Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on February 26, 2008, to implement certain provisions of the economic and fiscal statement tabled in Parliament on November 27, 2008 and to implement other fiscal and economic measures

Published by
The Honourable Jim Flaherty, P.C., M.P.
Minister of Finance

November 2008

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THE MINISTER OF FINANCE

90480—2008-11-26

  That it is expedient to implement certain provisions of the budget tabled in Parliament on February 26, 2008, to implement certain provisions of the economic and fiscal statement tabled in Parliament on November 27, 2008 and to implement other fiscal and economic measures as follows:

SHORT TITLE

Short title

  1.  This Act may be cited as the Budget and Economic and Fiscal Statement Implementation Act, 2008.

PART 1

AMENDMENTS IN RESPECT OF INCOME TAX

R.S., c. 1 (5th Supp.)

Income Tax Act

  2.  (1)  Subparagraph 6(1)(g)(ii) of the Income Tax Act is replaced by the following:

  (2)  Subsection (1) applies for taxation years that begin after the calendar year in which the Protocol set out in Schedule VI to the Canada-United States Tax Convention Act, 1984 enters into force.

  3.  (1)  Paragraph 7(1.4)(b) of the Act 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):

  (2)  Subsection (1) applies after December 19, 2007.

  4.  (1)  Subsection 12(1) of the Act is amended by adding the following after paragraph (z.4):

Former TFSA

  (2)  The definition "investment contract" in subsection 12(11) of the Act is amended by adding the following after paragraph (d):

  (3)  Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

  5.  (1)  The Act is amended by adding the following after section 12.4:

Definitions

  12.5  (1)  The definitions in this section apply for the purposes of this section and section 20.4.

"base year"
« année de base »

"base year" of an insurer means the insurer’s taxation year that immediately precedes its transition year.

"insurance business"
« entreprise d’assurance »

"insurance business" of an insurer, is an insurance business carried on by the insurer, other than a life insurance business.

"reserve transition amount"
« montant transitoire »

"reserve transition amount" of an insurer, in respect of an insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B

where

A is the maximum amount that the insurer would be permitted to claim under paragraph 20(7)(c) (and that would be prescribed by section 1400 of the Regulations for the purpose of paragraph 20(7)(c)) as a policy reserve for its base year in respect of its insurance policies if

B is the maximum amount that the insurer is permitted to claim under paragraph 20(7)(c) as a policy reserve for its base year.

"transition year"
« année transitoire »

"transition year" of an insurer means the insurer’s first taxation year that begins after September 2006.

Transition year income inclusion

  (2)  There shall be included in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year, the positive amount, if any, of the insurer’s reserve transition amount in respect of that insurance business.

Transition year income deduction reversal

  (3)  If an amount has been deducted under subsection 20.4(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be included in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula

A × B/1825

where

A is the amount deducted under subsection 20.4(2) in computing the insurer’s income for the transition year from that insurance business; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Winding-up

  (4)  If an insurer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the "parent"), and immediately after the winding-up the parent carries on an insurance business, in applying subsections (3) and 20.4(3) in computing the incomes of the insurer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the "start day") on which assets of the insurer were distributed to the parent on the winding-up,

Amalgamations

  (5)  If there is an amalgamation (within the meaning assigned by subsection 87(1)) of an insurer with one or more other corporations to form one corporation (referred to in this subsection as the "new corporation"), and immediately after the amalgamation the new corporation carries on an insurance business, in applying subsections (3) and 20.4(3) in computing the new corporation’s income for particular taxation years that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the insurer in respect of

Application of subsection (7)

  (6)  Subsection (7) applies if, at any time, an insurer (referred to in this subsection and subsection (7) as the "transferor") transfers, to a corporation (referred to in this subsection and subsection (7) as the "transferee") that is related to the transferor, property in respect of an insurance business carried on by the transferor in Canada (referred to in this subsection and subsection (7) as the "transferred business") and

Transfer of insurance business

  (7)  If this subsection applies in respect of the transfer, at any time, of property

Ceasing to carry on business

  (8)  If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the "discontinued business"), and none of subsections (4) to (6) apply, there shall be included in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula

A - B

where

A is the amount deducted under subsection 20.4(2) in computing the insurer’s income from the discontinued business for its transition year; and

B is the total of all amounts each of which is an amount included under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time.

Ceasing to exist

  (9)  If at any time an insurer that carried on an insurance business ceases to exist (otherwise than as a result of a winding-up or amalgamation described in subsection (4) or (5)), for the purposes of subsections (8) and 20.4(4), the insurer is deemed to have ceased to carry on the insurance business at the earlier of

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  6.  (1)  The Act is amended by adding the following after section 20.3:

Definitions

  20.4  (1)  The definitions in section 12.5 apply for the purposes of this section.

Transition year income deduction

  (2)  There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year the absolute value of the negative amount, if any, of the insurer’s reserve transition amount in respect of that insurance business.

Transition year income inclusion reversal

  (3)  If an amount has been included under subsection 12.5(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be deducted in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula

A × B/1825

where

A is the amount included under subsection 12.5(2) in computing the insurer’s income for the transition year from that insurance business; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Ceasing to carry on business

  (4)  If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the "discontinued business"), and none of subsections 12.5(4) to (6) apply, there shall be deducted in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula

A - B

where

A is any amount included under subsection 12.5(2) in computing the insurer’s income from the discontinued business for its transition year; and

B is the total of all amounts each of which is an amount deducted under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time.

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  7.  (1)  Subparagraph 39(1)(a)(ii.2) of the Act is replaced by the following:

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  8.  (1)  Subsection 40(3.5) of the Act is amended by adding the following after paragraph (b):

  (2)  Section 40 of the Act is amended by adding the following after subsection (9):

Application

  (10)  Subsection (11) applies in computing at any particular time a corporation’s gain or loss (in this subsection and subsection (11) referred to as the "new gain" or "new loss", as the case may be), in respect of any part (which in this subsection and subsection (11) is referred to as the "relevant part" and which may for greater certainty be the whole) of a foreign currency debt of the corporation, arising from a fluctuation in the value of the currency of the foreign currency debt (other than, for greater certainty, a gain or a capital loss that arises because of the application of subsection 111(12)), if at any time before the particular time the corporation realized a capital loss or gain in respect of the foreign currency debt because of subsection 111(12).

Gain or loss on foreign currency debt

  (11)  If this subsection applies, the new gain is the positive amount, or the new loss is the negative amount, as the case may be, determined by the formula

A + B - C

where

A is

B  is the total of all amounts each of which is that portion of the amount of a capital loss realized by the corporation at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to

C is the total of all amounts each of which is that portion of the amount of a gain realized by the corporation at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to

  (3)  Subsection (1) applies to dispositions on or after ANNOUNCEMENT DATE.

  (4)  Subsection (2) applies after 2005.

  9.  (1)  Paragraph (c) of the definition "superficial loss" in section 54 of the Act is replaced by the following:

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  10.  (1)  Paragraph 56(1)(d) of the Act is amended by striking out "or" at the end of subparagraph (i), by adding "or" at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

  (2)  Paragraph 56(1)(r) of the Act is amended by striking out "or" at the end of subparagraph (ii) and by adding the following after subparagraph (iii):

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

  (4)  Subsection (2) applies to the 2003 and subsequent taxation years except that, in its application to the 2003 to 2007 taxation years, paragraph 56(1)(r) of the Act, as amended by subsection (2), is to be read without reference to its subparagraph (v).

  11.  (1)  The Act is amended by adding the following after section 60.02:

Additions to clause 60(l)(v)(B.2) for 2008

  60.021  (1)  In determining the amount that may be deducted because of paragraph 60(l) in computing a taxpayer’s income for the 2008 taxation year, clause 60(l)(v)(B.2) shall be read as follows:

Meaning of eligible RRIF withdrawal amount

  (2)  A taxpayer’s eligible RRIF withdrawal amount for a taxation year in respect of a registered retirement income fund under which the taxpayer is the annuitant at the beginning of the taxation year is

A - B

where

A is the lesser of

B is the minimum amount under the fund for the taxation year; and

Meaning of eligible variable benefit withdrawal amount

  (3)  A taxpayer’s eligible variable benefit withdrawal amount for a taxation year in respect of an account of the taxpayer under a money purchase provision of a registered pension plan is the amount determined by the formula

A - B - C

where

A is the lesser of

B is the minimum amount for the account for the taxation year; and

C is the total of all contributions made by the taxpayer under the provision and designated for the purposes of subsection 8506(10) of the Regulations.

Expressions used in this section

  (4)  For the purposes of this section,

  (2)  If this Act is assented to after January 30, 2009, amounts paid by a taxpayer, to a registered retirement savings plan or registered retirement income fund under which the taxpayer is the annuitant, during the period that begins on March 2, 2009 and that ends on the day that is 30 days after the day on which this Act is assented to, are deemed for the purpose of paragraph 60(l) of the Income Tax Act to have been made on March 1, 2009, and not when they were actually made, except that the amounts so deemed shall not exceed the total of all amounts each of which is

  12.  (1)  Subparagraph 62(1)(c)(i) of the Act is replaced by the following:

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  13.  (1)  Section 80.01 of the Act is amended by adding the following after subsection (5):

Deemed settlement on SIFT trust wind-up event

  (5.1)  If a trust that is a SIFT wind-up entity is the only beneficiary under another trust (in this subsection referred to as the "subsidiary trust"), and a capital property that is a debt or other obligation (in this subsection referred to as the "subsidiary trust’s obligation") of the subsidiary trust to pay an amount to the SIFT wind-up entity is, as a consequence of a distribution from the subsidiary trust that is a SIFT trust wind-up event, settled at a particular time without any payment of an amount or by the payment of an amount that is less than the principal amount of the subsidiary trust’s obligation

  (2)  Subsection (1) applies after July 14, 2008.

  14.  (1)  Section 85.1 of the Act is amended by adding the following after subsection (6):

Application of subsection (8)

  (7)  Subsection (8) applies in respect of the disposition before 2013 by a taxpayer of SIFT wind-up entity equity (referred to subsection (8) as the "particular unit") to a taxable Canadian corporation, if

Rollover on SIFT unit for share exchange

  (8)  If this subsection applies in respect of a disposition by a taxpayer of a particular unit of a SIFT wind-up entity to a corporation for consideration that is an exchange share, the following rules apply:

(A - B) × C/A

where

A is the increase, if any, as a result of the disposition, in the paid-up capital in respect of all the shares of the capital stock of the corporation, computed without reference to this paragraph as it applies to the disposition,

B is the amount determined by the formula

D - E

where

D is

E is the total of all amounts each of which

C is the increase, if any, as a result of the disposition, in the paid-up capital in respect of the class of shares, computed without reference to this paragraph as it applies to the disposition.

  (2)  Subsection (1) applies to

  15.  (1)  Paragraph 87(2)(g.2) of the Act is replaced by the following:

Financial institution rules

  (2)  Subsection 87(2) of the Act is amended by adding the following after paragraph (s):

Deemed SIFT wind-up corporation

  (3)  Subsection 87(2.2) of the Act is replaced by the following:

Amalgamation of insurers

  (2.2)  Where there has been an amalgamation and one or more of the predecessor corporations was an insurer, the new corporation is, notwithstanding subsection (2), deemed, for the purposes of paragraphs 12(1)(d), (e), (e.1), (i) and (s), subsection 12.5(8), paragraphs 20(1)(l), (l.1), (p) and (jj) and 20(7)(c), subsections 20(22) and 20.4(4), sections 138, 138.1, 140, 142 and 148 and Part XII.3, to be the same corporation as, and a continuation of, each of those predecessor corporations.

  (4)  Subsections (1) and (3) apply to taxation years that begin after September 2006.

  (5)  Subsection (2) applies after December 19, 2007.

  16.  (1)  Subparagraph 88(1)(g)(i) of the Act is replaced by the following:

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  17.  (1)  The Act is amended by adding the following after section 88:

Application

  88.1  (1)  Subsection (2) applies to a trust’s distribution of property to a taxpayer if

SIFT trust wind-up event

  (2)  If this subsection applies to a trust’s distribution of property to a taxpayer, subsections 88(1) to (1.7), and section 87 and paragraphs 256(7)(a) to (e) as they apply for the purposes of those subsections, apply, with any modifications that the circumstances require, as if

  (2)  Subsection (1) applies after July 14, 2008, except that subsection 88.1(1) of the Act, as enacted by subsection (1), is to be read without reference to its paragraph (c) in its application to a trust’s distribution of property, if the distribution occurs no more than 60 days after the day on which this Act is assented to.

  18.  (1)  The definition "general rate income pool" in subsection 89(1) of the Act is replaced by the following:

"general rate income pool"
« compte de revenu à taux général »

"general rate income pool" at the end of a particular taxation year, of a taxable Canadian corporation that is a Canadian-controlled private corporation or a deposit insurance corporation in the particular taxation year, is the positive or negative amount determined by the formula

A - B

where

A is the positive or negative amount that would, before taking into consideration the specified future tax consequences for the particular taxation year, be determined by the formula

C + D + E + F - G

where

C is the corporation’s general rate income pool at the end of its preceding taxation year,

D is the amount, if any, that is the product of the corporation’s general rate factor for the particular taxation year multiplied by its adjusted taxable income for the particular taxation year,

E  is the total of all amounts each of which is

F  is the total of all amounts determined under subsections (4) to (6) in respect of the corporation for the particular taxation year, and

G is

exceeds

B  is the amount determined by the formula

H × (I - J)

where

H  is the corporation’s general rate factor for the particular taxation year,

I  is the total of the corporation’s full rate taxable incomes (as would be defined in the definition "full rate taxable income" in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) to (iii)) for the corporation’s preceding three taxation years, determined without taking into consideration the specified future tax consequences, for those preceding taxation years, that arise in respect of the particular taxation year, and

J  is the total of the corporation’s full rate taxable incomes (as would be defined in the definition "full rate taxable income" in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) to (iii)) for those preceding taxation years;

  (2)  Subparagraph (b)(iii) of the definition "paid-up capital" in subsection 89(1) of the Act is replaced by the following:

  (3)  Subsection 89(1) of the Act is amended by adding the following in alphabetical order:

"adjusted taxable income"
« revenu imposable rajusté »

"adjusted taxable income" of a corporation for a taxation year is the amount determined by the formula

A - B - C

where

A is

B is the amount determined by multiplying the amount, if any, deducted by the corporation under subsection 125(1) for the taxation year by the quotient obtained by dividing 100 by the rate of the deduction provided under that subsection for the taxation year, and

C is

"general rate factor"
« facteur du taux géneral »

"general rate factor" of a corporation for a taxation year is the total of

  (4)  Subsections (1) and (3) apply to the 2006 and subsequent taxation years.

  (5)  Subsection (2) applies after December 19, 2007.

  19.  (1)  Subsection 95(1) of the Act is amended by adding the following in alphabetical order:

"antecedent corporation"
« société antécédente »

"antecedent corporation" of a particular corporation means

"calculating currency"
« monnaie de calcul »

"calculating currency" for a taxation year of a foreign affiliate of a taxpayer means

"designated acquired corporation"
« société acquise désignée »

"designated acquired corporation" of a taxpayer means a particular antecedent corporation of the taxpayer if

"specified person or partnership"
« personne ou société de personnes déterminée »

"specified person or partnership", in respect of a taxpayer, at any time means the taxpayer or a person (other than a designated acquired corporation of the taxpayer), or a partnership, that is at that time

"specified predecessor corporation"
« société remplacée déterminée »

"specified predecessor corporation" of a particular corporation means

  (2)  Paragraph 95(2)(f) of the Act is replaced by the following:

exceeds

  (3)  The portion of subsection 95(2.2) of the Act before paragraph (a) is replaced by the following:

Qualifying interest throughout year

  (2.2)  For the purposes of paragraphs (2)(a) and (g), a non-resident corporation that is not a foreign affiliate of a taxpayer in respect of which the taxpayer has a qualifying interest throughout a particular taxation year is deemed to be a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest throughout that particular taxation year if

  (4)  Section 95 of the Act is amended by adding the following after subsection (2.2):

Controlled foreign affiliate throughout year

  (2.201)  For the purposes of paragraphs (2)(a) and (g), a non-resident corporation is deemed to be a controlled foreign affiliate of a taxpayer throughout a taxation year of the non-resident corporation if

  (5)  Section 95 of the Act is amended by adding the following after subsection (2.5):

Rule for the definition "specified person or partnership"

  (2.6)  For the purposes of paragraphs (a) to (d) of the definition "specified person or partnership" in subsection (1), if a person or partnership (referred to in this subsection as the "taxpayer") is not dealing at arm’s length with another person or partnership (referred to in this subsection as the "particular person") at a particular time, the taxpayer is deemed to have existed and not to have dealt at arm’s length with the particular person, nor with each specified predecessor corporation of the particular person, throughout the period that began when the particular person or the specified predecessor corporation, as the case may be, came into existence and that ends at the particular time.

  (6)  Subsections (1), (2) and (5) apply to taxation years of a foreign affiliate of a taxpayer that begin after October 2, 2007. However,

  (2.6)  For the purposes of paragraphs (a) to (d) of the definition "specified person or partnership" in subsection (1), in determining whether, at a particular time, a person was not, at a time (referred to in this subsection as the "prior time") that is before the particular time and at which that person did not exist, dealing at arm’s length with another person, where the person exists at the particular time but did not exist at the prior time

  (7)  Subsection (3) applies to taxation years of a foreign affiliate of a taxpayer that begin after 1994. However, the portion of subsection 95(2.2) of the Act before paragraph (a), as enacted by subsection (3), shall, in its application to taxation years of a foreign affiliate that begin after 1994 and before 2009, be read as follows:

  (2.2)  For the purposes of paragraphs (2)(a) and (g),

  (8)  Subsection (4) applies to taxation years of a foreign affiliate of a taxpayer that end after 1999. However,

  (9)  Notwithstanding subsections 152(4) to (5) of the Act, any assessment of a taxpayer’s tax, interest and penalties payable under the Act for any taxation year shall be made that is necessary to take into account the provisions of subsections (1) to (8).

  20.  (1)  The portion of subsection 107(2) of the Act before paragraph (a) is replaced by the following:

Distribution by personal trust

  (2)  Subject to subsections (2.001), (2.002) and (4) to (5), if at any time a property of a personal trust or a prescribed trust is distributed (otherwise than as a SIFT trust wind-up event) by the trust to a taxpayer who was a beneficiary under the trust and there is a resulting disposition of all or any part of the taxpayer’s capital interest in the trust,

  (2)  The portion of subsection 107(2.1) of the Act before paragraph (a) is replaced by the following:

Other distributions

  (2.1)  Where at any time a property of a trust is distributed by the trust to a beneficiary under the trust, there would, if this Act were read without reference to paragraphs (h) and (i) of the definition "disposition" in subsection 248(1), be a resulting disposition of all or any part of the beneficiary’s capital interest in the trust (which interest or part, as the case may be, is in this subsection referred to as the "former interest") and the rules in section 88.1, subsections (2) and (3.1) and section 132.2 do not apply in respect of the distribution,

  (3)  Section 107 of the Act is amended by adding the following after subsection (2.2):

Application of subsection (3.1)

  (3)  Subsection (3.1) applies to a trust’s distribution of property to a taxpayer if:

SIFT trust wind-up event

  (3.1)  If this subsection applies to a trust’s distribution of property, the following rules apply:

  (4)  Subsections (1) to (3) apply after July 14, 2008, except that subsection 107(3) of the Act, as enacted by subsection (3), is to be read without reference to its paragraph (c) in its application to a trust’s distribution of property, if the distribution occurs no more than 60 days after the day on which this Act is assented to.

  21.  (1)  Paragraph 107.4(3)(f) of the Act is replaced by the following:

  (2)  Subsection (1) applies

  22.  (1)  The portion of the definition "cost amount" in subsection 108(1) of the Act before paragraph (a) is replaced by the following:

"cost amount"
« coût indiqué »

"cost amount" to a taxpayer at any time of a capital interest or part of it, as the case may be, in a trust, means (notwithstanding subsection 248(1) and except for the purposes of subsection 107(3.1) and section 107.4 and except in respect of a capital interest in a trust that is at that time a foreign affiliate of the taxpayer),

  (2)  Subsection (1) applies after July 14, 2008.

  23.  (1)  Paragraph 110.1(8)(e) of the English version of the Act is replaced by the following:

  (2)  Section 110.1 of the Act is amended by adding the following after subsection (8):

Rules governing international medical charities

  (9)  For the purpose of paragraph (8)(e),

  (3)  Subsections (1) and (2) apply in respect of gifts made after June 2008.

  24.  (1)  Subsection 111(8) of the Act is amended by adding the following in alphabetical order:

"exchange rate"
« taux de change »

"exchange rate" at any time in respect of a currency of a country other than Canada means the rate of exchange between that currency and Canadian currency quoted by the Bank of Canada at noon on the day that includes that time or, if that day is not a business day, on the day that immediately precedes that day, or a rate of exchange acceptable to the Minister;

"foreign currency debt"
« dette en monnaie étrangère »

"foreign currency debt" means a debt obligation denominated in a currency of a country other than Canada;

  (2)  Section 111 of the Act is amended by adding the following after subsection (11):

Foreign currency debt on acquisition of control

  (12)  For the purposes of subsection (4), if at any time a corporation owes a foreign currency debt in respect of which the corporation would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the corporation is deemed to own at the time (in this subsection referred to as the "measurement time") that is immediately before that time a property

A + B - C

where

A  is the amount of principal owed by the corporation under the foreign currency debt at the measurement time, calculated, for greater certainty, using the exchange rate applicable at the measurement time,

B is the portion of any gain, previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A, and

C is the portion of any capital loss previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A; and

  (3)  Subsections (1) and (2) apply to any acquisition of control of a corporation that occurs

  (4)  If an election under paragraph (3)(b) is made by the corporation in respect of an acquisition of control, a designation under paragraph 111(4)(e) of the Act by the corporation for its taxation year that ended immediately before the acquisition of control is deemed to have been made in a timely manner if that designation is made on or before the corporation’s filing-due date for its taxation year that includes the day on which this Act is assented to.

  25.  (1)  Subparagraph 115(1)(a)(iii.21) of the Act is replaced by the following:

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  26.  (1)  Paragraph 116(6)(b) of the Act is replaced by the following:

  (2)  Subsection (1) applies after July 14, 2008.

  27.  (1)  Paragraph (b) of the description of B in subsection 118(10) of the Act is replaced by the following:

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  28.  (1)  The portion of subsection 118.1(5.3) of the Act before paragraph (a) is replaced by the following:

Direct designation — RRSPs, RRIFs and TFSAs

  (5.3)  If as a consequence of an individual’s death, a transfer of money, or a transfer by means of a negotiable instrument, is made, from an arrangement (other than an arrangement of which a licensed annuities provider is the issuer or carrier) that is a registered retirement savings plan or registered retirement income fund or that was, immediately before the individual’s death, a TFSA to a qualified donee, solely because of the donee’s interest or, for civil law, a right as a beneficiary under the arrangement, the individual was the annuitant under, or the holder of, the arrangement immediately before the individual’s death and the transfer occurs within the 36-month period that begins at the time of the death (or, where written application to extend the period has been made to the Minister by the individual’s legal representative, within such longer period as the Minister considers reasonable in the circumstances),

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

  29.  (1)  The definition "investment" in subsection 122.1(1) of the Act is replaced by the following:

"investment"
« placement »

"investment", in a trust or partnership,

  (2)  The portion of paragraph (a) of the definition "non-portfolio property" in subsection 122.1(1) of the Act before subparagraph (i) is replaced by the following:

  (3)  Paragraph (a) of the definition "qualified REIT property" in subsection 122.1(1) of the Act is replaced by the following:

  (4)  Subparagraph (c)(i) of the definition "qualified REIT property" in subsection 122.1(1) of the Act is replaced by the following:

  (5)  Paragraphs (c) and (d) of the definition "real estate investment trust" in subsection 122.1(1) of the Act are replaced by the following:

  (6)  Subparagraph (a)(ii) of the definition "rent from real or immovable properties" in subsection 122.1(1) of the Act is replaced by the following:

  (7)  The portion of the definition "SIFT trust" in subsection 122.1(1) of the Act before paragraph (a) is replaced by the following:

"SIFT trust"
« fiducie intermédiaire de placement déterminée »

"SIFT trust", being a specified investment flow-through trust, for a taxation year means a trust (other than an excluded subsidiary entity, or a real estate investment trust, for the taxation year) that meets the following conditions at any time during the taxation year:

  (8)  Subsection 122.1(1) of the Act is amended by adding the following in alphabetical order:

"equity"
« capitaux propres »

"equity", of an entity, means

"excluded subsidiary entity"
« filiale exclue »

"excluded subsidiary entity", for a taxation year, means an entity none of the equity of which is at any time in the taxation year

"portfolio investment entity"
« entité de placement de portefeuille »

"portfolio investment entity"at any time means an entity that does not at that time hold any non-portfolio property.

"publicly-traded liability"
« dette transigée publiquement »

"publicly-traded liability", of an entity, means a liability that is a security of the entity, that is not equity of the entity and that is listed or traded on a stock exchange or other public market.

"regulated innovative capital"
« capital innovateur réglementé »

"regulated innovative capital" means equity of a trust, where

"unaffiliated publicly-traded liability"
« dette non affiliée transigée publiquement »

"unaffiliated publicly-traded liability", of an entity at any time means a publicly-traded liability of the entity if, at that time the total fair market value of all publicly-traded liabilities of the entity that are held at that time by persons or partnerships that are not affiliated with the entity is at least 90% of the total fair market value of all publicly-traded liabilities of the entity.

  (9)  Subsections (1) to (8) are deemed to have come into force on October 31, 2006.

  30.  (1)  Paragraph (c) of the definition "eligible individual" in subsection 122.51(1) of the Act is replaced by the following:

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  31.  (1)  Paragraph (b) of the definition "working income" in subsection 122.7(1) of the Act is replaced by the following:

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  32.  (1)  Paragraph 127(9.01)(b) of the Act is replaced by the following:

  (2)  Paragraph 127(9.02)(b) of the Act is replaced by the following:

  (3)  Subparagraphs (a)(i) and (ii) of the description of B in subsection 127(10.2) of the Act are replaced by the following:

  (4)  Subsection 127(10.22) of the Act is replaced by the following:

Deemed non-association of corporations

  (10.22)  If a particular Canadian-controlled private corporation is associated with another corporation in circumstances where those corporations would not be associated if the Act were read without reference to paragraph 256(1.2)(a), the particular corporation has issued shares to one or more persons who have been issued shares by the other corporation and there is at least one shareholder of the particular corporation who is not a shareholder of the other corporation or one shareholder of the other corporation who is not a shareholder of the particular corporation, the particular corporation is deemed not to be associated with the other corporation for the purpose of determining the particular corporation’s expenditure limit under subsection (10.2).

  (5)  Paragraph 127(10.6)(c) of the Act is replaced by the following:

  (6)  Paragraph 127(36)(b) of the Act is replaced by the following:

  (7)  Subsections (1), (2) and (6) apply in respect of the 2008 and subsequent taxation years.

  (8)  Subsection (3) applies to taxation years that end on or after February 26, 2008.

  (9)  Subsections (4) and (5) apply to taxation years that end on or after March 9, 2009.

  33.  (1)  The definition "qualifying corporation" in subsection 127.1(2) of the Act is replaced by the following:

"qualifying corporation"
« société admissible »

"qualifying corporation" for a particular taxation year that ends in a calendar year means a particular corporation that is a Canadian-controlled private corporation in the particular taxation year the taxable income of which for its immediately preceding taxation year — together with, if the particular corporation is associated in the particular taxation year with one or more other corporations (in this subsection referred to as "associated corporations"), the taxable income of each associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year) — does not exceed the qualifying income limit of the particular corporation for the particular taxation year;

  (2)  Subsection 127.1(2) of the Act is amended by adding the following in alphabetical order:

"qualifying income limit"
« plafond de revenu admissible »

"qualifying income limit" of a corporation for a particular taxation year is the amount determined by the formula

$400,000 × [($40 million - A)/$40 million]

where

A is

  (3)  Subsections (1) and (2) apply to taxation years that end on or after February 26, 2008, except that for taxation years that include February 26, 2008, the formula in the definition "qualifying income limit" in subsection 127.1(2) of the Act and the portion of that definition that follows that formula, as enacted by subsection (2), shall be read as follows:

A + [($400,000 × [($40 million - B)/$40 million] - A) × (C/D)]

where

A is the business limit of the corporation for the particular taxation year determined in accordance with section 125 of the Act;

B is

C is the number of days in the particular taxation year that are after February 25, 2008; and

D is the total number of days in the particular taxation year.

  34.  (1)  The definition "qualifying trust" in subsection 127.4(1) of the Act is replaced by the following:

"qualifying trust"
« fiducie admissible »

"qualifying trust" for an individual in respect of a share means

  (2)  Subsection (1) applies to the 2001 and subsequent taxation years, except that the definition "qualifying trust" in subsection 127.4(1) of the Act, as amended by subsection (1),

  35.  (1)  Section 128.3 of the Act is replaced by the following:

Former resident — replaced shares

  128.3  If, in a transaction to which section 51, subparagraphs 85.1(1)(a)(i) and (ii), subsection 85.1(7) or section 86 or 87 applies, a person acquires a share (in this section referred to as the "new share") in exchange for another share or equity in a SIFT wind-up entity (in this section referred to as the "old share"), for the purposes of section 119, subsections 126(2.21) to (2.23), 128.1(6) to (8), 180.1(1.4) and 220(4.5) and (4.6), the person is deemed not to have disposed of the old share, and the new share is deemed to be the same share as the old share.

  (2)  Subsection (1) applies after December 19, 2007.

  36.  (1)  The portion of the definition "qualifying exchange" in subsection 132.2(2) of the Act before paragraph (a) is replaced by the following:

"qualifying exchange"
« échange admissible »

"qualifying exchange"means a transfer at any time (in this section referred to as the "transfer time") of all or substantially all of the property of a mutual fund corporation (other than a SIFT wind-up corporation) or mutual fund trust to a mutual fund trust (in this section referred to as the "transferor" and "transferee", respectively, and as the "funds"), if

  (2)  Subsection (1) applies after December 19, 2007.

  37.  (1)  The portion of subsection 138(10) of the Act before paragraph (b) is replaced by the following:

Application of financial institution rules

  (10)  Notwithstanding sections 142.3, 142.4, 142.5 and 142.51, where in a taxation year an insurer (other than an insurer resident in Canada that does not carry on a life insurance business) carries on an insurance business in Canada and in a country other than Canada, in computing its income for the year from carrying on an insurance business in Canada,

  (2)  Subsection 138(12) of the Act is amended by adding the following in alphabetical order:

"base year"
« année de base »

"base year" of a life insurer means the life insurer’s taxation year that immediately precedes its transition year;

"reserve transition amount"
« montant transitoire »

"reserve transition amount" of a life insurer, in respect of a life insurance business carried on by it in Canada in its transition year, is the positive or negative amount determined by the formula

A - B

where

A is the maximum amount that the life insurer would be permitted to claim under subparagraph 138(3)(a)(i) (and that would be prescribed by section 1404 of the Regulations for the purpose of subparagraph 138(3)(a)(i)) as a policy reserve for its base year in respect of its life insurance policies in Canada if

B is the maximum amount that the life insurer is permitted to claim under subparagraph 138(3)(a)(i) as a policy reserve for its base year;

"transition year"
« année transitoire »

"transition year" of a life insurer means the life insurer’s first taxation year that begins after September 2006;

  (3)  Section 138 of the Act is amended by adding the following after subsection (15):

Transition year income inclusion

  (16)  There shall be included in computing a life insurer’s income for its transition year from a life insurance business carried on by it in Canada in the transition year, the positive amount, if any, of the life insurer’s reserve transition amount in respect of that life insurance business.

Transition year income deduction

(17)  There shall be deducted in computing a life insurer’s income for its transition year from a life insurance business carried on by it in Canada in the transition year, the absolute value of the negative amount, if any, of the life insurer’s reserve transition amount in respect of that life insurance business.

Transition year income inclusion reversal

  (18)  If an amount has been included under subsection (16) in computing a life insurer’s income for its transition year from a life insurance business carried on by it in Canada, there shall be deducted in computing the life insurer’s income, for each particular taxation year of the life insurer that ends after the beginning of the transition year, from that life insurance business, the amount determined by the formula

A × B/1825

where

A is the amount included under subsection (16) in computing the life insurer’s income for the transition year from that life insurance business; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Transition year income deduction reversal

  (19)  If an amount has been deducted under subsection (17) in computing a life insurer’s income for its transition year from a life insurance business carried on by it in Canada, there shall be included in computing the life insurer’s income, for each particular taxation year of the life insurer that ends after the beginning of the transition year, from that life insurance business, the amount determined by the formula

A × B/1825

where

A is the amount deducted under subsection (17) in computing the life insurer’s income for the transition year from that life insurance business; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Winding-up

  (20)  If a life insurer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the "parent"), and immediately after the winding-up the parent carries on a life insurance business, in applying subsections (18) and   (19) in computing the income of the life insurer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the "start day") on which assets of the life insurer were distributed to the parent on the winding-up,

Amalgamations

  (21)  If there is an amalgamation (within the meaning assigned by subsection 87(1)) of a life insurer with one or more other corporations to form one corporation (referred to in this subsection as the "new corporation"), and immediately after the amalgamation the new corporation carries on a life insurance business, in applying subsections (18) and (19) in computing the income of the new corporation for particular taxation years of the new corporation that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the life insurer in respect of

Application of subsection (23)

  (22)  Subsection (23) applies if, at any time, a life insurer (referred to in this subsection and subsection (23) as the "transferor") transfers, to a corporation (referred to in this subsection and subsection (23) as the "transferee") that is related to the transferor, property in respect of a life insurance business carried on by the transferor in Canada (referred to in this subsection and subsection (23) as the "transferred business") and

Transfer of life insurance business

  (23)  If this subsection applies in respect of the transfer, at any time, of property

Ceasing to carry on business

  (24)  If at any time a life insurer ceases to carry on all or substantially all of a life insurance business (referred to in this subsection as the "discontinued business"), and none of subsections (20) to (22) apply,

A - B

where

A is the amount included under subsection (16) in computing the life insurer’s income from the discontinued business for its transition year, and

B is the total of all amounts each of which is an amount deducted under subsection (18) in computing the life insurer’s income from the discontinued business for a taxation year that began before that time; and

C - D

where

C is the amount deducted under subsection (17) in computing the life insurer’s income from the discontinued business for its transition year, and

D is the total of all amounts each of which is an amount included under subsection (19) in computing the life insurer’s income from the discontinued business for a taxation year that began before that time.

Ceasing to exist

  (25)  If at any time a life insurer that carried on a life insurance business ceases to exist (otherwise than as a result of a winding-up or amalgamation described in subsection (20) or (21)), for the purposes of subsection (24), the life insurer is deemed to have ceased to carry on the life insurance business at the earlier of

  (4)  Subsections (1) to (3) apply to taxation years that begin after September 2006.

  38.  (1)  Paragraph (a) of the definition "bien évalué à la valeur du marché" in subsection 142.2(1) of the French version of the Act is replaced by the following:

  (2)  Paragraph (d) of the definition "mark-to-market property" in subsection 142.2(1) of the Act is replaced by the following:

  (3)  The definition "mark-to-market property" in subsection 142.2(1) of the Act, as amended by subsection (2), is replaced by the following:

"mark-to-market property"
« bien évalué à la valeur du marché »

"mark-to-market property" of a taxpayer for a taxation year means property (other than an excluded property) held at any time in the taxation year by the taxpayer that is

  (4)  Subsection 142.2(1) of the Act is amended by adding the following in alphabetical order:

"excluded property"
« bien exclu »

"excluded property" of a taxpayer for a taxation year means property, held at any time in the taxation year by the taxpayer, that is

"fair value property"
« bien évalué à sa juste valeur »

"fair value property" of a taxpayer for a taxation year means property, held at any time in the taxation year by the taxpayer, that is — or it is reasonable to expect would, if the taxpayer held the property at the end of the taxation year, be — valued (otherwise than solely because its fair value was less than its cost to the taxpayer or, if the property is a specified debt obligation, because of a default of the debtor) in accordance with generally accepted accounting principles, at its fair value (determined in accordance with those principles) in the taxpayer’s balance sheet as at the end of the taxation year;

"tracking property"
« bien à évaluer »

"tracking property" of a taxpayer means property of the taxpayer the fair market value of which is determined primarily by reference to one or more criteria in respect of property (referred to in this definition as "tracked property") that, if owned by the taxpayer, would be mark-to-market property of the taxpayer, which criteria are

  (5)  The portion of subsection 142.2(2) of the Act before paragraph (a) is replaced by the following:

Significant interest

  (2)  For the purposes of the definitions "excluded property", "mark-to-market property" and "specified debt obligation" in subsection (1) and subsections (5) and 142.6(1.6), a taxpayer has a significant interest in a corporation at any time if

  (6)  Subsections 142.2(4) and (5) of the Act are replaced by the following:

Extension of meaning of "related"

  (4)  For the purposes of this subsection and subsections (2) and (3), in determining if, at a particular time, a person or partnership is related to another person or partnership, the rules in section 251 are to be applied as if,

  (7)  Subsections (1) and (2) apply to taxation years that end after February 22, 1994, except that any election made under paragraph (d.3) of the definition "mark-to-market property" in subsection 142.2(1) of the Act, as enacted by subsection (2), is deemed to have been made on a timely basis if it is filed with the Minister of National Revenue on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which this Act is assented to.

  (8)  Subsection (3) applies to taxation years that begin after September 2006 except that for taxation years that begin before November 7, 2007, the definition "mark-to-market property" in subsection 142.2(1) of the Act, as enacted by subsection (3), is to be read without its paragraph (d).

  (9)  Subsections (4) to (6) apply to taxation years that begin after September 2006 except that any election made under paragraph (d) of the definition "excluded property" in subsection 142.2(1) of the Act, as enacted by subsection (4), is deemed to have been made on a timely basis if it is filed with the Minister of National Revenue on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which this Act is assented to.

  39.  (1)  Section 142.5 of the Act is amended by adding the following after subsection (8):

Application of subsection (8.2)

  (8.1)  Subsection (8.2) applies to a taxpayer for its transition year if

Rules applicable to first deemed disposition of debt obligation

  (8.2)  If this subsection applies to a taxpayer for its transition year, the following rules apply to the taxpayer in respect of the particular disposition:

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  40.  (1)  The Act is amended by adding the following after section 142.5:

Definitions

  142.51  (1)  The following definitions apply for the purposes of this section and subsections 142.5(8.1) and (8.2).

"base year"
« année de base »

"base year" of a taxpayer means the taxpayer’s taxation year that immediately precedes its transition year.

"transition amount"
« montant transitoire »

"transition amount" of a taxpayer for the taxpayer’s transition year is the positive or negative amount determined by the formula

A - B

where

A is the total of all amounts each of which is the fair market value, at the end of the taxpayer’s base year, of a transition property of the taxpayer; and

B is the total of all amounts each of which is the cost amount to the taxpayer, at the end of the taxpayer’s base year, of a transition property of the taxpayer.

"transition property"
« bien transitoire »

"transition property" of a taxpayer means a property that

"transition year"
« année transitoire »

"transition year" of a taxpayer means the taxpayer’s first taxation year that begins after September 2006.

Transition year income inclusion

  (2)  If a taxpayer is a financial institution in its transition year, there shall be included in computing the taxpayer’s income for its transition year the absolute value of the negative amount, if any, of the taxpayer’s transition amount.

Transition year income deduction

  (3)  If a taxpayer is a financial institution in its transition year, there shall be deducted in computing the taxpayer’s income for its transition year the positive amount, if any, of the taxpayer’s transition amount.

Transition year income inclusion reversal

  (4)  If an amount has been included under subsection (2) in computing a taxpayer’s income for its transition year there shall be deducted in computing the taxpayer’s income for each particular taxation year of the taxpayer that ends after the beginning of the transition year, and in which particular taxation year the taxpayer is a financial institution, the amount determined by the formula

A × B/1825

where

A is the amount included under subsection (2) in computing the taxpayer’s income for the transition year; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Transition year income deduction reversal

  (5)  If an amount has been deducted under subsection (3) in computing a taxpayer’s income for its transition year, there shall be included in computing the taxpayer’s income, for each particular taxation year of the taxpayer ending after the beginning of the transition year, and in which particular taxation year the taxpayer is a financial institution, the amount determined by the formula

A × B/1825

where

A is the amount deducted under subsection (3) in computing the taxpayer’s income for the transition year; and

B is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.

Winding-up

  (6)  If a taxpayer has, in a winding-up to which subsection 88(1) has applied, been wound-up into another corporation (referred to in this subsection as the "parent"), and immediately after the winding-up the parent is a financial institution, in applying subsections (4) and (5) in computing the income of the taxpayer and of the parent for particular taxation years that end on or after the first day (referred to in this subsection as the "start day") on which assets of the taxpayer were distributed to the parent on the winding-up,

Amalgamations

  (7)  If there is an amalgamation (within the meaning assigned by subsection 87(1)) of a taxpayer with one or more other corporations to form one corporation (referred to in this subsection as the "new corporation"), and immediately after the amalgamation the new corporation is a financial institution, in applying subsections (4) and (5) in computing the income of the new corporation for particular taxation years of the new corporation that begin on or after the day on which the amalgamation occurred, the new corporation is, on and after that day, deemed to be the same corporation as and a continuation of the taxpayer in respect of

Application of subsection (9)

  (8)  Subsection (9) applies if, at any time, a taxpayer (referred to in this subsection and subsection (9) as the "transferor") transfers, to a corporation (referred to in this subsection and subsection (9) as the "transferee") that is related to the transferor, property in respect of a business carried on by the transferor in Canada (referred to in this subsection and subsection (9) as the "transferred business") and

Transfer of a business

  (9)  If this subsection applies in respect of the transfer, at any time, of property

Continuation of a partnership

  (10)  If subsection 98(6) deems a partnership (in this subsection referred to as the "new partnership") to be a continuation of another partnership (in this subsection referred to as the "predecessor partnership") and, at the time that is immediately after the predecessor partnership ceases to exist, the new partnership is a financial institution, in applying subsections (4) and (5) in computing the income of the new partnership for particular taxation years of the new partnership that begin on or after the day on which it comes into existence, the new partnership is, on and after that day, deemed to be the same partnership as and a continuation of the predecessor partnership in respect of

Ceasing to carry on a business

  (11)  If at any time, a taxpayer ceases to be a financial institution

A - B

where

A is the amount included under subsection (2) in computing the taxpayer’s income for its transition year, and

B is the total of all amounts each of which is an amount deducted under subsection (4) in computing the income of the taxpayer for a taxation year that began before that time; and

C - D

where

C is the amount deducted under subsection (3) in computing the taxpayer’s income for its transition year, and

D is the total of all amounts each of which is an amount included under subsection (5) in computing the taxpayer’s income for a taxation year that began before that time.

Ceasing to exist

  (12)  If at any time a taxpayer ceases to exist (otherwise than as a result of a merger to which subsection 87(2) applies, a winding-up to which subsection 88(1) applies or a continuation to which subsection 98(6) applies), for the purposes of subsection (11), the taxpayer is deemed to have ceased be a financial institution at the earlier of

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  41.  (1)  Section 142.6 of the Act is amended by adding the following after subsection (1.3):

Change in status — prescribed payment card corporation share

  (1.4)  If, at any particular time in a taxation year of a taxpayer that is a financial institution for the taxation year, a property becomes a mark-to-market property of the taxpayer for the taxation year because it ceased, at the particular time, to be a prescribed payment card corporation share of the taxpayer,

Change in status — prescribed securities exchange investment

  (1.5)  If, at any particular time in a taxation year of a taxpayer that is a financial institution for the taxation year, a property becomes a mark-to-market property of the taxpayer for the taxation year because it ceased, at the particular time, to be a prescribed securities exchange investment of the taxpayer,

Change in status — significant interest

  (1.6)  If, at the end of a particular taxation year of a taxpayer that is a financial institution for the taxation year, the taxpayer holds a share of the capital stock of a corporation, the taxpayer has a significant interest in that corporation at any time in the particular taxation year and the share is mark-to-market property of the taxpayer for the immediately following taxation year, the taxpayer is deemed to have,

  (2)  Subsection 142.6(2) of the Act is replaced by the following:

Deemed disposition not applicable

  (2)  For the purposes of this Act, the determination of when a taxpayer acquired a share shall be made without regard to a disposition or acquisition that occurred because of subsection 142.5(2) or subsection (1), (1.1), (1.2), (1.4), (1.5) or (1.6).

  (3)  Subsection 142.6(1.4) of the Act, as enacted by subsection (1), applies to taxation years that end after February 22, 1994.

  (4)  Subsection 142.6(1.5) of the Act, as enacted by subsection (1), applies to taxation years that begin after 1998.

  (5)  Subsection 142.6(1.6) of the Act, as enacted by subsection (1), applies to taxation years that begin after September 2006.

  (6)  Subsection (2) applies to taxation years that begin after September 2006.

  42.  (1)  Paragraph (b) of the definition "earned income" in subsection 146(1) of the Act is replaced by the following:

  (2)  The description of D in paragraph (b) of the definition "unused RRSP deduction room" in subsection 146(1) of the Act is replaced by the following:

D is the total of all amounts each of which is an amount deducted by the taxpayer,

  (3)  Subsection (1) applies to the 1997 and subsequent taxation years, except that in its application to the 1997 to 2007 taxation years, paragraph (b) of the definition "earned income" in subsection 146(1) of the Act, as enacted by subsection (1), is to be read without reference to "or subparagraph 56(1)(r)(v)".

  (4)  Subsection (2) applies for taxation years that begin after the calendar year in which the Protocol set out in Schedule VI to the Canada-United States Tax Convention Act, 1984 enters into force.

  43.  (1)  Subparagraph (b)(ii) of the definition "qualifying arrangement" in subsection 146.2(1) of the Act is replaced by the following:

  (2)  Subsections 146.2(3) to (9) of the Act are replaced by the following:

Paragraphs (2)(a), (b) and (e) not applicable

  (3)  The conditions in paragraphs (2)(a), (b) and (e) do not apply to the extent that they are inconsistent with subsection (4).

Using TFSA interest as security for a loan

  (4)  A holder of a TFSA may use the holder’s interest or, for civil law, right in the TFSA as security for a loan or other indebtedness if

TFSA

  (5)  If the issuer of an arrangement that is, at the time it is entered into, a qualifying arrangement files with the Minister, before March of the calendar year following the calendar year in which the arrangement was entered into, an election in prescribed form and manner to register the arrangement as a TFSA under the Social Insurance Number of the individual with whom the arrangement was entered into, the arrangement becomes a TFSA at the time the arrangement was entered into and ceases to be a TFSA at the earliest of the following times:

Trust not taxable

  (6)  No tax is payable under this Part by a trust that is governed by a TFSA on its taxable income for a taxation year, except that, if at any time in the taxation year, it carries on one or more businesses or holds one or more properties that are non-qualified investments (as defined in subsection 207.01(1)) for the trust, tax is payable under this Part by the trust on the amount that would be its taxable income for the taxation year if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or capital losses other than from dispositions of those properties, and for that purpose,

Amount credited to a deposit

  (7)  An amount that is credited or added to a deposit that is a TFSA as interest or other income in respect of the TFSA is deemed not to be received by the holder of the TFSA solely because of that crediting or adding.

Trust ceasing to be a TFSA

  (8)  If an arrangement that governs a trust ceases, at a particular time, to be a TFSA,

Trust ceasing to be a TFSA on death of holder

  (9)  If an arrangement that governs a trust ceases to be a TFSA because of the death of the holder of the TFSA,

A - B

where

A is the amount of a payment made out of or under the trust, in satisfaction of all or part of the taxpayer’s beneficial interest in the trust, in the taxation year, after the holder’s death and at or before the exemption-end time, and

B is an amount designated by the trust not exceeding the lesser of

A - B

where

A is the fair market value of all of the property held by the trust at the exemption-end time, and

B is the amount by which the fair market value of all of the property held by the trust immediately before the holder’s death exceeds the total of all amounts each of which is the value of B in paragraph (b) in respect of a payment made out of or under the trust.

Annuity contract ceasing to be a TFSA

  (10)  If an annuity contract ceases, at a particular time, to be a TFSA,

Deposit ceasing to be a TFSA

  (11)  If a deposit ceases, at a particular time, to be a TFSA,

Arrangement is TFSA only

  (12)  An arrangement that is a qualifying arrangement at the time it is entered into is deemed not to be a retirement savings plan, an education savings plan, a retirement income fund or a disability savings plan.

Regulations

  (13)  The Governor in Council may make regulations requiring issuers of TFSAs to file information returns in respect of TFSAs.

  (3)  Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

  44.  Section 146.3 of the Act is amended by adding the following after subsection (1):

Adjusted minimum amount for 2008

  (1.1)  The minimum amount under a retirement income fund for 2008 is 75 per cent of the amount that would, in the absence of this subsection, be the minimum amount under the fund for the year.

Exceptions

  (1.2)  Subsection (1.1) does not apply to a retirement income fund

  45.  (1)  The definition "entrusted shares percentage" in subsection 149.1(1) of the Act is repealed.

  (2)  The definition "divestment obligation percentage" in subsection 149.1(1) of the Act is replaced by the following:

"divestment obligation percentage"
« pourcentage de dessaisissement »

"divestment obligation percentage" of a private foundation for a particular taxation year, in respect of a class of shares of the capital stock of a corporation, is the percentage, if any, that is the lesser of

A + B - C

where

A is the percentage determined under this paragraph in respect of the private foundation in respect of the class for the preceding taxation year,

B is the total of all percentages, each of which is the portion of a net increase in the excess corporate holdings percentage of the private foundation in respect of the class for the particular taxation year or for a preceding taxation year that is allocated to the particular taxation year in accordance with subsection 149.2(5), and

C is the total of all percentages, each of which is the portion of a net decrease in the excess corporate holdings percentage of the private foundation in respect of the class for the particular taxation year or for a preceding taxation year that is allocated to the particular taxation year in accordance with subsection 149.2(7);

  (3)  Paragraph (c) of the definition "excess corporate holdings percentage" in subsection 149.1(1) of the Act is replaced by the following:

  (4)  Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:

"equity percentage"
« pourcentage d’intérêt »

"equity percentage" of a person in a corporation has, subject to subsection 149.2(2.1), the same meaning as defined in subsection 95(4);

"exempt shares"
« actions exonérées »

"exempt shares" held by a private foundation at any particular time means shares, of a class of the capital stock of a corporation,

"exempt shares percentage"
« pourcentage d’actions exonérées »

"exempt shares percentage" of a private foundation at any time, in respect of a class of shares of the capital stock of a corporation, is the total of all amounts, each of which is the percentage of the issued and outstanding shares of that class that are exempt shares held by the private foundation at that time;

"substituted shares"
« actions de remplacement »

"substituted shares" held by a private foundation means shares acquired by the private foundation, in exchange for exempt shares held by the private foundation, in the course of a transaction to which section 51, subsection 85.1(1) or section 86 or 87 applies;

  (5)  Subsection 149.1(15) of the Act is amended by striking out "and" at the end of paragraph (b), by adding "and’’ at the end of paragraph (c) and by adding the following after paragraph (c):

  (6)  Subsections (1) to (4) apply after March 18, 2007.

  46.  (1)  Section 149.2 of the Act is amended by adding the following after subsection (2):

Ownership

  (2.1)  For the purposes of the definition "equity percentage", and subparagraph (b)(iii) of the definition "exempt shares", in subsection 149.1(1), a person who, if paragraph 251(5)(b) applied would be deemed by that paragraph to have the same position in relation to the control of a corporation as if the person owned a share, is deemed to own the share.

  (2)  Section 149.2 of the Act is amended by adding the following after subsection (8):

Where subsection (10) applies

  (9)  Subsection (10) applies for the purposes of applying section 149.1 and subsections (8) and 188.1(3.1) to a private foundation at a particular time if, both on March 18, 2007 and at the particular time,

Shares held through a trust on March 18, 2007

  (10)  If this subsection applies at a particular time to a private foundation in respect of shares of a class of the capital stock of a corporation held by a trust, the private foundation is deemed to hold at the particular time that number of those shares as is determined by the formula

A × B/C

where

A is the lesser of the number of those shares held by the trust on March 18, 2007 and the number so held at the particular time,

B is the total fair market value of all interests held by the private foundation in the trust at the particular time, and

C is the total fair market value of all property held by the trust at the particular time.

Discretionary trusts

  (11)  For the purpose of subsection (10), if the amount of income or capital of a trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be.

  (3)  Subsection (1) applies after March 18, 2007.

  (4)  Subsection (2) applies to taxation years, of private foundations, that begin on or after February 26, 2008.

  (5)  If a registered charity was on March 19, 2007 a private foundation, in applying paragraphs 149.2(5)(b) and (c) of the Act to the first taxation year of the registered charity that begins after that date, the phrase "in the current year" in those paragraphs shall be read as the phrase "in the period that begins on March 18, 2007 and ends at the end of the current year".

  47.  (1)  Subsection 152(4) of the Act is amended by striking out "or" at the end of paragraph (a), by adding "or" at the end of paragraph (b) and by adding the following after paragraph (b):

  (2)  Section 152 of the Act is amended by adding the following after subsection (6.1):

Extended reassessment period

  (6.2)  The Minister shall reassess a taxpayer’s tax for a particular taxation year, in order to take into account the application of paragraph (d) of the definition "excluded property" in subsection 142.2(1), or the application of subsection 142.6(1.6), in respect of property held by the taxpayer, if

  (3)  Subsection (2) applies to taxation years that begin after 2001, except that

  48.  (1)  Clause 181.3(1)(c)(ii)(B) of the Act is repealed.

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  49.  (1)  Paragraph 188.1(3.2)(c) of the Act is replaced by the following:

  (2)  Section 188.1 of the Act is amended by adding the following after subsection (3.2):

Where subsection (3.5) applies

  (3.3)  Subsection (3.5) applies to a private foundation at a particular time in a taxation year if

Rules applicable

  (3.4)  For the purpose of subsections (3.3) and (3.5),

Avoidance of divestiture

  (3.5)  If this subsection applies to a private foundation at a particular time in respect of an interest of an insider of the private foundation in a trust, for the purposes of applying this section, subsection 149.1(1) and section 149.2,

A × B/C

where

A is the number of shares of that class that are held, directly or indirectly, by the trust at the particular time,

B is the total fair market value of all interests held by the insider in the trust at the particular time, and

C is the total fair market value of all property held by the trust at the particular time;

  (3)  Subsections (1) and (2) apply to taxation years, of private foundations, that begin on or after February 26, 2008.

  50.  (1)  Subparagraph 190.11(b)(ii) of the Act is repealed.

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  51.  (1)  Subparagraph 190.13(c)(iv) of the Act is repealed.

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  52.  (1)  The portion of the definition "SIFT partnership" in subsection 197(1) of the Act before paragraph (a) is replaced by the following:

"SIFT partnership"
« société de personnes intermédiaire de placement déterminée »

"SIFT partnership", being a specified investment flow-through partnership, for any taxation year, means a partnership other than an excluded subsidiary entity (as defined in subsection 122.1(1)) for the taxation year that meets the following conditions at any time during the taxation year:

  (2)  Subsection (1) is deemed to have come into force on October 31, 2006.

  53.  (1)  Paragraph (c.1) of the definition "qualified investment" in section 204 of the Act is replaced by the following:

  (2)  Subsection (1) applies in determining whether a property is, at any time after March 18, 2007, a qualified investment.

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

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

  55.  (1)  The definition "restricted property" in subsection 207.01(1) of the Act is repealed.

  (2)  Paragraph (a) of the definition "advantage" in subsection 207.01(1) of the Act is amended by striking out "and" at the end of subparagraphs (i) and (ii) and by adding the following after subparagraph (ii):

  (3)  Paragraph (b) of the definition "advantage" in subsection 207.01(1) of the Act is replaced by the following:

  (4)  The description of E in the definition "excess TFSA amount" in subsection 207.01(1) of the Act is replaced by the following:

E is the total of all amounts each of which is the qualifying portion of a distribution made in the calendar year and at or before the particular time under a TFSA of which the individual was the holder at the time of the distribution and, for this purpose, the qualifying portion of a distribution is

  (5)  The portion of the definition "prohibited investment" in subsection 207.01(1) of the Act before paragraph (a) is replaced by the following:

"prohibited investment"
« placement interdit »

"prohibited investment", at any time, for a trust governed by a TFSA means property (other than prescribed property) that is at that time

  (6)  Paragraph (d) of the definition "prohibited investment" in subsection 207.01(1) of the Act is replaced by the following:

  (7)  Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:

"exempt contribution"
« cotisation exclue »

"exempt contribution" means a contribution made in a calendar year under a TFSA by the survivor of an individual if

  (8)  Subsection 207.01(2) of the Act is repealed.

  (9)  The portion of subsection 207.01(3) of the Act before paragraph (a) is replaced by the following:

Survivor as successor holder

  (3)  If an individual’s survivor becomes the holder of a TFSA as a consequence of the individual’s death and, immediately before the individual’s death, the individual had an excess TFSA amount, the survivor is deemed (other than for the purposes of the definition "exempt contribution") to have made, at the beginning of the month following the individual’s death, a contribution under a TFSA equal to the amount, if any, by which

  (10)  Subsections (1) to (9) apply to the 2009 and subsequent taxation years.

  56.  (1)  The portion of section 207.03 of the Act before paragraph (a) is replaced by the following:

Tax payable on non-resident contributions

  207.03  If, at a particular time, a non-resident individual makes a contribution under a TFSA (other than a contribution that is a qualifying transfer or an exempt contribution), the individual shall pay a tax under this Part equal to 1% of the amount of the contribution in respect of each month that ends after the particular time and before the earlier of

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

  57.  (1)  Subsection 207.04(3) of the Act is replaced by the following:

Where both prohibited and non-qualified investment

  (3)  For the purposes of this section and subsection 146.2(6), if a trust governed by a TFSA holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.

  (2)  The portion of subsection 207.04(7) of the Act before paragraph (b) is replaced by the following:

Amount of additional tax payable

  (7)  The amount of tax payable under subsection (6) for a calendar year is 150% of the amount of tax that would be payable under Part I by the trust for the taxation year that ends in the calendar year if

  (3)  Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

  58.  (1)  The portion of subsection 207.06(2) of the Act before paragraph (a) is replaced by the following:

Waiver of tax payable

  (2)  If a person would otherwise be liable to pay a tax under this Part because of subsection 207.04(1) or section 207.05, the Minister may waive or cancel all or part of the liability where the Minister considers it just and equitable to do so having regard to all the circumstances, including

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

  59.  (1)  Paragraph (a) of the definition "registered life insurance policy" in subsection 211(1) of the Act is replaced by the following:

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

  60.  (1)  Paragraph 212(1)(p) of the Act is replaced by the following:

Former TFSA

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

  61.  (1)  The definition "assessable distribution" in subsection 218.3(1) of the Act is replaced by the following:

"assessable distribution"
« distribution déterminée »

"assessable distribution", in respect of a Canadian property mutual fund investment, means the portion of any amount that is paid or credited (otherwise than as a SIFT trust wind-up event), by the mutual fund that issued the investment, to a non-resident investor who holds the investment, and that is not otherwise subject to tax under Part I or Part XIII.

  (2)  Subsection (1) applies after July 14, 2008.

  62.  (1)  The portion of subsection 241(1) of the Act before paragraph (a) is replaced by the following:

Provision of information

  241.  (1)  Except as authorized by this section, no official or other representative of a government entity shall

  (2)  Subsection 241(2) of the Act is replaced by the following:

Evidence relating to taxpayer information

  (2)  Notwithstanding any other Act of Parliament or other law, no official or other representative of a government entity shall be required, in connection with any legal proceedings, to give or produce evidence relating to any taxpayer information.

  (3)  Paragraph 241(4)(l) of the Act is replaced by the following:

  (4)  The portion of subsection 241(5) of the Act before paragraph (a) is replaced by the following:

Disclosure to taxpayer or on consent

  (5)  An official or other representative of a government entity may provide taxpayer information relating to a taxpayer

  (5)  The portion of subsection 241(6) of the Act before paragraph (a) is replaced by the following:

Appeal from order or direction

  (6)  An order or direction that is made in the course of or in connection with any legal proceedings and that requires an official, other representative of a government entity or authorized person to give or produce evidence relating to any taxpayer information may, by notice served on all interested parties, be appealed forthwith by the Minister or by the person against whom the order or direction is made to

  (6)  Section 241 of the Act is amended by adding the following after subsection (9.1):

Restrictions on information sharing

  (9.2)  No information may be provided to a representative of a government entity under paragraph (4)(l) in connection with a program, activity or service provided or undertaken by the government entity unless the government entity uses the business number as an identifier in connection with the program, activity or service.

Public disclosure

  (9.3)  The Minister may, in connection with a program, activity or service provided or undertaken by the Minister, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number (other than an excluded individual).

Public disclosure by representative of government entity

  (9.4)  A representative of a government entity may, in connection with a program, activity or service provided or undertaken by the government entity, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number (other than an excluded individual), if

  (7)  The portion of the definition "taxpayer information" in subsection 241(10) of the Act after paragraph (b) is replaced by the following:

but does not include information that does not directly or indirectly reveal the identity of the taxpayer to whom it relates and, for the purposes of applying subsections (2), (5) and (6) to a representative of a government entity that is not an official, taxpayer information includes only the information referred to in paragraph (4)(l);

  (8)  Subsection 241(10) of the Act is amended by adding the following in alphabetical order:

"aboriginal government"
« gouvernement autochtone »

"aboriginal government" means an aboriginal government as defined in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act;

"contact information"
« coordonnées »

"contact information", in respect of a holder of a business number, means the name, address, telephone number, facsimile number and preferred language of communication of the holder, or similar information as specified by the Minister in respect of the holder, and includes such information in respect of one or more

"corporate information"
« renseignements d’entreprise »

"corporate information", in respect of a holder of a business number that is a corporation, means the name (including the number assigned by the incorporating authority), date of incorporation, jurisdiction of incorporation and any information on the dissolution, reorganization, amalgamation, winding-up or revival of the corporation;

"excluded individual"
« particulier exclu »

"excluded individual" means an individual who is a holder of a business number solely because the individual is required under this Act to deduct or withhold an amount from an amount paid or credited or deemed to be paid or credited;

"government entity"
« entité gouvernmentale »

"government entity" means

"registration information"
« renseignements relatifs à l’inscription »<</strong>/p>

"registration information", in respect of a holder of a business number, means

"representative"
« représentant »

"representative" of a government entity means a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, a government entity, and includes, for the purposes of subsections (1), (2), (5) and (6), a person who was formerly so employed, who formerly occupied such a position or who formerly was so engaged;

  63.  (1)  The definitions "personal trust" and "TFSA" in subsection 248(1) of the Act are replaced by the following:

"personal trust"
« fiducie personelle »

"personal trust" means a trust (other than a trust that is, or was at any time after 1999, a unit trust) that is

"TFSA"
« compte d’épargne libre d’impôt »

"TFSA", being a tax-free savings account, has the meaning assigned by subsection 146.2(5);

  (2)  Paragraph (d) of the definition "Canadian real, immovable or resource property" in subsection 248(1) of the Act is replaced by the following:

  (3)  Subsection 248(1) of the Act is amended by adding the following in alphabetical order:

"foreign currency debt"
« dette en monnaie étrangère »

"foreign currency debt" has the meaning assigned by subsection 111(8);

"SIFT trust wind-up event"
« fait lié à la conversion d’une EIPD-fiducie »

"SIFT trust wind-up event" means a distribution, by a particular trust resident in Canada of property to a taxpayer, that meets the following conditions:

"SIFT wind-up corporation"
« société de conversion d’EIPD »

"SIFT wind-up corporation", in respect of a SIFT wind-up entity, means at any particular time a corporation

"SIFT wind-up entity"
« EIPD convertible »

"SIFT wind-up entity" means a trust or partnership that at any time in the period that began on October 31, 2006 and that ends on July 14, 2008 is

"SIFT wind-up entity equity"
« intérêt dans une EIPD convertible »

"SIFT wind-up entity equity", or equity in a SIFT wind-up entity, means

except that if all of the interests described in paragraph (a) or (b), as the case may be, in the SIFT wind-up entity are described by reference to units, it means the part of the interest represented by such a unit;

  (4)  Subsection 248(3) of the Act is replaced by the following:

Property subject to certain Quebec institutions and arrangements

  (3)  For the purposes of this Act, if property is subject to an institution or arrangement that is described by this subsection and that is governed by the laws of the Province of Quebec, the following rules apply in respect of the property:

Gift of bare ownership of immovables

  (3.1)  Subsection (3) does not apply in respect of a usufruct or a right of use of an immovable in circumstances where a taxpayer disposes of the bare ownership of the immovable by way of a gift to a donee described in the definition "total charitable gifts", "total Crown gifts" or "total ecological gifts" in subsection 118.1(1) and retains, for life, the usufruct or the right of use.

Qualifying arrangement

  (3.2)  For the purposes of paragraphs 248(3)(b) and (c), an arrangement is a qualifying arrangement if it is

  (5)  The definition "personal trust" in subsection 248(1) of the Act, as enacted by subsection (1), applies after July 14, 2008.

  (6)  The definition "TFSA" in subsection 248(1) of the Act, as enacted by subsection (1), applies to the 2009 and subsequent taxation years.

  (7)  Subsection (2) is deemed to have come into force on October 31, 2006.

  (8)  The definition "foreign currency debt" in subsection 248(1) of the Act, as enacted by subsection (3), applies after 2005.

  (9)  The definitions "SIFT trust wind-up event", "SIFT wind-up corporation", "SIFT wind-up entity" and "SIFT wind-up entity equity" in subsection 248(1) of the Act, as enacted by subsection (3), apply after December 19, 2007.

  (10)  Subsections 248(3) and (3.2) of the Act, as enacted by subsection (4), apply to taxation years that begin after October 30, 2003 except that

  (11)  For taxation years that begin after 1988 and before October 31, 2003, paragraph 248(3)(d) of the Act shall, in its application to each arrangement that is entered into between an individual and a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee and that is accepted by the Minister for registration under section 146 or 146.3 of the Act, be read without reference to

  (12)  Subsection 248(3.1) of the Act, as enacted by subsection (4), applies to dispositions that occur after July 18, 2005.

  64.  (1)  Section 253.1 of the Act is replaced by the following:

Investments in limited partnerships

  253.1  For the purposes of subparagraph 108(2)(b)(ii), paragraphs 130.1(6)(b), 131(8)(b) and 132(6)(b), subsection 146.2(6), paragraphs 146.4(5)(b) and 149(1)(o.2), the definition "private holding corporation" in subsection 191(1) and regulations made for the purposes of paragraphs 149(1)(o.3) and (o.4), if a trust or corporation holds an interest as a member of a partnership and, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business or other activity of the partnership.

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

  65.  (1)  Subsection 256(7) of the Act is amended by striking out "and" at the end of paragraph (d), by adding "and" at the end of paragraph (e) and by adding the following after paragraph (e):

  (2)  Subsection (1) applies after July 14, 2008.

  66.  (1)  The portion of subsection 259(1) of the Act before paragraph (a) is replaced by the following:

Proportional holdings in trust property

  259.  (1)  For the purposes of subsections 146(6), (10) and (10.1), 146.2(6) and 146.3(7), (8) and (9) and Parts X, X.2 and XI to XI.1, if at any time a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u) to (u.2) or (x) acquires, holds or disposes of a particular unit in a qualified trust and the qualified trust elects for any period that includes that time to have this subsection apply,

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

2008, c. 28

Budget Implementation Act, 2008

  67.  The descriptions of A and B in subsection 19(5) of the Budget Implementation Act, 2008 are replaced by the following:

A is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Income Tax Act as that subsection read in its application to a taxation year that ended immediately before February 26, 2008;

B is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Income Tax Act, as that subsection would apply to a taxation year that ended on February 26, 2008;

C.R.C., c. 945

Income Tax Regulations

  68.  (1)  Paragraph 202(2)(h) of the Income Tax Regulations is replaced by the following:

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

  69.  (1)  Subsection 204(3) of the Regulations is amended by striking out "or" at the end of paragraph (d.1), by adding "or" at the end of paragraph (e) and by adding the following after paragraph (e):

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

  70.  (1)  Subsection 209(1) of the Regulations is replaced by the following:

  209.  (1)  A person who is required by section 200, 201, 202, 204, 208, 212, 214, 215, 217 or 218, subsection 223(2) or section 226, 227, 228, 229, 230, 232, 233 or 234 to make an information return shall forward to each taxpayer to whom the return relates two copies of the portion of the return that relates to that taxpayer.

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

  71.  (1)  Subsection 221(2) of the Regulations is replaced by the following:

  (2)  Where in any taxation year a reporting person (other than a registered investment) claims that a share of its capital stock issued by it, or an interest as a beneficiary under it, is a qualified investment under section 146, 146.1, 146.3, 204, 205 or 207.01 of the Act, the reporting person shall, in respect of the year and within 90 days after the end of the year, make an information return in prescribed form.

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

  72.  (1)  Section 223 of the Regulations and the heading before it are replaced by the following:

TFSAs

  223.  (1)  An issuer of a TFSA shall make an information return for each calendar year in prescribed form in respect of the TFSA.

  (2)  An issuer of a TFSA who makes a payment of an amount that is required because of paragraph 146.2(9)(b) of the Act to be included in computing the income of a taxpayer for a taxation year shall make an information return in prescribed form.

  (3)  An issuer of a TFSA that governs a trust shall notify the holder of the TFSA in prescribed form and manner before March of a calendar year if, at any time during the preceding calendar year,

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

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

  (2)  Subsection (1) applies to annuity contracts issued after 2008.

  74.  (1)  Subsection 400(1) of the Regulations is replaced by the following:

  400.  (1)  In applying the definition "taxable income earned in the year in a province" in subsection 124(4) of the Act for a corporation’s taxation year

  (1.1)  In this Part, a corporation’s taxable income for a taxation year is equal to the total of

A - B

where

A is the total of all amounts that are, because of the application of section 33.1 of the Act, not required to be added in computing the corporation’s income for the taxation year, and

B is the total of all amounts that are, because of the application of section 33.1 of the Act, not allowed to be deducted in computing the corporation’s income for the taxation year.

  (2)  Subsection 400(2) of the Regulation is amended by adding the following after paragraph (e):

  (3)  Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

  75.  (1)  Section 401 of the Regulations is replaced by the following:

  401.  This Part applies to determine the amount of taxable income of a corporation earned in a taxation year in a particular province.

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

  76.  (1)  The heading before section 402.1 and sections 402.1 and 402.2 of the Regulations are replaced by the following:

Central Paymaster

  402.1  (1)  In this Part, if an individual (referred to in this section as the "employee") is employed by a person (referred to in this section as the "employer") and performs a service in a particular province for the benefit of or on behalf of a corporation that is not the employer, an amount that may reasonably be regarded as equal to the amount of salary or wages earned by the employee for the service (referred to in this section as the "particular salary") is deemed to be salary paid by the corporation to an employee of the corporation in the corporation’s taxation year in which the particular salary is paid if

  (2)  In this Part, an amount deemed under subsection (1) to be salary paid by a corporation to an employee of the corporation for a service performed in a particular province is deemed to have been paid,

  (3)  In determining under this Part the amount of salaries and wages paid in a year by an employer, there shall be deducted the total of all amounts each of which is a particular salary paid by the employer in the year.

  (4)  Despite subparagraph (1)(a)(i), this section applies to a corporation and an employer that deal at arm’s length if the Minister determines that the corporation and the employer have entered into an arrangement the purpose of which is to reduce, through the provision of services as described in subsection (1), the total amount of income tax payable by the corporation under a law of the particular province referred to in subsection (1).

  (5)  For the purposes of this section, a partnership is deemed to be a corporation and the corporation’s taxation year is deemed to be the partnership’s fiscal period.

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

  77.  (1)  Section 403 of the Regulations is amended by adding the following after subsection (3):

  (4)  For the purposes of subsection (1), if in a taxation year an insurance corporation has no permanent establishment in a particular country other than Canada, but provides insurance on property in the particular country or has a contract for insurance, other than on property, with a person resident in the particular country, each net premium for the taxation year in respect of the insurance is deemed to be a net premium in respect of insurance on property situated in, or from contracts with persons resident in, as the case may be, the province in Canada or country other than Canada in which is situated the permanent establishment of the corporation to which the net premium is reasonably attributable in the circumstances.

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

  78.  (1)  Subsection 413(1) of the Regulations is replaced by the following:

  413.  (1)  In this Part, if a corporation is not resident in Canada, "salaries and wages paid in the year" by the corporation does not include salaries and wages paid to employees of a permanent establishment outside Canada.

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

  79.  (1)  The Regulations are amended by adding the following after section 413:

International Banking Centre Exception

  413.1  Despite any other provision in this Part, a corporation’s taxable income earned in a taxation year in a particular province is equal to the total of

A - B

where

A is the total of all amounts that are, because of the application of section 33.1 of the Act to a business carried on in a branch or office situated in the particular province, not allowed to be deducted in computing the corporation’s income for the taxation year, and

B is the total of all amounts that are, because of the application of section 33.1 of the Act to a business carried on in a branch or office situated in the particular province, not required to be added in computing the corporation’s income for the taxation year.

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

  80.  (1)  The heading before section 414 and sections 414 and 415 of the Regulations are replaced by the following:

Provincial SIFT Tax Rate

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

"general corporate income tax rate", in a province for a taxation year, means

"province" includes the Newfoundland offshore area and the Nova Scotia offshore area. (province)

"taxable SIFT distributions", for a taxation year, means

  (2)  In determining the amount of a SIFT trust’s or SIFT partnership’s taxable SIFT distributions for a taxation year earned in a province

  (3)  In applying the definition "provincial SIFT tax rate" in subsection 248(1) of the Act in respect of a SIFT trust or SIFT partnership for a taxation year, the prescribed amount determined in respect of the SIFT trust or SIFT partnership for the taxation year is

A + B

where

A is the total of all amounts, if any, each of which is in respect of a province in which the SIFT trust or SIFT partnership has a permanent establishment in the taxation year and is determined by the formula

C/D × E

where

C is its taxable SIFT distributions for the taxation year earned in the province,

D is its total taxable SIFT distributions for the taxation year, and

E is the decimal fraction equivalent of the general corporate income tax rate in the province for the taxation year, and

B is the amount determined by the formula

(1 - F/D) × 0.1

where

F is the total of all amounts each of which is an amount determined under the description of C in the description of A in respect of a province in which the SIFT trust or SIFT partnership has a permanent establishment in the taxation year.

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

  81.  (1)  The heading "Policy Reserves for Pre-1996 Policies" before section 1401 of the Regulations is replaced by the following:

Amounts Determined

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  82.  (1)  The portion of subsection 1401(1) of the Regulations before subparagraph (c)(i) is replaced by the following:

  1401.  (1)  For the purposes of section 307 of the Regulations and subsection 211.1(3) of the Act, the amounts determined under this subsection are,

  (2)  The portion of paragraph 1401(1)(c.1) of the Regulations before subparagraph (i) is replaced by the following:

  (3)  The portion of paragraph 1401(1)(d) of the Regulations before subparagraph (i) is replaced by the following:

  (4)  The portion of paragraph 1401(1)(d) of the Regulations after subparagraph (ix) and before subparagraph (x) is replaced by the following:

equal to the lesser of

  (5)  Subsection 1401(1) of the Regulations is amended by adding "and" at the end of paragraph (c.1) and by repealing paragraphs (d.1) to (e).

  (6)  Subsection 1401(1.1) of the Regulations is repealed.

  (7)  Subsections 1401(3) and (4) of the Regulations are repealed.

  (8)  Subsections (1) to (7) apply to taxation years that begin after September 2006.

  83.  (1)  Section 1404 of the Regulations and the headings before it are replaced by the following:

Division 4

Life Insurance Policy Reserves

  1404.  (1)  For the purpose of subparagraph 138(3)(a)(i) of the Act, there may be deducted, in computing a life insurer’s income from carrying on its life insurance business in Canada for a taxation year in respect of its life insurance policies in Canada, the amount the insurer claims, not exceeding

  (2)  For the purpose of paragraph 138(4)(b) of the Act, the amount prescribed in respect of an insurer for a taxation year, in respect of its life insurance policies in Canada, is

  (3)  For the purposes of paragraphs (1)(a) and (2)(a), the amount determined under this subsection in respect of an insurer for a taxation year, in respect of its life insurance policies in Canada, is the amount, which may be positive or negative, determined by the formula

A + B + C + D - M

where

A is the amount (except to the extent the amount is determined in respect of a claim, premium, dividend or refund in respect of which an amount is included in determining the value of B, C or D), in respect of the insurer’s life insurance policies in Canada, equal to the lesser of

B is the amount, in respect of the insurer’s life insurance policies in Canada under which there may be claims incurred before the end of the year that have not been reported to the insurer before the end of the year, equal to 95% of the lesser of

C is the total of all amounts each of which is the unearned portion at the end of the year of the premium paid by the policyholder for the policy, determined by apportioning the premium paid by the policyholder equally over the period to which that premium relates, where the policy is a group term life insurance policy that

D is the total of all amounts (other than an amount deductible under subparagraph 138(3)(a)(v) of the Act) each of which is the amount, which is the least of P, Q and R, in respect of a dividend, refund of premiums or refund of premium deposits provided for under the terms of a group life insurance policy that is a life insurance policy in Canada that will be

where

P is a reasonable amount as a reserve determined as at the end of the year in respect of the dividend, refund of premiums or refund of premium deposits provided for under the terms of the policy,

Q is 25% of the amount of the premium under the terms of the policy for the 12-month period ending

R is the amount of the reported reserve of the insurer at the end of the year in respect of the dividend, refund of premiums or refund of premium deposits provided for under the terms of the policy; and

M is the total of all amounts determined in respect of a life insurance policy in Canada each of which is

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  84.  (1)  The definition "life insurance policy in Canada" in subsection 1408(1) of the Regulations is replaced by the following:

"life insurance policy in Canada" has the same meaning as defined in subsection 138(12) of the Act. (police d’assurance-vie au Canada)

  (2)  Subsection 1408(1) of the Regulations is amended by adding the following in alphabetical order:

"life insurance policy" has the same meaning as defined in subsection 138(12) of the Act. (police d’assurance-vie)

  (3)  Subsections (1) and (2) apply to taxation years that begin after November 7, 2007.

  85.  (1)  Section 2400 of the Regulations is amended by adding the following after subsection (7):

  (8)  A computation that is required to be made under this Part in respect of an insurer’s taxation year that included September 30, 2006 and that is relevant to a computation (in this subsection referred to as the "transition year computation") that is required to be made under this Part in respect of the insurer’s first taxation year that begins after that date shall, for the purposes only of the transition year computation, be made using the same definitions, rules and methodologies that are used in the transition year computation.

  (2)  Subsection (1) applies to taxation years that begin after September 2006.

  86.  (1)  Subsection 2600(1) of the Regulations is replaced by the following:

  2600.  (1)  In applying the definition "income earned in the year in a province" in subsection 120(4) of the Act for an individual’s taxation year

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

  87.  (1)  The Regulations are amended by adding the following after section 3504:

Conditions

  3505.  (1)  The following conditions are prescribed in respect of a donee for the purposes of paragraph 110.1(8)(e) of the Act:

  (2)  Without limiting the application of the WHO Guidelines, for the purposes of paragraph (1)(c), a donee does not act in a manner consistent with the principles and objectives of those guidelines if the donee’s directors, trustees, officers or like officials have not

  (3)  A donee is considered not to have sufficient expertise for the purpose of a program to which paragraph (1)(d) or (e) applies if

  (4)  The Minister referred to in subsection (1) may

  (2)  Subsection (1) applies in respect of applications made at any time by donees for determinations in respect of gifts made after June 2008.

  88.  (1)  The portion of subsection 4900(1) of the Regulations before paragraph (a) is replaced by the following:

  4900.  (1)  For the purposes of paragraph (d) of the definition "qualified investment" in subsection 146(1) of the Act, paragraph (e) of the definition "qualified investment" in subsection 146.1(1) of the Act, paragraph (c) of the definition "qualified investment" in subsection 146.3(1) of the Act, paragraph (h) of the definition "qualified investment" in section 204 of the Act, paragraph (d) of the definition "qualified investment" in subsection 205(1) of the Act and paragraph (c) of the definition "qualified investment" in subsection 207.01(1) of the Act, each of the following investments is prescribed as a qualified investment for a plan trust at a particular time if at that time it is

  (2)  Paragraph 4900(1)(i.3) of the Regulations is repealed.

  (3)  Subparagraph 4900(1)(j.2)(ii) of the Regulations is replaced by the following:

  (4)  Paragraphs 4900(1)(k) and (l) of the Regulations are repealed.

  (5)  Paragraph 4900(1)(o) of the Regulations is repealed.

  (6)  Paragraph 4900(1)(s) of the Regulations is repealed.

  (7)  Subsection 4900(1) of the Regulations is amended by striking out "or" at the end of paragraph (u), by adding "or" at the end of paragraph (v) and by adding the following after paragraph (v):

  (8)  Subsection 4900(5) of the Regulations is replaced by the following:

  (5)  For the purposes of paragraph (e) of the definition "qualified investment" in subsection 146.1(1) of the Act, paragraph (d) of the definition "qualified investment" in subsection 205(1) of the Act and paragraph (c) of the definition "qualified investment" in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered disability savings plan, a registered education savings plan or a TFSA at any time if at that time the property is an interest in a trust or a share of the capital stock of a corporation that was a registered investment for a trust governed by a registered retirement savings plan during the calendar year in which that time occurs or during the preceding year.

  (9)  Paragraph 4900(12)(a) of the Regulations is replaced by the following:

  (10)  Section 4900 of the Regulations is amended by adding the following after subsection (13):

  (14)  For the purposes of paragraph (c) of the definition "qualified investment" in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a TFSA at any time if, at the time the property was acquired by the trust, the property

  (11)  Subsections (1) and (8) to (10) apply to the 2009 and subsequent taxation years.

  (12)  Subsections (2) to (6) apply to property acquired after the day on which this Act is assented to.

  (13)  Subsection (7) applies in determining whether a property is, at any time after 2005, a qualified investment, except that in applying paragraph 4900(1)(w) of the Regulations, as enacted by subsection (7), before December 14, 2007, it is to be read as follows:

  89.  (1)  The definitions "governing plan" and "qualifying share" in subsection 4901(2) of the Regulations are replaced by the following:

"governing plan" means a deferred profit sharing plan or a revoked plan, a registered disability savings plan, a registered education savings plan, a registered retirement income fund, a registered retirement savings plan or a TFSA; (régime d’encadrement)

"qualifying share", in respect of a specified cooperative corporation and a governing plan, means a share of the capital or capital stock of the corporation where

  (2)  The definition "connected person" in subsection 4901(2) of the English version of the Regulations is replaced by the following:

"connected person" under a governing plan of a plan trust means a person who is an annuitant, a beneficiary, an employer or a subscriber under, or a holder of, the governing plan and any person who does not deal at arms’s length with that person; (personne rattachée)

  (3)  Subsection 4901(2) of the Regulations is amended by adding the following in alphabetical order:

"specified small business corporation", at any time, means a corporation (other than a cooperative corporation) that would, at that time or at the end of the last taxation year of the corporation that ended before that time, be a small business corporation if the expression "Canadian-controlled private corporation" in the definition "small business corporation" in subsection 248(1) of the Act were read as "Canadian corporation (other than a corporation controlled at that time, directly or indirectly in any manner whatever, by one or more non-resident persons)". (société déterminée exploitant une petite entreprise)

  (4)  Subsections (1) to (3) apply to the 2009 and subsequent taxation years.

  90.  (1)  The Regulations are amended by adding the following after Part XLIX:

PART L

TAX-FREE SAVINGS ACCOUNTS — PROHIBITED INVESTMENTS

Investment not prohibited

  5000.  For the purpose of the portion of the definition "prohibited investment" in subsection 207.01(1) of the Act before paragraph (a), property described in paragraph 4900(1)(j.1) is prescribed property.

Prohibited investment

  5001.  For the purpose of paragraph (d) of the definition "prohibited investment" in subsection 207.01(1) of the Act, property that is a qualified investment for a trust governed by a TFSA solely because of subsection 4900(14) is prescribed property for the trust at any time if, at that time, it is not described in any of subparagraphs 4900(14)(a)(i) to (iii).

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

  91.  (1)  The headings before section 5700 of Regulations are replaced by the following:

PART LVII

MEDICAL EXPENSE TAX CREDIT

  (2)  Subsection (1) is deemed to have come into force on February 27, 2008.

  92.  (1)  Section 5700 of the Regulations is amended by striking out "and" at the end of paragraph (y) and by adding the following after paragraph (z):

  (2)  Subsection (1) applies to the 2008 and subsequent taxation years.

  93.  (1)  The Regulations are amended by adding the following after section 5700:

  5701.  For the purpose of subparagraph 118.2(2)(n)(ii) of the Act, a drug, medicament or other preparation or substance is prescribed if it

  (2)  Subsection (1) is deemed to have come into force on February 27, 2008.

  94.  (1)  Subsection 5906(2) of the Regulations is replaced by the following:

  (2)  For the purposes of subsection (1), the expression "permanent establishment" has:

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

  95.  (1)  Subsection 5907(11) of the Regulations is replaced by the following:

  (11)  For the purposes of this Part, a sovereign state or other jurisdiction is a "designated treaty country" for a taxation year of a foreign affiliate of a corporation if Canada has entered into a comprehensive agreement or convention for the elimination of double taxation on income, or a comprehensive tax information exchange agreement, in respect of that sovereign state or jurisdiction, that has entered into force and has effect for that taxation year, but any territory, possession, department, dependency or area of that sovereign state or jurisdiction to which that agreement or convention does not apply is not considered to be part of that sovereign state or jurisdiction for the purpose of determining whether it is a designated treaty country.

  (2)  Section 5907 of the Regulations is further amended by adding the following after subsection (11.1):

  (11.11)  For the purpose of applying subsection (11) in respect of a foreign affiliate of a corporation, where a comprehensive tax information exchange agreement enters into force on a particular day, the agreement is deemed to enter into force and to come into effect on the first day of the foreign affiliate’s taxation year that includes the particular day.

  (3)  Subsections (1) and (2) apply after 2007.

  96.  (1)  Paragraphs 7305.1(a) and (b) of the Regulations are replaced by the following:

  (2)  Subsection (1) applies to taxation years that end after 2007.

  97.  (1)  Paragraph 7306(a) of the Regulations is replaced by the following:

  (2)  Subsection (1) applies to kilometres driven after 2007.

  98.  (1)  Section 8308.1 of the Regulations is amended by adding the following after subsection (2):

Pension Credit — Tax Treaty

  (2.1)    For the purposes of applying subsection (2) in determining an individual’s pension credit for a calendar year with respect to an employer under a foreign plan, if any contributions made to, or benefits accruing under, the plan in respect of the individual and the calendar year benefit from the application of paragraph 8 of Article XVIII of the Canada-United States Tax Convention signed at Washington on September 26, 1980, or from the application of a similar provision in another tax treaty,

  (2)  Subsection (1) applies in determining pension credits for calendar years after the calendar year in which the Protocol set out in Schedule VI to the Canada-United States Tax Convention Act, 1984 enters into force.

  99.  (1)  Section 8308.2 of the Regulations is replaced by the following:

  8308.2  (1)  For the purposes of the descriptions of B in the definitions "RRSP deduction limit" and "unused RRSP deduction room" in subsection 146(1) of the Act and the description of B in paragraph 204.2(1.1)(b) of the Act, there is prescribed in respect of an individual for a calendar year the lesser of the money purchase limit for the preceding calendar year (in this section referred to as the "service year") and the amount determined by subsection (2), if the individual

  (2)  The amount determined for the purpose of subsection (1) is,

  (2)  Subsection (1) applies in determining prescribed amounts for calendar years that begin after the Protocol set out in Schedule VI to the Canada-United States Tax Convention Act, 1984 enters into force, except that in determining prescribed amounts for the first such year, the amount of the money purchase limit for the calendar year in which the Protocol enters into force is deemed to be reduced by $600.

  100.  (1)  Subsection 8506(7) of the Regulations and the heading before it are replaced by the following:

Special Rules for Minimum Amount

  (7)  The minimum amount for a member’s account under a money purchase provision of a registered pension plan for a calendar year is

  (2)  Section 8506 of the Regulations is amended by adding the following after subsection (8):

Recontribution — Adjusted Minimum Amount for 2008

  (9)  If a contribution made by a member of a registered pension plan and credited to the member’s account under a money purchase provision of the plan complies with the conditions in subsection (10), the contribution

Conditions Referred to in Subsection (9)

  (10)  The conditions referred to in subsection (9) are as follows:

A - B - C

where

A is the lesser of

B is the minimum amount for the account for 2008, and

C is the total of all other contributions made by the member under the money purchase provision at or before the time of the contribution and designated for the purposes of this subsection.

  (3)  If this Act is assented to after January 30, 2009, contributions made by a member of a registered pension plan, and credited to the member’s account under a money purchase provision of the plan, during the period that begins on March 2, 2009 and that ends on the day that is 30 days after the day on which this Act is assented to, are deemed for the purpose of subsection 8506(10) of the Income Tax Regulations, as enacted by subsection (2), to have been made on March 1, 2009, and not when they were actually made, except that the amounts so deemed shall not exceed the amount that would be determined in respect of the account under paragraph 8506(10)(c) of those Regulations, as enacted by subsection (2), if the value of C in the formula in that paragraph were nil.

  101.  (1)  The Regulations are amended by adding the following in numerical order:

  9002.1  For the purpose of paragraph (b) of the definition "excluded property" in subsection 142.2(1) of the Act, a prescribed payment card corporation share of a taxpayer at any time means a share of the capital stock of a particular corporation if, at that time,

  9002.2  For the purpose of paragraph (c) of the definition "excluded property" in subsection 142.2(1) of the Act, a prescribed securities exchange investment of a taxpayer at any time means a share of the capital stock of a corporation if, at that time, the corporation is not a public corporation and is

  (2)  Section 9002.1 of the Regulations, as enacted by subsection (1), applies to taxation years that end after February 22, 1994, except that, for taxation years that begin before October 1, 2006, the portion of that section before paragraph (a), as enacted by subsection (1), is to be read as follows:

  9002.1  For the purpose of paragraph (d.1) of the definition "mark-to-market property" in subsection 142.2(1) of the Act, a prescribed payment card corporation share of a taxpayer at any time means a share of the capital stock of a particular corporation if, at that time,

  (3)  Section 9002.2 of the Regulations, as enacted by subsection (1), applies to taxation years that begin after 1998 and before 2008, except that, for taxation years that begin before October 1, 2006, the portion of that section before paragraph (a), as enacted by subsection (1), is to be read as follows:

  9002.2  For the purpose of paragraph (d.2) of the definition "mark-to-market property" in subsection 142.2(1) of the Act, a prescribed securities exchange investment of a taxpayer at any time means a share of the capital stock of a corporation if, at that time, the corporation is not a public corporation and is

PART 2

AMENDMENTS IN RESPECT OF SALES AND EXCISE TAXES

2002, c. 22

Excise Act, 2001

2005, c. 38, s. 92

  102.  The portion of the definition "officer" in section 2 of the English version of the Excise Act, 2001 before paragraph (a) is replaced by the following:

"officer"
« préposé »

"officer" means, except in section 167, in the definition "contact information" in subsection 211(1) and in sections 226 and 296,

  103.  (1)  The portion of the definition "confidential information" in subsection 211(1) of the Act after paragraph (b) is replaced by the following:

It excludes information that does not directly or indirectly reveal the identity of the person to whom it relates and, for the purposes of applying subsections (3), (8) and (9) to a representative of a government entity that is not an official, it includes only the information referred to in paragraph (6)(j).

  (2)  Subsection 211(1) of the Act is amended by adding the following in alphabetical order:

"aboriginal government"
« gouvernement autochtone »

"aboriginal government" means an aboriginal government as defined in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act.

"contact information"
« coordonnées »

"contact information", in respect of a holder of a business number, means the name, address, telephone number, facsimile number and preferred language of communication of the holder, or similar information as specified by the Minister in respect of the holder, and includes such information in respect of one or more

"corporate information"
« renseignements d’entreprise »

"corporate information", in respect of a holder of a business number that is a corporation, means the name (including the number assigned by the incorporating authority), date of incorporation, jurisdiction of incorporation and any information on the dissolution, reorganization, amalgamation, winding-up or revival of the corporation.

"government entity"
« entité gouvernementale »

"government entity" means

"municipality"
« municipalité »

"municipality" means an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated.

"registration information"
« renseignements relatifs à l’inscription »

"registration information", in respect of a holder of a business number, means

"representative"
« représentant »

"representative" of a government entity means a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, a government entity, and includes, for the purposes of subsections (2), (3), (8) and (9), a person who was formerly so employed, who formerly occupied such a position or who formerly was so engaged.

  (3)  The portion of subsection 211(2) of the Act before paragraph (a) is replaced by the following:

Provision of information

  (2)  Except as authorized under this section, no official or other representative of a government entity shall knowingly

  (4)  Subsection 211(3) of the Act is replaced by the following:

Confidential information evidence not compellable

  (3)  Despite any other Act of Parliament or other law, no official or other representative of a government entity shall be required, in connection with any legal proceedings, to give or produce evidence relating to any confidential information.

  (5)  Paragraph 211(6)(j) of the Act is replaced by the following:

  (6)  Section 211 of the Act is amended by adding the following after subsection (6):

Restrictions on information sharing

  (6.1)  No information may be provided to a representative of a government entity under paragraph (6)(j) in connection with a program, activity or service provided or undertaken by the government entity unless the government entity uses the business number as an identifier in connection with the program, activity or service.

Public disclosure

  (6.2)  The Minister may, in connection with a program, activity or service provided or undertaken by the Minister, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number.

Public disclosure by representative of government entity

  (6.3)  A representative of a government entity may, in connection with a program, activity or service provided or undertaken by the government entity, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number, if

  (7)  The portion of subsection 211(8) of the Act before paragraph (a) is replaced by the following:

Disclosure to person or on consent

  (8)  An official or other representative of a government entity may provide confidential information relating to a person

  (8)  The portion of subsection 211(9) of the Act before paragraph (a) is replaced by the following:

Appeal from order or direction

  (9)  An order or direction that is made in the course of or in connection with any legal proceedings and that requires an official or other representative of a government entity to give or produce evidence relating to any confidential information may, by notice served on all interested parties, be appealed immediately by the Minister or by the person against whom it is made to

R.S., c. E-15

Excise Tax Act

1993, c. 27, s. 128(2)

  104.  (1)  The portion of the definition "confidential information" in subsection 295(1) of the Excise Tax Act after paragraph (b) is replaced by the following:

but does not include information that does not directly or indirectly reveal the identity of the person to whom it relates and, for the purposes of applying subsections (3), (6) and (7) to a representative of a government entity who is not an official, includes only the information described in paragraph (5)(j);

  (2)  Subsection 295(1) of the Act is amended by adding the following in alphabetical order:

"aboriginal government"
« gouvernement autochtone »

"aboriginal government" means an aboriginal government as defined in subsection 2(1) of the Federal-Provincial Fiscal Arrangements Act;

"contact information"
« coordonnées »

"contact information", in respect of a holder of a business number, means the name, address, telephone number, facsimile number and preferred language of communication of the holder, or similar information as specified by the Minister in respect of the holder, and includes such information in respect of one or more

"corporate information"
« renseignements d’entreprise »

"corporate information", in respect of a holder of a business number that is a corporation, means the name (including the number assigned by the incorporating authority), date of incorporation, jurisdiction of incorporation and any information on the dissolution, reorganization, amalgamation, winding-up or revival of the corporation;

"government entity"
« entité gouvernementale »

"government entity" means

"municipality"
« municipalité »

"municipality" does not include a local authority determined by the Minister to be a municipality under paragraph (b) of the definition "municipality" in subsection 123(1);

"registration information"
« renseignements relatifs à l’inscription »

"registration information", in respect of a holder of a business number, means

"representative"
« représentant »

"representative" of a government entity means a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, a government entity, and includes, for the purposes of subsections (2), (3), (6) and (7), a person who was formerly so employed, who formerly occupied such a position or who formerly was so engaged.

1993, c. 27, s. 128(3)

  (3)  The portion of subsection 295(2) of the Act before paragraph (a) is replaced by the following:

Provision of information

  (2)  Except as authorized under this section, no official or other representative of a government entity shall knowingly

1993, c. 27, s. 128(3)

  (4)  Subsection 295(3) of the Act is replaced by the following:

Evidence relating to confidential information

  (3)  Despite any other Act of Parliament or other law, no official or other representative of a government entity shall be required, in connection with any legal proceedings, to give or produce evidence relating to any confidential information.

2003, c. 15, s. 68(1)

  (5)  Subparagraph 295(5)(d)(i) of the Act is replaced by the following:

1996, c. 21, s. 67(2)

  (6)  Paragraph 295(5)(j) of the Act is replaced by the following:

  (7)  Section 295 of the Act is amended by adding the following after subsection (5):

Restrictions on information sharing

  (5.01)  No information may be provided to a representative of a government entity under paragraph (5)(j) in connection with a program, activity or service provided or undertaken by the government entity unless the government entity uses the business number as an identifier in connection with the program, activity or service.

Public disclosure

  (5.02)  The Minister may, in connection with a program, activity or service provided or undertaken by the Minister, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number.

Public disclosure by representative of government entity

  (5.03)  A representative of a government entity may, in connection with a program, activity or service provided or undertaken by the government entity, make available to the public the business number of, and the name of (including any trade name or other name used by), the holder of a business number, if

1993, c. 27, s. 128(3)

  (8)  The portion of subsection 295(6) of the Act before paragraph (a) is replaced by the following:

Disclosure to person or on consent

  (6)  An official or other representative of a government entity may provide confidential information relating to a person

1993, c. 27, s. 128(4)

  (9)  The portion of subsection 295(7) of the Act before paragraph (a) is replaced by the following:

Appeal from order or direction

  (7)  An order or direction that is made in the course of or in connection with any legal proceedings and that requires an official or other representative of a government entity to give or produce evidence relating to any confidential information may, by notice served on all interested parties, be appealed forthwith by the Minister or by the person against whom the order or direction is made to