Bill C-48

An Act to amend the Income Tax Act (natural resources)

368. (1) The portion of subsection 2(5) of An Act to Amend the Income Tax Act (Natural Resources) before paragraph (a) is replaced by the following:

(5) For each taxation year that ends after 2002 and begins before 2008, paragraph 18(1)(m) of the Act applies, notwithstanding paragraph 20(1)(v) of the Act, only to the percentage of each amount described by paragraph 18(1)(m) of the Act that is the total of:

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

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

Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act

369. (1) Subsections 216(1) and (2) of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act are replaced by the following:

216. (1) There shall be imposed, levied and collected under this Part in respect of the taxable income earned by, and the taxable capital of, a corporation in a taxation year in the offshore area, in accordance with subsection (3), the taxes, interest, penalties and other sums that would be imposed, levied and collected under the Nova Scotia Income Tax Act in respect of that taxable income and that taxable capital if the offshore area were in the land portion of the Province.

(2) Despite subsection (1), if taxes are imposed under the Nova Scotia Income Tax Act in respect of the taxable income earned by, or the taxable capital of, a corporation in a taxation year in the Province and taxes would, in the absence of this subsection, be imposed under subsection (1) in respect of that taxable income or that taxable capital, no taxes shall be imposed under subsection (1) in respect of that taxable income or that taxable capital.

(2) Subsection 216(4) of the Act is replaced by the following:

(4) For the purpose of this section, the taxable income of a corporation earned in a taxation year in the offshore area or in the Province shall be determined in accordance with Part IV of the Income Tax Regulations as though the offshore area were a province and the Income Tax Act were read without reference to the definition “province” in subsection 124(4) of that Act, and “taxable capital” means taxable capital employed in Canada determined in accordance with Part I.3 of that Act.

(3) Subsections (1) and (2) are deemed to have come into force on April 1, 1997.

Federal-Provincial Fiscal Arrangements Act

370. (1) Paragraph 12.2(1)(b) of the Federal-Provincial Fiscal Arrangements Act is replaced by the following:

(b) the Act of the legislature of the province imposing a tax on the income of corporations provides, in the opinion of the Minister, for a deduction in computing taxable income of a corporation for taxation years ending in the fiscal year of an amount that is not less than the amount deductible by the corporation for the year under paragraph 110(1)(k) of the Income Tax Act.

(2) Subsection (1) is deemed to have come into force on January 1, 2004.

Income Tax Amendments Act, 1997

371. (1) The version of subparagraph 130(3)(a)(vii) of the Income Tax Act found in subsection 155(2) of the Income Tax Amendments Act, 1997, as amended by subsection 92(1) of the Income Tax Amendments Act, 1998, chapter 22 of the Statutes of Canada, 1999, which subsection 155(2) is in this section referred to as the “enacting subsection”, is amended by adding the following immediately after clause (B):

(B.1) paragraph (b) of that definition were read as follows:

(b) each beneficiary of a trust (except a beneficiary of a trust governed by a registered education savings plan who has not attained 19 years of age) is deemed to own that proportion of all such shares owned by the trust at that time that the fair market value at that time of the beneficial interest of the beneficiary in the trust is of the fair market value at that time of all beneficial interests in the trust,

(2) The version of subparagraph 130(3)(a)(vii) of the Income Tax Act found in the enacting subsection is amended by adding the following immediately after clause (C):

(C.1) paragraph (e) of that definition were read as follows:

(e) notwithstanding paragraph (b), where a beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, the beneficiary (except a beneficiary of a trust governed by a registered education savings plan who has not attained 19 years of age) is deemed to own each share of the capital stock of a corporation owned at that time by the trust;

(3) Clause 130(3)(a)(vii)(B.1) of the Income Tax Act, as enacted by subsection (1), is repealed.

(4) Clause 130(3)(a)(vii)(C.1) of the Income Tax Act, as enacted by subsection (2), is repealed.

(5) Subsections (1) and (2) are deemed to have come into force on June 18, 1998.

(6) Subsections (3) and (4) apply to taxation years that begin after October 31, 2011.

Income Tax Amendments Act, 2000

372. (1) Subsection 59(2) of the Income Tax Amendments Act, 2000 is replaced by the following:

(2) Subsection (1) applies to taxation years that end after February 27, 2000, except that, for a taxation year of a debtor that includes either February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, the reference to “½” in subsection 80.01(10) of the Act, as enacted by subsection (1), is to be read as a reference to the fraction in paragraph 38(a) of the Act that applied to the debtor for the year in which the commercial debt obligation was deemed to have been settled.

(2) Subsection (1) is deemed to have come into force on June 14, 2001.

373. (1) Subsection 70(11) of the Act is replaced by the following:

(11) Subsections (4), (5) and (7) apply to taxation years that end after February 27, 2000, except that, for a taxation year of a taxpayer that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, the references to “twice” in subsection 93(1.2) of the Act, as enacted by subsection (4), in subsection 93(2) of the Act, as enacted by subsection (5), and in subsection 93(2.2) of the Act, as enacted by subsection (7), are to be read as references to “the fraction that is the reciprocal of the fraction in paragraph 38(a), as enacted by subsection 22(1) of the Income Tax Amendments Act, 2000, that applies to the taxpayer for the year, multiplied by”.

(2) Subsection (1) is deemed to have come into force on June 14, 2001.

374. (1) Subsection 80(27) of the Act is replaced by the following:

(27) Subsection (17) applies to distributions made on or after March 16, 2001, except that for a distribution made after 2001 and before 2009 by a particular trust of property (in this subsection referred to as “distributed property”), paragraph 107(4.1)(b) of the Act, as enacted by subsection (17), is to be read without reference to its subparagraph (ii), if

(a) subsection 75(2) of the Act was not applicable in respect of the distributed property, or property for which it was substituted (in this subsection referred to as “substituted property”), at any time during which the distributed property or the substituted property was held by

(i) the particular trust,

(ii) a trust that made a disposition, to which subsection 107.4(3) of the Act applied, to the particular trust, or

(iii) a trust that made a disposition, to which subsection 107.4(3) of the Act applied, to a trust described by subparagraph (ii) or by this subparagraph; and

(b) the only property in respect of which subsection 75(2) of the Act was applicable at a time at which it was held by a trust described in paragraph (a) is a property that was held by the trust before 1989 at a time at which subsection 75(2) of the Income Tax Act, R.S.C. 1952, was appli-cable in respect of the property.

(2) Subsection (1) is deemed to have come into force on June 14, 2001.

Keeping Canada’s Economy and Jobs Growing Act

375. Subsection 73(3) of the Keeping Can-ada’s Economy and Jobs Growing Act is replaced by the following:

(3) Subsections (1) and (2) apply to fiscal periods that end in or after 2011, except that an election referred to in subsection 249.1(10) of the Act, as enacted by subsection (2), is deemed to be filed on time if it is filed in writing with the Minister of National Reve-nue on or before January 31, 2012.

Income Tax Regulations

376. (1) Paragraph 104(3)(e) of the Income Tax Regulations is replaced by the following:

(e) the total amount of the payment and all other such payments received by the annuitant in respect of the home at or before the time of the payment does not exceed the dollar amount specified in paragraph (h) of the definition “regular eligible amount” in subsection 146.01(1) of the Act;

(2) Subsection (1) is deemed to have come into force on January 28, 2009.

377. (1) The portion of subsection 229(1) of the Regulations before paragraph (a) is replaced by the following:

229. (1) Every member, of a partnership that carries on a business in Canada at any time in a fiscal period of the partnership (other than a member that is, because of subsection 115.2(2) of the Act, not considered to be carrying on business in Canada at that time), or of a partnership that is at any time in a fiscal period of the partnership, a Canadian partnership or a SIFT partnership, shall make for that period an information return in prescribed form containing the following information:

(2) Subsection (1) applies to fiscal periods that end after 2007.

378. (1) Subclause 304(1)(c)(iv)(B)(II) of the Regulations is replaced by the following:

(II) if the holder is a trust

1. in the case of a specified trust, for the life of an individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death, or, in the case of a joint spousal or common-law partner trust, until the day of the later of the death of the individual and the death of the beneficiary under the trust who is the individual’s spouse or common-law partner,

2. in the case of a testamentary trust (other than a specified trust) where the annuity is issued before October 24, 2012, for the life of an individual who is entitled to receive income from the trust, and

3. in the case of any other testamentary trust other than a specified trust, for the life of an individual who was entitled when the contract was first held to receive all of the income of the trust that arose before the individual’s death,

(2) Clauses 304(1)(c)(iv)(C) to (E) of the Regulations are replaced by the following:

(C) if the annuity payments are to be made over a term that is guaranteed or fixed, the guaranteed or fixed term not exceed 91 years minus the age, when the contract was first held, in whole years of the following individual:

(I) if the holder is not a trust, the individual who is

1. in the case of a joint and last survivor annuity, the younger of the first holder and the survivor,

2. in the case of a contract that is held jointly, the younger of the first holders, and

3. in any other case, the first holder,

(II) if the holder is a specified trust, the individual who is

1. in the case of a joint and last survivor annuity held by a joint spousal or common-law partner trust, the younger of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and

2. in the case of an annuity that is not a joint and last survivor annuity, the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individual’s death,

(III) if the holder is a testamentary trust other than a specified trust, the individual who was the youngest beneficiary under the trust when the contract was first held,

(D) no loans exist under the contract,

(E) the holder’s rights under the contract not be disposed of otherwise than

(I) if the holder is an individual, on the holder’s death,

(II) if the holder is a specified trust (other than a joint spousal or common-law partner trust), on the death of the individual referred to in paragraph 104(4)(a) of the Act who is entitled to receive all of the income of the trust that arose before the individ-ual’s death,

(III) if the holder is a specified trust that is a joint spousal or common-law partner trust, on the later of the deaths of the individuals referred to in paragraph 104(4)(a) of the Act who are in combination entitled to receive all of the income of the trust that arose before the later of their deaths, and

(IV) if the holder is a testamentary trust, other than a specified trust, and the contract was first held after October 2011, on the earlier of

1. the time at which the trust ceases to be a testamentary trust, and

2. the death of the individual referred to in subclause (B)(II) or (C)(III), as the case may be, in respect of the trust, and

(F) no payments be made out of the contract other than as permitted by this section,

(3) Subsections (1) and (2) apply to the 2000 and subsequent taxation years, except that with regard to a contract held by a trust created by a taxpayer at a particular time in 2000 for the benefit of another individual, subclauses 304(1)(c)(iv)(B)(II) and (C)(II) of the Regulations, as enacted by subsections (1) and (2), are to be read without reference to “or common-law partner”, unless, because of an election made under section 144 of the Modernization of Benefits and Obligations Act, chapter 12 of the Statutes of Canada, 2000, sections 130 to 142 of that Act apply at the particular time to the taxpayer and the other individual.

379. (1) Subparagraph 309(1)(e)(i) of the Regulations is replaced by the following:

(i) policy dividends or other distributions of the life insurer’s income from its participating life insurance business, or

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

380. (1) The Regulations are amended by adding the following after section 309:

Income from participating life insurance businesses

309.1 For the purpose of subparagraph 309(1)(e)(i), in computing a life insurer’s income for a taxation year from its participating life insurance business carried on in Canada,

(a) there shall be included the amount determined by the formula

A × B/C

where

A      is the insurer’s gross Canadian life investment income (in this section as defined in subsection 2400(1)) for the year,

B      is the total of

(i) the insurer’s mean maximum tax actuarial reserve (in this section as defined in subsection 2400(1)) for the year in respect of participating life insurance policies in Canada, and

(ii) 1/2 of the total of

(A) all amounts on deposit with the insurer as at the end of the year in respect of policies described in subparagraph (i), and

(B) all amounts on deposit with the insurer as at the end of the immediately preceding taxation year in respect of policies described in subparagraph (i), and

C      the total of all amounts, each of which is

(i) the insurer’s mean maximum tax actuarial reserve for the year in respect of a class of life insurance policies in Canada, or

(ii) 1/2 of the total of

(A) all amounts on deposit with the insurer as at the end of the year in respect of a class of policies described in subparagraph (i), and

(B) all amounts on deposit with the insurer as at the end of the immediately preceding taxation year in respect of a class of policies described in subparagraph (i);

(b) there shall be included

(i) the insurer’s maximum tax actuarial reserve for the immediately preceding taxation year in respect of participating life insurance policies in Canada, and

(ii) the maximum amount deductible by the insurer under subparagraph 138(3)(a)(ii) of the Act in computing its income for the immediately preceding taxation year in respect of participating life insurance policies in Canada;

(c) there shall not be included any amount in respect of the insurer’s participating life insurance policies in Canada that was deducted under subparagraph 138(3)(a)(i) or (ii) of the Act in computing its income for the immediately preceding taxation year;

(d) subject to paragraph (a),

(i) there shall not be included any amount

(A) as a reserve that was deducted under paragraph 20(1)(l) of the Act in computing the insurer’s income for the immediately preceding taxation year, or

(B) that was included in determining the insurer’s gross Canadian life investment income for the year, and

(ii) no deduction shall be made in respect of any amount

(A) taken into account in determining the insurer’s gross Canadian life investment income for the year, or

(B) deductible under paragraph 20(1)(l) of the Act in computing the insurer’s income for the year;

(e) there shall be deducted

(i) the insurer’s maximum tax actuarial reserve for the year in respect of participating life insurance policies in Canada, and

(ii) the maximum amount deductible by the insurer under subparagraph 138(3)(a)(ii) of the Act in computing its income for the year in respect of participating life insurance policies in Canada;

(f) no deduction shall be made in respect of any amount deductible under subparagraph 138(3)(a)(iii) of the Act in computing the insurer’s income for the year;

(g) except as otherwise provided in paragraph (e), no deduction shall be made in respect of a reserve deductible under subparagraph 138(3)(a)(i) or (ii) of the Act in computing the insurer’s income for the year; and

(h) except as otherwise provided in this section, the provisions of the Act relating to the computation of income from a source shall apply.

(2) Subsection (1) applies to taxation years that begin after October 31, 2011, except that if a taxpayer has deducted an amount under subparagraph 138(3)(a)(iv) of the Act, as it read in its application to the taxpayer’s last taxation year that began before November 1, 2011, in computing the taxpayer’s income for that taxation year, then for the taxpayer’s first taxation year that begins after October 31, 2011 paragraph 309.1(b) of the Regulations, as enacted by subsection (1), is to be read as follows:

(b) there shall be included

(i) the amount deducted by the insurer under subparagraph 138(3)(a)(iv) of the Act, as it read in its application to the insurer’s last taxation year that began on or before October 31, 2011, in computing its income for the immediately preceding taxation year,

(ii) the insurer’s maximum tax actuarial reserve for the immediately preceding taxation year in respect of participating life insurance policies in Canada, and

(iii) the maximum amount deductible by the insurer under subparagraph 138(3)(a)(ii) of the Act in computing its income for the immediately preceding taxation year in respect of participating life insurance policies in Canada;

381. (1) Paragraph 407(1)(b) of the Regulations is replaced by the following:

(b) that proportion of its taxable income for the year that three times the number of revenue plane miles flown by its aircraft during the year in the province is of the total of all amounts, each of which is the total number of revenue plane miles flown by its aircraft during the year in a province in which the corporation had a permanent establishment.

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

382. (1) Paragraph 600(b) of the Regulations is replaced by the following :

(b) subsections 7(10), 13(4), (7.4) and (29), 14(6), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 104(5.3) and (14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3) and 256(9) of the Act;

(2) Paragraph 600(b) of the Regulations, as enacted by subsection (1), is replaced by the following:

(b) subsections 13(4), (7.4) and (29), 14(6), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3) and 256(9) of the Act;

(3) Subsection (1) is deemed to have come into force on May 13, 2010.

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

383. (1) Subsection 1100(1.13) of the Regulations is amended by adding the following after paragraph (a):

(a.1) notwithstanding paragraph (a), “exempt property” does not include property that is the subject of a lease if that property had, at the time the lease was entered into, an aggregate fair market value in excess of $1,000,000 and the lessee of the property is

(i) a person who is exempt from tax by reason of section 149 of the Act,

(ii) a person who uses the property in the course of carrying on a business, the income from which is exempt from tax under Part I of the Act by reason of any provision of the Act,

(iii) a Canadian government, or

(iv) a person not resident in Canada, except if the person uses the property primarily in the course of carrying on a business in Canada that is not a treaty-protected business;

(a.2) for the purposes of paragraph (a.1), if it is reasonable, having regard to all the circumstances, to conclude that one of the main reasons for the existence of two or more leases was to avoid the application of paragraph (a.1) by reason of each such lease being a lease of property where the property that was the subject of the lease had an aggregate fair market value, at the time the lease was entered into, not in excess of $1,000,000, each such lease shall be deemed to be a lease of property that had, at the time the lease was entered into, an aggregate fair market value in excess of $1,000,000;

(2) Subsection (1) applies to property that is the subject of a lease entered into after 4:00 p.m. Eastern Standard Time, March 4, 2010.

384. (1) Section 1101 of the Regulations is amended by adding the following after subsection (1af):

(1ag) If more than one property of a taxpayer is described in the same class in Schedule II, and one or more of the properties is a property in respect of which the taxpayer is a transferee that has elected under subsection 13(4.2) of the Act (each of which is referred to in this subsection as an “elected property”), a separate class is prescribed for each elected property of the taxpayer that would otherwise be included in the same class.

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

385. (1) Subsection 1106(11) of the Regulations is replaced by the following:

(11) For the purpose of the definition “assistance” in subsection 125.4(1) of the Act, “prescribed amount” means an amount paid or payable to a taxpayer under the License Fee Program of the Canada Media Fund.

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

386. (1) Subsection 1403(8) of the Regulations is replaced by the following:

(8) Subsections (9) and (10) apply to an insurer if

(a) in a taxation year of the insurer, there has been a disposition to the insurer by another person with whom the insurer was dealing at arm’s length in respect of which subsection 138(11.92) of the Act applied;

(b) as a result of the disposition, the insurer assumed obligations under life insurance policies (in this subsection and subsections (9) and (10) referred to as the “transferred policies”) in respect of which an amount may be claimed by the insurer as a reserve under paragraph 1401(1)(c) for the taxation year;

(c) the amount (referred to in this subsection and subsections (9) and (10) as the “reserve deficiency”) determined by the following formula is a positive amount:

(A – B) – C

where

A      is the total of all amounts received or receivable by the insurer from the other person in respect of the transferred policies,

B      is the total of all amounts paid or payable by the insurer to the other person in respect of commissions in respect of the amounts referred to in the description of A, and

C      is the total of the maximum amounts that may be claimed by the insurer as a reserve under 1401(1)(c) (determined without reference to this subsection) in respect of the transferred policies for the taxation year; and

(d) the reserve deficiency can reasonably be attributed to the fact that the rates of interest, mortality or policy lapse used by the issuer of the transferred policies in determining the cash surrender values or premiums under the transferred policies are no longer reasonable in the circumstances.

(9) If this subsection applies to an insurer in respect of transferred policies for which there was a reserve deficiency, then, for the purposes of subsection (1) and subject to subsection (10),

(a) the insurer may make such revisions to the rates of interest, mortality or policy lapse used by the issuer of the transferred policies to eliminate all or any part of the reserve deficiency; and

(b) the revised rates are deemed to have been used by the issuer of the transferred policies in determining the cash surrender value or premiums under the policies.

(10) If, under subsection (9), an insurer has revised the rates of interest, mortality or policy lapse used by the issuer of transferred policies, the Minister may, for the purposes of subsection (1) and paragraph (9)(b), make further revisions to the revised rates to the extent that the insurer’s revisions to those rates are not reasonable in the circumstances.

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

387. (1) Paragraph 1406(b) of the Regulations is replaced by the following:

(b) by excluding any obligation to pay a benefit under a segregated fund policy if

(i) the amount of the benefit varies with the fair market value of the segregated fund at the time the benefit becomes, or may become, payable, and

(ii) the benefit is not in respect of a guarantee given by the insurer under a segregated fund policy; and

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

388. (1) Subsections 2000(1) and (2) of the Regulations are replaced by the following:

2000. (1) Every official receipt issued by a particular person who is a registered agent of a registered party or an electoral district agent of a registered association, to an individual who makes a monetary contribution to the registered party or registered association, as the case may be, shall contain a statement that it is an official receipt for income tax purposes and shall, in a manner that cannot readily be altered, show clearly

(a) the name of the registered party or registered association, as the case may be;

(b) the serial number of the receipt;

(c) the name of the particular person, as recorded in the registry maintained by the Chief Electoral Officer under section 374 or 403.08 of the Canada Elections Act;

(d) the date on which the receipt is issued;

(e) the date on which the monetary contribution is received;

(f) the individual’s name and address;

(g) the amount of the monetary contribution;

(h) a description of the advantage, if any, in respect of the monetary contribution and the amount of that advantage; and

(i) the eligible amount of the monetary contribution.

(2) Subject to subsection (3), every official receipt issued by an official agent of a candidate to an individual who makes a monetary contribution to the candidate shall contain a statement that it is an official receipt for income tax purposes and shall, in a manner that cannot readily be altered, show clearly

(a) the name of the candidate, as it appears in the candidate’s nomination papers;

(b) the serial number of the receipt;

(c) the name of the official agent;

(d) the date on which the receipt is issued;

(e) the date on which the monetary contribution is received;

(f) the polling day;

(g) the individual’s name and address;

(h) the amount of the monetary contribution;

(i) a description of the advantage, if any, in respect of the monetary contribution and the amount of that advantage; and

(j) the eligible amount of the monetary contribution.

(2) Subsections 2000(5) and (6) of the Regulations are replaced by the following.

(5) A spoiled official receipt form shall be marked “cancelled” and, together with its duplicate, shall be filed by the electoral district agent, the official agent or the registered agent, as the case may be, together with the information return required to be filed with the Minister under subsection 230.1(2) of the Act.

(6) An official receipt form on which any of the following is incorrectly or illegibly entered is to be regarded as spoiled:

(a) the date on which the monetary contribution is received;

(b) the amount of the monetary contribution;

(c) a description of the advantage, if any, in respect of the monetary contribution and the amount of that advantage; and

(d) the eligible amount of the monetary contribution.

(3) Subsections (1) and (2) apply in respect of receipts issued after the day on which this Act receives royal assent, except that if this Act receives royal assent before 2013, in respect of receipts issued before that year

(a) paragraph 2000(1)(h) of the Regulations, as enacted by subsection (1), is to be read as follows:

(h) the amount of the advantage, if any, in respect of the monetary contribution; and

(b) paragraph 2000(2)(i) of the Regulations, as enacted by subsection (1), is to be read as follows:

(i) the amount of the advantage, if any, in respect of the monetary contribution; and

(c) paragraph 2000(6)(c) of the Regulations, as enacted by subsection (2), is to be read as follows:

(c) the amount of the advantage, if any, in respect of the monetary contribution; and

389. (1) Section 2001 of the Regulations and the heading before it are repealed.

(2) Subsection (1) is deemed to have come into force on January 1, 2004.

390. Section 2002 of the Regulations is replaced by the following:

2002. (1) The following definitions apply in this Part.

“Chief Electoral Officer” means the person named as chief electoral officer or substitute chief electoral officer under section 13 or 14 of the Canada Elections Act.

“nomination paper” means, in respect of a candidate, a nomination paper filed in respect of the candidate under the Canada Elections Act, with the corrections, if any, made under that Act to the nomination paper after its filing.

“official receipt” means a receipt issued for the purposes of subsection 127(3) of the Act containing the information that is required under that subsection.

“official receipt form” means

(a) in the case of an official receipt issued by an electoral district agent or a registered agent under subsection 2000(1), any printed form that an electoral district agent or a registered agent, as the case may be, has that is capable of being completed, or that originally was intended to be completed, as an official receipt of the electoral district agent or registered agent; and

(b) in the case of an official receipt issued by an official agent under subsection 2000(2), the official form prescribed under section 477 of the Canada Elections Act.

(2) In this Part, “official agent”,“polling day” and “registered agent” have the meanings assigned to them by the Canada Elections Act.

391. (1) Section 2402 of the Regulations and the heading before it are repealed.

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

392. (1) The heading before section 2404 and sections 2404 to 2409 of the Regulations are repealed.

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

393. (1) The portion of subsection 3501(1) of the Regulations after paragraph (d) and before subparagraph (e.1)(ii) is replaced by the following:

(e) where the gift is a cash gift, the date on which or the year during which the gift was received;

(e.1) where the gift is of property other than cash

(i) the date on which the gift was received,

(2) Paragraph 3501(1)(f) of the Regulations is replaced by the following:

(f) the date on which the receipt was issued;

(3) Paragraphs 3501(1)(g) and (h) of the Regulations are replaced by the following:

(g) the name and address of the donor including, in the case of an individual, the individual’s first name and initial;

(h) the amount that is

(i) the amount of a cash gift, or

(ii) if the gift is of property other than cash, the amount that is the fair market value of the property at the time that the gift is made;

(h.1) a description of the advantage, if any, in respect of the gift and the amount of that advantage;

(h.2) the eligible amount of the gift;

(4) Paragraph 3501(1)(i) of the English version of the Regulations is replaced by the following:

(i) the signature, as provided in subsection (2) or (3), of a responsible individual who has been authorized by the organization to acknowledge gifts; and

(5) The portion of subsection 3501(1.1) of the Regulations after paragraph (c) and before subparagraph (e)(ii) is replaced by the following:

(d) where the gift is a cash gift, the date on which the gift was received;

(e) where the gift is of property other than cash

(i) the date on which the gift was received,

(6) Paragraph 3501(1.1)(f) of the Regulations is replaced by the following:

(f) the date on which the receipt was issued;

(7) Paragraphs 3501(1.1)(g) and (h) of the Regulations are replaced by the following:

(g) the name and address of the donor including, in the case of an individual, the individual’s first name and initial;

(h) the amount that is

(i) the amount of a cash gift, or

(ii) if the gift is of property other than cash, the amount that is the fair market value of the property at the time that the gift was made;

(h.1) a description of the advantage, if any, in respect of the gift and the amount of that advantage;

(h.2) the eligible amount of the gift;

(8) Subsection 3501(6) of the Regulations is replaced by the following:

(6) Every official receipt form on which any of the following is incorrectly or illegibly entered is deemed to be spoiled:

(a) the date on which the gift is received;

(b) the amount of the gift, in the case of a cash gift;

(c) a description of the advantage, if any, in respect of the gift and the amount of that advantage; and

(d) the eligible amount of the gift.

(9) Subsections (1) to (8) apply in respect of gifts made after December 20, 2002, except that, in respect of receipts issued before 2013,

(a) paragraph 3501(1)(h.1) of the Regulations, as enacted by subsection (3), is to be read as follows:

(h.1) the amount of the advantage, if any, in respect of the gift;

(b) paragraph 3501(1.1)(h.1) of the Regulations, as enacted by subsection (7), is to be read as follows:

(h.1) the amount of the advantage, if any, in respect of the gift;

(c) paragraph 3501(6)(c) of the Regulations, as enacted by subsection (8), is to be read as follows:

(c) the amount of the advantage, if any, in respect of the gift; and

394. (1) The portion of section 3504 of the Regulations before paragraph (a) is replaced by the following:

3504. For the purposes of subparagraphs 110.1(2.1)(a)(ii) and 118.1(5.4)(a)(ii) of the Act, the following are prescribed donees:

(2) Subsection (1) is deemed to have come into force on May 2, 2007.

395. (1) Paragraph 4600(2)(k) of the Regulations is replaced by the following:

(k) a property included in Class 21, 24, 27, 29, 34, 39, 40, 43, 45, 46, 50 or 52 in Schedule II;

(2) Subsection (1) applies to property acquired after March 18, 2007, except that for property acquired before January 28, 2009, paragraph 4600(2)(k) of the Regulations, as enacted by subsection (1), is to be read without reference to Class 52.

396. (1) Paragraph 4800(1)(a) of the French version of the Regulations is replaced by the following:

(2) Paragraph 4800(2)(c) of the French version of the Regulations is replaced by the following:

(3) Subsections (1) and (2) apply to the 2000 and subsequent taxation years.

397. (1) The portion of section 4800.1 of the Regulations before paragraph (a) is replaced by the following:

4800.1 For the purposes of paragraph 107(1)(a) and subsections 107(1.1), (2) and (4.1) of the Act, the following are prescribed trusts:

(2) Subsection (1) is deemed to have come into force on January 1, 2000.

398. (1) The portion of section 4801 of the Regulations before subparagraph (b)(i) is replaced by the following:

4801. In applying at any time paragraph 132(6)(c) of the Act, the following are prescribed conditions in respect of a trust:

(a) either

(i) the following conditions are met:

(A) there has been at or before that time a lawful distribution in a province to the public of units of the trust and a prospectus, registration statement or similar document was not, under the laws of the province, required to be filed in respect of the distribution, and

(B) the trust

(I) was created after 1999 and on or before that time, or

(II) satisfies, at that time, the conditions prescribed in section 4801.001, or

(ii) a class of the units of the trust is, at that time, qualified for distribution to the public; and

(b) in respect of a class of the trust’s units that meets at that time the conditions described in paragraph (a), there are at that time no fewer than 150 beneficiaries of the trust, each of whom holds

(2) Subsection (1) applies to the 2000 and subsequent taxation years, except that for the purpose of applying clause 4801(a)(i)(B) of the Regulations, as enacted by subsection (1), to taxation years that end before 2004, that clause is to be read as follows:

(B) the trust was created after 1999 and on or before that time, or

399. (1) The Regulations are amended by adding the following after section 4801:

4801.001 For the purpose of applying at any particular time subclause 4801(a)(i)(B)(II), the following are the prescribed conditions:

(a) the trust was created before 2000;

(b) the trust was a unit trust on July 18, 2005;

(c) the particular time is after 2003; and

(d) the trusts elects by notifying the Minister, in writing before the trust’s filing-due date for its 2012 taxation year, that this section applies to it.

(2) Subsection (1) applies to the 2004 and subsequent taxation years.

400. (1) The portion of subsection 4803(2) of the French version of the Regulations before paragraph (d) is replaced by the following:

(2) Subsection (1) applies to the 2000 and subsequent taxation years.

401. (1) The portion of the description of A in the definition “underlying foreign tax” in subsection 5907(1) of the Regulations before subparagraph (i) is replaced by the following:

A      is, subject to subsection (1.03), the total of all amounts, in respect of the period, each of which is

(2) Section 5907 of the Regulations is amended by adding the following in numerical order:

(1.03) For the purposes of the description of A in the definition “underlying foreign tax” in subsection (1), income or profits tax paid in respect of the taxable earnings of a particular foreign affiliate of a particular corporation or in respect of a dividend received by the particular affiliate from another foreign affiliate of the particular corporation, and amounts by which the underlying foreign tax of the particular affiliate or any other foreign affiliate of the particular corporation is required under subsection (1.1) or (1.2) to be increased, is not to include any income or profits tax paid, or amounts by which the underlying foreign tax would otherwise be so required to be increased, as the case may be, in respect of the foreign accrual property income of the particular affiliate for a taxation year of the particular affiliate if, at any time in the year, a specified owner in respect of the particular corporation is considered,

(a) under the income tax laws (referred to in subsection (1.07) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of another corporation — that is, at any time in the year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to own less than all of the shares of the capital stock of the other corporation that are considered to be owned by the specified owner for the purposes of the Act; or

(b) under the income tax laws (referred to in subsection (1.08) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of a particular partnership — that is, at any time in the year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to have a lesser direct or indirect share of the income of the particular partnership than the specified owner is considered to have for the purposes of the Act.

(1.04) For the purposes of subsections (1.03) and (1.07), a “specified owner”, at any time, in respect of a corporation means the corporation or a person or partnership that is, at that time,

(a) a partnership of which the corporation is a member;

(b) a foreign affiliate of the corporation;

(c) a partnership a member of which is a foreign affiliate of the corporation; or

(d) a person or partnership referred to in any of subparagraphs (1.06)(a)(i) to (iii).

(1.05) For the purposes of this subsection and subsection (1.03), a “pertinent person or partnership”, at any time, in respect of a particular foreign affiliate of a corporation means the particular affiliate or a person or partnership that is, at that time,

(a) another foreign affiliate of the corporation

(i) in which the particular affiliate has an equity percentage, or

(ii) that has an equity percentage in the particular affiliate;

(b) a partnership a member of which is at that time a pertinent person or partnership in respect of the particular affiliate under this subsection; or

(c) a person or partnership referred to in any of subparagraphs (1.06)(b)(i) to (iii).

(1.06) For the purposes of subsections (1.04) and (1.05), if, as part of a series of transactions or events that includes the earning of the foreign accrual property income referred to in subsection (1.03), a foreign affiliate (referred to in this subsection as the “funding affiliate”) of the corporation or of a person (referred to in this subsection as the “related person”) resident in Canada that is related to the corporation, or a partnership (referred to in this subsection as the “funding partnership”) of which such an affiliate is a member, directly or indirectly provided funding to the particular affiliate, or a partnership of which the particular affiliate is a member, otherwise than by way of loans or other indebtedness that are subject to terms or conditions made or imposed, in respect of the loans or other indebtedness, that do not differ from those that would be made or imposed between persons dealing at arm’s length or by way of an acquisition of shares of the capital stock of any corporation, then

(a) if the funding affiliate is, or the funding partnership has a member that is, a foreign affiliate of the related person, the following persons and partnerships are deemed, at all times during which the foreign accrual property income is earned by the particular affiliate, to be specified owners in respect of the corporation:

(i) the related person,

(ii) each foreign affiliate of the related person, and

(iii) each partnership a member of which is referred to in subparagraph (i) or (ii); and

(b) the following persons and partnerships are deemed, at all times during which the foreign accrual property income is earned by the particular affiliate, to be pertinent persons or partnerships in respect of the particular affiliate:

(i) the funding affiliate or the funding partnership,

(ii) a non-resident corporation

(A) in which the funding affiliate has an equity percentage, or

(B) that has an equity percentage in the funding affiliate, and

(iii) a partnership a member of which is a person or partnership referred to in subparagraph (i) or (ii).

(1.07) For the purposes of paragraph (1.03)(a), a specified owner in respect of the particular corporation is not to be considered, under the relevant foreign tax law, to own less than all of the shares of the capital stock of another corporation that are considered to be owned for the purposes of the Act solely because the specified owner is not treated as a corporation under the relevant foreign tax law.

(1.08) For the purposes of paragraph (1.03)(b), a member of a partnership is not to be considered to have a lesser direct or indirect share of the income of the partnership under the relevant foreign tax law than for the purposes of the Act solely because of one or more of the following:

(a) a difference between the relevant foreign tax law and the Act in the manner of

(i) computing the income of the partnership, or

(ii) allocating the income of the partnership because of the admission to, or withdrawal from, the partnership of any of its members;

(b) the treatment of the partnership as a corporation under the relevant foreign tax law; or

(c) the fact that the member is not treated as a corporation under the relevant foreign tax law.

(1.09) For the purposes of subsection (1.03), if a specified owner owns, for the purposes of the Act, shares of the capital stock of a corporation and the dividends, or similar amounts, in respect of those shares are treated under the income tax laws of any country other than Canada under the laws of which any income of the corporation is subject to income taxation as interest or another form of deductible payment, the specified owner is deemed to be considered, under those tax laws, to own less than all of the shares of the capital stock of the corporation that are considered to be owned by the specified owner for the purposes of the Act.

(3) Subsections (1) and (2) apply to income or profits tax paid, and amounts referred to in subsections 5907(1.1) and (1.2) of the Regulations, in respect of the income of a foreign affiliate of a corporation for taxation years of the foreign affiliate that end in taxation years of the corporation that end after March 4, 2010, except that, for taxation years of the corporation that end on or before October 24, 2012,

(a) subsection 5907(1.03) of the Regulations, as enacted by subsection (2), is to be read as follows:

(1.03) For the purposes of the description of A in the definition “underlying foreign tax” in subsection (1), income or profits tax paid in respect of the taxable earnings of a particular foreign affiliate of a corporation or in respect of a dividend received by the particular affiliate from another foreign affiliate of the corporation, and amounts by which the underlying foreign tax of the particular affiliate, or any other foreign affiliate of the corporation, is required under subsection (1.1) or (1.2) to be increased, is not to include any income or profits tax paid, or amounts by which the underlying foreign tax would otherwise be so required to be increased, as the case may be, in respect of the foreign accrual property income of the particular affiliate that is earned during a period in which

(a) the corporation is considered, under the income tax laws (referred to in subsection (1.07) as the “relevant foreign tax law”) of any country, other than Canada, under the laws of which the income of the particular affiliate is subject to income taxation, to own less than all of the shares of the capital stock of the particular affiliate, of another foreign affiliate of the corporation in which the particular affiliate has an equity percentage, or of another foreign affiliate of the corporation that has an equity percentage in the particular affiliate, that are considered to be owned by the corporation for the purposes of the Act; or

(b) the corporation’s share of the income of a partnership that owns, based on the assumptions contained in paragraph 96(1)(c) of the Act, shares of the capital stock of the particular affiliate is, under the income tax laws (referred to in subsection (1.08) as the “relevant foreign tax law”) of any country, other than Canada, under the laws of which the income of the partnership is subject to income taxation, less than its share of the income for the purposes of the Act.

(b) subsection 5907(1.07) of the Regulations, as enacted by subsection (2), is to be read as follows:

(1.07) For the purposes of paragraph (1.03)(a), a corporation is not to be considered, under the relevant foreign tax law, to own less than all of the shares of the capital stock of a foreign affiliate of the corporation that are considered to be owned for the purposes of the Act solely because the corporation or the foreign affiliate is not treated as a corporation under the relevant foreign tax law.

(c) the portion of subsection 5907(1.08) of the Regulations before paragraph (a), as enacted by subsection (2), is to be read as follows:

(1.08) For the purposes of paragraph (1.03)(b), a member of a partnership is not to be considered to have a lesser share of the income of the partnership under the relevant foreign tax law than for the purposes of the Act solely because of one or more of the following:

(d) section 5907 of the Regulations is to be read without reference to its subsections (1.04) to (1.06) and (1.09), as enacted by subsection (2).

402. (1) The portion of paragraph 6202.1(1)(a) of the French version of the Regulations before subparagraph (i) is replaced by the following:

(2) Clauses 6202.1(1)(a)(iii)(A) and (B) of the Regulations are replaced by the following:

(A) it is convertible or exchangeable only into

(I) another share of the corporation that, if issued, would not be a prescribed share,

(II) a right (including a right conferred by a warrant) that

1. if it were issued, would not be a prescribed right, and

2. if it were exercised, would allow the person exercising it to acquire only a share of the corporation that, if the share were issued, would not be a prescribed share, or

(III) both a share described in subclause (I) and a right described in subclause (II), and

(B) all the consideration receivable by the holder on the conversion or exchange of the share is the share described in subclause (A)(I) or the right described in subclause (A)(II), or both, as the case may be, or

(3) Section 6202.1 of the Regulations is amended by adding the following after subsection (1):

(1.1) For the purpose of the definition “flow-through share” in subsection 66(15) of the Act, a new right to acquire a share of the capital stock of a corporation is a prescribed right if, at the time the right is issued,

(a) the amount that the holder of the right is entitled to receive in respect of the right on the dissolution, liquidation or winding-up of the corporation or on the redemption, acquisition or cancellation of the right by the corporation or by specified persons in relation to the corporation (referred to in this section as the “liquidation entitlement” of the right) can reasonably be considered to be, by way of a formula or otherwise, fixed, limited to a maximum or established to be not less than a minimum;

(b) the right is convertible or exchangeable into another security issued by the corporation unless

(i) the right is convertible or exchangeable only into

(A) a share of the corporation that, if issued, would not be a prescribed share,

(B) another right (including a right conferred by a warrant) that

(I) if it were issued, would not be a prescribed right, and

(II) if it were exercised, would allow the person exercising it to acquire only a share of the corporation that, if the share were issued, would not be a prescribed share, or

(C) both a share described in clause (A) and a right described in clause (B), and

(ii) all the consideration receivable by the holder on the conversion or exchange of the right is the share described in clause (A) or the right described in clause (B), or both, as the case may be;

(c) any person or partnership has, either absolutely or contingently, an obligation (other than an excluded obligation in relation to the right)

(i) to provide assistance,

(ii) to make a loan or payment,

(iii) to transfer property, or

(iv) to otherwise confer a benefit by any means whatever, including the payment of a dividend,

either immediately or in the future, that can reasonably be considered to be, directly or indirectly, a repayment or return by the corporation or a specified person in relation to the corporation of all or part of the consideration for which the right was issued or for which a partnership interest was issued in a partnership that acquires the right;

(d) any person or partnership has, either absolutely or contingently, an obligation (other than an excluded obligation in relation to the right) to effect any undertaking, either immediately or in the future, with respect to the right or the agreement under which the right is issued (including any guarantee, security, indemnity, covenant or agreement and including the lending of funds to or the placing of amounts on deposit with, or on behalf of, the holder of the right or where the holder is a partnership, the members of the partnership or specified persons in relation to the holder or the members of the partnership, as the case may be) that can reasonably be considered to have been given to ensure, directly or indirectly, that

(i) any loss that the holder of the right and, where the holder is a partnership, the members of the partnership or specified persons in relation to the holder or the members of the partnership, as the case may be, may sustain because of the holding, ownership or disposition of the right or any other property is limited in any respect, or

(ii) the holder of the right and, where the holder is a partnership, the members of the partnership or specified persons in relation to the holder or the members of the partnership, as the case may be, will derive earnings, because of the holding, ownership or disposition of the right or any other property;

(e) the corporation or a specified person in relation to the corporation can reasonably be expected

(i) to acquire or cancel the right in whole or in part otherwise than on a conversion or exchange of the right that meets the conditions set out in subparagraphs (b)(i) and (ii), or

(ii) to make a payment, transfer or other provision (otherwise than pursuant to an excluded obligation in relation to the right), directly or indirectly, by way of a dividend, loan, purchase of rights, financial assistance to any purchaser of the right or, where the purchaser is a partnership, the members of the partnership or in any other manner whatever, that can reasonably be considered to be a repayment or return of all or part of the consideration for which the right was issued or for which a partnership interest was issued in a partnership that acquires the right,

within five years after the date the right is issued, otherwise than as a consequence of an amalgamation of a subsidiary wholly-owned corporation, a winding-up of a subsidiary wholly-owned corporation to which subsection 88(1) of the Act applies or the payment of a dividend by a subsidiary wholly-owned corporation to its parent;

(f) any person or partnership can reasonably be expected to effect, within five years after the day the right is issued, any undertaking which, if it were in effect at the time the right was issued, would result in the right being a prescribed right because of paragraph (d);

(g) it can reasonably be expected that, within five years after the date the right is issued,

(i) any of the terms or conditions of the right or any existing agreement relating to the right or its issue will be modified in such a manner that the right would be a prescribed right if it had been issued at the time of the modification, or

(ii) any new agreement relating to the right or its issue will be entered into in such a manner that the right would be a prescribed right if it had been issued at the time the new agreement is entered into; or

(h) it can reasonably be expected that the right, if exercised, would allow the person exercising the right to acquire a share in a corporation that, if that share were issued, would be a prescribed share within five years after the day the right was issued.

(4) Subsections 6202.1(3) and (4) of the Regulations are replaced by the following:

(2.1) For the purpose of the definition “flow-through share” in subsection 66(15) of the Act, a new right is a prescribed right if

(a) the consideration for which the new right is to be issued is to be determined more than 60 days after entering into the agreement pursuant to which the new right is to be issued;

(b) the corporation or a specified person in relation to the corporation, directly or indi-rectly, for the purpose of assisting any person or partnership to acquire the new right or any person or partnership to acquire an interest in a partnership acquiring the new right (otherwise than because of an excluded obligation in relation to the new right),

(i) provided assistance,

(ii) made or arranged for a loan or payment,

(iii) transferred property, or

(iv) otherwise conferred a benefit by any means whatever, including the payment of a dividend; or

(c) the holder of the new right or, where the holder is a partnership, a member of the partnership, has a right under any agreement or arrangement entered into under circumstances where it is reasonable to consider that the agreement or arrangement was contemplated at or before the time the agreement to issue the new right was entered into,

(i) to dispose of the new right, and

(ii) through a transaction or event or a series of transactions or events contemplated by the agreement or arrangement, to acquire

(A) a share (referred to in this paragraph as the “acquired share”) of the capital stock of another corporation that would be a prescribed share under subsection (1) if the acquired share were issued at the time the new right was issued, other than a share that would not be a prescribed share if subsection (1) were read without reference to subparagraphs (1)(a)(iv) and (1)(d)(i) and (ii) where the acquired share is a share

(I) of a mutual fund corporation, or

(II) of a corporation that becomes a mutual fund corporation within 90 days after the acquisition of the acquired share, or

(B) a right (referred to in this paragraph as the “acquired right”) to acquire a share of the capital stock of another corporation that would, if it were issued at the time the new right was issued, be a prescribed right, other than a right that would not be a prescribed right if subsection (1.1) were read without reference to subparagraph (1.1)(e)(i) where the acquired right is a right to acquire a share of the capital stock

(I) of a mutual fund corporation, or

(II) of a corporation that becomes a mutual fund corporation within 90 days after the acquisition of the acquired right.

(3) For the purposes of subsections (1) and (1.1),

(a) the dividend entitlement of a share of the capital stock of a corporation is deemed not to be fixed, limited to a maximum or established to be not less than a minimum where all dividends on the share are determined solely by reference to a multiple or fraction of the dividend entitlement of another share of the capital stock of the corporation, or of another corporation that controls the corporation, where the dividend entitlement of that other share is not described in subparagraph (1)(a)(i); and

(b) the liquidation entitlement of a share of the capital stock of a corporation, or of a right to acquire a share of the capital stock of the corporation, as the case may be, is deemed not to be fixed, limited to a maximum or established to be not less than a minimum where

(i) all the liquidation entitlement is determinable solely by reference to

(A) the liquidation entitlement of another share of the capital stock of the corporation (or a share of the capital stock of another corporation that controls the corporation), or

(B) the liquidation entitlement of a right to acquire the capital stock of the corporation (or another corporation that controls the corporation),

(ii) the liquidation entitlement described in clause (i)(A), if any, is not described in subparagraph (1)(a)(ii), and

(iii) the liquidation entitlement described in clause (i)(B), if any, is not described in paragraph (1.1)(a).

(4) For the purposes of paragraphs (1)(c) and (e) and (1.1)(d) and (f), an agreement entered into between the first holder of a share or right and another person or partnership for the sale of the share or right to that other person or partnership for its fair market value at the time the share or right is acquired by the other person or partnership (determined without regard to the agreement) is deemed not to be an undertaking with respect to the share or right, as the case may be.

(5) The definition “excluded obligation” in subsection 6202.1(5) of the Regulations is replaced by the following:

“excluded obligation”, in relation to a share or new right issued by a corporation, means

(a) an obligation of the corporation

(i) with respect to eligibility for, or the amount of, any assistance under the Canadian Exploration and Development Incentive Program Act, the Canadian Exploration Incentive Program Act, the Ontario Mineral Exploration Program Act, R.S.O., c. O.27, or The Mineral Exploration Incentive Program Act, S.M. 1991-92, c. 45, or

(ii) with respect to the making of an election respecting such assistance and the flowing out of such assistance to the holder of the share or the new right in accordance with any of those Acts,

(b) an obligation of the corporation, in respect of the share or the new right, to distribute an amount that represents a payment out of assistance to which the corporation is entitled

(i) as a consequence of the corporation making expenditures funded by consideration received for shares or new rights issued by the corporation in respect of which the corporation purports to renounce an amount under subsection 66(12.6) of the Act, and

(ii) under section 25.1 of the Income Tax Act, R.S.B.C., 1996, c. 215, or

(c) an obligation of any person or partnership to effect an undertaking to indemnify a holder of the share or the new right or, where the holder is a partnership, a member of the partnership, for an amount not exceeding the amount of any tax payable under the Act or the laws of a province by the holder or the member of the partnership, as the case may be, as a consequence of

(i) the failure of the corporation to renounce an amount to the holder in respect of the share or the new right, or

(ii) a reduction, under subsection 66(12.73) of the Act, of an amount purported to be renounced to the holder in respect of the share or the new right; (obligation exclue)

(6) Subsection 6202.1(5) of the Regulations is amended by adding the following in alphabetical order:

“new right” means a right that is issued after December 20, 2002 to acquire a share of the capital stock of a corporation, other than a right that is issued at a particular time before 2003

(a) pursuant to an agreement in writing made on or before December 20, 2002,

(b) as part of a distribution of rights to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice, required by law to be filed before distribution of the rights begins, filed on or before December 20, 2002 with a public authority in Canada in accordance with the securities legislation of the province in which the rights are distributed, or

(c) to a partnership interests in which were issued as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice, required by law to be filed before distribution of the interests begins, filed on or before December 20, 2002 with a public authority in Canada in accordance with the securities legislation of the province in which the interests are distributed, where all interests in the partnership issued at or before the particular time were issued

(i) as part of the distribution, or

(ii) before the beginning of the distribution; (nouveau droit)

(7) Subsections (1) to (6) apply to shares and rights issued under an agreement made after December 20, 2002.

403. (1) The portion of section 6701 of the Regulations before paragraph (a) is replaced by the following:

6701. For the purposes of paragraph 40(2)(i), clause 53(2)(k)(i)(C), the definition “public corporation” in subsection 89(1), the definition “specified investment business” in subsection 125(7), the definition “approved share” in subsection 127.4(1), subsections 131(8) and (11), section 186.1, the definition “financial intermediary corporation” in subsection 191(1), the definition “eligible investment” in subsection 204.8(1) and subsection 204.81(8.3) of the Act, “prescribed labour-sponsored venture cap- ital corporation” means, at any particular time,

(2) Subsection (1) is deemed to have come into force on October 24, 2012.

404. (1) The Regulations are amended by adding the following after section 6707:

6708. For the purpose of paragraph 204.8(2)(b) and subsection 204.81(8.3) of the Act, section 27.2 of the Community Small Business Investment Funds Act, 1992, S.O. 1992, c. 18, is a prescribed wind-up rule.

6709. For the purposes of section 211.81 of the Act, sections 1086.14 and 1086.20 of the Taxation Act, R.S.Q., c. I-3, are prescribed provisions of a provincial law.

(2) Subsection (1) is deemed to have come into force on October 24, 2012.

405. (1) Section 6802 of the Regulations is amended by striking out “or” at the end of paragraph (f), by adding “or” at the end of paragraph (g) and by adding the following after paragraph (g):

(h) a trust established

(i) to hold shares of Air Canada, pursuant to the June 2009 memorandum of understanding between Air Canada and certain trade unions who represent employees of Air Canada, if

(A) the shares are held by the trust for the benefit of the trade unions, and

(B) each of the trade unions may direct the trustee to contribute, from time to time, amounts received or receivable by the trust in respect of the shares, whether as dividends, proceeds of disposition or otherwise, to one or more registered pension plans under which Air Canada is a participating employer, or

(ii) in relation to the wind-up of a registered pension plan sponsored by Fraser Papers Inc., if

(A) shares are held by the trust for the benefit of the registered pension plan, and

(B) the trustee will contribute amounts received or receivable by the trust in respect of the shares, whether as dividends, proceeds of disposition or otherwise, to the registered pension plan, not later than December 31, 2018.

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

406. (1) Part LXXXI of the Regulations is repealed.

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

407. (1) The definition “predecessor employer” in subsection 8500(1) of the Regulations is replaced by the following:

“predecessor employer” means, in relation to a particular employer, an employer (in this definition referred to as the “vendor”) who has sold, assigned or otherwise disposed of all or part of the vendor’s business or undertaking or all or part of the assets of the vendor’s business or undertaking to the particular employer or to another employer who, at any time after the sale, assignment or other disposition, becomes a predecessor employer in relation to the partic-ular employer, if all or a significant number of employees of the vendor have, in conjunction with the sale, assignment or disposition, become employees of the employer acquiring the business, undertaking or assets; (employeur remplacé)

(2) Section 8500 of the Regulations is amended by adding the following after subsection (1.1):

(1.2) The definition “predecessor employer” in subsection (1) applies for the purpose of subsection 147.2(8) of the Act.

(3) Section 8500 of the Regulations is amended by adding the following after subsection (8):

(9) For the purposes of paragraph 147.3(6)(b) of the Act and subparagraphs 8502(d)(iv) and 8503(2)(h)(iii), if an amount is transferred in accordance with subsection 147.3(3) of the Act to a defined benefit provision (referred to in this subsection as the “current provision”) of a registered pension plan from a defined benefit provision (referred to in this subsection as the “former provision”) of another registered pension plan on behalf of all or a significant number of members whose benefits under the former provision are replaced by benefits under the current provision, each current service contribution made at a particular time under the former provision by a member whose benefits are so replaced is deemed to be a current service contribution made at that particular time under the current provision by the member.

(4) Subsection (1) is deemed to have come into force on November 6, 2010, except that it does not apply in respect of a sale, assignment or disposition of a business or undertaking that occurred before that date.

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

(6) Subsection (3) applies is deemed to have come into force on January 1, 2000.

408. (1) Paragraph 8502(b) of the Regulations is amended by striking out “or” at the end of subparagraph (iv), by adding “or” at the end of subparagraph (v) and by adding the following after subparagraph (v):

(v.1) is paid by the trustee of a trust described in paragraph 6802(h), where the amount would have been an eligible contribution if the amount had been paid in respect of a defined benefit provision of the plan by an employer with respect to the employer’s employees or former employees,

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

409. (1) Section 8504 of the Regulations is amended by adding the following after subsection (2):

Predecessor Employer

(2.1) For the purposes of subsection (2), if the pensionable service of the member under the provision includes a period throughout which the member was employed by a predecessor employer to an employer who participates in the plan, the predecessor employer is deemed to have participated under the provision for the benefit of the member.

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

410. (1) Paragraph 8514(2.1)(a) of the Regulations is replaced by the following:

(a) the plan contains no money purchase provision other than a money purchase provision under which each member account is credited, on a reasonable basis and no less frequently than annually, an amount based on the income earned, losses incurred and capital gains and capital losses realized, on all of the property held by the plan;

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

411. (1) Section 8604 of the Regulations is repealed.

(2) Subsection (1) is deemed to have come into force on December 20, 2002.

412. (1) Section 8901 of the Regulations and the heading before it are repealed.

(2) Subsection (1) applies to fiscal periods that begin after the day on which this Act receives royal assent.

PART 6

MEASURES IN RESPECT OF SALES TAX

Excise Tax Act

413. Subsection 81.25(2) of the Excise Tax Act is repealed.

414. Subsection 81.29(3) of the Act is repealed.

415. (1) The Act is amended by adding the following after section 177:

Collecting Body and Collective Societies

177.1 (1) In this section, “collective society” means a collective society, as defined in section 2 of the Copyright Act, that is a registrant.

(2) In this section, the expressions “collecting body”, “eligible author”, “eligible maker” and “eligible performer” have the same meanings as in section 79 of the Copyright Act.

(3) If a collecting body or a collective society makes a taxable supply to a person that is an eligible author, eligible maker, eligible perform-er or a collective society and the supply includes a service of collecting or distributing the levy payable under section 82 of the Copyright Act, the value of the consideration for the supply is, for the purpose of determining tax payable in respect of the supply, deemed to be equal to the amount determined by the formula:

A – B

where

A      is the value of that consideration as otherwise determined for the purposes of this Part; and

B      is the part of the value of the consideration referred to in the description of A that is exclusively attributable to the service.

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

416. (1) Subsection 225.1(4.1) of the Act is replaced by the following:

(4.1) An amount is not to be included in the total for B in the formula set out in subsection (2) for a reporting period of a charity to the extent that, before the end of the period, the amount was refunded to the charity under this or any other Act of Parliament or was remitted to the charity under the Financial Administration Act or the Customs Tariff.

(2) Subsection (1) applies for the purpose of determining the net tax of a charity for reporting periods beginning after 1996.

PART 7