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Notice of Ways and Means Motion to amend the Income Tax Act, the Excise Tax Act and related legislation

PART 4
AMENDMENTS TO THE INCOME TAX ACT RELATED TO BIJURALISM

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

91. (1) Subparagraph 12(1)(x)(viii) of the Income Tax Act is replaced by the following:

(viii) may not reasonably be considered to be a payment made in respect of the acquisition by the payer or the public authority of an interest in the taxpayer, an interest in, or for civil law a right in, the taxpayer's business or an interest in, or for civil law a real right in, the taxpayer's property;

(2) Subsection 12(4) of the Act is replaced by the following:

Interest from investment contract

(4) Subject to subsection (4.1), if in a taxation year a taxpayer (other than a taxpayer to whom subsection (3) applies) holds an interest in, or for civil law a right in, an investment contract on any anniversary day of the contract, there shall be included in computing the taxpayer's income for the year the interest that accrued to the taxpayer to the end of that day with respect to the investment contract, to the extent that the interest was not otherwise included in computing the taxpayer's income for the year or any preceding taxation year.

(3) Subsections 12(9) and (9.1) of the Act are replaced by the following:

Deemed accrual

(9) For the purposes of subsections (3), (4) and (11) and 20(14) and (21), if a taxpayer acquires an interest in, or for civil law a right in, a prescribed debt obligation, an amount determined in prescribed manner is deemed to accrue to the taxpayer as interest on the obligation in each taxation year during which the taxpayer holds the interest or the right in the obligation.

Exclusion of proceeds of disposition

(9.1) If a taxpayer disposes of an interest in, or for civil law a right in, a debt obligation that is a debt obligation in respect of which the proportion of the payments of principal to which the taxpayer is entitled is not equal to the proportion of the payments of interest to which the taxpayer is entitled, the portion of the proceeds of disposition received by the taxpayer that can reasonably be considered to represent a recovery of the cost to the taxpayer of the interest or the right in the debt obligation shall, notwithstanding any other provision of this Act, not be included in computing the taxpayer's income, and for the purpose of this subsection, a debt obligation includes, for greater certainty, all of the issuer's obligations to pay principal and interest under that obligation.

(4) Paragraph (i) of the definition "investment contract" in subsection 12(11) of the Act is replaced by the following:

(ian obligation in respect of which the taxpayer has (otherwise than because of subsection (4)) at periodic intervals of not more than one year, included, in computing the taxpayer's income throughout the period in which the taxpayer held an interest in, or for civil law a right in, the obligation, the income accrued on it for those intervals,

92. (1) The portion of subsection 13(5.2) of the Act before paragraph (a) is replaced by the following:

Deemed cost and depreciation

(5.2) If , at any time, a taxpayer has acquired a capital property that is depreciable property or real or immovable property in respect of which, before that time, the taxpayer or any person with whom the taxpayer was not dealing at arm's length was entitled to a deduction in computing income in respect of any amount paid or payable for the use of, or the right to use, the property and the cost or the capital cost (determined without reference to this subsection) at that time of the property to the taxpayer is less than the fair market value thereof at that time determined without reference to any option with respect to that property, for the purposes of this section, section 20 and any regulations made under paragraph 20(1)(a), the following rules apply:

(2) Subsection 13(5.3) of the Act is replaced by the following:

Deemed recapture

(5.3) If , at any time in a taxation year, a taxpayer has disposed of a capital property that is an option with respect to depreciable property or real or immovable property in respect of which the taxpayer or any person with whom the taxpayer was not dealing at arm's length was entitled to a deduction in computing income in respect of any amount paid for the use of, or the right to use, the property, for the purposes of this section, the amount, if any, by which the proceeds of disposition to the taxpayer of the option exceed the taxpayer's cost in respect thereof is deemed to be an excess referred to in subsection (1) in respect of the taxpayer for the year.

(3) Paragraph 13(7.5)(c) of the Act is replaced by the following:

(cif a taxpayer acquires an intangible property, or for civil law an incorporeal property, as a consequence of making a payment to which paragraph (a) applies or incurring a cost to which paragraph (b) applies,

(i) the property referred to in paragraph (a) or (b) is deemed to include the intangible or incorporeal property, and

(ii) the portion of the capital cost referred to in paragraph (a) or (b) that applies to the intangible or incorporeal property is deemed to be the amount determined by the formula

A × B/C
where
A

is the lesser of the amount of the payment made or cost incurred and the amount determined for C,

B

is the fair market value of the intangible or incorporeal property at the time the payment was made or the cost was incurred, and

C

is the fair market value at the time the payment was made or the cost was incurred of all intangible or incorporeal properties acquired as a consequence of making the payment or incurring the cost; and

93. (1) Paragraph (c) of the definition "eligible capital expenditure" in subsection 14(5) of the Act is replaced by the following:

(cthat is the cost of, or any part of the cost of,

(i) tangible property, or for civil law corporeal property, of the taxpayer,

(ii) intangible property, or for civil law incorporeal property, that is depreciable property of the taxpayer,

(iii) property in respect of which any deduction (otherwise than under paragraph 20(1)(b)) is permitted in computing the taxpayer's income from the business or would be so permitted if the taxpayer's income from the business were sufficient for the purpose, or

(iv) an interest in, or for civil law a right in, or a right to acquire any property described in any of subparagraphs (i) to (iii)

(2) Subparagraph (f)(iv) of the definition "eligible capital expenditure" in subsection 14(5) of the Act is replaced by the following:

(iv) an interest in, or for civil law a right in, or a right to acquire any property described in any of subparagraphs (i) to (iii).

94. The portion of subsection 16.1(1) of the Act before paragraph (a) is replaced by the following:

Leasing properties

16.1 (1) Where a taxpayer (in this section referred to as the "lessee") leases tangible property, or for civil law corporeal property, that is not prescribed property and that would, if the lessee acquired the property, be depreciable property of the lessee, from a person resident in Canada other than a person whose taxable income is exempt from tax under this Part, or from a non-resident person who holds the lease in the course of carrying on a business through a permanent establishment in Canada, as defined by regulation, any income from which is subject to tax under this Part, who owns the property and with whom the lessee was dealing at arm's length (in this section referred to as the "lessor") for a term of more than one year, if the lessee and the lessor jointly elect in prescribed form filed with their returns of income for their respective taxation years that include the particular time when the lease began, the following rules apply for the purpose of computing the income of the lessee for the taxation year that includes the particular time and for all subsequent taxation years:

95. (1) Paragraph 18(2)(f) of the Act is replaced by the following:

(fin the case of a corporation whose principal business is the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm's length, the corporation's base level deduction for the particular year.

(2) Paragraphs 18(3.4)(a) and (b) of the Act are replaced by the following:

(aa corporation whose principal business is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm's length, or

(ba partnership

(i) each member of which is a corporation described in paragraph (a), and

(ii) the principal business of which is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property held by it, to or for a person with whom each member of the partnership is dealing at arm's length,

96. (1) Paragraph 18.1(9)(b) of the French version of the Act is replaced by the following:

bau cours de la période commençant au moment de la disposition ou de l'extinction et se terminant 30 jours après ce moment, un contribuable — qui avait une part directe ou indirecte dans le droit — a une autre semblable part dans un autre droit aux produits, laquelle autre part est un abri fiscal ou un abri fiscal déterminé au sens de l'article 143.2.

(2) Subparagraph 18.1(10)(b)(v) of the French version of the Act is replaced by the following:

(v) en cas d'application du paragraphe (9), le début d'une période de 30 jours tout au long de laquelle aucun contribuable ayant eu une part directe ou indirecte dans le droit n'a une autre semblable part dans un autre droit aux produits, laquelle autre part est un abri fiscal ou un abri fiscal déterminé au sens de l'article 143.2.

97. (1) Subparagraph 20(1)(m)(iii) of the Act is replaced by the following:

(iii) periods for which rent or other amounts for the possession or use of land or of chattels or movables have been paid in advance, or

(2) Paragraph 20(1)(n) of the Act is replaced by the following:

Reserve for unpaid amounts

(nif an amount included in computing the taxpayer's income from the business for the year or for a preceding taxation year in respect of property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real or immovable property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, a reasonable amount as a reserve in respect of any part of the amount that can reasonably be regarded as a portion of the profit from the sale;

(3) The portion of subsection 20(11) of the Act before paragraph (a) is replaced by the following:

Foreign taxes on income from property exceeding 15%

(11) In computing the income of an individual from a property other than real or immovable property for a taxation year after 1975 that is income from a source outside Canada, there may be deducted the amount, if any, by which,

(4) The portion of subsection 20(21) of the Act before paragraph (a) is replaced by the following:

Debt obligation

(21) If a taxpayer has in a particular taxation year disposed of a property that is an interest in, or for civil law a right in, a debt obligation for consideration equal to its fair market value at the time of disposition, there may be deducted in computing the taxpayer's income for the particular year the amount, if any, by which

98. (1) The portion of subsection 20.1(1) of the French version of the Act before paragraph (a) is replaced by the following:

Argent emprunté pour tirer un revenu d'un bien

20.1 (1) Le contribuable qui, à un moment donné, cesse d'utiliser de l'argent emprunté en vue de tirer un revenu d'une immobilisation (sauf un bien immeuble ou réel ou un bien amortissable) est réputé continuer à ainsi utiliser la fraction de l'argent emprunté qui correspond à l'excédent visé à l'alinéa b), dans la mesure où cette fraction reste à rembourser après ce moment, si les conditions ci-après sont réunies :

(2) Paragraph 20.1(1)(a) of the English version of the Act is replaced by the following:

(aat any time after 1993 borrowed money ceases to be used by a taxpayer for the purpose of earning income from a capital property (other than real or immovable property or depreciable property), and

99. (1) Paragraph 35(1)(a) of the Act is replaced by the following:

(ais received in a taxation year by an individual as consideration for the disposition by the individual to the corporation of a mining property or an interest, or for civil law a right, therein acquired by the individual as a result of the individual's efforts as a prospector, either alone or with others, or

(2) Subparagraph 35(1)(b)(ii) of the Act is replaced by the following:

(ii) as consideration for the disposition by the person referred to in subparagraph (i) to the corporation of a mining property or an interest, or for civil law a right, therein acquired under the arrangement under which that person made the advance or paid the expenses, or if the prospector's employee, acquired by the person through the employee's efforts,

(3) Paragraphs 35(1)(e) and (f) of the Act are replaced by the following:

(enotwithstanding subdivision c, in computing the cost to the individual, person or partnership, as the case may be, of the share, no amount shall be included in respect of the disposition of the mining property or the interest, or for civil law the right, therein, as the case may be,

(fnotwithstanding sections 66 and 66.2, in computing the cost to the corporation of the mining property or the interest, or for civil law the right, therein, as the case may be, no amount shall be included in respect of the share, and

100. Paragraph (b) of the definition "mining property" in subsection 35(2) of the Act is replaced by the following:

(breal property or an immovable in Canada (other than depreciable property) the principal value of which depends on its mineral resource content;

101. Paragraph (h) of the definition "flow-through entity" in subsection 39.1(1) of the Act is replaced by the following:

(ha trust maintained primarily for the benefit of employees of a corporation or two or more corporations that do not deal at arm's length with each other, where one of the main purposes of the trust is to hold interests in, or for civil law rights in, shares of the capital stock of the corporation or corporations, as the case may be, or any corporation not dealing at arm's length therewith,

102. Subparagraph (i) of the description of D in paragraph 40(2)(b) of the Act is replaced by the following:

(i) if the acquisition date is before February 23, 1994 and the taxpayer or the taxpayer's spouse or common-law partner elected under subsection 110.6(19) in respect of the property or an interest, or for civil law a right, therein that was owned, immediately before the disposition, by the taxpayer, 4/3 of the lesser of

(A) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election by the taxpayer or spouse or common-law partner under subsection 110.6(19) in respect of the property or the interest or right if

(I) this Act were read without reference to subsection 110.6(20), and

(II) the amount designated in the election were equal to the amount, if any, by which the fair market value of the property or the interest or right at the end of February 22, 1994 exceeds the amount determined by the formula

E – 1.1F
where
E

is the amount designated in the election that was made in respect of the property or the interest or right , and

F

is the fair market value of the property or the interest or right at the end of February 22, 1994, and

(B) the total of all amounts each of which is the taxable capital gain of the taxpayer or of their spouse or common-law partner that would have resulted from an election that was made under subsection 110.6(19) in respect of the property or the interest or right if the property were the principal residence of neither the taxpayer nor the spouse or common-law partner for each particular taxation year unless the property was designated, in a return of income for the taxation year that includes February 22, 1994 or for a preceding taxation year, to be the principal residence of either of them for the particular taxation year, and

103. The portion of paragraph 43.1(2)(b) of the French version of the Act before subparagraph (i) is replaced by the following:

blorsque la personne qui détient un domaine résiduel sur le bien réel immédiatement avant le décès du particulier a un lien de dépendance avec le détenteur du domaine viager, le moins élevé des montants ci-après est ajouté, après ce décès, au calcul du prix de base rajusté du bien pour cette personne :

104. The portion of subsection 44(6) of the Act before paragraph (a) is replaced by the following:

Deemed proceeds of disposition

(6) If a taxpayer has disposed of property that was a former business property and was in part a building and in part the land (or an interest, or for civil law a right, therein) subjacent to, or immediately contiguous to and necessary for the use of, the building, for the purposes of this subdivision, the amount if any, by which

105. Paragraphs 44.1(10)(c) and (d) of the Act are replaced by the following:

(ca corporation the principal business of which is the leasing, rental, development or sale, or any combination of those activities, of real or immovable property owned by it; or

(da corporation more than 50% of the fair market value of the property of which (net of debts incurred to acquire the property) is attributable to real or immovable property.

106. (1) Paragraph 53(1)(o) of the French version of the Act is replaced by the following:

olorsque le bien est un bien réel du contribuable, tout montant à ajouter, en application de l'alinéa 43.1(2)b), dans le calcul du prix de base rajusté du bien pour le contribuable;

(2) The portion of paragraph 53(2)(e) of the Act before subparagraph (i) is replaced by the following:

(eif the property is a share, or an interest in or a right to — or, for civil law, a right in or to — a share, of the capital stock of a corporation acquired before August 1976, an amount equal to any expense incurred by the taxpayer in consideration therefor, to the extent that the expense was, by virtue of

107. The portion of the definition "listed personal property" in section 54 of the Act before paragraph (a) is replaced by the following:

"listed personal property"

« biens meubles déterminés »

"listed personal property" of a taxpayer means the taxpayer's personal-use property that is all or any portion of, or any interest in or right to — or, for civil law, any right in or to — any

108. The portion of the description of A in subsection 56.1(2) of the Act before paragraph (a) is replaced by the following:

A

is the total of all amounts each of which is an amount (other than an amount that is otherwise a support amount) that became payable by a person in a taxation year, under an order of a competent tribunal or under a written agreement, in respect of an expense (other than an expenditure in respect of a self-contained domestic establishment in which the person resides or an expenditure for the acquisition of tangible property, or for civil law corporeal property, that is not an expenditure on account of a medical or education expense or in respect of the acquisition, improvement or maintenance of a self-contained domestic establishment in which the taxpayer described in paragraph (a) or (b) resides) incurred in the year or the preceding taxation year for the maintenance of a taxpayer, children in the taxpayer's custody or both the taxpayer and those children, if the taxpayer is

109. The portion of the description of A in subsection 60.1(2) of the Act before paragraph (a) is replaced by the following:

A

is the total of all amounts each of which is an amount (other than an amount that is otherwise a support amount) that became payable by a taxpayer in a taxation year, under an order of a competent tribunal or under a written agreement, in respect of an expense (other than an expenditure in respect of a self-contained domestic establishment in which the taxpayer resides or an expenditure for the acquisition of tangible property, or for civil law corporeal property, that is not an expenditure on account of a medical or education expense or in respect of the acquisition, improvement or maintenance of a self-contained domestic establishment in which the person described in paragraph (a) or (b) resides) incurred in the year or the preceding taxation year for the maintenance of a person, children in the person's custody or both the person and those children, if the person is

110. Subparagraph 65(2)(a)(i) of the Act is replaced by the following:

(i) natural accumulations of petroleum or natural gas, oil or gas wells or mineral resources in which the taxpayer has any interest or, for civil law, right , or

111. Paragraphs 66(12.1)(a) and (b) of the Act are replaced by the following:

(aif as a result of a transaction occurring after May 6, 1974 an amount has become receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer therefor was property (other than a share or a Canadian resource property, or an interest in or a right to — or, for civil law, a right in or to — the share or the property ) or services, the original cost of which to the taxpayer may reasonably be regarded as having been primarily Canadian exploration and development expenses of the taxpayer (or would have been so regarded if they had been incurred by the taxpayer after 1971 and before May 7, 1974) or a Canadian exploration expense, there shall at that time be included in the amount determined for G in the definition "cumulative Canadian exploration expense" in subsection 66.1(6) in respect of the taxpayer the amount that became receivable by the taxpayer at that time; and

(bif as a result of a transaction occurring after May 6, 1974 an amount has become receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer therefor was property (other than a share or a Canadian resource property, or an interest in or a right to — or, for civil law, a right in or to — the share or the property ) or services, the original cost of which to the taxpayer may reasonably be regarded as having been primarily a Canadian development expense, there shall at that time be included in the amount determined for G in the definition "cumulative Canadian development expense" in subsection 66.2(5) in respect of the taxpayer the amount that became receivable by the taxpayer at that time.

112. (1) Paragraph (i) of the definition "Canadian exploration expense" in subsection 66.1(6) of the Act is replaced by the following:

(iany expense referred to in any of paragraphs (a) to (g) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares ,

(2) Paragraph (j) of the definition "Canadian exploration expense" in subsection 66.1(6) of the Act is replaced by the following:

(jany consideration given by the taxpayer for any share or any interest in or right to — or, for civil law, any right in or to — a share, except as provided by paragraph (i),

113. (1) Clause 66.2(2)(b)(ii)(A) of the Act is replaced by the following:

(A) an amount included in the taxpayer's income for the year by virtue of a disposition in the year of inventory described in section 66.3 that was a share or any interest in or right to — or, for civil law, any right in or to — a share, acquired by the taxpayer under circumstances described in paragraph (g) of the definition "Canadian development expense" in subsection (5) or paragraph (i) of the definition "Canadian exploration expense" in subsection 66.1(6), or

(2) Paragraph (g) of the definition "Canadian development expense" in subsection 66.2(5) of the Act is replaced by the following:

(gany cost or expense referred to in any of paragraphs (a) to (e) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the cost or expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares,

(3) Paragraph (h) of the definition "Canadian development expense" in subsection 66.2(5) of the Act is replaced by the following:

(hany consideration given by the taxpayer for any share or any interest in or right toor, for civil law, any right in or to — a share, except as provided by paragraph (g),

114. The portion of subsection 66.3(2) of the Act before paragraph (a) is replaced by the following:

Deductions from paid-up capital

(2) If , at any time after May 23, 1985, a corporation has issued a share of its capital stock under circumstances described in paragraph (i) of the definition "Canadian exploration expense" in subsection 66.1(6), paragraph (g) of the definition "Canadian development expense" in subsection 66.2(5) or paragraph (c) of the definition "Canadian oil and gas property expense" in subsection 66.4(5) or has issued a share of its capital stock on the exercise of an interest in or right to — or, for civil law, a right in or to — such a share granted under circumstances described in any of those paragraphs, in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that included that share

115. (1) Clause 66.4(2)(a)(ii)(A) of the Act is replaced by the following:

(A) an amount included in the taxpayer's income for the year by virtue of a disposition in the year of inventory described in section 66.3 that was a share or any interest in or right to — or, for civil law, any right in or to — a share acquired by the taxpayer under circumstances described in paragraph (c) of the definition "Canadian oil and gas property expense" in subsection (5), or

(2) Paragraph (c) of the definition "Canadian oil and gas property expense" in subsection 66.4(5) of the Act is replaced by the following:

(cany cost or expense referred to in paragraph (a) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the cost or expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares,

(3) The portion of the description of F in the definition "cumulative Canadian oil and gas property expense" in subsection 66.4(5) of the Act before paragraph (a) is replaced by the following:

F

is the total of all amounts each of which is an amount in respect of property described in paragraph (a), (c) or (d) of the definition "Canadian resource property" in subsection 66(15) or any right to or interest in — or, for civil law, any right in or to — such a property, other than such a right or interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership, (in this description referred to as "the particular property") disposed of by the taxpayer before that time equal to the amount, if any, by which

116. (1) Clause 66.7(1)(b)(i)(A) of the Act is replaced by the following:

(A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds of the disposition have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules , this clause, clause (3)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,

(2) Clause 66.7(2)(b)(i)(A) of the Act is replaced by the following:

(A) the amount included under subsection 59(1) in computing its income for the year that can reasonably be regarded as attributable to the disposition by it of any interest in or right to — or, for civil law, any right in or to — the particular property, or

(3) Clause 66.7(3)(b)(i)(A) of the Act is replaced by the following:

(A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as being attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules , this clause, clause (1)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,

117. The portion of paragraph 79.1(6)(b) of the Act before subparagraph (i) is replaced by the following:

(ball amounts each of which is an outlay or expense made or incurred, or a specified amount at that time of a debt that is assumed, by the creditor at or before that time to protect the creditor's interest, or for civil law the creditor's right, in the particular property, except to the extent the outlay or expense

118. Paragraph 80(2)(o) of the Act is replaced by the following:

(onotwithstanding paragraph (n), if a commercial debt obligation, for which a particular person is liable with one or more other persons, is settled at any time in respect of the particular person but not in respect of all of the other persons, the portion of the obligation that can reasonably be considered to be the particular person's share of the obligation shall be considered to have been issued by the particular person and settled at that time and not at any subsequent time;

119. Subsection 80.04(11) of the English version of the Act is replaced by the following:

Joint and several, or solidary, liability

(11) If taxes, interest and penalties are payable under this Act by a person for a taxation year and those taxes, interest and penalties are payable by a debtor because of subsection (10), the debtor and the person are jointly and severally, or solidarily, liable to pay those amounts.

120. (1) Paragraphs 85(1.1)(a) and (b) of the Act are replaced by the following:

(aa capital property (other than real or immovable property, an option in respect of such property , or an interest in real property or a real right in an immovable , owned by a non-resident person);

(ba capital property that is real or immovable property, an option in respect of such property , or an interest in real property or a real right in an immovable , owned by a non-resident insurer if that property and the property received as consideration for that property are designated insurance property for the year;

(2) Paragraph 85(1.1)(f) of the Act is replaced by the following:

(fan inventory (other than real or immovable property, an option in respect of such property , or an interest in real property or a real right in an immovable );

(3) Paragraph 85(1.1)(h) of the Act is replaced by the following:

(ha capital property that is real or immovable property, an option in respect of such property , or an interest in real property or a real right in an immovable , owned by a non-resident person (other than a non-resident insurer) and used in the year in a business carried on in Canada by that person; or

(4) Subparagraph 85(2)(a)(i) of the Act is replaced by the following:

(i) a capital property (other than real or immovable property, an option in respect of such property , or an interest in real property or a real right in an immovable , if the partnership was not a Canadian partnership at the time of the disposition),

121. (1) Subparagraph (a)(ii) of the definition "investment business" in subsection 95(1) of the Act is replaced by the following:

(ii) the development of real property or immovables for sale, the lending of money, the leasing or licensing of property or the insurance or reinsurance of risks,

(2) Paragraph (g) of the definition "investment property" in subsection 95(1) of the Act is replaced by the following:

(greal property or immovables ,

(3) Paragraph (j) of the definition "investment property" in subsection 95(1) of the Act is replaced by the following:

(jinterests in, or for civil law rights in , or options in respect of, property that is included in any of paragraphs (a) to (i);

122. (1) The portion of subsection 98(3) of the Act before paragraph (a) is replaced by the following:

Rules applicable if partnership ceases to exist

(3) If at any particular time after 1971 a Canadian partnership has ceased to exist and all the partnership property has been distributed to persons who were members of the partnership immediately before that time so that immediately after that time each such person has, in each such property, an undivided interest, or for civil law an undivided right (which undivided interest or undivided right is referred to in this subsection as an "undivided interest or right", as the case may be) that, when expressed as a percentage (referred to in this subsection as that person's "percentage") of all undivided interests or rights in the property, is equal to the person's undivided interest or right , when so expressed, in each other such property, if each such person has jointly so elected in respect of the property in prescribed form and within the time referred to in subsection 96(4), the following rules apply:

(2) The portion of paragraph 98(3)(b) before subparagraph (i) of the Act is replaced by the following:

(bthe cost to each such person of that person's undivided interest or right in each such property is deemed to be an amount equal to the total of

(3) Subparagraph 98(3)(b)(ii) of the Act is replaced by the following:

(ii) where the amount determined under subparagraph (a)(i) exceeds the amount determined under subparagraph (a)(ii), the amount determined under paragraph (c) in respect of the person's undivided interest or right in the property;

(4) Paragraph 98(3)(c) of the Act is replaced by the following:

(cthe amount determined under this paragraph in respect of each such person's undivided interest or right in each such property that was a capital property (other than depreciable property) of the partnership is such portion of the excess, if any, described in subparagraph (b)(ii) as is designated by the person in respect of the property, except that

(i) in no case shall the amount so designated in respect of the person's undivided interest or right in any such property exceed the amount, if any, by which the person's percentage of the fair market value of the property immediately after its distribution exceeds the person's percentage of the cost amount to the partnership of the property immediately before its distribution, and

(ii) in no case shall the total of amounts so designated in respect of the person's undivided interest or right in all such capital properties (other than depreciable property) exceed the excess, if any, described in subparagraph (b)(ii);

(5) Paragraph 98(3)(e) of the Act is replaced by the following:

(eif the property so distributed by the partnership was depreciable property of the partnership of a prescribed class and any such person's percentage of the amount that was the capital cost to the partnership of that property exceeds the amount determined under paragraph (b) to be the cost to the person of the person's undivided interest or right in the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a)

(i) the capital cost to the person of the person's undivided interest or right in the property is deemed to be the person's percentage of the amount that was the capital cost to the partnership of the property, and

(ii) the excess is deemed to have been allowed to the person in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the person of the undivided interest or right;

(6) Subparagraph 98(3)(g)(i) of the Act is replaced by the following:

(i) for the purposes of determining under this Act any amount relating to cumulative eligible capital, an eligible capital amount, an eligible capital expenditure or eligible capital property, each such person is deemed to have continued to carry on the business, in respect of which the property was eligible capital property and that was previously carried on by the partnership, until the time that the person disposes of the person's undivided interest or right in the property,

123. (1) Clauses 108(2)(b)(ii)(A) and (B) of the Act are replaced by the following:

(A) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable ),

(B) the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or

(2) Clauses 108(2)(b)(iii)(F) and (G) of the Act are replaced by the following:

(F) real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and

(G) rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,

(3) Paragraph 108(2)(c) of the Act is replaced by the following:

(cthe fair market value of the property of the trust at the end of 1993 was primarily attributable to real property or an interest in real property — or to immovables or a real right in immovables — and the trust was a unit trust throughout any calendar year that ended before 1994 and the fair market value of the property of the trust at the particular time is primarily attributable to property described in paragraph (a) or (b) of the definition "qualified investment" in section 204, real property or an interest in real property — or immovables or a real right in immovables — or any combination of those properties.

124. Clause (a)(ii)(A) of the definition "qualified investment" in subsection 115.2(1) of the Act is replaced by the following:

(A) real or immovable property situated in Canada,

125. (1) Paragraph 116(6)(a.1) of the Act is replaced by the following:

(a.1a property (other than real or immovable property situated in Canada, a Canadian resource property or a timber resource property) that is described in an inventory of a business carried on in Canada by the person;

(2) Paragraph 116(6)(h) of the Act is replaced by the following:

(han interest, or for civil law a right, in property referred to in any of paragraphs (a) to (g); and

126. The portion of the definition "specified investment business" in subsection 125(7) of the Act before paragraph (a) is replaced by the following:

"specified investment business"

« entreprise de placement déterminée »

"specified investment business" , carried on by a corporation in a taxation year, means a business (other than a business carried on by a credit union or a business of leasing property other than real or immovable property) the principal purpose of which is to derive income (including interest, dividends, rents and royalties) from property but, except where the corporation was a prescribed labour-sponsored venture capital corporation at any time in the year, does not include a business carried on by the corporation in the year where

127. (1) The portion of subparagraph 126(2.21)(a)(i) of the Act before clause (A) is replaced by the following:

(i) where the property is real or immovable property situated in a country other than Canada,

(2) Subparagraph 126(2.21)(a)(ii) of the Act is replaced by the following:

(ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time,

(3) The portion of subparagraph 126(2.22)(a)(i) of the Act before clause (A) is replaced by the following:

(i) where the property is real or immovable property situated in a country other than Canada,

(4) Subparagraph 126(2.22)(a)(ii) of the Act is replaced by the following:

(ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time,

128. Paragraph (d) of the description of A in the definition "scientific research and experimental development tax credit" in subsection 127.3(2) of the English version of the Act is replaced by the following:

(da bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation (in this section referred to as a "debt obligation") acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of that debt obligation, or

129. (1) The portion of paragraph 128(1)(e) of the English version of the Act before subparagraph (i) is replaced by the following:

(eif , in the case of any taxation year of the corporation ending during the period the corporation is a bankrupt, the corporation fails to pay any tax payable by it under this Act for any such year, the corporation and the trustee in bankruptcy are jointly and severally, or solidarily, liable to pay the tax, except that

(2) Subparagraph 128(1)(e)(ii) of the Act is replaced by the following:

(ii) payment by either of them discharges the liability to the extent of the amount paid;

130. (1) Subparagraph 128.1(4)(b)(i) of the Act is replaced by the following:

(i) real or immovable property situated in Canada, a Canadian resource property or a timber resource property,

(2) Subparagraph 128.1(7)(h)(ii) of the English version of the Act is replaced by the following:

(ii) if the individual alone makes such an election or specification, the individual and the trust are jointly and severally, or solidarily, liable for any amount payable under this Act by the trust as a result of the election or specification, and

131. (1) Paragraphs 130.1(6)(b) and (c) of the Act are replaced by the following:

(bits only undertaking was the investing of funds of the corporation and it did not manage or develop any real or immovable property;

(cnone of the property of the corporation consisted of

(i) debts owing to the corporation that were secured on real or immovable property situated outside Canada,

(ii) debts owing to the corporation by non-resident persons, except any such debts that were secured on real or immovable property situated in Canada,

(iii) shares of the capital stock of corporations not resident in Canada, or

(iv) real or immovable property situated outside Canada, or any leasehold interest in such property;

(2) Paragraph 130.1(6)(g) of the Act is replaced by the following:

(gthe cost amount to the corporation of all real or immovable property of the corporation, including leasehold interests in such property (except real or immovable property acquired by the corporation by foreclosure or otherwise after default made on a mortgage, hypothec or agreement of sale of real or immovable property) did not exceed 25% of the cost amount to it of all its property;

132. Subparagraphs 131(8)(b)(i) and (ii) of the Act are replaced by the following:

(i) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable ),

(ii) the acquiring, holding, maintaining, improving, leasing or managing of any real property (or interest in real property) or of any immovable (or real right in immovables) that is capital property of the corporation, or

133. Subparagraphs 132(6)(b)(i) and (ii) of the Act are replaced by the following:

(i) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable ),

(ii) the acquiring, holding, maintaining, improving, leasing or managing of any real property (or interest in real property) or of any immovable (or real right in immovables) that is capital property of the trust, or

134. (1) Subparagraph (b)(i) of the definition "non-resident-owned investment corporation" in subsection 133(8) of the Act is replaced by the following:

(i) ownership of, or trading or dealing in, bonds, shares, debentures, mortgages, hypothecary claims, bills, notes or other similar property or any interest, or for civil law any right, therein,

(2) Subparagraph (b)(iii) of the definition « société de placement appartenant à des non-résidents » in subsection 133(8) of the French version of the Act is replaced by the following:

(iii) soit de loyers, de la location de chatels , de frais ou rémunérations sur chartes-parties, de rentes, de redevances, d'intérêts ou de dividendes,

(3) Paragraph (c) of the definition "société de placement appartenant à des non-résidents" in subsection 133(8) of the French version of the Act is replaced by the following:

cau plus 10 % de son revenu brut de chaque année d'imposition se terminant au cours de la période ont été tirés de loyers, de la location de chatels , de frais ou rémunérations sur chartes-parties;

135. (1) Subsection 138(4.4) of the Act is replaced by the following:

Income inclusion

(4.4) If , for a period of time in a taxation year, a life insurer

(aowned land (other than land referred to in paragraph (c) or (d)) or an interest, or for civil law a right, therein that was not held primarily for the purpose of gaining or producing income from the land for the period,

(bhad an interest, or for civil law a right, in a building that was being constructed, renovated or altered,

(cowned land subjacent to the building referred to in paragraph (b) or an interest, or for civil law a right, therein, or

(downed land immediately contiguous to the land referred to in paragraph (c) or an interest, or for civil law a right, therein that was used or was intended to be used for a parking area, driveway, yard, garden or other use necessary for the use or intended use of the building referred to in paragraph (b),

there shall be included in computing the insurer's income for the year, where the land, building, or interest or right , was designated insurance property of the insurer for the year, or property used or held by it in the year in the course of carrying on an insurance business in Canada, the total of all amounts each of which is the amount prescribed in respect of the insurer's cost or capital cost, as the case may be, of the land, building, or interest or right , for the period, and the amount prescribed shall, at the end of the period, be included in computing

(ewhere the land, or interest or right therein, is property described in paragraph (a), the cost to the insurer of the land, or of the interest or right therein, and

(fwhere the land, building, or interest or right therein, is property described in paragraphs (b) to (d), the capital cost to the insurer of the interest or right in the building described in paragraph (b).

(2) Clauses 138(4.5)(b)(ii)(A) and (B) of the French version of the Act are replaced by the following:

(A) si le bien est un fonds de terre, ou un intérêt ou, pour l'application du droit civil , un droit sur un fonds de terre du cessionnaire, visé à l'alinéa (4.4)a), dans le calcul du coût de ce bien pour le cessionnaire,

(B) si le bien est un fonds de terre, un bâtiment, ou un intérêt ou, pour l'application du droit civil , un droit sur un fonds de terre ou un bâtiment, visé aux alinéas (4.4)b) à d), dans le calcul du coût en capital, pour le cessionnaire, de l'intérêt ou, pour l'application du droit civil, du droit sur le bâtiment visé à l'alinéa (4.4)b).

(3) Clauses 138(4.5)(e)(ii)(A) and (B) of the English version of the Act are replaced by the following:

(A) where the property is land or an interest, or for civil law a right, therein of the transferee described in paragraph (4.4)(a), the cost to the transferee of the land, or of the interest or right therein, and

(B) where the property is land or a building, or an interest therein or for civil law a right therein , described in paragraphs (4.4)(b) to (d), the capital cost to the transferee of the interest or of the right in the building described in paragraph (4.4)(b).

136. (1) Subparagraph 142.7(7)(a)(ii) of the Act is replaced by the following:

(ii) the entrant bank assumes an obligation of the Canadian affiliate that is an instrument or commitment described in paragraph 20(1)(l.1) or an obligation in respect of goods, services, land, or chattels or movable property , described in subparagraph 20(1)(m)(i), (ii) or (iii),

(2) Subparagraph 142.7(7)(f)(ii) of the Act is replaced by the following:

(ii) in applying paragraph 20(1)(m), an amount in respect of the goods, services, land, chattels or movable property , that was included under paragraph 12(1)(a) in computing the Canadian affiliate's income from a business is deemed to have been so included in computing the entrant bank's income from its Canadian banking business for a preceding taxation year,

137. (1) Subparagraph (a)(iii) of the definition "earned income" in subsection 146(1) of the Act is replaced by the following:

(iii) property, where the income is derived from the rental of real or immovable property or from royalties in respect of a work or invention of which the taxpayer was the author or inventor,

(2) Subparagraph (e)(ii) of the definition "earned income" in subsection 146(1) of the Act is replaced by the following:

(ii) property, where the loss is sustained from the rental of real or immovable property,

138. Clauses 149(1)(o.2)(ii)(A) to (C) of the Act are replaced by the following:

(A) limited its activities to

(I) acquiring, holding, maintaining, improving, leasing or managing capital property that is real property or an interest in real property — or immovables or a real right in immovables — owned by the corporation, another corporation described by this subparagraph and subparagraph (iv) or a registered pension plan, and

(II) investing its funds in a partnership that limits its activities to acquiring, holding, maintaining, improving, leasing or managing capital property that is real property or an interest in real property — or immovables or a real right in immovables — owned by the partnership,

(B) made no investments other than in real property or an interest in real property — or immovables or a real right in immovables — or investments that a pension plan is permitted to make under the Pension Benefits Standards Act, 1985 or a similar law of a province, and

(C) borrowed money solely for the purpose of earning income from real property or an interest in real property or from immovables or a real right in immovables ,

139. Paragraph 153(6)(c) of the Act is replaced by the following:

(cis authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables.

140. The portion of paragraph 159(1)(a) of the English version of the Act before subparagraph (i) is replaced by the following:

(athe legal representative is jointly and severally, or solidarily, liable with the taxpayer

141. (1) Paragraph 160(1)(d) of the English version of the Act is replaced by the following:

(dthe transferee and transferor are jointly and severally, or solidarily, liable to pay a part of the transferor's tax under this Part for each taxation year equal to the amount by which the tax for the year is greater than it would have been if it were not for the operation of sections 74.1 to 75.1 of this Act and section 74 of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, in respect of any income from, or gain from the disposition of, the property so transferred or property substituted for it , and

(2) The portion of paragraph 160(1)(e) of the English version of the Act before subparagraph (i) is replaced by the following:

(ethe transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

(3) The portion of subsection 160(1.1) of the English version of the Act before the formula is replaced by the following:

Joint and several, or solidary, liability — subsection 69(11)

(1.1) If a particular person or partnership is deemed by subsection 69(11) to have disposed of a property at any time, the person referred to in that subsection to whom a benefit described in that subsection was available in respect of a subsequent disposition of the property or property substituted for the property is jointly and severally, or solidarily, liable with each other taxpayer to pay a part of the other taxpayer's liabilities under this Act in respect of each taxation year equal to the amount determined by the formula

(4) The portion of subsection 160(1.2) of the English version of the Act before paragraph (a) is replaced by the following:

Joint and several, or solidary, liability — tax on split income

(1.2) A parent of a specified individual is jointly and severally, or solidarily, liable with the individual for the amount required to be added because of subsection 120.4(2) in computing the specified individual's tax payable under this Part for a taxation year if, during the year, the parent

(5) The portion of subsection 160(3) of the English version of the Act before paragraph (a), as enacted by subsection 16 (2), is replaced by the following:

Discharge of liability

(3) If a particular taxpayer has become jointly and severally, or solidarily, liable with another taxpayer under this section or because of paragraph 94(3)(d) or (e) or subsection 94(17) in respect of part or all of a liability under this Act of the other taxpayer,

(6) Subsection 160(3)(b) of the English version of the Act is replaced by the following:

(ba payment by the other taxpayer on account of that taxpayer's liability discharges the particular taxpayer's liability only to the extent that the payment operates to reduce that other taxpayer's liability to an amount less than the amount in respect of which the particular taxpayer is, by this section, made jointly and severally, or solidarily, liable.

(7) Subsection 160(3.1) of the Act is replaced by the following:

Fair market value of undivided interest or right

(3.1) For the purposes of this section and section 160.4, the fair market value at any time of an undivided interest, or for civil law an undivided right, in a property, expressed as a proportionate interest or right in that property, is, subject to subsection (4), deemed to be equal to the same proportion of the fair market value of that property at that time.

142. Subsections 160.1(2.1) and (2.2) of the English version of the Act are replaced by the following:

Liability for refunds by reason of section 122.61

(2.1) If a person was a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual at the end of a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay any excess described in subsection (1) that was refunded in respect of the year to, or applied to a liability of, the individual as a consequence of the operation of section 122.61 if the person was the individual's cohabiting spouse or common-law partner at the time the excess was refunded, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act.

Liability for excess refunds under section 126.1 to partners

(2.2) Every taxpayer who, on the day on which an amount has been refunded to, or applied to the liability of, a member of a partnership as a consequence of the operation of subsection 126.1(7) or (13) in excess of the amount to which the member was so entitled, is a member of that partnership is jointly and severally, or solidarily, liable with each other taxpayer who on that day is a member of the partnership to pay the excess and to pay interest on the excess, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act.

143. (1) The portion of subsection 160.2(4) of the English version of the Act before paragraph (a) is replaced by the following:

Rules applicable

(4) If a taxpayer and an annuitant have, by virtue of subsection (1) or (2), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant under this Act, the following rules apply:

(2) Paragraph 160.2(4)(a) of the Act is replaced by the following:

(aa payment by the taxpayer on account of the taxpayer's liability shall to the extent thereof discharge their liability; but

(3) Paragraph 160.2(4)(b) of the English version of the Act is replaced by the following:

(ba payment by the annuitant on account of the annuitant's liability discharges the taxpayer's liability only to the extent that the payment operates to reduce the annuitant's liability to an amount less than the amount in respect of which the taxpayer was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable.

144. (1) The portion of subsection 160.3(3) of the English version of the Act before paragraph (a) is replaced by the following:

Rules applicable

(3) If a taxpayer and another person have, by virtue of subsection (1), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:

(2) Paragraph 160.3(3)(a) of the Act is replaced by the following:

(aa payment by the other person on account of the other person's liability shall to the extent thereof discharge their liability; but

(3) Paragraph 160.3(3)(b) of the English version of the Act is replaced by the following:

(ba payment by the taxpayer on account of the taxpayer's liability discharges the other person's liability only to the extent that the payment operates to reduce the taxpayer's liability to an amount less than the amount in respect of which the other person was, by subsection (1), made jointly and severally, or solidarily, liable.

145. (1) The portion of subsection 160.4(4) of the English version of the Act before paragraph (a) is replaced by the following:

Rules applicable

(4) If a corporation and another person have, because of subsection (1) or (2), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the corporation under this Act

(2) Paragraph 160.4(4)(a) of the Act is replaced by the following:

(aa payment by the other person on account of that person's liability shall to the extent thereof discharge their liability; and

(3) Paragraph 160.4(4)(b) of the English version of the Act is replaced by the following:

(ba payment by the corporation on account of the corporation's liability discharges the other person's liability only to the extent that the payment operates to reduce the corporation's liability to an amount less than the amount in respect of which the other person was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable.

146. Subparagraph 163.2(8)(b)(i) of the French version of the Act is replaced by the following:

(i) une part a ou doit avoir un numéro d'inscription attribué en vertu de l'article 237.1 qui est le même numéro que celui qui s'applique à chacune des autres parts dans le bien,

147. Paragraph (d) of the definition "financial institution" in subsection 181(1) of the Act is replaced by the following:

(dauthorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables ,

148. (1) Paragraph 181.3(1)(a) of the Act is replaced by the following:

(athe total of all amounts each of which is the carrying value at the end of the year of an asset of the financial institution (other than property held by the institution primarily for the purpose of resale that was acquired by the financial institution, in the year or the preceding taxation year, as a consequence of another person's default, or anticipated default, in respect of a debt owed to the institution) that is tangible, or for civil law corporeal, property used in Canada and, in the case of a financial institution that is an insurance corporation, that is non-segregated property, within the meaning assigned by subsection 138(12),

(2) Subparagraph 181.3(1)(b)(i) of the Act is replaced by the following:

(i) the total of all amounts each of which is the carrying value of an asset of the partnership, at the end of its last fiscal period ending at or before the end of the year, that is tangible, or for civil law corporeal, property used in Canada

149. Subparagraph 181.4(d)(i) of the Act is replaced by the following:

(i) is a ship or aircraft operated by the corporation in international traffic or is personal or movable property used in its business of transporting passengers or goods by ship or aircraft in international traffic, and

150. (1) The portion of subsection 185(4) of the English version of the Act before paragraph (a) is replaced by the following:

Joint and several, or solidary, liability from excessive elections

(4) Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation's tax payable under this Part because of the election that

(2) The portion of subsection 185(6) of the English version of the Act before paragraph (a) is replaced by the following:

Rules applicable

(6) If under subsection (4) a corporation and another person have become jointly and severally, or solidarily, liable to pay part or all of the corporation's tax payable under this Part in respect of a dividend described in that subsection,

(3) Paragraph 185(6)(a) of the Act is replaced by the following:

(aa payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge their liability after that time; and

151. Subsection 188(4) of the English version of the Act is replaced by the following:

Joint and several, or solidary, liability — tax transfer

(4) If property has been transferred to a charitable organization in circumstances described in subsection (3) and it may reasonably be considered that the organization acted in concert with a charitable foundation for the purpose of reducing the disbursement quota of the foundation, the organization is jointly and severally, or solidarily, liable with the foundation for the tax imposed on the foundation by that subsection in an amount not exceeding the net value of the property.

152. Paragraph (c) of the definition "financial institution" in subsection 190(1) of the Act is replaced by the following:

(cis authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real property or immovables or investing in indebtedness on the security of mortgages on real property or of hypothecs on immovables ,

153. (1) Paragraph 191.3(1)(e) of the English version of the Act is replaced by the following:

(ethe transferor corporation and the transferee corporation are jointly and severally, or solidarily, liable to pay the amount of tax specified in the agreement and any interest or penalty in respect thereof.

(2) Subsection 191.3(5) of the English version of the Act is replaced by the following:

Assessment of transferor corporation

(5) The Minister may at any time assess a transferor corporation in respect of any amount for which it is jointly and severally, or solidarily, liable by reason of paragraph (1)(e) and the provisions of Division I of Part I are applicable in respect of the assessment as though it had been made under section 152.

(3) The portion of subsection 191.3(6) of the English version of the Act before paragraph (a) is replaced by the following:

Payment by transferor corporation

(6) If a transferor corporation and a transferee corporation are by reason of paragraph (1)(e) jointly and severally, or solidarily, liable in respect of tax payable by the transferee corporation under subparagraph 191.1(1)(a)(iv) and any interest or penalty in respect thereof, the following rules apply:

(4) Paragraph 191.3(6)(a) of the Act is replaced by the following:

(aa payment by the transferor corporation on account of the liability shall, to the extent thereof, discharge their liability; and

(5) Paragraph 191.3(6)(b) of the English version of the Act is replaced by the following:

(ba payment by the transferee corporation on account of its liability discharges the transferor corporation's liability only to the extent that the payment operates to reduce the transferee corporation's liability under this Act to an amount less than the amount in respect of which the transferor corporation was, by paragraph (1)(e), made jointly and severally, or solidarily, liable.

154. (1) The portion of subparagraph 204.4(2)(a)(ii) of the Act after clause (A) is replaced by the following:

(B) the amount by which the fair market value at the time of acquisition of its real or immovable property that may reasonably be regarded as being held for the purpose of producing income from property exceeds the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property

is not less than 80% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property,

(2) Subparagraphs 204.4(2)(a)(iii) and (iv) of the Act are replaced by the following:

(iii) the fair market value at the time of acquisition of its shares, bonds, mortgages, hypothecary claims and other securities of any one corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality) is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is an amount owing by it on account of its acquisition of real or immovable property,

(iv) the amount by which

(A) the fair market value at the time of acquisition of any one of its real or immovable properties

exceeds

(B) the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property

is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property,

(3) Clause 204.4(2)(a)(viii)(A) of the Act is replaced by the following:

(A) a mortgage or hypothecary claim (other than a mortgage or hypothecary claim insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages or hypothecary claims and that is approved as a private insurer of mortgages or hypothecary claims by the Superintendent of Financial Institutions pursuant to the powers assigned to the Superintendent under subsection 6(1) of the Office of the Superintendent of Financial Institutions Act ), or an interest therein, or for civil law a right therein, in respect of which the mortgagor or hypothecary debtor is the annuitant under a registered retirement savings plan or registered retirement income fund, or a person with whom the annuitant is not dealing at arm's length, if any of the funds of a trust governed by such a plan or fund have been used to acquire an interest in the applicant, or

155. (1) Subparagraph 204.6(2)(b)(ii) of the Act is replaced by the following:

(ii) the total of all amounts each of which is an amount owing by the trust at the end of the month in respect of the acquisition of real property or immovables.

(2) Subsection 204.6(3) of the Act is replaced by the following:

Tax payable — real property or immovables

(3) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) holds real or immovable property, it shall, in respect of that month, pay a tax under this Part equal to 1% of the total of all amounts each of which is the amount by which the excess of

(athe fair market value at the time of its acquisition of any one real or immovable property of the taxpayer

over

(bthe total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of the real or immovable property

was greater than 10% of the amount by which the total of all amounts each of which is the fair market value at the time of its acquisition of a property held by it at the end of the month exceeds the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of real or immovable property.

156. Paragraphs (c) and (c.1) of the definition "carved-out property" in subsection 209(1) of the Act are replaced by the following:

(can interest, or for civil law a right, in respect of a property that was acquired by the person solely in consideration of the person's undertaking under an agreement to incur Canadian exploration expense or Canadian development expense in respect of the property and, where the agreement so provides, to acquire gas or oil well equipment (as defined in subsection 1104(2) of the Income Tax Regulations ) in respect of the property,

(c.1an interest, or for civil law a right, in respect of a property that was retained by the person under an agreement under which another person obtained an absolute or conditional right to acquire another interest, or for civil law another right, in respect of the property, if the other interest or right is not carved-out property of the other person because of paragraph (c),

157. (1) Subparagraphs 212(1)(d)(viii) and (ix) of the Act are replaced by the following:

(viii) a payment made under a bona fide cost-sharing arrangement under which the person making the payment shares on a reasonable basis with one or more non-resident persons research and development expenses in exchange for an interest, or for civil law a right, in any or all property or other things of value that may result therefrom,

(ix) a rental payment for the use of or the right to use outside Canada any tangible, or for civil law corporeal, property,

(2) Paragraph 212(13)(f) of the Act is replaced by the following:

(finterest on any mortgage, hypothecary claim or other indebtedness entered into or issued or modified after March 31, 1977 and secured by real property situated in Canada or an interest therein, or by immovables situated in Canada or real rights therein, to the extent that the amount so paid or credited is deductible in computing the non-resident person's taxable income earned in Canada or the amount on which the non-resident person is liable to pay tax under Part I,

158. (1) Paragraph 216(1)(b) of the Act is replaced by the following:

(bthe non-resident person's income from the non-resident person's interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the non-resident person's share of the income of a partnership of which the non-resident person was a member from its interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in , timber resource properties and timber limits in Canada, were the non-resident person's only income;

(2) Paragraphs 216(2)(a) and (b) of the Act are replaced by the following:

(arent on real or immovable property or from timber royalties paid to the person, and

(bthe person's share of the rent on real or immovable property or from timber royalties paid to a partnership of which the person is a member

(3) The portion of subsection 216(4) of the Act before paragraph (a) is replaced by the following:

Optional method of payment

(4) If a non-resident person or, in the case of a partnership, each non-resident person who is a member of the partnership files with the Minister an undertaking in prescribed form to file within six months after the end of a taxation year a return of income under Part I for the year as permitted by this section, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the non-resident person or the partnership, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect under this section not to remit under that subsection, and if that election is made, the elector shall,

(4) Paragraph 216(5)(b) of the Act is replaced by the following:

(bthe person's income from the person's interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the person's share of the income of a partnership of which the person was a member from its interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, were the person's only income;

159. Subsection 219(1.1) of the Act is replaced by the following:

Excluded gains

(1.1) For the purpose of subsection (1), the definition "taxable Canadian property" in subsection 248(1) shall be read without reference to paragraphs (a) and (c) to (k) of that definition and as if the only options, interests or rights referred to in paragraph (l) of that definition were those in respect of property described in paragraph (b) of that definition.

160. (1) The portion of subsection 223(5) of the Act before paragraph (a) is replaced by the following:

Charge on property

(5) A document issued by the Federal Court evidencing a certificate in respect of a debtor registered under subsection (3), a writ of that Court issued pursuant to the certificate or any notification of the document or writ (such document, writ or notification in this section referred to as a "memorial") may be filed, registered or otherwise recorded for the purpose of creating a charge, lien or priority on, or a binding interest in, property in a province, or any interest in, or for civil law any right in, such property, held by the debtor in the same manner as a document evidencing

(2) Subsection 223(6) of the Act is replaced by the following:

Creation of charge

(6) If a memorial has been filed, registered or otherwise recorded under subsection (5),

(aa charge, lien or priority is created on, or a binding interest is created in, property in the province, or any interest in, or for civil law any right in, such property, held by the debtor, or

(bsuch property, or interest or right in the property, is otherwise bound,

in the same manner and to the same extent as if the memorial were a document evidencing a judgment referred to in paragraph (5)(a) or an amount referred to in paragraph (5)(b), and the charge, lien, priority or binding interest created shall be subordinate to any charge, lien, priority or binding interest in respect of which all steps necessary to make it effective against other creditors were taken before the time the memorial was filed, registered or otherwise recorded.

(3) Paragraphs 223(7)(c) and (d) of the Act are replaced by the following:

(cto cancel or withdraw the memorial wholly or in respect of any of the property, or interests or rights , affected by the memorial, or

(dto postpone the effectiveness of the filing, registration or other recording of the memorial in favour of any right, charge, lien or priority that has been or is intended to be filed, registered or otherwise recorded in respect of any property, or interest or right , affected by the memorial,

(4) Paragraph 223(8)(a) of the Act is replaced by the following:

(aa memorial is presented for filing, registration or other recording under subsection (5) or a document relating to the memorial is presented for filing, registration or other recording for the purpose of any proceeding described in subsection (7) to any official in the land registry system , personal property or movable property registry system , or other registry system, of a province, it shall be accepted for filing, registration or other recording, or

161. The definition "security interest" in subsection 224(1.3) of the Act is replaced by the following:

"security interest"

« garantie »

"security interest" means any interest in, or for civil law any right in, property that secures payment or performance of an obligation and includes an interest, or for civil law a right, created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for;

162. Section 224.2 of the Act is replaced by the following:

Acquisition of debtor's property

224.2 For the purpose of collecting debts owed by a person to Her Majesty under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act, the Minister may purchase or otherwise acquire any interest in, or for civil law any right in, the person's property that the Minister is given a right to acquire in legal proceedings or under a court order or that is offered for sale or redemption and may dispose of any interest or right so acquired in such manner as the Minister considers reasonable.

163. (1) Subsection 225(1) of the Act is replaced by the following:

Seizure of goods, chattels or movable property

225. (1) If a person has failed to pay an amount as required by this Act, the Minister may give 30 days notice to the person by registered mail addressed to the person's latest known address of the Minister's intention to direct that the person's goods and chattels, or movable property, be seized and sold, and, if the person fails to make the payment before the expiration of the 30 days, the Minister may issue a certificate of the failure and direct that the person's goods and chattels, or movable property, be seized.

(2) Subsection 225(5) of the Act is replaced by the following:

Exemptions from seizure

(5) Goods and chattels, or movable property, of any person in default that would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section.

164. Subsection 226(2) of the Act is replaced by the following:

Seizure in case of default of payment

(2) If a taxpayer fails to pay, as required, any tax, interest or penalties demanded under this section, the Minister may direct that the goods and chattels, or movable property, of the taxpayer be seized and subsections 225(2) to (5) apply, with respect to the seizure, with any modifications that the circumstances require.

165. (1) The portion of paragraph 227(5)(b) of the English version of the Act before subparagraph (i) is replaced by the following:

(bis jointly and severally, or solidarily, liable with the payer to pay to the Receiver General

(2) Subsection 227(8.1) of the English version of the Act is replaced by the following:

Joint and several, or solidary, liability

(8.1) If a particular person has failed to deduct or withhold an amount as required under subsection 153(1) or section 215 in respect of an amount that has been paid to a non-resident person, the non-resident person is jointly and severally, or solidarily, liable with the particular person to pay any interest payable by the particular person pursuant to subsection (8.3) in respect thereof.

(3) Subsection 227(10.2) of the English version of the Act is replaced by the following:

Joint and several, or solidary, liability re contributions to RCA

(10.2) If a non-resident person fails to deduct, withhold or remit an amount as required by subsection 153(1) in respect of a contribution under a retirement compensation arrangement that is paid on behalf of the employees or former employees of an employer with whom the non-resident person does not deal at arm's length, the employer is jointly and severally, or solidarily, liable with the non-resident person to pay any amount payable under subsection (8), (8.2), (8.3), (9), (9.2) or (9.4) by the non-resident person in respect of the contribution.

166. (1) Subparagraphs (a)(i) and (ii) of the definition "bien étranger déterminé" in subsection 233.3(1) of the French version of the Act are replaced by the following:

(i) les fonds ou le bien intangible ou, pour l'application du droit civil, le bien incorporel situés, déposés ou détenus à l'étranger,

(ii) le bien tangible ou, pour l'application du droit civil, le bien corporel situé à l'étranger,

(2) Subparagraph (a)(viii) of the definition "bien étranger déterminé" in subsection 233.3(1) of the French version of the Act is replaced by the following:

(viii) l'intérêt ou, pour l'application du droit civil, le droit sur un bien (sauf celui appartenant à une société ou une fiducie autre que la personne) qui est un bien étranger déterminé ou le droit à un tel bien, immédiat ou futur, absolu ou conditionnel et prévu par un contrat, en equity ou autrement,

(3) Subparagraph (b)(viii) of the definition "bien étranger déterminé" in subsection 233.3(1) of the French version of the Act is replaced by the following:

(viii) l'intérêt ou, pour l'application du droit civil, le droit sur un bien visé à l'un des sous-alinéas (i) à (vii) ou le droit d'acquérir un tel bien.

(4) Paragraphs (a) and (b) of the definition "specified foreign property" in subsection 233.3(1) of the English version of the Act are replaced by the following:

(afunds or intangible property, or for civil law incorporeal property, situated, deposited or held outside Canada,

(btangible property, or for civil law corporeal property, situated outside Canada,

(5) Paragraph (h) of the definition "specified foreign property" in subsection 233.3(1) of the English version of the Act is replaced by the following:

(han interest in, or for civil law a right in, or a right — under a contract in equity or otherwise either immediately or in the future and either absolutely or contingently — to, any property (other than any property owned by a corporation or trust that is not the person) that is specified foreign property, and

(6) Paragraph (q) of the definition "specified foreign property" in subsection 233.3(1) of the English version of the Act is replaced by the following:

(qan interest in, or for civil law a right in, or a right to acquire, a property that is described in any of paragraphs (j) to (p).

167. (1) Paragraph (c) of the definition "foreign resource property" in subsection 248(1) of the Act is replaced by the following:

(can oil or gas well in that country or real or immovable property in that country the principal value of which depends on its petroleum or natural gas content (but not including depreciable property),

(2) Paragraphs (f) and (g) of the definition "foreign resource property" in subsection 248(1) of the Act are replaced by the following:

(fa real or immovable property in that country the principal value of which depends upon its mineral resource content (but not including depreciable property),

(ga right to or an interest in — or for civil law a right to or in — any property described in any of paragraphs (a) to (e) , other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or

(han interest in real property described in paragraph (f) or a real right in an immovable described in that paragraph, other than an interest or a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership;

(3) The portion of the definition "former business property" in subsection 248(1) of the Act after paragraph (d) is replaced by the following:

and for the purpose of this definition, "rental property" of a taxpayer means real or immovable property owned by the taxpayer, whether jointly with another person or otherwise, and used by the taxpayer in the taxation year in respect of which the expression is being applied principally for the purpose of gaining or producing gross revenue that is rent (other than property leased by the taxpayer to a person related to the taxpayer and used by that related person principally for any other purpose), but, for greater certainty, does not include a property leased by the taxpayer or the related person to a lessee, in the ordinary course of a business of the taxpayer or the related person of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling or promoting the sale of the goods or services of the taxpayer or the related person;

(4) The portion of the definition "property" in subsection 248(1) of the Act before paragraph (a) is replaced by the following:

"property"

« biens »

"property" means property of any kind whatever whether real or personal, immovable or movable, tangible or intangible, or corporeal or incorporeal and, without restricting the generality of the foregoing, includes

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

Interest in real property

(4) In this Act, an interest in real property includes a leasehold interest in real property but does not include an interest as security only derived by virtue of a mortgage, agreement for sale or similar obligation.

Real right in immovables

(4.1) In this Act, a real right in an immovable includes a lease but does not include a security right derived by virtue of a hypothec, agreement for sale or similar obligation.

(6) Subsections 248(20) and (21) of the Act are replaced by the following:

Partition of property

(20) Subject to subsections (21) to (23), for the purposes of this Act, if at any time a property owned by two or more persons is the subject of a partition, the following rules apply, notwithstanding any retroactive or declaratory effect of the partition:

(aeach such person who had, immediately before that time, an interest in, or for civil law a right in, the property (which interest or right in the property is referred to in this subsection and subsection (21) as an "interest" or a "right", as the case may be) is deemed not to have disposed at that time of that proportion, not exceeding 100%, of the interest or right that the fair market value of that person's interest or right in the property immediately after that time is of the fair market value of that person's interest or right in the property immediately before that time,

(beach such person who has an interest or a right in the property immediately after that time is deemed not to have acquired at that time that proportion of the interest or right that the fair market value of that person's interest or right in the property immediately before that time is of the fair market value of that person's interest or right in the property immediately after that time,

(ceach such person who had an interest or a right in the property immediately before that time is deemed to have had until that time, and to have disposed at that time of, that proportion of the person's interest or right to which paragraph (a) does not apply,

(deach such person who has an interest or a right in the property immediately after that time is deemed not to have had before that time, and to have acquired at that time, that proportion of the person's interest or right to which paragraph (b) does not apply, and

(eparagraphs (a) to (d) do not apply if the interest or right of the person is an interest or a right in fungible tangible property, or for civil law fungible corporeal property described in that person's inventory,

and, for the purposes of this subsection, if an interest or a right in the property is an undivided interest or right , the fair market value of the interest or right at any time is deemed to be equal to that proportion of the fair market value of the property at that time that the interest or right is of all the undivided interests or rights in the property.

Subdivision of property

(21) If a property that was owned by two or more persons is the subject of a partition among those persons and, as a consequence of it , each such person has, in the property, a new interest or right the fair market value of which immediately after the partition, expressed as a percentage of the fair market value of all the new interests or rights in the property immediately after the partition, is equal to the fair market value of that person's undivided interest or right immediately before the partition, expressed as a percentage of the fair market value of all the undivided interests or rights in the property immediately before the partition,

(asubsection (20) does not apply to the property, and

(bthe new interest or right of each such person is deemed to be a continuation of that person's undivided interest or right in the property immediately before the partition,

and, for the purposes of this subsection,

(csubdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are co-owned by the same persons who co-owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and

(dif an interest or a right in the property is or includes an undivided interest or right , the fair market value of the interest or right shall be determined without regard to any discount or premium that applies to a minority or majority interest or right in the property.

(7) The portion of subsection 248(23.1) of the Act before paragraph (a) is replaced by the following:

Transfers after death

(23.1) If , as a consequence of the laws of a province relating to spouses' or common-law partners' interests or rights in respect of property as a result of marriage or common-law partnership, property is, after the death of a taxpayer,

168. Subparagraphs 253(c)(ii) and (iii) of the Act are replaced by the following:

(ii) property (other than depreciable property) that is a timber resource property, an option in respect of a timber resource property or an interest in, or for civil law a right in, a timber resource property, or

(iii) property (other than capital property) that is real or immovable property situated in Canada, including an option in respect of such property or an interest in, or for civil law a real right in, such property , whether or not the property is in existence,

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