Part 1
Overview: Amendments to the Income Tax Act and To Related Regulations

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Part 1

A. Adoption Expense Tax Credit

To better recognize the costs unique to adopting a child, this measure increases the maximum amount of eligible expenses for the Adoption Expense Tax Credit to $15,000 per child for 2014.

This maximum amount is indexed to inflation for taxation years after 2014.

B. Medical Expense Tax Credit

This measure expands the list of expenses eligible for the Medical Expense Tax Credit to include (1) the cost of the design of individualized therapy plans (e.g., applied behaviour analysis therapy for children with autism) if certain conditions are met, and (2) the costs associated with service animals for people with severe diabetes.

This measure applies to expenses incurred after 2013.

C. Search and Rescue Volunteers Tax Credit (SRVTC)

To recognize the important role played by search and rescue volunteers in contributing to the security and safety of Canadians, this measure allows eligible ground, air and marine search and rescue volunteers to claim a 15‑per-cent non-refundable tax credit based on an amount of $3,000. To qualify for the SRVTC, an individual must perform at least 200 hours of volunteer search and rescue services in a taxation year for one or more eligible search and rescue organizations.

An individual who performs both eligible volunteer firefighting services and eligible volunteer search and rescue services will be able to claim either the Volunteer Firefighters Tax Credit or the SRVTC.

This measure applies to the 2014 and subsequent taxation years.

D. Mineral Exploration Tax Credit for Flow-Through Share Investors

To facilitate the raising of equity to fund mineral exploration, this measure extends for one year the Mineral Exploration Tax Credit for flow-through share investors. Flow-through shares allow expenses associated with Canadian mineral exploration activities to be renounced to investors who can deduct the expenses in calculating their own taxable income. The Mineral Exploration Tax Credit is an additional benefit, available to individuals who invest in flow-through shares, equal to 15 per cent of certain exploration expenses incurred in Canada and renounced to flow-through share investors.

This measure applies to flow-through share agreements entered into before April 2015.

E. Pension Transfer Limits

Existing rules modify the transfer limits that apply to the payment of a lump sum from a defined benefit registered pension plan to a registered retirement savings plan in certain situations. These relieving rules assist pension plan members when the pension plan is underfunded and being wound up, and the employer is insolvent. This measure extends access to these rules to additional situations (e.g., when the payment of the lump sum is approved pursuant to pension benefits standards legislation).

This measure applies to payments made after 2012.

F. GST/HST Credit Administration

Currently, individuals may apply for the Goods and Services Tax/Harmonized Sales Tax (GST/HST) Credit by checking the GST/HST application box on their annual income tax returns. This measure will eliminate the need for individuals to apply for the GST/HST Credit and will allow the Canada Revenue Agency to automatically determine if an individual is eligible to receive the GST/HST Credit.

This measure applies in respect of income tax returns for the 2014 and subsequent taxation years.

G. Donations of Ecologically Sensitive Land

Certain donations of ecologically sensitive land (or easements, covenants and servitudes on such land) are eligible for special tax assistance. Donors may currently carry forward amounts not claimed for up to five years. To permit donors to take greater advantage of tax assistance and thereby encourage larger donations, this measure extends the carry-forward period to ten years.

This measure applies to donations made after February 10, 2014.

H. Donations of Certified Cultural property

This measure removes, for certified cultural property acquired as part of a gifting arrangement that is a tax shelter, the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor in certain circumstances. Other donations of certified cultural property will not be affected by this measure.

This measure applies to donations made after February 10, 2014.

I. State Supporters of Terrorism

To prevent potential abuse of the charitable sector by foreign state supporters of terrorism, this measure allows the Minister of National Revenue to refuse to register, or to revoke the registration of, a charity or Canadian amateur athletic association that accepts a donation from a foreign state listed as a supporter of terrorism under the State Immunity Act.

This measure applies to donations accepted after February 10, 2014.

J. Remittance Thresholds for Employer Source Deductions

To reduce the tax compliance burden, this measure reduces the frequency of remittances for source deductions for certain small and medium-sized employers. The threshold level at which employers are required to remit up to two times per month is increased to $25,000 from $15,000 of average monthly withholdings. As well, the threshold level at which employers are required to remit up to four times per month is increased to $100,000 from $50,000 of average monthly withholdings.

This measure applies to amounts deducted or withheld after 2014.

K. Combating Tax Non-compliance

This measure clarifies and strengthens the Canada Revenue Agency's ability to share information with the Financial Transactions and Reports Analysis Centre of Canada. This measure is consequential to amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to strengthen Canada's anti-money laundering and anti-terrorist financing regime.

Similar amendments are made to the Excise Tax Act and Excise Act, 2001.

This measure applies on Royal Assent.

L. Reporting of Proposed Tax Measures

To make it easier for taxpayers to know the status of proposed tax measures, this measure requires the Minister of Finance to table, on or before the fifth sitting day after October 31 of each year, a report in Parliament listing every tax measure not yet enacted into law that the Government has, since the last general election and before the beginning of the previous fiscal year, publicly announced its intention to implement (other than any tax measure that the Government has announced its intention not to proceed with).

This measure applies on Royal Assent.

Part 1 (Other)

A. Labour-Sponsored Venture Capital Corporations Tax Credit

This measure introduces transitional rules to facilitate the orderly exit of federally registered labour-sponsored venture capital corporations from the Labour-Sponsored Venture Capital Corporations Tax Credit program. Draft legislative proposals were released for comment on November 27, 2013.

This measure comes into force on November 27, 2013.

B. International Electronic Funds Transfers

This measure, announced in Economic Action Plan 2013, requires certain financial intermediaries to report to the Canada Revenue Agency international electronic funds transfers of $10,000 or more. Draft legislative proposals were released for comment on January 9, 2014.

Consequential amendments are made to the Excise Tax Act, Excise Act, 2001 and Air Travellers Security Charge Act.

This measure applies to electronic funds transfers made after 2014.

C. Offshore Tax Information Program

Under the Offshore Tax Informant Program, originally announced in Economic Action Plan 2013, the Canada Revenue Agency will pay rewards to individuals who provide information relating to major international tax non-compliance where that information leads to the collection of tax. This measure amends the Income Tax Act to make payments to informants taxable, to permit the sharing of information and to defer payments to provinces for assessed taxes until those taxes have been collected.

Similar amendments are made to the Excise Tax Act and Excise Act, 2001.

This measure applies on Royal Assent.

D. Serious Offences

This measure amends the taxpayer information provisions of the Income Tax Act to permit the disclosure of taxpayer information to an appropriate police organization where there are reasonable grounds to suspect that the information would be relevant to the investigation of a serious offence, including money laundering. Draft legislative proposals were released for comment on July 12, 2013.

Similar amendments are made to the Excise Tax Act and Excise Act, 2001.

This measure applies on Royal Assent.

E. Mark-to-market: exemption for the Business Development Bank of Canada

This measure provides that the Business Development Bank of Canada and BDC Capital Inc. are not financial institutions for the purposes of the Income Tax Act's mark-to-market rules.

This measure applies to taxation years that end after November 29, 2013.

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