SUMMARY

Part 1 of this enactment amends the Air Travellers Security Charge Act to reduce the amounts charged to airline passengers under that Act.

Part 2 amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the Government of Quebec and interested Indian Bands situated in Quebec.

Part 3 amends the Income Tax Act and related Acts to

• – introduce a new disability supports deduction;

• – improve the recognition of medical expenses for caregivers;

• – expand the Education Tax Credit to apply to the cost of an otherwise eligible course taken, without any reimbursement, in connection with an office or employment;

• – accelerate to 2005 the increase in the small business deduction threshold to $300,000;

• – ensure that unconnected small businesses engaging in R&D do not have to share access to the enhanced 35% scientific research and experimental development tax credit solely because they receive investments from the same venture capital investors;

• – extend the carry-forward period for business losses to 10 years;

• – extend the expiry date for the mineral exploration tax credit to the end of 2005;

• – eliminate the deductibility of fines and penalties;

• – impose a tax liability on gains from dispositions of taxable Canadian property, and certain otherwise non-taxable amounts, distributed by a mutual fund trust to non-residents;

• – ensure that the General Anti-Avoidance Rules in the Income Tax Act apply to transactions effected through a misuse or abuse of the Income Tax Regulations, a tax treaty or other federal legislation;

• – extend the rules governing transactions between affiliated persons to transactions entered into by trusts;

• – constrain the ability of persons, other than cooperative corporations and credit unions, to deduct patronage dividends;

• – limit the period, during which taxpayers may open up old income tax returns, to 10 years;

• – prevent the use of schemes designed to sell otherwise unusable charitable donations tax credits;

• – introduce a new regulatory regime for Registered Charities;

• – introduce tax relief for Canadian Forces personnel and police deployed to international high-risk operational missions;

• – allow for certain notices made to federally regulated financial institutions to be binding if made to a designated branch of the institution; and

• – clarify, in conjunction with income tax sharing agreements with Aboriginal governments, that penalties imposed under the Income Tax Act are to be determined on the basis of the amount of one’s federal tax liability before taking any such tax sharing agreement into account.