Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures”.

Part 1 implements certain income tax and related measures by

Part 1 also amends the Mutual Legal Assistance in Criminal Matters Act to, among other things, define the term “agreement” as applying, among other things, to tax information exchange agreements and tax treaties to which Canada is a party, and provide for orders to produce financial information for the purposes of investigation and prosecution of certain offences set out in subsection 462.‍48(1.‍1) of the Criminal Code. The enactment also amends paragraph 462.‍48(2)‍(c) of the Criminal Code to provide that information may also be gathered under Part IX of the Excise Tax Act and under the Excise Act, 2001.

Part 2 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by

Part 3 implements certain excise measures by

Part 4 enacts and amends several Acts in order to implement various measures.

Division 1 of Part 4 amends the Customs Tariff in order to simplify it and reduce the administrative burden for Canadian businesses and the Government of Canada by consolidating similar tariff items that have the same tariff rates and removing end-use provisions where appropriate. The amendments also clarify existing tariff provisions and make other technical amendments.

Division 2 of Part 4 amends the Canada Pension Plan to modify the calculation of the amount to be attributed for a year in which a contributor is a family allowance recipient and their first or second additional contributory period begins or ends.

Subdivision A of Division 3 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to, among other things,

Subdivision B of Division 3 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things,

Subdivision C of Division 3 of Part 4 amends the Office of the Superintendent of Financial Institutions Act, the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to, among other things, clarify that providing legally privileged information to the Superintendent of Financial Institutions does not constitute a waiver of the privilege.

Division 4 of Part 4 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to remove the right of persons to decide not to proceed further with importing or exporting currency or monetary instruments that are required to be reported.

Division 5 of Part 4 amends the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act to, among other things, allow for the application, within the offshore area, of the provincial greenhouse gas pricing regime and to confer powers and impose duties and functions on the Canada–Newfoundland and Labrador Offshore Petroleum Board for the application of that regime. It also amends the Greenhouse Gas Pollution Pricing Act to provide that the provincial regime does not apply if the offshore area is mentioned in Part 2 of Schedule 1 to that Act. Finally, it amends the Offshore Health and Safety Act to postpone the repeal of certain regulations.

Division 6 of Part 4 amends the Canada Business Corporations Act to set out criteria for identifying individuals with significant control over a corporation. The Division also sets out a requirement for a corporation that meets certain criteria to keep a register of individuals with significant control and requirements respecting the information to be recorded in it. Finally, the Division includes applicable offences and punishments.

Subdivision A of Division 7 of Part 4 amends the Patent Act in order to

Subdivision B of Division 7 of Part 4 amends the Trade-marks Act to, among other things,

Subdivision C of Division 7 of Part 4 amends the Copyright Act in order to specify that certain information is not permitted to be included within a notice under the notice and notice regime and to provide for a regulation-making power to prohibit further types of information from being included within such a notice.

Subdivision D of Division 7 of Part 4 enacts the College of Patent Agents and Trade-mark Agents Act. That Act establishes the College of Patent Agents and Trade-mark Agents, which is to be responsible for the regulation of patent agents and trade-mark agents in the public interest. That Act, among other things,

Subdivision E of Division 7 of Part 4 amends the Bankruptcy and Insolvency Act to provide that intellectual property users may preserve their usage rights when intellectual property rights are sold or disposed of in an insolvency proceeding or when the agreement relating to such property rights is disclaimed or resiliated in such a proceeding. It also amends the Companies’ Creditors Arrangement Act to provide that intellectual property users may preserve their usage rights when intellectual property rights are sold or disposed of.

Subdivision F of Division 7 of Part 4 amends the Access to Information Act and the Privacy Act to provide that the head of a government institution may refuse to disclose, under either of those Acts, information that is subject to the privilege set out in section 16.‍1 of the Patent Act or section 51.‍13 of the Trade-marks Act. It makes a related amendment to the Pest Control Products Act.

Subdivision G of Division 7 of Part 4 amends the National Research Council Act to clarify that the National Research Council of Canada has the authority to dispose of all forms of intellectual property that it develops, including future rights to such property and to provide the Council with the authority to dispose of real, personal, movable and immovable property, complementing the current provision in the Act that allows it to acquire such property.

Subdivision H of Division 7 of Part 4 amends the Copyright Act in order to modernize the legislative framework relating to the Copyright Board so as to improve the timeliness and clarity of its proceedings and decision-making processes. More specifically, it repeals spent provisions and

Division 8 of Part 4 amends the Employment Insurance Act to, among other things, increase the maximum number of weeks for which parental benefits may be paid if these benefits are divided between claimants. It also amends the Canada Labour Code to, among other things, increase the aggregate amount of leave that may be taken by employees under sections 206.‍1 and 206.‍2 if that leave is divided between employees.

Division 9 of Part 4 enacts the Canadian Gender Budgeting Act in order to state the Government’s policy of promoting gender equality and inclusiveness by taking gender and diversity into consideration in the budget process. It also establishes related reporting requirements.

Division 10 of Part 4 amends the Bank Act to strengthen provisions that apply to a bank or an authorized foreign bank in relation to the protection of customers and the public. It implements enhancements in the areas of corporate governance, responsible business conduct, disclosure and transparency, and redress. It also amends the Financial Consumer Agency of Canada Act to strengthen the mandate of the Financial Consumer Agency of Canada and grant additional powers to that Agency.

Division 11 of Part 4 amends the First Nations Land Management Act to give effect to amendments to the Framework Agreement on First Nation Land Management respecting, among other things, procedures for obtaining community approval of a land code, the lands to which a land code may apply, the addition of lands to First Nation land by order of the Minister and the transfer of capital moneys.

Division 12 of Part 4 amends the First Nations Fiscal Management Act to, among other things,

Division 13 of Part 4 amends the Export and Import Permits Act to give the Minister of Foreign Affairs the authority to issue an import allocation for goods that are included on the Import Control List under subsection 5(6) of that Act.

Division 14 of Part 4 enacts the Pay Equity Act to establish a proactive process for the achievement of pay equity by the redressing of the systemic gender-based discrimination experienced by employees who occupy positions in predominantly female job classes. The new Act requires federal public and private sector employers that have 10 or more employees to establish and maintain a pay equity plan within set time frames so as to identify and correct differences in compensation between predominantly female and predominantly male job classes for which the work performed is of equal value. The new Act provides for the powers, duties and functions of a Pay Equity Commissioner, which include facilitating the resolution of disputes, conducting compliance audits and investigating disputes, objections and complaints, as well as making orders and imposing administrative monetary penalties for violations of that Act. The new Act also requires the Pay Equity Commissioner to report annually to Parliament on the administration and enforcement of the new Act.

Division 14 also amends the Parliamentary Employment and Staff Relations Act to provide for the application of the Pay Equity Act to parliamentary employers with certain adaptations and without limiting the powers, privileges and immunities of the Senate, the House of Commons and the members of those Houses.

It also makes the Minister of Labour responsible for the administration of the Federal Contractors Program for Pay Equity.

Finally, it makes related and consequential amendments to certain Acts and repeals the section of the Budget Implementation Act, 2009 that enacts the Public Sector Equitable Compensation Act.

Subdivision A of Division 15 of Part 4 amends the Canada Labour Code to, among other things,

Subdivision B of Division 15 of Part 4 amends the Canada Labour Code to allow the Minister of Labour to designate a Head of Compliance and Enforcement who will exercise most of the powers and perform most of the duties and functions that are related to the administration and enforcement of Parts II, III and IV of the Code.

Division 16 of Part 4 amends the Wage Earner Protection Program Act to, among other things, increase the maximum amount that may be paid to an individual under the Act, expand the definition of eligible wages, expand the conditions under which a payment may be made under the Act and create additional requirements related to Her Majesty in right of Canada’s right of subrogation in respect of payments made under the Act.

Division 17 of Part 4 amends the Bretton Woods and Related Agreements Act, the European Bank for Reconstruction and Development Agreement Act and the Official Development Assistance Accountability Act to harmonize the periods within which the reports under those Acts must be laid before Parliament in order to better communicate Canada’s international development efforts. It also repeals the definition of “official development assistance” in the Official Development Assistance Accountability Act and confers the power to define this expression by regulation.

Division 17 also enacts the International Financial Assistance Act, which provides the Minister of Foreign Affairs and the Minister for International Development with powers, duties and functions to support the delivery of a sovereign loans program, an international assistance innovation program and a federal international assistance program that promotes the mitigation of or adaptation to climate change through repayable contributions.

Division 18 of Part 4 enacts the Department for Women and Gender Equality Act which, among other things, establishes the Department for Women and Gender Equality to assist the Minister responsible for that department in exercising or performing the Minister’s powers, duties and functions that extend to and include all matters relating to women and gender equality, including the advancement of equality in respect of sex, sexual orientation, or gender identity or expression and the promotion of a greater understanding of the intersection of sex and gender with other identity factors. It also contains transitional provisions. Finally, Division 18 makes consequential amendments to other Acts.

Division 19 of Part 4 enacts the Addition of Lands to Reserves and Reserve Creation Act which authorizes a Minister, designated by the Governor in Council, to set apart lands as reserves for the use and benefit of First Nations. The Division also repeals Part 2 of the Manitoba Claim Settlements Implementation Act and the Claim Settlements (Alberta and Saskatchewan) Implementation Act.

Division 20 of Part 4 amends section 715.‍42 of the Criminal Code to require the publication of any decision not to publish a remediation agreement or order related to that agreement and of any decision related to the review of such a decision, to specify that the court may make the first decision subject to a condition, including one related to the duration of non-publication, and to allow anyone to request a review of that decision.

Division 21 of Part 4 enacts the Poverty Reduction Act, which sets out two targets for poverty reduction in Canada.

Division 22 of Part 4 amends the Canada Shipping Act, 2001 to, among other things,

Division 23 of Part 4 amends the Marine Liability Act to modernize the Ship-source Oil Pollution Fund, including, among other things,

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Division of corporation under foreign laws

(1.‍5) If a non-resident corporation (in this subsection referred to as the “original corporation”) governed by the laws of a foreign jurisdiction undergoes a division under those laws that results in all or part of its property and liabilities becoming the property and liabilities of one or more other non-resident corporations (each of which is referred to in this subsection as a “new corporation”) and, as a consequence of the division, a shareholder of the original corporation acquires one or more shares (referred to in this subsection as “new shares”) of the capital stock of a new corporation at a particular time, the following rules apply:

• (a) except to the extent that any of subparagraphs (1)‍(a.‍1)‍(i) to (iii) and paragraph (1)‍(b) applies (determined without reference to this subsection) to the acquisition of the new shares

  • (i) in the case where, for each class of shares of the capital stock of the original corporation of which shares are held by the shareholder immediately before the division, new shares are received at the particular time by shareholders of that class on a pro rata basis in respect of all the shares (referred to in this subsection as the “original shares”) of that class

    • (A) at the particular time, the original corporation is deemed to have distributed, and the shareholder is deemed to have received, as a dividend in kind in respect of the original shares, the new shares acquired by the shareholder at the particular time, and

    • (B) the amount of the dividend in kind received by the shareholder in respect of an original share is deemed to be equal to the fair market value, immediately after the particular time, of the new shares acquired by the shareholder at the particular time in respect of the original share, and

  • (ii) in any case where subparagraph (i) does not apply, the original corporation is deemed, at the particular time, to have conferred a benefit on the shareholder equal to the total fair market value, at that time, of the new shares acquired by the shareholder as a consequence of the division;

• (b) any gain or loss of the original corporation from a distribution of the new shares as a consequence of the division is deemed to be nil; and

• (c) each property of the original corporation that becomes at any time (referred to in this paragraph as the “disposition time”) property of the new corporation as a consequence of the division is deemed to be

  • (i) disposed of by the original corporation immediately before the disposition time for proceeds of disposition equal to the property’s fair market value, and

  • (ii) acquired by the new corporation at the disposition time at a cost equal to the amount determined under subparagraph (i) to be the original corporation’s proceeds of disposition.

• (ii) the average of all amounts each of which is the corporation’s contributed surplus (other than any portion of that contributed surplus that arose at a time when the corporation was non-resident, or that arose in connection with a disposition to which subsection 212.‍1(1.‍1) applies or an investment, as defined in subsection 212.‍3(10), to which subsection 212.‍3(2) applies) at the beginning of a calendar month that ends in the year, to the extent that it was contributed by a specified non-resident shareholder of the corporation, and

• (k) any amount that would otherwise be proceeds of disposition of property of a taxpayer to the extent that the amount is deemed by subsection 84.‍1(1), 212.‍1(1.‍1) or 212.‍2(2) to be a dividend paid to the taxpayer or, if the taxpayer is a partnership, to a member of the taxpayer; (produit de disposition)

• (c.‍1) if the corporation is an insurance corporation, any action by which it converts contributed surplus related to its insurance business (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.‍1(1.‍1) applies or an investment, as defined in subsection 212.‍3(10), to which subsection 212.‍3(2) applies) into paid-up capital in respect of the shares of its capital stock, 

• (c.‍2) if the corporation is a bank, any action by which it converts any of its contributed surplus that arose on the issuance of shares of its capital stock (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.‍1(1.‍1) applies or an investment, as defined in subsection 212.‍3(10), to which subsection 212.‍3(2) applies) into paid-up capital in respect of shares of its capital stock, or

• (c.‍3) if the corporation is neither an insurance corporation nor a bank, any action by which it converts into paid-up capital in respect of a class of shares of its capital stock any of its contributed surplus that arose after March 31, 1977 (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.‍1(1.‍1) applies or an investment, as defined in subsection 212.‍3(10), to which subsection 212.‍3(2) applies)

• (i) on the issuance of shares of that class or shares of another class for which the shares of that class were substituted (other than an issuance to which section 51, 66.‍3, 84.‍1, 85, 85.‍1, 86 or 87 or subsection 192(4.‍1) or 194(4.‍1) applied),

• (d) paragraph 95(2)‍(g.‍04), subsections 95(2.‍2) and (8) to (12) and section 126.

• unless it is established by the taxpayer or the foreign affiliate that, throughout the period in the taxation year during which the business was carried on by the affiliate,

• (iii) the business (other than any business conducted principally with persons with whom the affiliate does not deal at arm’s length) is carried on by the affiliate as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, the activities of which are regulated under the laws

Rule for investment business definition and paragraph (2)‍(l)

(2.‍11) A taxpayer or a foreign affiliate of the taxpayer, as the case may be, is deemed not to have established that the conditions in subparagraph (a)‍(i) of the definition investment business in subsection (1), or in subparagraph (2)‍(l)‍(iii), have been satisfied throughout a period in a particular taxation year of the affiliate unless

Tracking interests — interpretation

(8) For the purposes of subsections (9) to (12), a particular property is a tracking interest in respect of a person or partnership (referred to in this subsection as the “tracked entity”) if

• (a) all or part of the fair market value of the particular property — or of any payment or right to receive an amount in respect of the particular property — can reasonably be considered to be determined, directly or indirectly, by reference to one or more of the following criteria in respect of property or activities of the tracked entity (referred to in this subsection and subsections (9) to (11) as the “tracked property and activities”):

  • (i) the fair market value of property of the tracked entity,

  • (ii) any revenue, income or cash flow from property or activities of the tracked entity,

  • (iii) any profits or gains from the disposition of property of the tracked entity, and

  • (iv) any similar criteria in respect of property or activities of the tracked entity; and

• (b) the tracked property and activities in respect of the particular property represent less than all of the property and activities of the tracked entity.

Tracking interests — investment business definition

(9) For the purposes of the definition investment business in subsection (1), if, at any time in a taxation year of a foreign affiliate of a taxpayer, a person or partnership holds a tracking interest in respect of the affiliate or a partnership of which the affiliate is a member, the tracked property and activities in respect of the tracking interest are, to the extent they would not otherwise be part of an investment business of the affiliate, deemed, in respect of the taxpayer,

• (a) to be a separate business carried on by the affiliate throughout the year; and

• (b) not to be part of any other business of the affiliate.

Conditions for subsection (11)

(10) Subsection (11) applies in respect of a foreign affiliate of a taxpayer for a taxation year of the affiliate if, at any time in the year,

• (a) the taxpayer holds a property that is a tracking interest in respect of the affiliate; and

• (b) shares of a class of the capital stock of the affiliate the fair market value of which can reasonably be considered to be determined by reference to the tracked property and activities in respect of the tracking interest (referred to in subsection (11) as a “tracking class”) are held by the taxpayer or a foreign affiliate of the taxpayer.

Tracking class — separate corporation

(11) If this subsection applies in respect of a foreign affiliate (referred to in this subsection as the “actual affiliate”) of a taxpayer for a taxation year of the actual affiliate, the following rules apply for the purpose of determining the amounts, if any, to be included under subsection 91(1), and to be deducted under subsection 91(4), by the taxpayer in respect of the year and for the purpose of applying section 233.‍4 in respect of the year:

• (a) the tracked property and activities of the actual affiliate are deemed to be property and activities of a non-resident corporation (referred to in this subsection as the “separate corporation”) that is separate from the actual affiliate and not to be property or activities of the actual affiliate;

• (b) any income, losses or gains for the year in respect of the property and activities described in paragraph (a) are deemed to be income, losses or gains of the separate corporation and not of the actual affiliate;

• (c) all rights and obligations of the actual affiliate in respect of the property and activities described in paragraph (a) are deemed to be rights and obligations of the separate corporation and not of the actual affiliate;

• (d) the separate corporation is deemed to have, at the end of the year, 100 issued and outstanding shares of a single class (referred to in this subsection as the “single class”) of its capital stock, having full voting rights under all circumstances;

• (e) each shareholder of the actual affiliate is deemed to own, at the end of the year, that number of shares of the single class that is equal to the product of 100 and the amount that would be the aggregate participating percentage (as defined in subsection 91(1.‍3)) of that shareholder in respect of the actual affiliate for the year if

  • (i) the actual affiliate were a controlled foreign affiliate of that shareholder at the end of the year,

  • (ii) the only shares of the capital stock of the actual affiliate issued and outstanding at the end of the year were shares of tracking classes in respect of the tracked properties and activities, and

  • (iii) the only income, losses and gains of the actual affiliate for the year were those referred to in paragraph (b); and

• (f) any amounts included under subsection 91(1), or deducted under subsection 91(4), by the taxpayer in respect of shares of the separate corporation are deemed to be amounts included under subsection 91(1), or deducted under subsection 91(4), as the case may be, by the taxpayer in respect of shares of tracking classes held by the taxpayer or a foreign affiliate of the taxpayer, as the case may be.

Tracking interests – controlled foreign affiliate

(12) If subsection (11) does not apply in respect of a foreign affiliate of the taxpayer for a taxation year of the affiliate, the affiliate is deemed to be a controlled foreign affiliate of the taxpayer throughout the taxation year if, at any time in the year, a tracking interest in respect of the affiliate, or a partnership of which the affiliate is a member, is held by

• (a) the taxpayer; or

• (b) a person or partnership (each referred to in this paragraph as a “holder”), if

  • (i) the holder does not deal at arm’s length with the taxpayer at that time,

  • (ii) where either the taxpayer or the holder is a partnership and the other party is not, any member of the partnership does not deal at arm’s length, at that time, with the other party, or

  • (iii) where both the taxpayer and the holder are partnerships, the taxpayer or any member of the taxpayer does not deal at arm’s length, at that time, with the holder or any member of the holder.

Tiered partnerships

(2.‍01) For the purposes of this section, a taxpayer includes a partnership.

• (e) if the taxpayer is not a partnership, be deemed to be the taxpayer’s limited partnership loss in respect of the partnership for the year, and

• (f) if the taxpayer is a partnership, reduce the taxpayer’s share of any loss of the partnership for a fiscal period of the partnership ending in the taxation year of the taxpayer from a business (other than a farming business) or from property.

Tiered partnerships — adjustments

(2.‍11) The following rules apply to taxation years of a taxpayer that end after February 26, 2018:

• (a) for the purpose of applying section 111, the taxpayer’s non-capital loss, or limited partnership loss in respect of a partnership, for a preceding taxation year shall be determined as if subsection (2.‍01) and paragraph (2.‍1)‍(f) applied in respect of taxation years that end before February 27, 2018; and

• (b) in computing the adjusted cost base to the taxpayer of the taxpayer’s interest in a partnership after February 26, 2018, there shall be added an amount equal to the portion of the amount of any reduction because of paragraph (a) in a non-capital loss of the taxpayer that can reasonably be considered to relate to the amount of a loss deducted under subparagraph 53(2)‍(c)‍(i) in computing the adjusted cost base of that interest.

• (A) the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed operational mission (as determined by the Department of National Defence or the Department of Public Safety and Emergency Preparedness) that is

  • (I) assessed for risk allowance at level 3 or higher (as determined by the Department of National Defence), or

  • (II) assessed at a risk score greater than 1.‍99 and less than 2.‍50 (as determined by the Department of National Defence) and designated by the Minister of Finance, and

• (A) the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed international operational mission (as determined by the Minister of National Defence, the Minister of Public Safety and Emergency Preparedness or by a person designated by either Minister), and

• (b) the taxpayer establishes that, throughout the particular period, no tax-indifferent investor or group of tax-indifferent investors, each member of which is affiliated with every other member, has all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share.

• (ii) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.‍31) has not been eliminated and cannot reasonably be expected by it to be eliminated;

• (B) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.‍31) has not been eliminated and cannot reasonably be expected by it to be eliminated;

• (B) all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.‍31) has not been eliminated and cannot reasonably be expected by it to be eliminated; or

End of particular period

(2.‍33) If, at a time during a particular period referred to in subsection (2.‍31), a counterparty, specified counterparty, affiliated counterparty or affiliated specified counterparty reasonably expects to become a tax-indifferent investor or — if it has provided a representation described by subparagraph (2.‍32)‍(a)‍(ii) or clause (2.‍32)‍(b)‍(iii)‍(B) or (c)‍(iii)‍(B) in respect of a share — that all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share will be eliminated, the particular period for which it has provided a representation in respect of the share is deemed to end at that time.

Subsection (5.‍2) — excluded dividends

(5.‍21) A dividend, other than a dividend received under subsection 84(3), shall not be included in the total determined under subparagraph (b)‍(ii) of the description of B in subsection (5.‍2) unless

Exception

(9.‍1) Subsection (8) does not apply for the purpose of paragraph (5.‍21)‍(b) in respect of a dividend received on a share, referred to in paragraph (a) of the description of B in subsection (5.‍2), during a synthetic disposition period of a synthetic disposition arrangement in respect of that share.

• (i) an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada or the government of a province for the benefit of the other individual; (particulier admissible)

working income, of an individual for a taxation year, means the total of

• (a) the total of all amounts each of which would, if this Act were read without reference to section 8, be the individual’s income for the taxation year from an office or employment,

• (b) all amounts that are included because of paragraph 56(1)‍(n) or (o) or subparagraph 56(1)‍(r)‍(v) in computing the individual’s income for a period in the taxation year, and

• (c) the total of all amounts each of which is the individual’s income for the taxation year from a business carried on by the individual otherwise than as a specified member of a partnership.‍ (revenu de travail)

Optional amounts

(1.‍1) An individual may determine the total amount for the definition working income for both the individual and the individual’s eligible spouse, if applicable, for a taxation year as if the Act were read without reference to paragraph 81(1)‍(a) and subsection 81(4) and if so, the individual shall determine the total amount for the definition adjusted net income for both the individual and the individual’s eligible spouse, if applicable, for the taxation year as if the Act were read without reference to paragraph 81(1)‍(a) and subsection 81(4).

Deemed payment on account of tax

(2) Subject to subsections (4) and (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula

Only one eligible individual

(5) If an eligible individual has an eligible spouse for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the purposes of subsection (2) in respect of the taxation year,

• (a) if the individuals agree on which individual is the eligible individual for the taxation year, only that individual shall be an eligible individual for the purposes of subsection (2) in respect of the taxation year; and

• (b) in any other case, only the individual that the Minister designates is the eligible individual for the purposes of subsection (2) in respect of the taxation year.

Special rules for eligible dependant

(10) For the purpose of applying subsections (2) and (3), if an individual (referred to in this subsection as the “child”) would be, but for this subsection, an eligible dependant of more than one eligible individual for a taxation year, the child is deemed only to be an eligible dependant of

• (a) if the individuals agree, the agreed upon individual; and

• (b) in any other case, the individual designated by the Minister.

SUBDIVISION a.‍3 

Climate Action Incentive

Definitions

122.‍8 (1) The following definitions apply in this section.

cohabiting spouse or common-law partner, of an individual at any time, has the same meaning as in section 122.‍6.‍ (époux ou conjoint de fait visé)

eligible individual, for a taxation year, means an individual (other than a trust) who is, at the end of the taxation year,

• (a) 18 years of age or older;

• (b) a parent who resides with their child; or

• (c) married or in a common-law partnership.‍ (particulier admissible)

qualified dependant, of an individual for a taxation year, means a person who, at the end of the taxation year,

• (a) is the individual’s child or is dependent for support on the individual or on the individual’s cohabiting spouse or common-law partner;

• (b) resides with the individual;

• (c) is under the age of 18 years;

• (d) is not an eligible individual for the taxation year; and

• (e) is not a qualified relation of any individual for the taxation year.‍ (personne à charge admissible)

qualified relation, of an individual for a taxation year, means the person, if any, who, at the end of the taxation year, is the individual’s cohabiting spouse or common-law partner.‍ (proche admissible)

return of income, in respect of a person for a taxation year, means the person’s return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)‍(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the person had tax payable under this Part for the taxation year.‍ (déclaration de revenu)

Persons not eligible individuals, qualified relations or qualified dependants

(2) Notwithstanding subsection (1), a person is not an eligible individual, is not a qualified relation and is not a qualified dependant, for a taxation year, if the person

• (a) died before April of the year following the taxation year;

• (b) is confined to a prison or similar institution for a period of at least 90 days during the taxation year;

• (c) is a non-resident person at any time in the taxation year;

• (d) is a person described in paragraph 149(1)‍(a) or (b) at any time in the taxation year; or

• (e) is a person in respect of whom a special allowance under the Children’s Special Allowances Act is payable at any time in the taxation year.

Residence

(3) For the purposes of this section, an individual is considered to reside at any time only at their principal place of residence.

Deemed overpayment

(4) An eligible individual who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount determined by the formula

Authority to specify amounts

(5) The Minister of Finance may specify amounts for a province for a taxation year for the purposes of this section. If the Minister of Finance does not specify a particular amount that is relevant for the purposes of this section, that particular amount is deemed to be nil for the purpose of applying this section.

Deemed rebate in respect of fuel charges

(6) The amount deemed by this section to have been paid on account of tax payable for a taxation year is deemed to have been paid in the year following the taxation year as a rebate in respect of charges levied under Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the relevant province.

Only one eligible individual

(7) If an individual is a qualified relation of another individual for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the taxation year, only the individual that the Minister designates is the eligible individual for the taxation year.

Exception — qualified dependant

(8) If a person would, if this Act were read without reference to this subsection, be the qualified dependant of two or more individuals, for a taxation year,

• (a) the person is deemed to be a qualified dependant, for the taxation year, of the one of those individuals on whom those individuals agree; and

• (b) in any other case, the person is deemed to be, for the taxation year, a qualified dependant only of the individual that the Minister designates.

Effect of bankruptcy

(9) For the purposes of this section, if an individual becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year.

Trusts and partnerships look-through rule

(1.‍2) For the purposes of this subsection and paragraph (1)‍(c.‍1), if at any time shares of the capital stock of a corporation resident in Canada are owned by a trust or a partnership (each referred to in this subsection as a “conduit”), each person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a “holder”), as the case may be, is deemed to own the shares of each class of the capital stock of the corporation that are owned by the conduit the number of which is determined by the formula

Conditions for subsection (4.‍2)

(4.‍1) Subsection (4.‍2) applies in respect of a particular taxation year of a particular corporation if the following conditions are met:

• (a) the particular corporation has an amount of tax payable for the year under Part IV;

• (b) the particular corporation has claimed amounts under paragraph 186(1)‍(c) or (d) in respect of the year; and

• (c) the particular corporation would, in the absence of paragraphs 186(1)‍(c) and (d), have an amount determined, at the end of the year, under both paragraph (a) of the definition eligible refundable dividend tax on hand and paragraph (b) of the definition non-eligible refundable dividend tax on hand in subsection (4).

Part IV tax — allocation of losses

(4.‍2) If this subsection applies in respect of a particular taxation year of a corporation, for the purpose of determining the amount under paragraph (a) of the definition eligible refundable dividend tax on hand in subsection (4), in respect of the corporation at the end of the year, the amount determined under subsection 186(1) in respect of the corporation for the year is deemed to be the amount determined by the formula

Proceeds — mark-to-market property

(4) For greater certainty, if a taxpayer is a financial institution in a taxation year and disposes of a share that is mark-to-market property of the taxpayer for the year, the taxpayer’s proceeds from the disposition do not include any amount that would otherwise be proceeds from the disposition to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed by subparagraph 88(2)‍(b)‍(ii) not to be a dividend.

charitable purposes includes the disbursement of funds to a qualified donee; (fins de bienfaisance)

• (a) constituted and operated exclusively for charitable purposes,

• (a.‍1) all the resources of which are devoted to charitable activities carried on by the organization itself,

charitable activities includes public policy dialogue and development activities carried on in furtherance of a charitable purpose; (activités de bienfaisance)

Exclusions

(1.‍1) For the purposes of paragraphs (2)‍(b), (3)‍(b) and (4)‍(b) and subsection (21), the following shall be deemed to be neither an amount expended in a taxation year on charitable activities nor a gift made to a qualified donee:

• (b) in any taxation year, it disburses not more than 50% of its income for that year to qualified donees; or

• (c) it disburses income to a registered charity that the Minister has designated in writing as a charity associated with it.

Charitable purposes

(6.‍1) For the purposes of the definition charitable foundation in subsection (1), a corporation or trust that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.

Charitable purposes

(6.‍2) For the purposes of the definition charitable organization in subsection (1), an organization that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.

Activities of Canadian amateur athletic associations

(6.‍201) For the purposes of the definition Canadian amateur athletic association in subsection (1), an association that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to devote that part of its resources to its exclusive purpose and exclusive function.

Deemed charitable activity

(10) An amount paid by a charitable organization to a qualified donee that is not paid out of the income of the charitable organization is deemed to be a devotion of a resource of the charitable organization to a charitable activity carried on by it.

Public policy activities

(10.‍1) Subject to subsections (6.‍1) and (6.‍2), public policy dialogue and development activities carried on by an organization, corporation or trust in support of its stated purposes shall be considered to be carried on in furtherance of those purposes and not for any other purpose.

• (b) the amount of tax, if any, deemed by subsection 120(2) or (2.‍2), 122.‍5(3), 122.‍51(2), 122.‍7(2) or (3), 122.‍8(4), 122.‍9(2), 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.

• (iii) est établie par suite de la conclusion d’une opération impliquant le contribuable et une personne non-résidente avec laquelle il avait un lien de dépendance,

• (iii) is made

  • (A) as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm’s length, or

  • (B) in respect of any income, loss or other amount in relation to a foreign affiliate of the taxpayer,

• (b.‍4) the assessment, reassessment or additional assessment is made before the day that is six years after the end of the normal reassessment period for the taxpayer in respect of the year if

• (i) a reassessment of tax for the year was required under subsection (6), or would have been so required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to in that subsection, in order to take into account a deduction claimed under section 111 in respect of a loss for a subsequent taxation year,

• (ii) an assessment, reassessment, additional assessment of tax or notification that no tax is payable for the subsequent taxation year referred to in subparagraph (i) was made or issued after the normal reassessment period in respect of the subsequent taxation year as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm’s length, and

• (iii) the assessment, reassessment, additional assessment or notification that no tax is payable referred to in subparagraph (ii) reduced the amount of the loss for the subsequent taxation year;

Extended period of assessment

(4.‍01) Notwithstanding subsections (4) and (5), an assessment, reassessment or additional assessment to which paragraph (4)‍(a), (b), (b.‍1), (b.‍3), (b.‍4) or (c) applies in respect of a taxpayer for a taxation year may be made after the taxpayer’s normal reassessment period in respect of the year to the extent that, but only to the extent that, it can reasonably be regarded as relating to,

• (iii) the transaction, income, loss or other amount referred to in subparagraph (4)‍(b)‍(iii),

• (d) if paragraph (4)‍(b.‍4) applies to the assessment, reassessment or additional assessment, the reduction under subparagraph (4)‍(b.‍4)‍(iii).

• (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), 122.‍8(4), 122.‍9(2), 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 year.

• (c.‍4) the amount, if any, by which

  • (i) the total of all amounts each of which is an amount that would be deemed by section 122.‍8 to be paid by that person for the year or, where that person is the qualified relation of an individual for that year (within the meaning assigned by subsection 122.‍8(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 122.‍8(1)) for the year

• exceeds

  • (ii) the total of all amounts each of which is an amount that is deemed by section 122.‍8 to be paid by that person or by an individual of whom the person is the qualified relation for the year (within the meaning assigned by subsection 122.‍8(1)),

• (e) in the case of a person that is a registered charity or registered Canadian amateur athletic association, if the person devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office.

Non-arm’s length sales of shares by non-residents

212.‍1 (1) Subsection (1.‍1) applies if a non-resident person disposes of shares (in this section referred to as the “subject shares”) of any class of the capital stock of a corporation resident in Canada (in this section referred to as the “subject corporation”) to another corporation resident in Canada (in this section referred to as the “purchaser corporation”) with which the non-resident person does not (otherwise than because of a right referred to in paragraph 251(5)‍(b)) deal at arm’s length and, immediately after the disposition, the subject corporation is connected (within the meaning that would be assigned by subsection 186(4) if the references in that subsection to “payer corporation” and “particular corporation” were read as “subject corporation” and “purchaser corporation”, respectively, and if section 186 were read without reference to its subsection (6)) with the purchaser corporation.

• (a) the amount, if any, by which the fair market value of any consideration (other than any share of the capital stock of the purchaser corporation) received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares exceeds the paid-up capital in respect of the subject shares immediately before the disposition shall, for the purposes of this Act, be deemed to be a dividend

Deemed consideration

(1.‍2) For the purposes of subsections (1) and (1.‍1), if, in the absence of this subsection, no consideration would be received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares, the non-resident person is deemed to receive consideration other than shares of the capital stock of the purchaser corporation from the purchaser corporation for the subject shares, the fair market value of which is equal to the amount, if any, by which the fair market value of the subject shares disposed of by the non-resident person exceeds the amount of any increase because of the disposition in the fair market value of the shares of the capital stock of the purchaser corporation.

• (a) a non-resident person shall, for greater certainty, be deemed not to deal at arm’s length with a purchaser corporation at the time of a disposition described in subsection (1) if the non-resident person was,

• (b) for the purposes of determining whether or not a non-resident person referred to in paragraph (a) was a member of a group of less than six persons that controlled a corporation at any time, any shares of the capital stock of that corporation owned at that time by any of the following persons shall be deemed to be owned at that time by the non-resident person and not by the person who actually owned the shares at that time:

  • (i) the non-resident person’s child (within the meaning assigned by subsection 70(10)), who is under 18 years of age, or the non-resident person’s spouse or common-law partner,

  • (ii) a trust of which the non-resident person, a person described in subparagraph (i) or a corporation described in subparagraph (iii) is a beneficiary,

  • (iii) a corporation controlled by the non-resident person, a person described in subparagraph (i), a trust described in subparagraph (ii) or any combination thereof, and

  • (iv) a partnership of which the non-resident person or a person described in one of subparagraphs (i) to (iii) is a majority-interest partner or a member of a majority-interest group of partners (as defined in subsection 251.‍1(3));

• (b) it is not the case that, at the time of the disposition, or as part of a transaction or event or series of transactions or events that includes the disposition, a non-resident person

• (i) holds, directly or indirectly, shares of the capital stock of the purchaser corporation, and

Tiered trusts and partnerships

(5) For the purposes of this section and paragraph (k) of the definition proceeds of disposition in section 54, a person or partnership that is, at any time, a beneficiary under a trust (other than a trust that is the non-resident person referred to in subsection (1)), or a member of a partnership (such trust or partnership referred to in this subsection as the “particular conduit”), that is a beneficiary under a trust or member of a partnership (such trust or partnership referred to in this subsection as the “other conduit”) is deemed

• (a) to be a beneficiary under or member of, as the case may be, the other conduit; and

• (b) to hold the interest in the other conduit that is held by the particular conduit in the proportion expressed by the formula

  A/B

  where

  A

  is the portion of the fair market value, at that time, of the person or partnership’s interest in the particular conduit that is attributable to the interest in the other conduit held by the particular conduit, and

  B

  is the total fair market value, at that time, of all direct interests (determined without reference to this subsection) in the other conduit.

Trusts and partnerships look-through rule

(6) The following rules apply for the following purposes:

• (a) for the purposes of this subsection and subsections (1) and (1.‍1), if at any time an interest (in this paragraph referred to as the “pertinent interest”) in a trust or a partnership (each referred to in this subsection as a “conduit”) is disposed of by a person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a “holder”), as the case may be, to a purchaser and any portion of the fair market value of the pertinent interest is attributable to shares of the capital stock of a corporation resident in Canada held, directly or indirectly (unless all of the shares are held indirectly through one or more non-resident corporations), by the conduit (in this paragraph referred to as the “shares held by the conduit”), then

  • (i) the holder is deemed, on a class-by-class basis, to have disposed, at that time, of the shares held by the conduit to the purchaser, and the purchaser is deemed to have acquired the shares, in the proportion expressed by the formula

    A/B

    where

    A

    is the portion of the fair market value, at that time, of the pertinent interest that is attributable to the shares held by the conduit, and

    B

    is the total fair market value, at that time, of the shares held by the conduit, and

  • (ii) the holder is deemed to have received from the purchaser and the purchaser is deemed to have paid to the holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula

    A × B/C

    where

    A

    is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the holder from the purchaser for the pertinent interest,

    B

    is the amount determined for A in subparagraph (i), and

    C

    is the total fair market value of the pertinent interest;

• (b) for the purposes of subsections (1) and (1.‍1) and paragraph (c), if at any time a conduit (other than a non-resident trust) disposes of shares of the capital stock of a corporation resident in Canada to a purchaser, then

  • (i) each holder of an interest in the conduit is deemed, on a class-by-class basis, to have disposed, at that time, of the shares to the purchaser in the proportion expressed by the formula

    A/B

    where

    A

    is the fair market value, at that time, of the holder’s interest in the conduit, and

    B

    is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and

  • (ii) each holder of an interest in the conduit is deemed to have received from the purchaser and the purchaser is deemed to have paid to each such holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula

    A × B/C

    where

    A

    is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the conduit from the purchaser for the shares,

    B

    is the amount determined for A in subparagraph (i), and

    C

    is the amount determined for B in subparagraph (i);

• (c) for the purposes of subsections (1) and (1.‍1), if at any time a conduit acquires shares of the capital stock of a corporation resident in Canada from a vendor, then

  • (i) each holder of an interest in the conduit is deemed to have acquired, at that time, the shares from the vendor, on a class-by-class basis, in the proportion expressed by the formula

    A/B

    where

    A

    is the fair market value, at that time, of the holder’s interest in the conduit, and

    B

    is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and

  • (ii) each holder of an interest in the conduit is deemed to have paid to the vendor and the vendor is deemed to have received from each such holder, as consideration for the shares deemed to have been acquired in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula

    A × B/C

    where

    A

    is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is paid by the conduit to the vendor for the shares,

    B

    is the amount determined for A in subparagraph (i), and

    C

    is the amount determined for B in subparagraph (i); and

• (d) for the purpose of determining whether the subject corporation is connected with the purchaser corporation for the purposes of subsection (1) at any time, if at that time a conduit owns shares of the capital stock of the subject corporation, each holder of an interest in the conduit is deemed to own, at that time, the shares of each class of the capital stock of the subject corporation that are owned by the conduit the number of which is determined by the formula

  A × B/C

  where

  A

  is the total number of shares of the class of the capital stock of the subject corporation that are owned by the conduit at that time,

  B

  is the fair market value, at that time, of the holder’s interest in the conduit, and

  C

  is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit.

Avoidance of subsections (5) and (6)

(7) The amounts determined for A and B in paragraph (5)‍(b), for A and B in subparagraph (6)‍(c)‍(i) and for B and C in paragraph (6)‍(d) are, in respect of an interest as a beneficiary under a trust held by a person or partnership, deemed to be equal to one if

• (a) the person or partnership’s share of the accumulating 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; and

• (b) it can reasonably be considered that one of the reasons for the discretionary power is to avoid or limit the application of subsection (1.‍1).

Definitions

231 In sections 231.‍1 to 231.‍8,

Time period not to count

(7) The period of time between the day on which an application for review of a requirement is made pursuant to subsection (4) and the day on which the application is finally disposed of shall not be counted in the computation of

Time period not to count

231.‍8 The following periods of time shall not be counted in the computation of the period of time within which an assessment may be made for a taxation year of a taxpayer under subsection 152(4):

• (a) where the taxpayer is served a notice of a requirement under subsection 231.‍2(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and

• (b) where an application is commenced by the Minister under subsection 231.‍7(1) to order the taxpayer to provide any access, assistance, information or document, the period of time between the day on which the taxpayer files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of.

Returns respecting foreign affiliates

(4) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 12 months after the end of the year or period.

Returns respecting foreign affiliates

(4) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 10 months after the end of the year or period.

• (xiii) an order made under the Mutual Legal Assistance in Criminal Matters Act to gather or send information, for the purposes of an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would constitute an offence for which an order could be obtained under subsection 462.‍48(3) of the Criminal Code, in response to a request made pursuant to

  • (A) an administrative arrangement entered into under section 6 of the Mutual Legal Assistance in Criminal Matters Act, or

  • (B) a bilateral agreement for mutual legal assistance in criminal matters to which Canada is a party;

SLA compensation payment means an amount paid pursuant to

• (a) a securities lending arrangement as compensation for an underlying payment; or

• (b) a specified securities lending arrangement as compensation for an underlying payment, including, if the property transferred or lent is described in subparagraph (a)‍(ii) of the definition specified securities lending arrangement, as compensation for a taxable dividend paid on a share described in subparagraph (a)‍(i) of that definition; (paiement compensatoire (MPVM))

specified securities lending arrangement means an arrangement, other than a securities lending arrangement, under which

• (a) a particular person (referred to in this definition as a “transferor”) transfers or lends at any particular time a property to another person (referred to in this definition as a “transferee”) and the property is

  • (i) a particular share described in paragraph (a) of the definition qualified security, or

  • (ii) a property in respect of which the following conditions are met:

    • (A) the property is

      • (I) an interest in a partnership, or

      • (II) an interest as a beneficiary under a trust, and

    • (B) all or any part of the fair market value of the property, immediately before the particular time, is derived, directly or indirectly, from a share described in subparagraph (i),

• (b) it may reasonably be expected, at the particular time, that the transferee — or a person that does not deal at arm’s length with, or is affiliated with, the transferee — will transfer or return after the particular time to the transferor — or a person that does not deal at arm’s length with, or is affiliated with, the transferor (referred to in this definition as a “substitute transferor”) — a property that is identical or substantially identical to the property so transferred or lent, and

• (c) the transferor’s (together with any substitute transferor’s) risk of loss or opportunity for gain or profit with respect to the particular property is not changed in any material respect; (mécanisme de prêt de valeurs mobilières déterminé)