nation law or, subject to section 295 of the Excise Tax Act, of Part IX of that Act, and for the provision by the first nation to the Government of Canada or the government of the province, as the case may be, of information acquired in the administration of the first nation law;

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

(5) Subject to subsection (6), if an administration agreement has been entered into in respect of a first nation law, as defined in subsection 11(1) or 12(1), payments may be made to a person out of the Consolidated Revenue Fund on account of any amount that is payable to the person under that law in accordance with the agreement unless the first nation law is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act.

425. Section 16 of the Act is replaced by the following:

16. (1) If an administration agreement entered into by the authorized body of a first nation is in effect in respect of a first nation law, as defined in subsection 11(1) or 12(1), the Minister of National Revenue or, if the first nation law is administered by the government of a province under an agreement entered into under section 7 of the Federal-Provincial Fiscal Arrangements Act, the appropriate minister for that province may, for the purposes of the administration agreement, require any person having a place of business, or maintaining assets of a business, on the lands of the first nation to make a report respecting supplies relating to that business made by the person or property or services acquired or imported for consumption, use or supply in connection with those lands and that business.

(2) A report under subsection (1) shall be made in the manner and form authorized by the Minister of National Revenue and at the time and containing information specified by that Minister. The report shall be filed with the Minister of National Revenue or, if a first nation law is administered by the government of a province under an agreement referred to in that subsection, with the appropriate minister for that province.

PART 8

COORDINATING AMENDMENTS

426. (1) In this section, “other Act” means the Pooled Registered Pension Plans Act.

(2) If this Act receives royal assent after the first day on which both the other Act and subsection 2(1) of the Jobs and Growth Act, 2012 are in force, then, on the day on which this Act receives royal assent, subparagraph 6(1)(a)(i) of the Income Tax Act, as enacted by subsection 170(1) of this Act, is replaced by the following:

(i) derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a pooled registered pension plan, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan,

(3) If both the other Act and subsection 2(1) of the Jobs and Growth Act, 2012 come into force on the same day as this Act receives royal assent, then this Act is deemed to have received royal assent before the coming into force of that subsection 2(1).

(4) On the first day on which the other Act is in force and this Act has received royal assent,

(a) the portion of paragraph 60(n.1) of the Income Tax Act before subparagraph (i), as enacted by subsection 196(4) of this Act, is replaced by the following:

(n.1) an amount paid by the taxpayer in the year to a pooled registered pension plan or registered pension plan if

(b) subparagraph 60(n.1)(iii) of the Income Tax Act, as enacted by subsection 196(4) of this Act, is replaced by the following:

(iii) no portion of the amount is deductible under any of paragraph 8(1)(m) and subsections 146(5) to (5.2) in computing the taxpayer’s income for the year;

(5) On the first day on which the other Act is in force and on which both this Act and the Jobs and Growth Act, 2012 have received royal assent

(a) section 253.1 of the Income Tax Act, as enacted by subsection 363(1) of this Act, is replaced by the following:

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), paragraph 146.4(5)(b), subsection 147.5(8), paragraph 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.

(b) section 57 of the Jobs and Growth Act, 2012 is deemed never to have come into force and is repealed.

(6) Subsection (4) applies to the 2009 and subsequent taxation years, except that, before the day on which the other Act comes into force

(a) the portion of paragraph 60(n.1) of the Income Tax Act before subparagraph (i), as enacted by paragraph (4)(a), is to be read without reference to “pooled registered pension plan or”; and

(b) subparagraph 60(n.1)(iii) of the Income Tax Act, as enacted by paragraph (4)(b), is to be read as follows:

(iii) no portion of the amount is deductible under paragraph 8(1)(m) in computing the taxpayer’s income for the year;

427. (1) Subsections (2) to (5) apply if Bill C-45, introduced in the 1st session of the 41st Parliament and entitled Jobs and Growth Act, 2012 (in this section referred to as the “other Act”), receives royal assent.

(2) On the first day on which both the other Act and this Act have received royal assent,

(a) the portion of subsection 18(5) of the Income Tax Act before the definition “outstanding debts to specified non-residents” is replaced by the following:

(5) Notwithstanding any other provision of this Act (other than subsection (5.1)), in this subsection and subsections (4) to (6),

(b) the definition “specified proportion” in subsection 18(5) of the Income Tax Act is repealed;

(c) the portion of subsection 93.1(1) of the Income Tax Act before paragraph (a) is replaced by the following:

93.1 (1) For the purposes of determining whether a non-resident corporation is a foreign affiliate of a corporation resident in Canada for the purposes of subsections (2), 20(12) and 39(2.1), sections 90, 93 and 113, paragraphs 128.1(1)(c.3) and (d), section 212.3 and subsection 219.1(2), (and any regulations made for the purposes of those provisions), section 95 (to the extent that it is applied for the purposes of those provisions), paragraph 95(2)(g.04) and section 126, if, based on the assumptions contained in paragraph 96(1)(c), at any time shares of a class of the capital stock of a corporation are owned by a partnership or are deemed under this subsection to be owned by a partnership, then each member of the partnership is deemed to own at that time the number of those shares that is equal to the proportion of all those shares that

(d) clause 212.3(9)(c)(ii)(B) of the Income Tax Act, as enacted by subsection 49(1) of the other Act, is replaced by the following:

(B) as a dividend or qualifying return of capital, within the meaning assigned by subsection 90(3), in respect of a class of subject shares, or the portion of a dividend or qualifying return of capital in respect of a class of substituted shares that may reasonably be considered to relate to the subject shares, or

(e) subparagraph 212.3(18)(b)(vii) of the Income Tax Act, as enacted by subsection 49(1) of the other Act, is replaced by the following:

(vii) as a dividend or a qualifying return of capital, within the meaning assigned by subsection 90(3), in respect of the shares of another non-resident corporation that is, immediately before the investment time, a foreign affiliate of the CRIC;

(f) paragraph 212.3(20)(a) of the Income Tax Act, as enacted by subsection 49(1) of the other Act, is replaced by the following:

(a) the total of all amounts each of which is the amount of a debt obligation assumed by the CRIC in respect of the liquidation and dissolution, redemption, dividend or qualifying return of capital, as the case may be, and

(g) the portion of section 8201 of the Income Tax Regulations before paragraph (a) is replaced by the following:

8201. For the purposes of subsection 16.1(1), the definition “outstanding debts to specified non-residents” in subsection 18(5), subsections 100(1.3) and 112(2), the definition “qualified Canadian transit organization” in subsection 118.02(1), subsections 125.4(1) and 125.5(1), the definition “taxable supplier” in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), the definition “Canadian banking business” in subsection 248(1) and paragraph 260(5)(a) of the Act, a “permanent establishment” of a person or partnership (either of whom is referred to in this section as the “person”) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, where the person does not have any fixed place of business, the principal place at which the person’s business is conducted, and

(3) Paragraph (2)(c) is deemed to have come into force on August 20, 2011, except that before March 29, 2012, the portion of subsection 93.1(1) of the Income Tax Act before paragraph (a), as enacted by subsection paragraph 2(c), is to be read as follows:

93.1 (1) For the purposes of determining whether a non-resident corporation is a foreign affiliate of a corporation resident in Canada for the purposes of subsections (2), 20(12) and 39(2.1), sections 90, 93 and 113, paragraph 128.1(1)(d), (and any regulations made for the purposes of those provisions), section 95 (to the extent that it is applied for the purposes of those provisions), paragraph 95(2)(g.04) and section 126, if, based on the assumptions contained in paragraph 96(1)(c), at any time shares of a class of the capital stock of a corporation are owned by a partnership or are deemed under this subsection to be owned by a partnership, then each member of the partnership is deemed to own at that time the number of those shares that is equal to the proportion of all those shares that

(4) Clause 212.3(9)(c)(ii)(B) of the Income Tax Act, as enacted by paragraph (2)(d), subparagraph 212.3(18)(b)(vii) of that Act, as enacted by paragraph (2)(e), and paragraph 212.3(20)(a) of that Act, as enacted by paragraph (2)(f), apply in respect of transactions and events that occur after March 28, 2012, other than transactions and events to which subsections 212.3(9), (18) and (20) of the Income Tax Act, as enacted by subsection 49(1) of the other Act, do not apply because of subsection 49(2) or (3) of the other Act.

(5) Paragraph (2)(g) applies to the 2012 and subsequent taxation years.