Archived - Explanatory Notes Relating to the Excise Tax Act, the Income Tax Act, the First Nations Goods and Services Tax Act, the Yukon First Nations Self-Government Act, and Related Acts

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

June 2006


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Table of Contents


Clause in Legislation Section of the Act Amended Topic

Part 1
Amendments related to the GST / HST Rate Reduction
Excise Tax Act
2 123(1) Definition "basic tax content"
3 165 Imposition of goods and services tax
4 173(1) Employee and shareholder benefits
5 174 Travel and other allowances
6 176(1) Acquisition of used returnable containers
7 181(1) Coupons
8 181.1 Rebates
9 182(1) Forfeitures and extinguished debt
10 183(4), (5), and (6) Seizure and repossession
11 184(3), (4), and (5) Property transferred to insurer on settlement of claim
12 184.1(2) Performance bonds
13 187(c) Bets and games of chance
14 188 Prizes
15 193 Real property credits
16 194 Incorrect statement
17 202(4) Non-exclusive use of passenger vehicle or aircraft
18 211 Election for real property of a public service body
19 212 Imposition of goods and services tax on imported goods
20 218 Imposition of goods and services tax on imported supplies
21 225.2(2) Selected listed financial institution special attribution method
22 233(2) Patronage dividends
23 253 Employee and partner rebates
24 254 New housing rebate
25 254.1 New housing rebate for building only and rebate in Nova Scotia
26 255 Cooperative housing rebate and rebate in Nova Scotia
27 256 Rebate for owner-built homes
28 256.2 Rebate in respect of newly constructed or substantially renovated residential rental accommodation
29 256.3 to 256.6 Transitional rebate
30 257 Non-registrant sale of real property
31 259 Rebates
32 274.1 and 274.2 Anti-avoidance transactions respecting rate change

Air Travellers Security Charge Act
33 12(1) and (2) Amount of charge

Excise Act, 2001
34 58.1 to 58.6 Tobacco products inventory tax
35 216(2) Punishment – minimum and maximum amount
36 240 Contravention of subsection 50(5)
37 Sched. 1, para. 1(b) Duty on cigarettes
38 Sched. 1, para. 2(b) Duty on tobacco sticks
39 Sched. 1, para. 3(b) Duty on other manufactured tobacco
40 Sched. 1, s. 4 Duty on cigars
41 Sched. 2 Application of interest
42 Application of interest

Excise Act
43 Sched., Part II Duty on beer

Excise Act, 2001
44 217(2) and (3) Punishment for certain alcohol offences
45 218(2) and (3) Punishment for more serious alcohol offences
46 242 Contravention of section 72
47 243 Contravention of section 73, etc.
48 Sched. 4 Duty on spirits
49 Sched. 6 Duty on wine
50 Application of interest

Part 2
Amendments to the Income Tax Act
51 38 Gifts of publicly traded securities and environmentally sensitive land
52 53 Adjustments to cost base – interest in a partnership
53 64 Disability supports deduction
54 67.1 Expenses for food, etc.
55 87 Tax deferred cooperative shares
56 110 Charitable donation deduction
57 111 Carry-forward period for business, restricted farm, and farm losses
58 117 Tax rates applicable to individuals
59 117.1 Annual adjustment (indexing)
60 118 Personal credits
61 118.01 Adoption expense tax credit
62 118.2 Medical expense credit
63 118.3 Credit for impairment in physical or mental functions
64 118.4 Nature of impairment
65 118.61 Unused tuition and education tax credits
66 118.81 Tuition and education tax credits transferred
67 118.91 Part-year residents
68 118.92 Ordering of credits
118.93 Credits in separate returns
118.94 Tax payable by non-resident
69 118.95 Credits in year of bankruptcy
70 122.51 Refundable medical expense supplement
71 122.61 Canada Child Tax Benefit and the Child Disability Benefit
72 123.2 Corporate surtax
73 123.4 Corporate tax reductions
74 125.1 Manufacturing and processing profits deduction
75 127 Flow-through mining expenditure
75.1 127.52 Alternative minimum tax
76 127.531 Basic minimum tax credit determined
77 127.54 Minimum tax credit – foreign tax credit
78 128 Where individual bankrupt
79 135 Deduction in computing income
80 135.1 Agricultural cooperatives – tax-deferred patronage dividends
81 136 Definition of "cooperative corporation"
82 181.1 Federal capital tax
83 186 Carry-forward period for business losses and farm losses under Part IV
84 211.1 Carry-forward period for Canadian life investment losses
85 225.1 Federal capital tax – consequential amendment to subsection 225.1(8)
86 227 Payments by trustees, etc.
87 227.1 Liability of directors for failure to deduct
88 235 Federal capital tax – consequential amendment to section 235

Part 3
Amendments Relating to the Excise Tax on Jewellery, Etc.
Excise Tax Act
89 Sched. I, ss. 5 to 5.2 Excise tax on jewellery

Budget Implementation Act, 2005
90 26 Excise tax on jewellery

Part 4
Amendments Relating to Aboriginal Tax Powers and Aboriginal Tax Treatment
First Nations Goods and Services Tax Act
91 Part 2 Title of Part 2
92 17 Interpretation
93 21 and 22 Application of other Acts
94 23 Delegation – authority to enact a law
95 24 Delegation – force of law
96 29 Amendment of Schedule 2
97 Sched. 2 Amendment of Schedule 2

Yukon First Nations Self-Government Act
98 22.1 Transitional tax exemption

Part 5
Other Tax-Related Amendments
Air Travellers Security Charge Act
99 21(2) Small amounts payable
100 25(1) and (2) Effect of extension
101 27 Interest and penalties
102 30(1) Waiving or reducing interest
103 30.1 Dishonoured instruments
104 40(4) Restriction
105 53 Failure to file a return when required
106 54 Effect of extension for returns
107 55 Waiving or cancelling penalties
108 56 Waiving or cancelling penalties
109 61(2) Saving
110 62(3) Penalty on conviction
111 72(3) Assessment before collection
112 74(12) Details in certificates and memorials

Excise Act, 2001
113 165(2) Amounts payable of $2 or less in total
114 168(2)(c) and (d) Effect of extension
115 170(4) Minimum interest and penalty
116 173 Waiving or reducing interest
117 188 Assessments
118 189(4) Restriction on refunds
119 251 to 251.2 Failure to answer demand
120 254(1) Notice of imposed penalty
121 255.1 Waiving or reducing failure to file penalty
122 286(1)(e) Collection restrictions – deduction or set-off
123 288(12) Details in certificates and memorials – penalty under section 251.1

Excise Tax Act
124 7(1) and (1.1) Failure to file a return when required
125 68.5(9.1) Failure to file a return when required
126 77 Restriction on refunds and credits
127 79(4) and (5) Failure to answer a demand
128 79.01 Transitional rule
129 79.02(2) Amounts payable of $2 or less in total
130 79.03(4) Interest and penalty amounts of $25 or less
131 79.1 Instalment for large taxpayers
132 81.4 Dishonoured instruments
133 86(4) Collection restrictions
133.1 87 Collection in jeopardy
134 88(1) Waiver or cancellation of interest or penalty
135 95.1 Failure to file a return when required
136 123(1) Definition "financial service"
137 225(3)(b) Restriction
138 225.1(4)(b) Restriction
139 229 Payment of net tax refund
140 230 Overpayment of refund
141 236.1 Adjustment if property not exported or supplied
142 236.2 Adjustment in respect of export certificate
143 236.3 Adjustment in respect of export distribution centre certificate
144 256.2(10) Repayment of rebate
145 263.02 Restriction on rebate
146 280 Interest
147 280.1 to 280.3 Penalties
148 281(2)(c) and (d) Extension for returns
149 281.1 Waiving or cancelling interest
150 283 Failure to answer a demand
151 296 Assessments
152 297 Assessment of rebate
153 297.1 Minimum amounts owing
154 298(1)(e) Period for assessment
155 313(3) Interest on judgments
156 315(1) Assessment before collection
157 316(11)(b) Details in certificates and memorials
158 322.1(3)(f) Effect of authorization
159 326(3) Saving
160 327(3) Penalty on conviction

Income Tax Act
161 18(1)(t) Payments under different acts
162 161.4 Small amounts
163 164 Withholding of refunds
164 220 Administration and enforcement
165 221.2 Re-appropriation of amounts
166 225.1 Collection restrictions

Part 6
Consequential and Related Amendments
Income Tax Act
173 56 Income inclusion
174 60 Other deductions
175 122.5 Definitions
176 122.6 Definitions
177 122.61 Canada Child Tax Benefit
178 180.2 Definitions
179 241 Communication of information