Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures

MINISTER OF FINANCE
90881WMA—2018-10-24
That it is expedient to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures as follows:

Short Title

Short title
1  This Act may be cited as the Budget Implementation Act, 2018, No. 2.
PART 1

Amendments to the Income Tax Act and to Other Legislation

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

Income Tax Act

2  (1)  Subsection 15(1.4) of the Income Tax Act is amended by adding "and" at the end of paragraph (c), by striking out "and" at the end of paragraph (d) and by repealing paragraph (e).
(2)  Section 15 of the Act is amended by adding the following after subsection (1.4):
Division of corporation under foreign laws
(1.5)  If a non-resident corporation (in this subsection referred to as the "original corporation") governed by the laws of a foreign jurisdiction undergoes a division under those laws that results in all or part of its property and liabilities becoming the property and liabilities of one or more other non-resident corporations (each of which is referred to in this subsection as a "new corporation") and, as a consequence of the division, a shareholder of the original corporation acquires one or more shares (referred to in this subsection as "new shares") of the capital stock of a new corporation at a particular time, the following rules apply:
(a)  except to the extent that any of subparagraphs (1)(a.1)(i) to (iii) and paragraph (1)(b) applies (determined without reference to this subsection) to the acquisition of the new shares
(i)  in the case where, for each class of shares of the capital stock of the original corporation of which shares are held by the shareholder immediately before the division, new shares are received at the particular time by shareholders of that class on a pro rata basis in respect of all the shares (referred to in this subsection as the "original shares") of that class
(A)  at the particular time, the original corporation is deemed to have distributed, and the shareholder is deemed to have received, as a dividend in kind in respect of the original shares, the new shares acquired by the shareholder at the particular time, and
(B)  the amount of the dividend in kind received by the shareholder in respect of an original share is deemed to be equal to the fair market value, immediately after the particular time, of the new shares acquired by the shareholder at the particular time in respect of the original share, and
(ii)  in any case where subparagraph (i) does not apply, the original corporation is deemed, at the particular time, to have conferred a benefit on the shareholder equal to the total fair market value, at that time, of the new shares acquired by the shareholder as a consequence of the division;
(b)  any gain or loss of the original corporation from a distribution of the new shares as a consequence of the division is deemed to be nil; and
(c)  each property of the original corporation that becomes at any time (referred to in this paragraph as the "disposition time") property of the new corporation as a consequence of the division is deemed to be
(i)  disposed of by the original corporation immediately before the disposition time for proceeds of disposition equal to the property's fair market value, and
(ii)  acquired by the new corporation at the disposition time at a cost equal to the amount determined under subparagraph (i) to be the original corporation's proceeds of disposition.
  
(3)  Subsection (1) is deemed to have come into force on October 24, 2012.
(4)  Subsection (2) applies in respect of divisions that occur after October 23, 2012.
3  (1)  Subparagraph (a)(ii) of the definition equity amount in subsection 18(5) of the Act is replaced by the following:
(ii)  the average of all amounts each of which is the corporation's contributed surplus (other than any portion of that contributed surplus that arose at a time when the corporation was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) at the beginning of a calendar month that ends in the year, to the extent that it was contributed by a specified non-resident shareholder of the corporation, and
(2)  Subsection (1) applies in respect of transactions or events that occur after February 26, 2018.
4  (1)  Paragraph (k) of the definition proceeds of disposition in section 54 of the Act is replaced by the following:
(k)  any amount that would otherwise be proceeds of disposition of property of a taxpayer to the extent that the amount is deemed by subsection 84.1(1), 212.1(1.1) or 212.2(2) to be a dividend paid to the taxpayer or, if the taxpayer is a partnership, to a member of the taxpayer; (produit de disposition)
(2)  Subsection (1) applies in respect of dispositions that occur after February 26, 2018.
5  (1)  Paragraphs 84(1)(c.1) and (c.2) of the Act are replaced by the following:
(c.1)  if the corporation is an insurance corporation, any action by which it converts contributed surplus related to its insurance business (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of the shares of its capital stock,
(c.2)  if the corporation is a bank, any action by which it converts any of its contributed surplus that arose on the issuance of shares of its capital stock (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of shares of its capital stock, or
(2)  The portion of paragraph 84(1)(c.3) of the Act before subparagraph (ii) is replaced by the following:
(c.3)  if the corporation is neither an insurance corporation nor a bank, any action by which it converts into paid-up capital in respect of a class of shares of its capital stock any of its contributed surplus that arose after March 31, 1977 (other than any portion of that contributed surplus that arose at a time when it was non-resident, or that arose in connection with a disposition to which subsection 212.1(1.1) applies or an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies)
(i)  on the issuance of shares of that class or shares of another class for which the shares of that class were substituted (other than an issuance to which section 51, 66.3, 84.1, 85, 85.1, 86 or 87 or subsection 192(4.1) or 194(4.1) applied),
(3)  Subsections (1) and (2) apply in respect of transactions or events that occur after February 26, 2018.
6  (1)  Paragraph 93.1(1.1)(d) of the Act is replaced by the following:
(d)  paragraph 95(2)(g.04), subsections 95(2.2) and (8) to (12) and section 126.
(2)  Subsection (1) is deemed to have come into force on February 27, 2018.
7  (1)  The portion of paragraph 95(2)(l) of the Act after subparagraph (ii) and before subparagraph (iii) is replaced by the following:
unless it is established by the taxpayer or the foreign affiliate that, throughout the period in the taxation year during which the business was carried on by the affiliate,
(2)  The portion of subparagraph 95(2)(l)(iii) of the Act before clause (A) is replaced by the following:
(iii)  the business (other than any business conducted principally with persons with whom the affiliate does not deal at arm's length) is carried on by the affiliate as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities or commodities, the activities of which are regulated under the laws
(3)  Paragraph 95(2)(l) of the Act is amended by striking out "and" at the end of subparagraph (iii) and by repealing subparagraph (iv).
(4)  The portion of subsection 95(2.11) of the Act before paragraph (a) is replaced by the following:
Rule for investment business definition and paragraph (2)(l)
(2.11)  A taxpayer or a foreign affiliate of the taxpayer, as the case may be, is deemed not to have established that the conditions in subparagraph (a)(i) of the definition investment business in subsection (1), or in subparagraph (2)(l)(iii), have been satisfied throughout a period in a particular taxation year of the affiliate unless
  
(5)  Section 95 of the Act is amended by adding the following after subsection (7):
Tracking interests — interpretation
(8)  For the purposes of subsections (9) to (12), a particular property is a tracking interest in respect of a person or partnership (referred to in this subsection as the "tracked entity") if
(a)  all or part of the fair market value of the particular property — or of any payment or right to receive an amount in respect of the particular property — can reasonably be considered to be determined, directly or indirectly, by reference to one or more of the following criteria in respect of property or activities of the tracked entity (referred to in this subsection and subsections (9) to (11) as the "tracked property and activities"):
(i)  the fair market value of property of the tracked entity,
(ii)  any revenue, income or cash flow from property or activities of the tracked entity,
(iii)  any profits or gains from the disposition of property of the tracked entity, and
(iv)  any similar criteria in respect of property or activities of the tracked entity; and
(b)  the tracked property and activities in respect of the particular property represent less than all of the property and activities of the tracked entity.
  
Tracking interests — investment business definition
(9)  For the purposes of the definition investment business in subsection (1), if, at any time in a taxation year of a foreign affiliate of a taxpayer, a person or partnership holds a tracking interest in respect of the affiliate or a partnership of which the affiliate is a member, the tracked property and activities in respect of the tracking interest are, to the extent they would not otherwise be part of an investment business of the affiliate, deemed, in respect of the taxpayer,
(a)  to be a separate business carried on by the affiliate throughout the year; and
(b)  not to be part of any other business of the affiliate.
  
Conditions for subsection (11)
(10)  Subsection (11) applies in respect of a foreign affiliate of a taxpayer for a taxation year of the affiliate if, at any time in the year,
(a)  the taxpayer holds a property that is a tracking interest in respect of the affiliate; and
(b)  shares of a class of the capital stock of the affiliate the fair market value of which can reasonably be considered to be determined by reference to the tracked property and activities in respect of the tracking interest (referred to in subsection (11) as a "tracking class") are held by the taxpayer or a foreign affiliate of the taxpayer.
  
Tracking class — separate corporation
(11)  If this subsection applies in respect of a foreign affiliate (referred to in this subsection as the "actual affiliate") of a taxpayer for a taxation year of the actual affiliate, the following rules apply for the purpose of determining the amounts, if any, to be included under subsection 91(1), and to be deducted under subsection 91(4), by the taxpayer in respect of the year and for the purpose of applying section 233.4 in respect of the year:
(a)  the tracked property and activities of the actual affiliate are deemed to be property and activities of a non-resident corporation (referred to in this subsection as the "separate corporation") that is separate from the actual affiliate and not to be property or activities of the actual affiliate;
(b)  any income, losses or gains for the year in respect of the property and activities described in paragraph (a) are deemed to be income, losses or gains of the separate corporation and not of the actual affiliate;
(c)  all rights and obligations of the actual affiliate in respect of the property and activities described in paragraph (a) are deemed to be rights and obligations of the separate corporation and not of the actual affiliate;
(d)  the separate corporation is deemed to have, at the end of the year, 100 issued and outstanding shares of a single class (referred to in this subsection as the "single class") of its capital stock, having full voting rights under all circumstances;
(e)  each shareholder of the actual affiliate is deemed to own, at the end of the year, that number of shares of the single class that is equal to the product of 100 and the amount that would be the aggregate participating percentage (as defined in subsection 91(1.3)) of that shareholder in respect of the actual affiliate for the year if
(i)  the actual affiliate were a controlled foreign affiliate of that shareholder at the end of the year,
(ii)  the only shares of the capital stock of the actual affiliate issued and outstanding at the end of the year were shares of tracking classes in respect of the tracked properties and activities, and
(iii)  the only income, losses and gains of the actual affiliate for the year were those referred to in paragraph (b); and
(f)  any amounts included under subsection 91(1), or deducted under subsection 91(4), by the taxpayer in respect of shares of the separate corporation are deemed to be amounts included under subsection 91(1), or deducted under subsection 91(4), as the case may be, by the taxpayer in respect of shares of tracking classes held by the taxpayer or a foreign affiliate of the taxpayer, as the case may be.
  
Tracking interests – controlled foreign affiliate
(12)  If subsection (11) does not apply in respect of a foreign affiliate of the taxpayer for a taxation year of the affiliate, the affiliate is deemed to be a controlled foreign affiliate of the taxpayer throughout the taxation year if, at any time in the year, a tracking interest in respect of the affiliate, or a partnership of which the affiliate is a member, is held by
(a)  the taxpayer; or
(b)  a person or partnership (each referred to in this paragraph as a "holder"), if
(i)  the holder does not deal at arm's length with the taxpayer at that time,
(ii)  where either the taxpayer or the holder is a partnership and the other party is not, any member of the partnership does not deal at arm's length, at that time, with the other party, or
(iii)  where both the taxpayer and the holder are partnerships, the taxpayer or any member of the taxpayer does not deal at arm's length, at that time, with the holder or any member of the holder.
  
(6)  Subsections (1) to (4) apply to taxation years of a foreign affiliate of a taxpayer that begin after February 26, 2018.
(7)  Subsection (5) applies to taxation years of a foreign affiliate of a taxpayer that begin after February 26, 2018, except that, notwithstanding subsection 95(10) of the Act, as enacted by subsection (5), subsection 95(11) of the Act, as enacted by subsection (5), shall not apply in respect of a foreign affiliate of the taxpayer in respect of taxation years of the affiliate that begin after February 26, 2018 and before the day on which the ways and means motion to implement this subsection is tabled in the House of Commons (in this subsection referred to as the "tabling date"), if the taxpayer
(a)  elects in writing under this subsection in respect of all of its foreign affiliates; and
(b)  files the election with the Minister of National Revenue on or before the day that is the later of
(i)  the day that is six months after the day on which this Act receives royal assent, and
(ii)  the taxpayer's filing-due date for its taxation year that includes the tabling date.
8  (1)  Section 96 of the Act is amended by adding the following after subsection (2):
Tiered partnerships
(2.01)  For the purposes of this section, a taxpayer includes a partnership.
  
(2)  Subsection 96(2.1) of the Act is amended by striking out "and" at the end of paragraph (d) and by replacing paragraph (e) with the following:
(e)  if the taxpayer is not a partnership, be deemed to be the taxpayer's limited partnership loss in respect of the partnership for the year, and
(f)  if the taxpayer is a partnership, reduce the taxpayer's share of any loss of the partnership for a fiscal period of the partnership ending in the taxation year of the taxpayer from a business (other than a farming business) or from property.
(3)  Section 96 of the Act is amended by adding the following after subsection (2.1):
Tiered partnerships — adjustments
(2.11)  The following rules apply to taxation years of a taxpayer that end after February 26, 2018:
(a)  for the purpose of applying section 111, the taxpayer's non-capital loss, or limited partnership loss in respect of a partnership, for a preceding taxation year shall be determined as if subsection (2.01) and paragraph (2.1)(f) applied in respect of taxation years that end before February 27, 2018; and
(b)  in computing the adjusted cost base to the taxpayer of the taxpayer's interest in a partnership after February 26, 2018, there shall be added an amount equal to the portion of the amount of any reduction because of paragraph (a) in a non-capital loss of the taxpayer that can reasonably be considered to relate to the amount of a loss deducted under subparagraph 53(2)(c)(i) in computing the adjusted cost base of that interest.
  
(4)  Subsections (1) and (2) apply to taxation years that end after February 26, 2018.
9  (1)  Clause 110(1)(f)(v)(A) of the Act is replaced by the following:
(A)  the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed operational mission (as determined by the Department of National Defence or the Department of Public Safety and Emergency Preparedness) that is
(I)  assessed for risk allowance at level 3 or higher (as determined by the Department of National Defence), or
(II)  assessed at a risk score greater than 1.99 and less than 2.50 (as determined by the Department of National Defence) and designated by the Minister of Finance, and
(2)  Clause 110(1)(f)(v)(A) of the Act is replaced by the following:
(A)  the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed international operational mission (as determined by the Minister of National Defence, the Minister of Public Safety and Emergency Preparedness or by a person designated by either Minister), and
(3)  Subsection (1) applies in respect of missions initiated after September 2012 and in respect of missions initiated before October 2012 that were not prescribed under Part LXXV of the Income Tax Regulations as that Part read on February 28, 2013.
(4)  Subsection (2) applies to the 2017 and subsequent taxation years.
10  (1)  Paragraph 112(2.31)(b) of the Act is replaced by the following:
(b)  the taxpayer establishes that, throughout the particular period, no tax-indifferent investor or group of tax-indifferent investors, each member of which is affiliated with every other member, has all or substantially all of the risk of loss and opportunity for gain or profit in respect of the share.
(2)  Subparagraph 112(2.32)(a)(ii) of the Act is replaced by the following:
(ii)  all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated;
(3)  Clause 112(2.32)(b)(iii)(B) of the Act is replaced by the following:
(B)  all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated;
(4)  Clause 112(2.32)(c)(iii)(B) of the Act is replaced by the following:
(B)  all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share during the particular period referred to in subsection (2.31) has not been eliminated and cannot reasonably be expected by it to be eliminated; or
(5)  Subsection 112(2.33) of the Act is replaced by the following:
End of particular period
(2.33)  If, at a time during a particular period referred to in subsection (2.31), a counterparty, specified counterparty, affiliated counterparty or affiliated specified counterparty reasonably expects to become a tax-indifferent investor or — if it has provided a representation described by subparagraph (2.32)(a)(ii) or clause (2.32)(b)(iii)(B) or (c)(iii)(B) in respect of a share — that all or substantially all of its risk of loss and opportunity for gain or profit in respect of the share will be eliminated, the particular period for which it has provided a representation in respect of the share is deemed to end at that time.
  
(6)  The description of B in subsection 112(5.2) of the Act is replaced by the following:
B  is
(a)  if the taxpayer received a dividend under subsection 84(3) in respect of the share, the total determined under subparagraph (b)(ii), and
(b)  in any other case, the lesser of
(i)  the loss, if any, from the disposition of the share that would be determined before the application of this subsection if the cost of the share to any taxpayer were determined without reference to
(A)  paragraphs 87(2)(e.2) and (e.4), 88(1)(c), 138(11.5)(e) and 142.5(2)(b),
(B)  subsection 85(1), where the provisions of that subsection are required by paragraph 138(11.5)(e) to be applied, and
(C)  paragraph 142.6(1)(d), and
(ii)  the total of all amounts each of which is
(A)  where the taxpayer is a corporation, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxpayer's taxable income or taxable income earned in Canada for any taxation year,
(B)  where the taxpayer is a partnership, a taxable dividend received by the taxpayer on the share, to the extent of the amount that was deductible under this section or subsection 115(1) or 138(6) in computing the taxable income or taxable income earned in Canada for any taxation year of members of the partnership,
(C)  where the taxpayer is a trust, an amount designated under subsection 104(19) in respect of a taxable dividend on the share, or
(D)  a dividend (other than a taxable dividend) received by the taxpayer on the share,
(7)  Paragraph (c) of the description of C in subsection 112(5.2) of the Act is replaced by the following:
(c)  where the taxpayer is a partnership, a loss of a member of the partnership on a deemed disposition of the share before that time was reduced because of subsection (3.1) or (4), and
(8)  The portion of subsection 112(5.21) of the Act before paragraph (a) is replaced by the following:
Subsection (5.2) — excluded dividends
(5.21)  A dividend, other than a dividend received under subsection 84(3), shall not be included in the total determined under subparagraph (b)(ii) of the description of B in subsection (5.2) unless
  
(9)  Section 112 of the Act is amended by adding the following after subsection (9):
Exception
(9.1)  Subsection (8) does not apply for the purpose of paragraph (5.21)(b) in respect of a dividend received on a share, referred to in paragraph (a) of the description of B in subsection (5.2), during a synthetic disposition period of a synthetic disposition arrangement in respect of that share.
  
(10)  Subsections (1) to (5) apply in respect of dividends that are paid or become payable after February 26, 2018.
(11)  Subsections (6) to (9) apply in respect of dispositions that occur after February 26, 2018.
11  (1)  The definition eligible individual in section 122.6 of the Act is amended by striking out "and" at the end of paragraph (g), by adding "and" at the end of paragraph (h) and by adding the following after paragraph (h):
(i)  an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada or the government of a province for the benefit of the other individual; (particulier admissible)
(2)  Subsection (1) is deemed to have come into force on January 1, 2008.
12  (1)  The definition working income in subsection 122.7(1) of the Act is replaced by the following:
working income, of an individual for a taxation year, means the total of
(a)  the total of all amounts each of which would, if this Act were read without reference to section 8, be the individual's income for the taxation year from an office or employment,
(b)  all amounts that are included because of paragraph 56(1)(n) or (o) or subparagraph 56(1)(r)(v) in computing the individual's income for a period in the taxation year, and
(c)  the total of all amounts each of which is the individual's income for the taxation year from a business carried on by the individual otherwise than as a specified member of a partnership. (revenu de travail)
(2)  Paragraph (a) of the definition adjusted net income in subsection 122.7(1) of the Act is repealed.
(3)  Section 122.7 of the Act is amended by adding the following after subsection (1):
Optional amounts
(1.1)  An individual may determine the total amount for the definition working income for both the individual and the individual's eligible spouse, if applicable, for a taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4) and if so, the individual shall determine the total amount for the definition adjusted net income for both the individual and the individual's eligible spouse, if applicable, for the taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4).
  
(4)  The portion of subsection 122.7(2) of the Act before the formula is replaced by the following:
Deemed payment on account of tax
(2)  Subject to subsections (4) and (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula
  
(5)  Subsection 122.7(5) of the Act is replaced by the following:
Only one eligible individual
(5)  If an eligible individual has an eligible spouse for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the purposes of subsection (2) in respect of the taxation year,
(a)  if the individuals agree on which individual is the eligible individual for the taxation year, only that individual shall be an eligible individual for the purposes of subsection (2) in respect of the taxation year; and
(b)  in any other case, only the individual that the Minister designates is the eligible individual for the purposes of subsection (2) in respect of the taxation year.
  
(6)  Subsection 122.7(10) of the Act is replaced by the following:
Special rules for eligible dependant
(10)  For the purpose of applying subsections (2) and (3), if an individual (referred to in this subsection as the "child") would be, but for this subsection, an eligible dependant of more than one eligible individual for a taxation year, the child is deemed only to be an eligible dependant of
(a)  if the individuals agree, the agreed upon individual; and
(b)  in any other case, the individual designated by the Minister.
  
(7)  Subsections (1) to (6) come into force or are deemed to have come into force on January 1, 2019.
13  (1)  The Act is amended by adding the following after section 122.71:
SUBDIVISION a.3
Climate Action Incentive
Definitions
122.8  (1)  The following definitions apply in this section.
cohabiting spouse or common-law partner, of an individual at any time, has the same meaning as in section 122.6. (époux ou conjoint de fait visé)
eligible individual, for a taxation year, means an individual (other than a trust) who is, at the end of the taxation year,
(a)  18 years of age or older;
(b)  a parent who resides with their child; or
(c)  married or in a common-law partnership. (particulier admissible)
qualified dependant, of an individual for a taxation year, means a person who, at the end of the taxation year,
(a)  is the individual's child or is dependent for support on the individual or on the individual's cohabiting spouse or common-law partner;
(b)  resides with the individual;
(c)  is under the age of 18 years;
(d)  is not an eligible individual for the taxation year; and
(e)  is not a qualified relation of any individual for the taxation year. (personne à charge admissible)
qualified relation, of an individual for a taxation year, means the person, if any, who, at the end of the taxation year, is the individual's cohabiting spouse or common-law partner. (proche admissible)
return of income, in respect of a person for a taxation year, means the person's return of income (other than a return of income under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the person had tax payable under this Part for the taxation year. (déclaration de revenu)
Persons not eligible individuals, qualified relations or qualified dependants
(2)  Notwithstanding subsection (1), a person is not an eligible individual, is not a qualified relation and is not a qualified dependant, for a taxation year, if the person
(a)  died before April of the year following the taxation year;
(b)  is confined to a prison or similar institution for a period of at least 90 days during the taxation year;
(c)  is a non-resident person at any time in the taxation year;
(d)  is a person described in paragraph 149(1)(a) or (b) at any time in the taxation year; or
(e)  is a person in respect of whom a special allowance under the Children's Special Allowances Act is payable at any time in the taxation year.
Residence
(3)  For the purposes of this section, an individual is considered to reside at any time only at their principal place of residence.
Deemed overpayment
(4)  An eligible individual who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount determined by the formula
(A + B + C × D) × E
where
A is the amount specified by the Minister of Finance for an eligible individual for the taxation year for the province (in this subsection and subsection (6) referred to as the "relevant province") in which the eligible individual resides at the end of the taxation year;
B is
(a)  the amount specified by the Minister of Finance for a qualified relation for the taxation year for the relevant province, if
(i)  the eligible individual has a qualified relation at the end of the taxation year, or
(ii)  subparagraph (i) does not apply and the eligible individual has a qualified dependant at the end of the taxation year, and
(b)  in any other case, nil;
C is the amount specified by the Minister of Finance for a qualified dependant for the taxation year for the relevant province;
D is the number of qualified dependants of the eligible individual at the end of the taxation year, other than a qualified dependant in respect of whom an amount is included because of subparagraph (a)(ii) of the description of B for the taxation year; and
E is
(a)  1.1, if there is a census metropolitan area, as determined in the last census published by Statistics Canada before the taxation year, in the relevant province and the individual does not reside in a census metropolitan area at the end of the taxation year, and
(b)  1, in any other case.
Authority to specify amounts
(5)  The Minister of Finance may specify amounts for a province for a taxation year for the purposes of this section. If the Minister of Finance does not specify a particular amount that is relevant for the purposes of this section, that particular amount is deemed to be nil for the purpose of applying this section.
Deemed rebate in respect of fuel charges
(6)  The amount deemed by this section to have been paid on account of tax payable for a taxation year is deemed to have been paid in the year following the taxation year as a rebate in respect of charges levied under Part 1 of the Greenhouse Gas Pollution Pricing Act in respect of the relevant province.
Only one eligible individual
(7)  If an individual is a qualified relation of another individual for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the taxation year, only the individual that the Minister designates is the eligible individual for the taxation year.
Exception — qualified dependant
(8)  If a person would, if this Act were read without reference to this subsection, be the qualified dependant of two or more individuals, for a taxation year,
(a)  the person is deemed to be a qualified dependant, for the taxation year, of the one of those individuals on whom those individuals agree; and
(b)  in any other case, the person is deemed to be, for the taxation year, a qualified dependant only of the individual that the Minister designates.
Effect of bankruptcy
(9)  For the purposes of this section, if an individual becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year.
(2)  Subsection (1) applies to the 2018 and subsequent taxation years.
14  (1)  Section 128.1 of the Act is amended by adding the following after subsection (1.1):
Trusts and partnerships look-through rule
(1.2)  For the purposes of this subsection and paragraph (1)(c.1), if at any time shares of the capital stock of a corporation resident in Canada are owned by a trust or a partnership (each referred to in this subsection as a "conduit"), each person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a "holder"), as the case may be, is deemed to own the shares of each class of the capital stock of the corporation that are owned by the conduit the number of which is determined by the formula
A × B/C
where
A is the total number of shares of the class of the capital stock of the corporation that is owned by the conduit at that time;
B is the fair market value, at that time, of the holder's interest in the conduit; and
C is the total fair market value, at that time, of all interests in the conduit.
  
(2)  Subsection (1) applies in respect of transactions or events that occur after February 26, 2018.
15  (1)  Section 129 of the Act is amended by adding the following after subsection (4):
Conditions for subsection (4.2)
(4.1)  Subsection (4.2) applies in respect of a particular taxation year of a particular corporation if the following conditions are met:
(a)  the particular corporation has an amount of tax payable for the year under Part IV;
(b)  the particular corporation has claimed amounts under paragraph 186(1)(c) or (d) in respect of the year; and
(c)  the particular corporation would, in the absence of paragraphs 186(1)(c) and (d), have an amount determined, at the end of the year, under both paragraph (a) of the definition eligible refundable dividend tax on hand and paragraph (b) of the definition non-eligible refundable dividend tax on hand in subsection (4).
  
Part IV tax — allocation of losses
(4.2)  If this subsection applies in respect of a particular taxation year of a corporation, for the purpose of determining the amount under paragraph (a) of the definition eligible refundable dividend tax on hand in subsection (4), in respect of the corporation at the end of the year, the amount determined under subsection 186(1) in respect of the corporation for the year is deemed to be the amount determined by the formula
A + B − C
where
A is the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of eligible dividends;
B is the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the eligible refundable dividend tax on hand of other corporations; and
C is the amount determined by the formula
38 1/3% (D + E) − (F + G)
where
D is the amount claimed by the corporation under paragraph 186(1)(c) for the year,
E is the amount claimed by the corporation under paragraph 186(1)(d) for the year,
F is the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of taxable dividends (other than eligible dividends), and
G is the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the non-eligible refundable dividend tax on hand of other corporations.
  
(2)  Subsection (1) applies to taxation years that begin after 2018.
16  (1)  Section 142.5 of the Act is amended by adding the following after subsection (3):
Proceeds — mark-to-market property
(4)  For greater certainty, if a taxpayer is a financial institution in a taxation year and disposes of a share that is mark-to-market property of the taxpayer for the year, the taxpayer's proceeds from the disposition do not include any amount that would otherwise be proceeds from the disposition to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed by subparagraph 88(2)(b)(ii) not to be a dividend.
  
(2)  Subsection (1) applies in respect of dispositions that occur after February 26, 2018.
17  (1)  The definition political activity in subsection 149.1(1) of the Act is repealed.
(2)  The definition charitable purposes in subsection 149.1(1) of the Act is replaced by the following:
charitable purposes includes the disbursement of funds to a qualified donee; (fins de bienfaisance)
(3)  Paragraph (a) of the definition charitable organization in subsection 149.1(1) of the Act is replaced by the following:
(a)  constituted and operated exclusively for charitable purposes,
(a.1)  all the resources of which are devoted to charitable activities carried on by the organization itself,
(4)  Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:
charitable activities includes public policy dialogue and development activities carried on in furtherance of a charitable purpose; (activités de bienfaisance)
(5)  The portion of subsection 149.1(1.1) of the Act before paragraph (a) is replaced by the following:
Exclusions
(1.1)  For the purposes of paragraphs (2)(b), (3)(b) and (4)(b) and subsection (21), the following shall be deemed to be neither an amount expended in a taxation year on charitable activities nor a gift made to a qualified donee:
  
(6)  Subsection 149.1(1.1) of the Act is amended by adding "and" at the end of paragraph (a) and by repealing paragraph (b).
(7)  Paragraphs 149.1(6)(b) and (c) of the Act are replaced by the following:
(b)  in any taxation year, it disburses not more than 50% of its income for that year to qualified donees; or
(c)  it disburses income to a registered charity that the Minister has designated in writing as a charity associated with it.
(8)  Subsections 149.1(6.1) and (6.2) of the Act are replaced by the following:
Charitable purposes
(6.1)  For the purposes of the definition charitable foundation in subsection (1), a corporation or trust that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.
  
Charitable purposes
(6.2)  For the purposes of the definition charitable organization in subsection (1), an organization that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes.
  
(9)  Subsection 149.1(6.201) of the Act is replaced by the following:
Activities of Canadian amateur athletic associations
(6.201)  For the purposes of the definition Canadian amateur athletic association in subsection (1), an association that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to devote that part of its resources to its exclusive purpose and exclusive function.
  
(10)  Subsection 149.1(10) of the Act is replaced by the following:
Deemed charitable activity
(10)  An amount paid by a charitable organization to a qualified donee that is not paid out of the income of the charitable organization is deemed to be a devotion of a resource of the charitable organization to a charitable activity carried on by it.
  
(11)  Section 149.1 of the Act is amended by adding the following after subsection (10):
Public policy activities
(10.1)  Subject to subsections (6.1) and (6.2), public policy dialogue and development activities carried on by an organization, corporation or trust in support of its stated purposes shall be considered to be carried on in furtherance of those purposes and not for any other purpose.
  
(12)  Subsections (1), (2), (7) and (10) are deemed to have come into force
(a)  on June 29, 2012 in respect of organizations, corporations and trusts that are registered charities on September 14, 2018 and in respect of associations that are registered Canadian amateur athletic associations on that date; and
(b)  on September 14, 2018 in any other case.
(13)  Subsections (3), (4), (6), (8) and (11) are deemed to have come into force
(a)  on January 1, 2008 in respect of organizations, corporations and trusts that are registered charities on September 14, 2018; and
(b)  on September 14, 2018 in any other case.
(14)  Subsection (9) is deemed to have come into force
(a)  on January 1, 2012 in respect of associations that are registered Canadian amateur athletic associations on September 14, 2018; and
(b)  on September 14, 2018 in any other case.
18  (1)  Paragraph 152(1)(b) of the Act is replaced by the following:
(b)  the amount of tax, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 125.4(3), 125.5(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year.
(2)  Subparagraph 152(4)(b)(iii) of the French version of the Act is replaced by the following:
(iii)  est établie par suite de la conclusion d'une opération impliquant le contribuable et une personne non-résidente avec laquelle il avait un lien de dépendance,
(3)  Subparagraph 152(4)(b)(iii) of the Act is replaced by the following:
(iii)  is made
(A)  as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm's length, or
(B)  in respect of any income, loss or other amount in relation to a foreign affiliate of the taxpayer,
(4)  Subsection 152(4) of the Act is amended by adding the following after paragraph (b.3):
(b.4)  the assessment, reassessment or additional assessment is made before the day that is six years after the end of the normal reassessment period for the taxpayer in respect of the year if
(i)  a reassessment of tax for the year was required under subsection (6), or would have been so required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to in that subsection, in order to take into account a deduction claimed under section 111 in respect of a loss for a subsequent taxation year,
(ii)  an assessment, reassessment, additional assessment of tax or notification that no tax is payable for the subsequent taxation year referred to in subparagraph (i) was made or issued after the normal reassessment period in respect of the subsequent taxation year as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm's length, and
(iii)  the assessment, reassessment, additional assessment or notification that no tax is payable referred to in subparagraph (ii) reduced the amount of the loss for the subsequent taxation year;
(5)  The portion of subsection 152(4.01) of the Act before paragraph (a) is replaced by the following:
Extended period of assessment
(4.01)  Notwithstanding subsections (4) and (5), an assessment, reassessment or additional assessment to which paragraph (4)(a), (b), (b.1), (b.3), (b.4) or (c) applies in respect of a taxpayer for a taxation year may be made after the taxpayer's normal reassessment period in respect of the year to the extent that, but only to the extent that, it can reasonably be regarded as relating to,
  
(6)  Subparagraph 152(4.01)(b)(iii) of the Act is replaced by the following:
(iii)  the transaction, income, loss or other amount referred to in subparagraph (4)(b)(iii),
(7)  Subsection 152(4.01) 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):
(d)  if paragraph (4)(b.4) applies to the assessment, reassessment or additional assessment, the reduction under subparagraph (4)(b.4)(iii).
(8)  Paragraph 152(4.2)(b) of the Act is replaced by the following:
(b)  redetermine the amount, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2), 122.7(2) or (3), 122.8(4), 122.9(2), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year or deemed by subsection 122.61(1) to be an overpayment on account of the taxpayer's liability under this Part for the year.
(9)  Subsections (1) and (8) apply to the 2018 and subsequent taxation years.
(10)  Subsection (2) is deemed to have come into force on February 27, 2018.
(11)  Subsections (3) and (6) apply to taxation years of a taxpayer that begin after February 26, 2018.
(12)  Subsections (4), (5) and (7) apply in respect of a taxation year if a reassessment of tax for the year was required under subsection 152(6) of the Act, or would have been so required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to in that subsection, in order to take into account a deduction claimed under section 111 of the Act in respect of a loss for a subsequent taxation year that ends after February 26, 2018.
19  (1)  Subsection 163(2) of the Act is amended by adding the following after paragraph (c.3):
(c.4)  the amount, if any, by which
(i)  the total of all amounts each of which is an amount that would be deemed by section 122.8 to be paid by that person for the year or, where that person is the qualified relation of an individual for that year (within the meaning assigned by subsection 122.8(1)), by that individual, if that total were calculated by reference to the information provided in the person's return of income (within the meaning assigned by subsection 122.8(1)) for the year
exceeds
(ii)  the total of all amounts each of which is an amount that is deemed by section 122.8 to be paid by that person or by an individual of whom the person is the qualified relation for the year (within the meaning assigned by subsection 122.8(1)),
(2)  Subsection (1) applies to the 2018 and subsequent taxation years.
20  (1)  Subsection 188.2(2) of the Act is amended by adding "or" at the end of paragraph (d) and by replacing paragraphs (e) to (g) with the following:
(e)  in the case of a person that is a registered charity or registered Canadian amateur athletic association, if the person devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office.
(2)  Subsection (1) is deemed to have come into force
(a)  on June 29, 2012 in respect of organizations, corporations and trusts that are registered charities on September 14, 2018 and in respect of associations that are registered Canadian amateur athletic associations on that date; and
(b)  on September 14, 2018 in any other case.
21  (1)  Subsection 212.1(1) of the Act is replaced by the following:
Non-arm's length sales of shares by non-residents
212.1  (1)  Subsection (1.1) applies if a non-resident person disposes of shares (in this section referred to as the "subject shares") of any class of the capital stock of a corporation resident in Canada (in this section referred to as the "subject corporation") to another corporation resident in Canada (in this section referred to as the "purchaser corporation") with which the non-resident person does not (otherwise than because of a right referred to in paragraph 251(5)(b)) deal at arm's length and, immediately after the disposition, the subject corporation is connected (within the meaning that would be assigned by subsection 186(4) if the references in that subsection to "payer corporation" and "particular corporation" were read as "subject corporation" and "purchaser corporation", respectively, and if section 186 were read without reference to its subsection (6)) with the purchaser corporation.
(2)  The portion of paragraph 212.1(1.1)(a) of the Act before subparagraph (i) is replaced by the following:
(a)  the amount, if any, by which the fair market value of any consideration (other than any share of the capital stock of the purchaser corporation) received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares exceeds the paid-up capital in respect of the subject shares immediately before the disposition shall, for the purposes of this Act, be deemed to be a dividend
(3)  Subsection 212.1(1.2) of the Act is replaced by the following:
Deemed consideration
(1.2)  For the purposes of subsections (1) and (1.1), if, in the absence of this subsection, no consideration would be received by the non-resident person referred to in subsection (1) from the purchaser corporation for the subject shares, the non-resident person is deemed to receive consideration other than shares of the capital stock of the purchaser corporation from the purchaser corporation for the subject shares, the fair market value of which is equal to the amount, if any, by which the fair market value of the subject shares disposed of by the non-resident person exceeds the amount of any increase because of the disposition in the fair market value of the shares of the capital stock of the purchaser corporation.
  
(4)  The portion of paragraph 212.1(3)(a) of the Act before subparagraph (i) is replaced by the following:
(a)  a non-resident person shall, for greater certainty, be deemed not to deal at arm's length with a purchaser corporation at the time of a disposition described in subsection (1) if the non-resident person was,
(5)  Paragraph 212.1(3)(b) of the Act is replaced by the following:
(b)  for the purposes of determining whether or not a non-resident person referred to in paragraph (a) was a member of a group of less than six persons that controlled a corporation at any time, any shares of the capital stock of that corporation owned at that time by any of the following persons shall be deemed to be owned at that time by the non-resident person and not by the person who actually owned the shares at that time:
(i)  the non-resident person's child (within the meaning assigned by subsection 70(10)), who is under 18 years of age, or the non-resident person's spouse or common-law partner,
(ii)  a trust of which the non-resident person, a person described in subparagraph (i) or a corporation described in subparagraph (iii) is a beneficiary,
(iii)  a corporation controlled by the non-resident person, a person described in subparagraph (i), a trust described in subparagraph (ii) or any combination thereof, and
(iv)  a partnership of which the non-resident person or a person described in one of subparagraphs (i) to (iii) is a majority-interest partner or a member of a majority-interest group of partners (as defined in subsection 251.1(3));
(6)  Subsection 212.1(3) of the Act is amended by adding "and" at the end of paragraph (d) and by repealing paragraph (e).
(7)  The portion of paragraph 212.1(4)(b) of the Act before subparagraph (ii) is replaced by the following:
(b)  it is not the case that, at the time of the disposition, or as part of a transaction or event or series of transactions or events that includes the disposition, a non-resident person
(i)  holds, directly or indirectly, shares of the capital stock of the purchaser corporation, and
(8)  Section 212.1 of the Act is amended by adding the following after subsection (4):
Tiered trusts and partnerships
(5)  For the purposes of this section and paragraph (k) of the definition proceeds of disposition in section 54, a person or partnership that is, at any time, a beneficiary under a trust (other than a trust that is the non-resident person referred to in subsection (1)), or a member of a partnership (such trust or partnership referred to in this subsection as the "particular conduit"), that is a beneficiary under a trust or member of a partnership (such trust or partnership referred to in this subsection as the "other conduit") is deemed
(a)  to be a beneficiary under or member of, as the case may be, the other conduit; and
(b)  to hold the interest in the other conduit that is held by the particular conduit in the proportion expressed by the formula
A/B
where
A is the portion of the fair market value, at that time, of the person or partnership's interest in the particular conduit that is attributable to the interest in the other conduit held by the particular conduit, and
B is the total fair market value, at that time, of all direct interests (determined without reference to this subsection) in the other conduit.
  
Trusts and partnerships look-through rule
(6)  The following rules apply for the following purposes:
(a)  for the purposes of this subsection and subsections (1) and (1.1), if at any time an interest (in this paragraph referred to as the "pertinent interest") in a trust or a partnership (each referred to in this subsection as a "conduit") is disposed of by a person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a "holder"), as the case may be, to a purchaser and any portion of the fair market value of the pertinent interest is attributable to shares of the capital stock of a corporation resident in Canada held, directly or indirectly (unless all of the shares are held indirectly through one or more non-resident corporations), by the conduit (in this paragraph referred to as the "shares held by the conduit"), then
(i)  the holder is deemed, on a class-by-class basis, to have disposed, at that time, of the shares held by the conduit to the purchaser, and the purchaser is deemed to have acquired the shares, in the proportion expressed by the formula
A/B
where
A is the portion of the fair market value, at that time, of the pertinent interest that is attributable to the shares held by the conduit, and
B is the total fair market value, at that time, of the shares held by the conduit, and
(ii)  the holder is deemed to have received from the purchaser and the purchaser is deemed to have paid to the holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula
A × B/C
where
A is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the holder from the purchaser for the pertinent interest,
B is the amount determined for A in subparagraph (i), and
C is the total fair market value of the pertinent interest;
(b)  for the purposes of subsections (1) and (1.1) and paragraph (c), if at any time a conduit (other than a non-resident trust) disposes of shares of the capital stock of a corporation resident in Canada to a purchaser, then
(i)  each holder of an interest in the conduit is deemed, on a class-by-class basis, to have disposed, at that time, of the shares to the purchaser in the proportion expressed by the formula
A/B
where
A is the fair market value, at that time, of the holder's interest in the conduit, and
B is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and
(ii)  each holder of an interest in the conduit is deemed to have received from the purchaser and the purchaser is deemed to have paid to each such holder, as consideration for the shares deemed to have been disposed of in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula
A × B/C
where
A is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is received by the conduit from the purchaser for the shares,
B is the amount determined for A in subparagraph (i), and
C is the amount determined for B in subparagraph (i);
(c)  for the purposes of subsections (1) and (1.1), if at any time a conduit acquires shares of the capital stock of a corporation resident in Canada from a vendor, then
(i)  each holder of an interest in the conduit is deemed to have acquired, at that time, the shares from the vendor, on a class-by-class basis, in the proportion expressed by the formula
A/B
where
A is the fair market value, at that time, of the holder's interest in the conduit, and
B is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit, and
(ii)  each holder of an interest in the conduit is deemed to have paid to the vendor and the vendor is deemed to have received from each such holder, as consideration for the shares deemed to have been acquired in subparagraph (i), consideration (other than any share of the capital stock of the purchaser corporation) in an amount determined by the formula
A × B/C
where
A is the fair market value of the consideration (other than any share of the capital stock of the purchaser corporation) that is paid by the conduit to the vendor for the shares,
B is the amount determined for A in subparagraph (i), and
C is the amount determined for B in subparagraph (i); and
(d)  for the purpose of determining whether the subject corporation is connected with the purchaser corporation for the purposes of subsection (1) at any time, if at that time a conduit owns shares of the capital stock of the subject corporation, each holder of an interest in the conduit is deemed to own, at that time, the shares of each class of the capital stock of the subject corporation that are owned by the conduit the number of which is determined by the formula
A × B/C
where
A is the total number of shares of the class of the capital stock of the subject corporation that are owned by the conduit at that time,
B is the fair market value, at that time, of the holder's interest in the conduit, and
C is the total fair market value, at that time, of all direct interests (determined without reference to subsection (5)) in the conduit.
  
Avoidance of subsections (5) and (6)
(7)  The amounts determined for A and B in paragraph (5)(b), for A and B in subparagraph (6)(c)(i) and for B and C in paragraph (6)(d) are, in respect of an interest as a beneficiary under a trust held by a person or partnership, deemed to be equal to one if
(a)  the person or partnership's share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power; and
(b)  it can reasonably be considered that one of the reasons for the discretionary power is to avoid or limit the application of subsection (1.1).
  
(9)  Subsections (1) to (8) apply in respect of dispositions that occur after February 26, 2018.
22  The portion of section 231 of the Act before the first definition is replaced by the following:
Definitions
231  In sections 231.1 to 231.8,
23  The portion of subsection 231.6(7) of the Act before paragraph (a) is replaced by the following:
Time period not to count
(7)  The period of time between the day on which an application for review of a requirement is made pursuant to subsection (4) and the day on which the application is finally disposed of shall not be counted in the computation of
  
24  The Act is amended by adding the following after section 231.7:
Time period not to count
231.8  The following periods of time shall not be counted in the computation of the period of time within which an assessment may be made for a taxation year of a taxpayer under subsection 152(4):
(a)  where the taxpayer is served a notice of a requirement under subsection 231.2(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and
(b)  where an application is commenced by the Minister under subsection 231.7(1) to order the taxpayer to provide any access, assistance, information or document, the period of time between the day on which the taxpayer files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of.
25  (1)  Subsection 233.4(4) of the Act is replaced by the following:
Returns respecting foreign affiliates
(4)  A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 12 months after the end of the year or period.
  
(2)  Subsection 233.4(4) of the Act is replaced by the following:
Returns respecting foreign affiliates
(4)  A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 10 months after the end of the year or period.
  
(3)  Subsection (1) applies to taxation years of a taxpayer, and fiscal periods of a partnership, that begin in 2020.
(4)  Subsection (2) applies to taxation years of a taxpayer, and fiscal periods of a partnership, that begin after 2020.
26  Paragraph 241(4)(e) of the Act is amended by striking out "or" at the end of subparagraph (xi), by adding "or" at the end of subparagraph (xii) and by adding the following after subparagraph (xii):
(xiii)  an order made under the Mutual Legal Assistance in Criminal Matters Act to gather or send information, for the purposes of an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would constitute an offence for which an order could be obtained under subsection 462.48(3) of the Criminal Code, in response to a request made pursuant to
(A)  an administrative arrangement entered into under section 6 of the Mutual Legal Assistance in Criminal Matters Act, or
(B)  a bilateral agreement for mutual legal assistance in criminal matters to which Canada is a party;
27  (1)  The definition SLA compensation payment in subsection 260(1) of the Act is replaced by the following:
SLA compensation payment means an amount paid pursuant to
(a)  a securities lending arrangement as compensation for an underlying payment; or
(b)  a specified securities lending arrangement as compensation for an underlying payment, including, if the property transferred or lent is described in subparagraph (a)(ii) of the definition specified securities lending arrangement, as compensation for a taxable dividend paid on a share described in subparagraph (a)(i) of that definition; (paiement compensatoire (MPVM))
(2)  Subsection 260(1) of the Act is amended by adding the following in alphabetical order:
specified securities lending arrangement means an arrangement, other than a securities lending arrangement, under which
(a)  a particular person (referred to in this definition as a "transferor") transfers or lends at any particular time a property to another person (referred to in this definition as a "transferee") and the property is
(i)  a particular share described in paragraph (a) of the definition qualified security, or
(ii)  a property in respect of which the following conditions are met:
(A)  the property is
(I)  an interest in a partnership, or
(II)  an interest as a beneficiary under a trust, and
(B)  all or any part of the fair market value of the property, immediately before the particular time, is derived, directly or indirectly, from a share described in subparagraph (i),
(b)  it may reasonably be expected, at the particular time, that the transferee — or a person that does not deal at arm's length with, or is affiliated with, the transferee — will transfer or return after the particular time to the transferor — or a person that does not deal at arm's length with, or is affiliated with, the transferor (referred to in this definition as a "substitute transferor") — a property that is identical or substantially identical to the property so transferred or lent, and
(c)  the transferor's (together with any substitute transferor's) risk of loss or opportunity for gain or profit with respect to the particular property is not changed in any material respect; (mécanisme de prêt de valeurs mobilières déterminé)
(3)  The portion of subsection 260(5) of the Act before paragraph (a) is replaced by the following:
Where subsection (5.1) applies
(5)  Subsection (5.1) applies to a taxpayer for a taxation year in respect of a particular amount (other than an amount received as proceeds of disposition or an amount received by a person under an arrangement where it may reasonably be considered that one of the main reasons for the person entering into the arrangement was to enable the person to receive an SLA compensation payment pursuant to a securities lending arrangement, or a dealer compensation payment, that would be deductible in computing the taxable income, or not included in computing the income, for any taxation year of the person) received by the taxpayer in the taxation year
  
(4)  Paragraph 260(6)(a) of the Act is replaced by the following:
(a)  if the taxpayer is a registered securities dealer and the particular amount is deemed by subsection (5.1) to have been received as a taxable dividend, no more than 2/3 of the particular amount (unless, for greater certainty, the particular amount is an amount for which a deduction in computing income may be claimed under subsection (6.1) by the taxpayer); or
(5)  The portion of subsection 260(6.1) of the Act before paragraph (a) is replaced by the following:
Deductible amount
(6.1)  There may be deducted in computing a corporation's income under Part I from a business or property for a taxation year an amount equal to the lesser of
  
(6)  Subsections (1) to (5) apply in respect of amounts paid or payable, or received or receivable, as compensation for dividends after February 26, 2018. However, subsections (1) to (5) do not apply in respect of amounts paid or payable, or received or receivable, as compensation for dividends after February 26, 2018 and before October 2018, if they are pursuant to a written arrangement entered into before February 27, 2018.
R.S., c. C-46

Criminal Code

28  Paragraph 462.48(2)(c) of the Criminal Code is replaced by the following:
(c)  the type of information or book, record, writing, return or other document obtained by or on behalf of the Minister of National Revenue for the purposes of the Income Tax Act, Part IX of the Excise Tax Act or the Excise Act, 2001 to which access is sought or that is proposed to be examined or communicated; and
R.S., c. 30 (4th Supp.)

Mutual Legal Assistance in Criminal Matters Act

29  The definition agreement in subsection 2(1) of the Mutual Legal Assistance in Criminal Matters Act is replaced by the following:
agreement means
(a)  a treaty, convention or other international agreement that is in force, to which Canada is a party and that contains a provision respecting mutual legal assistance in criminal matters, or
(b)  to the extent of their application to criminal investigations or prosecutions and except for the purposes of Parts II and III of this Act, the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol or other international instrument, as ratified by Canada, or a comprehensive tax information exchange agreement that has effect and to which Canada is a party or a tax treaty, as defined in subsection 248(1) of the Income Tax Act; (accord)
30  Subsection 5(1) of the Act is replaced by the following:
Publication in Canada Gazette
5  (1)  Unless the agreement has been published under subsection (2), an agreement referred to in paragraph (a) of the definition agreement in subsection 2(1) — or the provisions respecting mutual legal assistance in criminal matters contained in a convention or other international agreement — must be published in the Canada Gazette no later than 60 days after it comes into force.
31  Section 7 of the Act is replaced by the following:
Functions of Minister
7  (1)  The Minister is responsible for the implementation of every agreement referred to in paragraph (a) of the definition agreement in subsection 2(1) and for the administration of this Act.
How request dealt with
(2)  When a request is made to the Minister under an agreement referred to in paragraph (a) of the definition agreement in subsection 2(1) by a state or entity or a Canadian competent authority, the Minister shall deal with the request in accordance with the agreement and this Act.
How request dealt with
(3)  When a request made by a state or entity under an agreement referred to in paragraph (b) of the definition agreement in subsection 2(1) is presented to the Minister by the Minister of National Revenue, the Minister shall deal with the request in accordance with the agreement and this Act.
32  Subsection 8(1) of the Act is replaced by the following:
Limitation — requests under agreements
8  (1)  If a request for mutual legal assistance is made under an agreement, the Minister may not give effect to the request by means of the provisions of this Part unless the agreement provides for assistance with respect to the subject-matter of the request.
33  The Act is amended by adding the following after section 22.05:
Orders to gather tax information
22.06  (1)  A judge of the province to whom an application is made under subsection 17(2) with respect to an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would have constituted an offence referred to in subsection 462.48(1.1) of the Criminal Code may make an order for the gathering of the information or documents referred to in paragraph 462.48(2)(c) of that Act.
Criminal Code applies
(2)  Subject to subsection (3), an order made under subsection (1) may be obtained and made in accordance with subsections 462.48(1) to (5) of the Criminal Code and executed in the manner provided for in that Act, with any necessary modifications.
Provisions applicable to order
(3)  Paragraphs 18(2)(b) and (c), subsections 18(3) to (9) and sections 19 to 22, other than paragraph 19(1)(a), apply, with any necessary modifications, in respect of an order made under subsection (1) and prevail over any provisions of the Criminal Code that are inconsistent with them.
2016, c. 14

An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act

34  Subsection 66(1) of An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act is
(a)  amended by replacing the clause 60(e)(ii)(A) that it enacts with the following:
(A)  the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1.1) or (1.2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and
(b)  amended by replacing the subparagraph 60(e.1)(i) that it enacts with the following:
(i)  the total of all amounts each of which is an amount payable by the taxpayer for the year as an employee's contribution under subsection 8(1.1) or (1.2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and
C.R.C., c. 945

Income Tax Regulations

35  (1)  The Income Tax Regulations are amended by adding the following after section 202:
Requirement to file
203  Every institution that is a designated educational institution (as defined in subsection 118.6(1) of the Act) because of paragraph (a) of that definition shall make an information return in prescribed form in respect of each individual enrolled at that institution who is a qualifying student (as defined in subsection 118.6(1)) for a month in a taxation year.
(2)  Subsection (1) applies to the 2019 and subsequent taxation years.
36  (1)  Subsection 205(3) of the Regulations is amended by adding the following in alphabetical order:
Tuition and Enrolment Certificate
 
(2)  Subsection (1) comes into force or is deemed to have come into force on January 1, 2019.
37  (1)  Subsection 205.1(1) of the Regulations is amended by adding the following in alphabetical order:
Tuition and Enrolment Certificate
 
(2)  Subsection (1) comes into force or is deemed to have come into force on January 1, 2019.
38  (1)  Subsection 209(1) of the Regulations is replaced by the following:
209  (1)  A person who is required by section 200, 201, 202, 203, 204, 212, 214, 215, 217 or 218, subsection 223(2) or section 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 209(5) of the Regulations is replaced by the following:
(5)  A person may provide a Statement of Remuneration Paid (T4) information return or a Tuition and Enrolment Certificate, as required under subsection (1), as a single document in an electronic format (instead of the two copies required under subsection (1)) to the taxpayer to whom the return relates, on or before the date on which the return is to be filed with the Minister, unless
(a)  the specified criteria referred to in section 221.01 of the Act are not met;
(b)  the taxpayer has requested that the information return be provided in paper format; or
(c)  at the time the return is required to be issued,
(i)  if the return is a T4, the taxpayer is on extended leave or is no longer an employee of the person, or
(ii)  the taxpayer cannot reasonably be expected to have access to the information return in electronic format.
  
(3)  Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2019.
39  (1)  The definition designated person or partnership in subsection 5907(1) of the Regulations is replaced by the following:
designated person or partnership, in respect of a taxpayer at any time, means
(a)  the taxpayer,
(b)  a person or partnership that is at that time
(i)  a person (other than a partnership) that does not, at that time, deal at arm's length with the taxpayer, or
(ii)  a partnership a member of which is, at that time, a designated person or partnership in respect of the taxpayer under this definition, and
(c)  if a foreign affiliate of the taxpayer is an original corporation that undergoes a division in respect of which subsection 15(1.5) of the Act applies, a new corporation in respect of the division; (personne ou société de personnes désignée)
(2)  The portion of subparagraph 5907(2)(f)(ii) of the Regulations before clause (A) is replaced by the following:
(ii)  subject to subsections (2.01) and (2.011), does not arise with respect to a disposition (other than a disposition to which subsection (9) applies), of property by the affiliate,
(3)  The portion of subparagraph 5907(2)(j)(iii) of the Regulations before clause (A) is replaced by the following:
(iii)  subject to subsections (2.01) and (2.011), does not arise with respect to a disposition (other than a disposition to which subsection (9) applies), of property by the affiliate,
(4)  Section 5907 of the Regulations is amended by adding the following after subsection (2.01):
(2.011)  Subparagraphs (2)(f)(ii) and (j)(iii) and subsection (5.1) do not apply to a particular disposition of property (referred to in this subsection as the "affiliate property") by a particular foreign affiliate of a taxpayer to another foreign affiliate of the taxpayer if
(a)  the particular disposition is a disposition referred to in subparagraph 15(1.5)(c)(i) of the Act;
(b)  all of the shares of the capital stock of the other affiliate are owned, at a particular time that is within 180 days after the day that includes the time of the particular disposition, by a person or partnership that at the particular time is not a designated person or partnership in respect of the taxpayer; and
(c)  the affiliate property is not disposed of by the other affiliate as part of a series of transactions or events that includes the particular disposition.
  
(5)  Subsection (1) is deemed to have come into force on July 27, 2018.
(6)  Subsections (2) to (4) apply in respect of dispositions that occur after October 23, 2012.

Coordinating Amendments

2016, c. 14
40  (1)  If subsection 66(1) of An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act (in this section referred to as the "other Act") comes into force before section 34 of this Act, then
(a)  that section 34 is deemed never to have come into force and is repealed;
(b)  clause 60(e)(ii)(A) of the Income Tax Act is replaced by the following:
(A)  the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under subsection 10(1.1) or (1.2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and
(c)  subparagraph 60(e.1)(i) of the Act is replaced by the following:
(i)  the total of all amounts each of which is an amount payable by the taxpayer for the year as an employee's contribution under subsection 8(1.1) or (1.2) of the Canada Pension Plan or as a like contribution under a provincial pension plan, as defined in section 3 of that Act, and
(2)  If subsection 66(1) of the other Act comes into force on the same day as section 34 of this Act, that section 34 is deemed to have come into force before that subsection 66(1).
PART 2

Amendments to the Excise Tax Act (GST/HST Measures) and to Related Legislation

R.S., c. E-15

Excise Tax Act

41  (1)  Subsection 123(1) of the Excise Tax Act is amended by adding the following in alphabetical order:
emission allowance means
(a)  an allowance, credit or similar instrument (other than a prescribed allowance, credit or instrument) that
(i)  is issued or created by, or on behalf of,
(A)  a government, a government of a foreign country, a government of a political subdivision of a country, a supranational organization or an international organization (each of which is in this definition referred to as a "regulator"),
(B)  a board, commission or other body established by a regulator, or
(C)  an agency of a regulator,
(ii)  can be used to satisfy a requirement under
(A)  a scheme or arrangement implemented by, or on behalf of, a regulator to regulate greenhouse gas emissions, or
(B)  a prescribed scheme or arrangement, and
(iii)  represents a specific quantity of greenhouse gas emissions expressed as carbon dioxide equivalent, or
(b)  a prescribed property; (unité d'émission)
investment limited partnership means a limited partnership, the primary purpose of which is to invest funds in property consisting primarily of financial instruments, if
(a)  the limited partnership is, or forms part of an arrangement or structure that is, represented or promoted as a hedge fund, investment limited partnership, mutual fund, private equity fund, venture capital fund or other similar collective investment vehicle, or
(b)  the total value of all interests in the limited partnership held by listed financial institutions is 50% or more of the total value of all interests in the limited partnership; (société en commandite de placement)
(2)  The definition emission allowance, as enacted by subsection (1), is deemed to have come into force on June 27, 2018 but also applies in respect of any supply made before that day if any amount of tax under Division II of Part IX of the Act that is payable in respect of the supply was not collected before that day.
(3)  The definition investment limited partnership, as enacted by subsection (1), is deemed to have come into force on September 8, 2017.
42  (1)  Section 132 of the Act is amended by adding the following after subsection (5):
Residence of investment limited partnerships
(6)  For the purposes of this Part but subject to subsection (2), an investment limited partnership is deemed not to be resident in Canada at any time if, at that time, the total value of all interests in the partnership held by non-resident members of the partnership (other than prescribed members) is 95% or more of the total value of all interests in the partnership.
  
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.
43  (1)  Subsection 149(5) of the Act is amended by striking out "and" at the end of paragraph (f) and by adding the following after that paragraph:
(f.1)  an investment limited partnership; and
(2)  Subsection (1) applies in respect of
(a)  any taxation year of a person that begins after 2018; and
(b)  the taxation years of a person that begin in 2018 if the person elects to have subsection (1) apply in respect of those taxation years.
(3)  An election under paragraph (2)(b) is to
(a)  be made in prescribed form containing prescribed information; and
(b)  be filed with the Minister of National Revenue in prescribed manner on or before the day that is 60 days after the day on which this Act receives royal assent or any later day that the Minister of National Revenue may allow.
(4)  If a person makes an election under paragraph (2)(b), the references in subsection 244.1(4) of the Act, as enacted by subsection 46(1), to "2018" and "2019" are to be read as "2017" and "2018", respectively, in applying that subsection 244.1(4) in respect of the person.
44  (1)  Section 221 of the Act is amended by adding the following after subsection (2):
Exception — emission allowance
(2.1)  A supplier (other than a prescribed supplier) that makes a taxable supply of an emission allowance is not required to collect tax under Division II payable by the recipient in respect of the supply.
  
(2)  Subsection (1) is deemed to have come into force on June 27, 2018 but also applies in respect of any supply of an emission allowance made before that day if any amount of tax under Division II of Part IX of the Act that is payable in respect of the supply was not collected before that day, except that in respect of those supplies subsection 221(2.1) of the Act, as enacted by subsection (1), is to be read as follows:
(2.1)  A supplier (other than a prescribed supplier) that makes a taxable supply of an emission allowance is not required to collect any amount of tax under Division II that is payable by the recipient in respect of the supply and that was not collected before June 27, 2018.
  
45  (1)  The portion of subsection 228(4) of the Act before paragraph (a) is replaced by the following:
Real property and emission allowance — self-assessment
(4)  If tax under Division II is payable by a person in respect of a supply of property that is real property or an emission allowance and the supplier is not required to collect the tax and is not deemed to have collected the tax,
  
(2)  Subsection (1) is deemed to have come into force on June 27, 2018 but also applies in respect of any supply of an emission allowance made before that day if any amount of tax under Division II of Part IX of the Act that is payable in respect of the supply was not collected before that day, except that in respect of those supplies subsection 228(4) of the Act, as amended by subsection (1), is to be read as follows:
(4)  If a supply of an emission allowance is made to a person, the following rules apply in respect of the tax under Division II that is payable in respect of the supply and that has not been collected before June 27, 2018 (in this subsection referred to as the "uncollected tax"):
(a)  to the extent that the uncollected tax became payable before June 27, 2018,
(i)  if the person is a registrant and acquired the emission allowance for use or supply primarily in the course of commercial activities of the person, the person shall, on or before the day on or before which the person's return for the reporting period that includes June 27, 2018 is required to be filed, pay the uncollected tax to the Receiver General and report the uncollected tax in that return, and
(ii)  in any other case, the person shall, on or before July 31, 2018, pay the uncollected tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the uncollected tax in prescribed form containing prescribed information; and
(b)  to the extent that the uncollected tax became payable after June 26, 2018,
(i)  if the person is a registrant and acquired the emission allowance for use or supply primarily in the course of commercial activities of the person, the person shall, on or before the day on or before which the person's return for the reporting period in which the uncollected tax became payable is required to be filed, pay the uncollected tax to the Receiver General and report the uncollected tax in that return, and
(ii)  in any other case, the person shall, on or before the last day of the month following the calendar month in which the uncollected tax became payable, pay the uncollected tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the uncollected tax in prescribed form containing prescribed information.
  
46  (1)  Section 244.1 of the Act is amended by adding the following after subsection (3):
Fiscal year — investment limited partnership
(4)  If a particular fiscal year of an investment limited partnership begins in 2018 and includes January 1, 2019 and the investment limited partnership would be a selected listed financial institution throughout a reporting period in the particular fiscal year if the particular fiscal year began on January 1, 2019 and ended on December 31, 2019, the following rules apply:
(a)  the particular fiscal year ends on December 31, 2018;
(b)  subject to subsection (2), the fiscal years of the investment limited partnership are calendar years as of January 1, 2019;
(c)  any election made by the investment limited partnership under section 244 ceases to have effect as of January 1, 2019; and
(d)  if the first taxation year of the investment limited partnership that begins after 2018 does not begin on January 1, 2019, for the purposes of this Part (other than section 149) the investment limited partnership is deemed, for the period beginning on January 1, 2019 and ending on the day preceding the first day of that taxation year, to be a financial institution, a listed financial institution and a person referred to in subparagraph 149(1)(a)(ix).
  
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.
47  (1)  Paragraphs 259.1(2)(a) and (b) of the Act are replaced by the following:
(a)  in the case of a specified person described in paragraph (f) of the definition specified person in subsection (1), the person does not acquire or import the specified property for
(i)  the purpose of making a supply by way of sale of the specified property for consideration, or
(ii)  the purpose of transferring ownership of the specified property to another person in the course of supplying another property or a service for consideration; and
(b)  in any other case, the person does not acquire or import the specified property for
(i)  the purpose of making a supply by way of sale of the specified property, or
(ii)  the purpose of transferring ownership of the specified property to another person in the course of supplying another property or a service.
(2)  Subsection (1) applies to any acquisition or importation of property in respect of which tax
(a)  becomes payable after July 27, 2018 without having been paid on or before that day; or
(b)  is paid after July 27, 2018 without having become payable on or before that day.
48  (1)  The portion of subsection 261(1) of the English version of the Act after paragraph (b) is replaced by the following:
tax, net tax, penalty, interest or other obligation under this Part in circumstances where the amount was not payable or remittable by the person, whether the amount was paid by mistake or otherwise, the Minister shall, subject to subsections (2) to (3), pay a rebate of that amount to the person.
(2)  Section 261 of the Act is amended by adding the following after subsection (2):
Restriction — emission allowance
(2.1)  A rebate in respect of an amount paid in respect of a supply of an emission allowance is not to be paid under subsection (1) to a person unless
(a)  the person paid the amount to the Receiver General; or
(b)  prescribed circumstances exist or prescribed conditions are met.
  
(3)  Subsections (1) and (2) are deemed to have come into force on June 27, 2018 but do not apply in respect of an amount that was, before that day, paid as or on account of, or taken into account as, tax, net tax, penalty, interest or other obligation under Part IX of the Act.
49  (1)  Subsection 272.1(3) of the Act is amended by striking out "and" at the end of paragraph (a) and by replacing paragraph (b) with the following:
(b)  in the case of management or administrative services that are rendered by a general partner of an investment limited partnership to the investment limited partnership under an agreement for the particular supply of those services,
(i)  if subsection 136.1(2) applies in respect of the particular supply, for each separate supply of those services that is deemed under paragraph 136.1(2)(a) to be made by the general partner for a billing period (within the meaning of that subsection), the separate supply is deemed, despite paragraph 136.1(2)(c), to be made for consideration that becomes due on the last day of the billing period equal to the fair market value of the services rendered under the agreement by the general partner to the investment limited partnership during the billing period, determined as if the general partner were not a member of the investment limited partnership and were dealing at arm's length with the investment limited partnership, and
(ii)  in any other case,
(A)  the general partner is deemed to have made, and the investment limited partnership is deemed to have received, a separate supply of those services for each reporting period of the general partner during which those services are, or are to be, rendered under the agreement, and
(B)  each separate supply of those services that is deemed to be made under clause (A) for a reporting period of the general partner is deemed to be made on the first day of the reporting period for consideration that becomes due on the last day of the reporting period equal to the fair market value of the services rendered under the agreement by the general partner to the investment limited partnership during the reporting period, determined as if the general partner were not a member of the investment limited partnership and were dealing at arm's length with the investment limited partnership; and
(c)  in any other case, the supply is deemed to have been made for consideration that becomes due at the time the supply is made equal to the fair market value at that time of the property or service acquired by the partnership determined as if the person were not a member of the partnership and were dealing at arm's length with the partnership.
(2)  Section 272.1 of the Act is amended by adding the following after subsection (7):
Investment limited partnership — supply by general partner
(8)  For the purposes of this Part, if a general partner of an investment limited partnership renders a management or administrative service to the investment limited partnership,
(a)  the rendering of the service is deemed not to be done by the general partner as a member of the investment limited partnership; and
(b)  the supply by the general partner to the investment limited partnership that includes the service is deemed to have been made otherwise than in the course of the investment limited partnership's activities.
  
(3)  For the purposes of subsections (4) to (6) and Part IX of the Act, if management or administrative services are rendered by a general partner of an investment limited partnership to the investment limited partnership under a particular agreement entered into before September 8, 2017 and if some or all of those services are rendered on or after that day, the following rules apply:
(a)  in respect of the management or administrative services that are rendered on or after September 8, 2017 (referred to in this paragraph as the "subsequent services"),
(i)  the general partner is deemed to have made, and the investment limited partnership is deemed to have received, a particular supply of the subsequent services and the particular supply is deemed to have been made on September 8, 2017,
(ii)  the subsequent services are deemed to have been rendered under an agreement for the particular supply and not under the particular agreement and the agreement for the particular supply is deemed to have been entered into on September 8, 2017,
(iii)  any amount that is charged, collected or remitted at any time as or on account of tax under Part IX of the Act in respect of an amount of consideration that is reasonably attributable to the rendering of the subsequent services is deemed to be an amount of tax that is collected at that time in respect of the particular supply, and
(iv)  if the total of all amounts of tax that are payable under Part IX of the Act in respect of the particular supply before February 27, 2018 is in excess of the total of the amounts that are deemed under subparagraph (iii) to be amounts collected before that day in respect of that supply, that excess is deemed, despite subsection 272.1(3) of the Act, to have become payable on February 27, 2018 and the general partner is deemed to have collected that excess on that day; and
(b)  in respect of the management or administrative services, if any, that are rendered before September 8, 2017 (referred to in this paragraph as the "prior services"),
(i)  the general partner is deemed to have made, and the investment limited partnership is deemed to have received, a supply of the prior services (referred to in this paragraph as the "earlier supply") and the earlier supply is deemed to have been made on the day on which the particular agreement is entered into,
(ii)  the prior services are deemed to have been rendered under an agreement for the earlier supply and not under the particular agreement and the agreement for the earlier supply is deemed to have been entered into on the day on which the particular agreement is entered into, and
(iii)  any amount that is charged, collected or remitted at any time as or on account of tax under Part IX of the Act in respect of an amount of consideration that is reasonably attributable to the rendering of the prior services under the particular agreement is deemed to be an amount of tax that is collected at that time in respect of the earlier supply.
(4)  Subsection (1) applies in respect of any supply made after September 7, 2017.
(5)  Subsection (2) is deemed to have come into force on September 8, 2017 but also applies in respect of management or administrative services that are rendered under an agreement entered into before that day if an amount was, before that day, charged, collected or remitted as or on account of tax under Part IX of the Act in respect of those services or in respect of any supply made under the agreement.
(6)  For the purposes of Part IX of the Act, if subsection 272.1(8) of the Act, as enacted by subsection (2), applies in respect of management or administrative services that are rendered before September 8, 2017 by a general partner of an investment limited partnership to the investment limited partnership under an agreement entered into before that day, the following rules apply:
(a)  subsection 272.1(3) of the Act does not apply in respect of the supply of the management or administrative services made by the general partner to the investment limited partnership;
(b)  any amount that the investment limited partnership pays or credits to the general partner after September 7, 2017 that is reasonably attributable to the management or administrative services is deemed to be consideration for the supply of those services by the general partner to the investment limited partnership that becomes due at the time the amount is paid or credited; and
(c)  if an amount was charged, collected or remitted as or on account of tax in respect of a particular amount — being an amount that the investment limited partnership paid or credited to the general partner before September 8, 2017 and that is reasonably attributable to the management or administrative services — the particular amount is deemed to be consideration for a taxable supply of those services that becomes due at the time the amount is paid or credited.
50  The Act is amended by adding the following after section 289.1:
Time period not to count
289.2  The following periods of time shall not be counted in the computation of the period of time within which an assessment of a person may be made under section 296 or 297:
(a)  if the person is served a notice of a requirement under subsection 289(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and
(b)  if an application is commenced by the Minister under subsection 289.1(1) to order the person to provide any access, assistance, information or document, the period of time between the day on which the person files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of.
51  The portion of subsection 292(7) of the Act before paragraph (a) is replaced by the following:
Time period not to count
(7)  The period of time between the day on which an application for the review of a requirement is made under subsection (4) and the day on which the application is finally disposed of shall not be counted in the computation of
  
52  (1)  Paragraph 295(5)(d.1) of the Act is replaced by the following:
(d.1)  provide confidential information, or allow the inspection of or access to confidential information, as the case may be, under, and solely for the purpose of,
(i)  paragraph 33.1(a) of the Old Age Security Act,
(ii)  an order made under subsection 462.48(3) of the Criminal Code, or
(iii)  an order made under the Mutual Legal Assistance in Criminal Matters Act to gather or send information, for the purposes of an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would constitute an offence for which an order could be obtained under subsection 462.48(3) of the Criminal Code, in response to a request made pursuant to
(A)  an administrative arrangement entered into under section 6 of the Mutual Legal Assistance in Criminal Matters Act, or
(B)  a bilateral agreement for mutual legal assistance in criminal matters to which Canada is a party;
(2)  Paragraph 295(5)(n) of the Act is replaced by the following:
(n)  provide confidential information, or allow the inspection of or access to confidential information, as the case may be, solely for the purposes of a provision contained in a tax treaty (as defined in subsection 248(1) of the Income Tax Act) or in a listed international agreement; or
53  (1)  Paragraph 298(1)(b) of the Act is replaced by the following:
(b)  in the case of an assessment of tax payable by the person under Division II in respect of a supply to which subsection 221(2) or (2.1) applies, more than four years after the later of the day on or before which the person was required to file the return in which that tax was required to be reported and the day the return was filed;
(2)  Subsection (1) is deemed to have come into force on June 27, 2018.
SOR/91-26; SOR/2011-56, s. 4; SOR/2013-71, s. 17

Financial Services and Financial Institutions (GST/HST) Regulations

54  (1)  The Financial Services and Financial Institutions (GST/HST) Regulations are amended by adding the following after section 4:
Prescribed Member for Subsection 132(6) of the Act
4.1  For the purposes of subsection 132(6) of the Act, the following members of an investment limited partnership are prescribed members:
(a)  a member that is a non-resident trust if the total value of the assets of the member in which one or more persons resident in Canada have a beneficial interest is more than 5% of the total value of the assets of the member; and
(b)  a member that is a non-resident limited partnership if the total value of all interests in the member held by persons resident in Canada is more than 5% of the total value of all interests in the member.
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.
SOR/2001-171

Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations

55  (1)  The definition distributed investment plan in subsection 1(1) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations is amended by striking out "or" at the end of paragraph (g), by adding "or" at the end of paragraph (h) and by adding the following after paragraph (h):
(i)  an investment limited partnership. (régime de placement par répartition)
(2)  The definition permanent establishment in subsection 1(1) of the Regulations is amended by adding "and" at the end of paragraph (b) and by replacing paragraphs (c) and (d) by the following:
(c)  in the case of a partnership that is not an investment plan,
(i)  if all the members of the partnership are individuals or trusts, any permanent establishment that would be a permanent establishment of the partnership under subsection 2600(2) of the Income Tax Regulations if the partnership were an individual, and
(ii)  if subparagraph (i) does not apply, any permanent establishment that would be a permanent establishment of the partnership under subsection 400(2) of the Income Tax Regulations if the partnership were a corporation. (établissement stable)
(3)  The portion of paragraph (b) of the definition provincial series in subsection 1(1) of the Regulations before subparagraph (i) is replaced by the following:
(b)  under the terms of the prospectus, registration statement, partnership agreement or other similar document for the series, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the series include the following:
(4)  The definition series in subsection 1(1) of the Regulations is amended by striking out "and" at the end of paragraph (a), by adding "and" at the end of paragraph (b) and by adding the following after paragraph (b):
(c)  in respect of a partnership, a class of units of the partnership. (série)
(5)  The definition unit in subsection 1(1) of the Regulations is amended by striking out "and" at the end of paragraph (d) and by adding the following after that paragraph:
(d.1)  in respect of a partnership, an interest of a person in the partnership;
(d.2)  in respect of a series of a partnership, a unit of the partnership of that series; and
(6)  Subsection (1) applies in respect of any reporting period of a person that begins
(a)  after 2018; and
(b)  in 2018 if the person is a listed financial institution throughout the reporting period of the person that includes January 1, 2018.
(7)  Subsections (2) to (5) are deemed to have come into force on September 8, 2017.
56  (1)  The portion of section 2 of the Regulations before paragraph (a) is replaced by the following:
Qualifying partnership
2  For the purposes of these Regulations, a partnership that is not an investment plan is a qualifying partnership during a taxation year of the partnership if, at any time in the taxation year, the partnership has
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.
57  (1)  The portion of paragraph 11(b) of the Regulations before subparagraph (i) is replaced by the following:
(b)  under the terms of the prospectus, registration statement, partnership agreement or other similar document for the financial institution, or under the laws of Canada or a province, the conditions for a person owning or acquiring units of the financial institution include
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.
58  (1)  The portion of the definition plan merger in subsection 16(1) of the Regulations before paragraph (a) is replaced by the following:
plan merger means the merger or combination of two or more trusts, corporations or partnerships, each of which was, immediately before the merger or combination, a distributed investment plan and each of which is referred to in this definition as a "predecessor", to form one trust, corporation or partnership (referred to in this definition as the "continuing plan") in such a manner that
(2)  Paragraph (c) of the definition plan merger in subsection 16(1) of the Regulations is replaced by the following:
(c)  the merger or combination is otherwise than as a result of the acquisition of property of a particular trust, corporation or partnership by another trust, corporation or partnership, pursuant to the purchase of that property by the other trust, corporation or partnership or as a result of the distribution of that property to the other trust, corporation or partnership on the winding-up of the particular trust, corporation or partnership. (fusion de régimes)
(3)  Subsections (1) and (2) are deemed to have come into force on September 8, 2017.
59  (1)  The Regulations are amended by adding the following after section 72:

Transitional Rules for Investment Limited Partnerships

Investment limited partnerships — 2019
73  (1)  A particular investment limited partnership to which subparagraph 149(1)(a)(ix) of the Act does not apply is deemed to be an investment plan that is a distributed investment plan for the following purposes:
(a)  the purposes of determining under section 30 the percentage for a series of a selected listed financial institution or of another investment limited partnership described in subsection (2), for a participating province and for a particular period (as defined in subsection 16(1)) of the selected listed financial institution or other investment limited partnership and the purposes of determining under section 32 the percentage for a participating province and for a particular period (as defined in subsection 16(1)) of a selected listed financial institution or of another investment limited partnership described in subsection (2), but only if the percentage is to be used in the determination of
(i)  the positive amount that the financial institution or other investment limited partnership is required to add, or the negative amount that the financial institution or other investment limited partnership is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019,
(ii)  the instalment base under subsection 237(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019,
(iii)  the interim net tax under subsection 228(2.1) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the financial institution or other investment limited partnership that begins in 2019, or
(iv)  if a joint election made under section 55 by the financial institution or other investment limited partnership and the manager of the financial institution or other investment limited partnership is in effect at any time in a fiscal year of the manager that begins in 2019,
(A)  an amount that, under paragraph 55(2)(c), is a prescribed amount for the purposes of the description of G in subsection 225.2(2) of the Act for a reporting period in the fiscal year, or
(B)  the positive amount that the manager is required to add, or the negative amount that the manager is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to the adaptations made to that subsection under paragraph 55(2)(d), for a reporting period in the fiscal year;
(b)  the purposes of determining under section 28 an investor percentage of the particular investment limited partnership as of a day in 2018; and
(c)  the purposes of applying section 52 to the particular investment limited partnership in respect of any information that is requested under that section by a selected listed financial institution or by another investment limited partnership described in subsection (2), but only if the information is required for
(i)  the determination of a percentage referred to in paragraph (a) of the financial institution or other investment limited partnership that is to be used in the determination of an amount described in any of subparagraphs (a)(i) to (iv), or
(ii)  the determination under section 28 of an investor percentage of the financial institution or other investment limited partnership as of a day in 2018.
Investment limited partnerships — 2019
(2)  If an investment limited partnership is a selected listed financial institution throughout the reporting period of the investment limited partnership that includes January 1, 2019 but is not a selected listed financial institution throughout the preceding reporting period of the investment limited partnership, the following rules apply:
(a)  for the purposes of determining under section 28 an investor percentage of the investment limited partnership as of a day in 2018, the investment limited partnership is deemed to be a selected listed financial institution;
(b)  the investment limited partnership is deemed to be, throughout 2018, a selected listed financial institution and an investment plan that is a distributed investment plan for the purposes of determining under section 30 or 33 the investment limited partnership's percentage for a series of the investment limited partnership, for a participating province and for a particular period (as defined in subsection 16(1)) of the investment limited partnership and for the purposes of determining under section 32 or 34 the investment limited partnership's percentage for a participating province and for a particular period (as defined in subsection 16(1)) of the investment limited partnership, but only if the percentage is to be used in the determination of
(i)  the positive amount that the investment limited partnership is required to add, or the negative amount that the investment limited partnership is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the investment limited partnership that begins in 2019,
(ii)  the instalment base under subsection 237(2) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the investment limited partnership that begins in 2019,
(iii)  the interim net tax under subsection 228(2.1) of the Act, having regard to any applicable adaptations made to that subsection under these Regulations, for a reporting period in a fiscal year of the investment limited partnership that begins in 2019, or
(iv)  if a joint election made under section 55 by the investment limited partnership and the manager of the investment limited partnership is in effect at any time in a fiscal year of the manager that begins in 2019,
(A)  an amount that, under paragraph 55(2)(c), is a prescribed amount for the purposes of the description of G in subsection 225.2(2) of the Act for a reporting period in the fiscal year, or
(B)  the positive amount that the manager is required to add, or the negative amount that the manager is able to deduct, in determining its net tax under subsection 225.2(2) of the Act, having regard to the adaptations made to that subsection under paragraph 55(2)(d), for a reporting period in the fiscal year; and
(c)  for the purposes of section 52, the investment limited partnership is deemed to be
(i)  if the units of the investment limited partnership are issued in two or more series, a selected stratified investment plan throughout 2018, or
(ii)  in any other case, a selected non-stratified investment plan throughout 2018.
(2)  Subsection (1) is deemed to have come into force on September 8, 2017.

Transitional Provisions

60  (1)  Despite paragraph 298(1)(a) of the Excise Tax Act, the Minister of National Revenue may at any time assess under section 296 of that Act the net tax of a trust governed by a registered education savings plan (as defined in subsection 248(1) of the Income Tax Act) for a reporting period of the trust that ends after June 2010 but begins before July 22, 2016, provided that the assessment
(a)  is made solely for the purpose of determining the amount for a province that, under subsection 225.2(2) of the Excise Tax Act, is required to be added to, or may be deducted from, that net tax; and
(b)  is made on or before the day that is four years after the later of
(i)  the day on which this Act receives royal assent, and
(ii)  the day on which the return under section 238 of the Excise Tax Act for the reporting period was filed.
(2)  Despite paragraph 298(1)(e) of the Excise Tax Act, the Minister of National Revenue may at any time assess under section 296 of that Act any penalty payable by a trust governed by a registered education savings plan (as defined in subsection 248(1) of the Income Tax Act), provided that
(a)  the assessment relates solely to the amount for a province that, under subsection 225.2(2) of the Excise Tax Act, is required to be added to, or may be deducted from, the net tax for a reporting period of the trust that ends after June 2010 but begins before July 22, 2016; and
(b)  if the penalty is other than a penalty under section 280.1, 285, 285.01 or 285.1 of the Excise Tax Act, the assessment is made on or before the day that is four years after the later of
(i)  the day on which this Act receives royal assent, and
(ii)  the day on which the trust becomes liable to pay the penalty.
(3)  Despite paragraphs 298(1)(a) and (e) of the Excise Tax Act, if an election made under section 55 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations by a trust governed by a registered education savings plan (as defined in subsection 248(1) of the Income Tax Act) and a manager (as defined in subsection 1(1) of those Regulations) of the trust is in effect at any time in a particular reporting period of the manager that ends in a reporting period of the trust that ends after June 2010 but begins before July 22, 2016,
(a)  the Minister of National Revenue may at any time assess the net tax of the manager for the particular reporting period, provided that the assessment
(i)  is made solely for the purpose of determining the amount for a province and for the trust that, under subsection 225.2(2) of the Excise Tax Act and due to the application of section 55 of those Regulations, is required to be added to, or may be deducted from, that net tax, and
(ii)  is made on or before the day that is four years after the later of
(A)  the day on which this Act receives royal assent, and
(B)  the day on which the return under section 238 of the Excise Tax Act for the particular reporting period was filed; and
(b)  the Minister of National Revenue may at any time assess any penalty payable by the manager, provided that
(i)  the assessment relates solely to the amount for a province and for the trust that, under subsection 225.2(2) of the Excise Tax Act and due to the application of section 55 of those Regulations, is required to be added to, or may be deducted from, the net tax of the manager for the particular reporting period, and
(ii)  if the penalty is other than a penalty under section 280.1, 285, 285.01 or 285.1 of the Excise Tax Act, the assessment is made on or before the day that is four years after the later of
(A)  the day on which this Act receives royal assent, and
(B)  the day on which the manager becomes liable to pay the penalty.
PART 3

Amendments to the Excise Tax Act (Excise Measures), the Air Travellers Security Charge Act and the Excise Act, 2001

R.S., c. E-15

Excise Tax Act

61  (1)  Paragraph 68.01(1)(a) of the Excise Tax Act is amended by adding the following after subparagraph (i):
(i.1)  to the vendor, if the quantity of the diesel fuel is at least 1,000 litres, the vendor applies for the payment and the purchaser certifies that, and the vendor reasonably believes that, the purchaser will use the diesel fuel exclusively to generate electricity other than in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation, or
(2)  Paragraph 68.01(1)(b) of the Act is replaced by the following:
(b)  to a purchaser that applies for the payment and that uses the diesel fuel to generate electricity (other than in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation), if no application in respect of the diesel fuel can be made by the vendor under subparagraph (a)(i.1).
(3)  Paragraph 68.01(3)(a) of the Act is replaced by the following:
(a)  the vendor described in subparagraph (1)(a)(i) or (i.1) applies for it within two years after the vendor sells the diesel fuel to the purchaser described in subparagraph (1)(a)(i) or (i.1), as the case may be; or
2002, c. 9, s. 5

Air Travellers Security Charge Act

62  The portion of subsection 38(6) of the Air Travellers Security Charge Act before paragraph (a) is replaced by the following:
Time period not to count
(6)  The period between the day on which an application for the review of a requirement is made and the day on which the application is finally disposed of shall not be counted in the computation of
  
2002, c. 22

Excise Act, 2001

63  (1)  The Excise Act, 2001 is amended by adding the following after section 2:
Dutiable amount — consideration
2.1  The following rules apply in determining an amount of consideration for the purposes of the definition dutiable amount in section 2:
(a)  if a provision of Part IX of the Excise Tax Act deems the consideration, or part of the consideration, for a supply not to be consideration for the supply, a supply to be made for no consideration or a supply not to have been made by a person, that deeming does not apply for that determination; and
(b)  subsection 155(1) of that Act is to be read without reference to "and the recipient of the supply is not a registrant who is acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the recipient,".
(2)  Subsection (1) is deemed to have come into force on September 17, 2018.
64  The Act is amended by adding the following after section 209:
Time period not to count
209.1  The following periods of time shall not be counted in the computation of the period of time within which an assessment of a person may be made under section 188 or 189:
(a)  if the person is served a notice of a requirement under subsection 208(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and
(b)  if an application is commenced by the Minister under subsection 209(1) to order the person to provide any access, assistance, information or record, the period of time between the day on which the person files a notice of appearance, or otherwise opposes the application, and the day on which the application is finally disposed of.
65  The portion of subsection 210(7) of the Act before paragraph (a) is replaced by the following:
Time period not to count
(7)  The period between the day on which an application for the review of a requirement is made and the day on which the application is finally disposed of shall not be counted in the computation of
  
66  (1)  Paragraph 211(6)(d.1) of the Act is replaced by the following:
(d.1)  provide confidential information, or allow the inspection of or access to confidential information, as the case may be, under, and solely for the purpose of,
(i)  paragraph 33.1(a) of the Old Age Security Act,
(ii)  an order made under subsection 462.48(3) of the Criminal Code, or
(iii)  an order made under the Mutual Legal Assistance in Criminal Matters Act to gather or send information, for the purposes of an investigation or prosecution relating to an act or omission that, if it had occurred in Canada, would constitute an offence for which an order could be obtained under subsection 462.48(3) of the Criminal Code, in response to a request made pursuant to
(A)  an administrative arrangement entered into under section 6 of the Mutual Legal Assistance in Criminal Matters Act, or
(B)  a bilateral agreement for mutual legal assistance in criminal matters to which Canada is a party;
(2)  Paragraph 211(6)(l) of the Act is replaced by the following:
(l)  provide confidential information, or allow the inspection of or access to confidential information, as the case may be, solely for the purposes of a provision contained in a tax treaty (as defined in subsection 248(1) of the Income Tax Act) or in a listed international agreement;
67  (1)  Paragraph (a) of the description of B in section 233.1 of the Act is replaced by the following:
(a)  if the contravention occurred in a specified province, 300% of the amount determined for A, and
(2)  Paragraph (a) of the description of C in section 233.1 of the Act is replaced by the following:
(a)  if the contravention occurred in a prescribed specified province, 200% of the amount determined for paragraph (b) of the description of A, and
68  (1)  Paragraph (a) of the description of B in section 234.1 of the Act is replaced by the following:
(a)  if the contravention occurred in a specified province, 300% of the amount determined for A, and
(2)  Paragraph (a) of the description of C in section 234.1 of the Act is replaced by the following:
(a)  if the contravention occurred in a prescribed specified province, 200% of the amount determined for paragraph (b) of the description of A, and