Budget Implementation Act, 2006 (S.C. 2006, c. 4)

Assented to 2006-06-22

  •  (1) The portion of the description of N in the description of M in subsection 122.61(1) of the Act before paragraph (a) is replaced by the following:

    N 
    is the product obtained by multiplying $2,300 by the number of qualified dependants in respect of whom both
  • (2) The description of P in the description of M in subsection 122.61(1) of the Act is replaced by the following:

    P 
    is 4% (or where the person is an eligible individual in respect of only one qualified dependant included in the description of N at the beginning of the month, 2%) of the amount determined for the description of O,
  • (3) Subsections (1) and (2) apply in respect of overpayments deemed to arise during months that are after June 2006.

  •  (1) Subsections 123.2(2) and (3) of the Act are replaced by the following:

    • Marginal note:Specified percentage

      (2) The specified percentage of a corporation for a taxation year is that proportion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year.

  • (2) Section 123.2 of the Act is repealed.

  • (3) Subsection (2) applies to taxation years that begin after 2007.

  •  (1) The definition general rate reduction percentage in subsection 123.4(1) of the Act is replaced by the following:

    general rate reduction percentage

    pourcentage de réduction du taux général

    general rate reduction percentage of a corporation for a taxation year is the total of

    • (a) that proportion of 7% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year,

    • (b) that proportion of 7.5% that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year,

    • (c) that proportion of 8% that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year, and

    • (d) that proportion of 9% that the number of days in the taxation year that are after 2009 is of the number of days in the taxation year.

  • (2) The portion of paragraph (a) of the definition full rate taxable income in subsection 123.4(1) of the Act before subparagraph (ii) is replaced by the following:

    • (a) if the corporation is not a corporation described in paragraph (b) or (c) for the year, the amount by which the corporation’s taxable income for the year (or, for greater certainty, if the corporation is non-resident, its taxable income earned in Canada for the year) exceeds the total of

      • (i) if an amount is deducted under subsection 125.1(1) from the corporation’s tax otherwise payable under this Part for the year, the amount obtained by dividing the amount so deducted by the corporation’s general rate reduction percentage for the taxation year,

  •  (1) The portion of subsection 125.1(1) of the Act before paragraph (a) is replaced by the following:

    Marginal note:Manufacturing and processing profits deductions
    • 125.1 (1) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year an amount equal to the corporation’s general rate reduction percentage for the taxation year (within the meaning assigned by subsection 123.4(1)) multiplied by the lesser of

  • (2) The portion of subsection 125.1(2) of the Act before the formula is replaced by the following:

    • Marginal note:Electrical energy and steam

      (2) A corporation that generates electrical energy for sale, or produces steam for sale, in a taxation year may deduct from its tax otherwise payable under this Part for the year an amount equal to the corporation’s general rate reduction percentage for the taxation year (within the meaning assigned by subsection 123.4(1)) multiplied by the amount determined by the formula

  •  (1) Paragraph (d) of the definition investment tax credit in subsection 127(9) of the Act is repealed.

  • (2) Paragraph (a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following:

    • (a) that is a Canadian exploration expense incurred by a corporation after May 1, 2006 and before 2008 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2008) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1),

  • (3) Paragraphs (c) and (d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are replaced by the following:

    • (c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after May 1, 2006 and before April 1, 2007, and

    • (d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after May 1, 2006 and before April 1, 2007;

  • (4) Section 127 of the Act is amended by adding the following after subsection (9):

    • Marginal note:Transitional application of investment tax credit definition

      (9.01) For the purpose of applying each of paragraphs (c) to (f), (h) and (i) of the definition investment tax credit in subsection (9) in respect of a taxpayer, the reference to “10” in that paragraph is to be read as a reference to the number that is the lesser of

      • (a) 20, and

      • (b) the number that is the total of 10 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 2005 exceeds 11.

    • Marginal note:Transitional application of investment tax credit definition

      (9.02) For the purpose of applying paragraph (g) of the definition investment tax credit in subsection (9) in respect of a taxpayer, the reference to “9” in that paragraph is to be read as a reference to the number that is the lesser of

      • (a) 19, and

      • (b) the number that is the total of 9 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 2005 exceeds 11.

  • (5) Section 127 of the Act is amended by adding the following after subsection (35);

    • Marginal note:Transitional application of investment tax credit recapture

      (36) For the purpose of applying each of subsection (27) or (29) in respect of a taxpayer, subsection (28) in respect of a partnership or subsection (34) or (35) in respect of a purchaser and an original user, as the case may be, (which taxpayer, partnership or original user is, in this subsection, referred to as the “taxpayer”), the reference to “10” in that subsection is to be read as a reference to the number that is the lesser of

      • (a) 20, and

      • (b) the number that is the total of 10 and the number of taxation years or fiscal periods, as the case may be, by which the number of taxation years or fiscal periods of the taxpayer that have ended after 2005 exceeds 11.

  • (6) Subsections (1), (4) and (5) apply to the 2006 and subsequent taxation years.

  • (7) Subsections (2) and (3) apply to expenses renounced under agreements made after May 1, 2006.

 
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