Archived - Explanatory Notes Relating to Remaining Budget 2006 Income Tax Measures, Dividend Taxation and Canadian Vintners and Brewers

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

October 2006

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These notes are intended for information purposes and should not be construed as an official interpretation of the provisions they describe.

Table of Contents


Clause in Legislation

Section of the Act Amended

Topic


Preface

Part 1 – Remaining Budget 2006 Income Tax Measures

2

8

Apprentice mechanic’s tool costs

3

14

Eligible capital property

4

40(1.1)

Reserve – property disposed of to a child

5

44(1.1)

Reserve – former property disposed of to a child

6

56

Other sources of income

7

60

Deductions in computing income

8

63

Child care expense

9

64

Disability supports deduction

10

70

Transfer of farm and fishing property to child

11

73

Inter vivos

transfer of farm property to child

12

74.1

Transfers and loans to minors

13

85(5.1)

Acquisition of certain tools
    – capital cost and deemed depreciation

14

97(5)

Acquisition of certain tools
    – capital cost and deemed depreciation

15

104(21.2)(b)

Beneficiary’s taxable capital gain

16

108(1)

Definitions

17

110.6

Definitions

18

117(2)

Tax rates applicable to individuals

19

117.1(1)

Annual adjustment of deductions and other amounts

20

118(3)

Pension credit

21

118.02

Transit pass tax credit

 

118.03

Child Fitness tax credit

22

118.3

Credit for mental or physical impairment

23

118.6

Textbook tax credit

24

118.61

Unused tuition and education tax credits

25

118.8

Transfer of unused credits to spouse or common-law partner

26

118.81

Tuition and education tax credits transferred

27

118.9

Transfer to parent or grandparent

28

118.91

Part-year residents

29

118.92

Ordering of credits

 

118.93

Credits in separate returns

 

118.94

Tax payable by non-resident

30

118.95

Credits in year of bankruptcy

31

122.51

Refundable medical expense supplement

32

123.4(1)

Full rate taxable income

33

125

Small business deduction

34

127

Deductions from tax payable

35

127.531

Basic minimum tax credit determined

36

128(2)(e)

Where individual bankrupt

37

137(3)

Credit unions

38

137.1(9)

Deposit insurance corporations

39

147.2(7)

Registered Pension Plans – Letter of credit

40 to 42

Part VI

Minimum tax on financial institutions


Part 2 – Dividend Taxation

43

15(1.1)

Consequential amendment to subsection 15(1.1)

44

82(1)

Taxable dividends received

45

87(2)

Consequential amendments to subsection 87(2)

46

88(1)(e.2)

Consequential amendment to paragraph 88(1)(e.2)

47

89(1)

Definitions

   

    "eligible dividend"

   

    "excessive eligible dividend designation"

   

    "general rate income pool"

   

    "low rate income pool"

  89(4)

GRIP addition: becoming a CCPC

  89(5)

GRIP addition: post-amalgamation

  89(6)

GRIP addition: post-winding-up

  89(7)

GRIP addition for 2006

  89(8)

LRIP addition: ceasing to be a CCPC

  89(9)

LRIP addition: post-amalgamation

  89(10)

LRIP addition: post-winding-up

  89(11) to (13)

Election: non-CCPC

  89(14)

Dividend designation

  89(15)

Interpretation – deposit insurance corporations

48

121

Dividend tax credit for eligible dividends

49

125(7)

Interpretation – "Canadian-controlled private corporation"

50

127.52(1)(f)

Consequential amendment to paragraph 127.52(1)(f)

51

Part III.1

Additional tax on excessive eligible dividend designations

  185.1(1)

Tax on excessive eligible dividend designations

  185.1(2) to (4)

Election

  185.2

Rules applicable to Part III.1

52

248

Interpretation

  248(1)

Definitions

   

    "eligible dividend"

   

    "excessive eligible dividend designation"

   

    "general rate income pool"

   

    "low rate income pool"

53

249(4.1)

Deemed year-end on status change

54

260

Eligible dividend


Part 3 – Excise Act, 2001

55

87

Information on container

56

134(3)

Bulk wine - relief for 100% Canadian wine

57

135(2)

Packaged wine - relief for 100% Canadian wine


Excise Act

58

2

Definition – person

59 2.2 to 2.4

Related and associated persons

60

170(1)

Duties

61

170.1

Reduced rates – Canadian beer

62

Schedule

List of duty rate provisions

63

Schedule
Part II.1

Duty on Canadian beer