Jobs and Economic Growth Act (S.C. 2010, c. 12)
Full Document:
Assented to 2010-07-12
Jobs and Economic Growth Act
S.C. 2010, c. 12
Assented to 2010-07-12
An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures
SUMMARY
Part 1 of this enactment implements income tax measures proposed in the March 4, 2010 Budget. In particular, it
(a) introduces amendments to allow a recipient of Universal Child Care Benefit amounts to designate that the amounts be included in the income of the dependant in respect of whom the recipient has claimed an Eligible Dependant Credit, or if the credit is not claimed by the recipient, a child of the recipient who is a qualified dependant under the Universal Child Care Benefit Act;
(b) clarifies rules relating to the Medical Expense Tax Credit to exclude expenses for purely cosmetic procedures;
(c) clarifies rules relating to payments made to a Registered Education Savings Plan or a Registered Disability Savings Plan through a program funded, directly or indirectly, by a province or administered by a province;
(d) implements amendments to the family income thresholds used to determine eligibility for Canada Education Savings Grants, Canada Disability Savings Grants and Canada Disability Savings Bonds;
(e) reinstates the 50% inclusion rate for Canadian residents who have been in receipt of U.S. social security benefits since before January 1, 1996;
(f) extends the mineral exploration tax credit for one year;
(g) reduces the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations;
(h) modifies the definition “taxable Canadian property” to exclude certain shares and other interests that do not derive their value principally from real or immovable property situated in Canada, Canadian resource property, or timber resource property;
(i) introduces amendments to allow the issuance of a refund of an overpayment of tax under Part I of the Income Tax Act to certain non-residents in circumstances where an assessment of such amounts has been made outside the usual period during which a refund may be made;
(j) repeals the exclusion for indictable tax offences from the proceeds of crime and money laundering regime; and
(k) increases the pension surplus threshold for employer contributions to registered pension plans to 25%.
Part 2 amends the Excise Act, 2001 and the Customs Act to implement an enhanced stamping regime for tobacco products by introducing new controls over the production, distribution and possession of a new excise stamp for tobacco products.
Part 2 also amends the Excise Tax Act and certain related regulations in respect of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to:
(a) simplify the operation of the GST/HST for the direct selling industry using a commission-based model;
(b) clarify the application of the GST/HST to purely cosmetic procedures and to devices or other goods used or provided with cosmetic procedures, and to services related to cosmetic procedures;
(c) reaffirm the policy intent and provide certainty respecting the scope of the definition of “financial service” in respect of certain administrative, management and promotional services;
(d) address advantages that currently exist in favour of imported financial services over comparable domestic services;
(e) streamline the application of the input tax credit rules to financial institutions;
(f) provide a new, uniform GST/HST rebate system that will apply fairly and equitably to employer-sponsored pension plans;
(g) introduce a new annual information return for financial institutions to improve GST/HST reporting in the financial services sector; and
(h) extend the due date for filing annual GST/HST returns from three months to six months after year-end for certain financial institutions.
In addition, Part 2 amends regulations made under the Excise Tax Act and the Excise Act, 2001 to reduce the interest rate payable by the Minister of National Revenue in respect of overpaid taxes and duties by corporations.
Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement on or after April 1, 2010 and for which any payment is made on or after that date. It also reduces the interest payable by the Minister of National Revenue to corporations under that Act.
Part 4 amends the Softwood Lumber Products Export Charge Act, 2006 to provide for a higher rate of charge on the export of certain softwood lumber products from the regions of Ontario, Quebec, Manitoba or Saskatchewan. It also amends that Act to reduce the rate of interest payable by the Minister of National Revenue on tax overpayments made by corporations.
Part 5 amends the Customs Tariff to implement measures announced in the March 4, 2010 Budget to reduce Most-Favoured-Nation rates of duty and, if applicable, rates of duty under other tariff treatments on a number of tariff items relating to manufacturing inputs and machinery and equipment imported on or after March 5, 2010.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to provide additional payments to certain provinces and to correct a cross-reference in that Act.
Part 7 amends the Expenditure Restraint Act to impose a freeze on the allowances and salaries to be paid to members of the Senate and the House of Commons for the 2010–2011, 2011–2012 and 2012–2013 fiscal years.
Part 8 amends a number of Acts to reduce or eliminate Governor in Council appointments, including the North American Free Trade Agreement Implementation Act. This Part also amends that Act to establish the Canadian Section of the NAFTA Secretariat within the Department of Foreign Affairs and International Trade. In addition, this Part repeals The Intercolonial and Prince Edward Island Railways Employees’ Provident Fund Act. Finally, this Part makes consequential and related amendments to other Acts.
Part 9 amends the Pension Benefits Standards Act, 1985. In particular, the Act is amended to
(a) require an employer to fully fund benefits if the whole of a pension plan is terminated;
(b) authorize an employer to use a letter of credit, if certain conditions are met, to satisfy solvency funding obligations in respect of a pension plan that has not been terminated in whole;
(c) permit a pension plan to provide for variable benefits, similar to those paid out of a Life Income Fund, in respect of a defined contribution provision of the pension plan;
(d) establish a distressed pension plan workout scheme, under which the employer and representatives of members and retirees may negotiate changes to the plan’s funding requirements, subject to the approval of the Minister of Finance;
(e) permit the Superintendent of Financial Institutions to replace an actuary if the Superintendent is of the opinion that it is in the best interests of members or retirees;
(f) provide that only the Superintendent may declare a pension plan to be partially terminated;
(g) provide for the immediate vesting of members’ benefits;
(h) require the administrator to make additional information available to members and retirees following the termination of a pension plan; and
(i) repeal spent provisions.
Part 10 provides for the retroactive coming into force in Canada of the Agreement on Social Security between Canada and the Republic of Poland.
Part 11 amends the Export Development Act to grant Export Development Canada the authority to establish offices outside Canada. It also clarifies that Corporation’s authority with respect to asset management and the forgiveness of certain debts and obligations.
Part 12 enacts the Payment Card Networks Act, the purpose of which is to regulate national payment card networks and the commercial practices of payment card network operators. Among other things, that Act confers a number of regulation-making powers. This Part also makes related amendments to the Financial Consumer Agency of Canada Act to expand the mandate of the Agency so that it may supervise payment card network operators to determine whether they are in compliance with the provisions of the Payment Card Networks Act and its regulations and monitor the implementation of voluntary codes of conduct.
Part 13 amends the Financial Consumer Agency of Canada Act to provide the Financial Consumer Agency of Canada with a broader oversight role to allow it to verify compliance with ministerial undertakings and directions. The amendments also increase the Agency’s ability to undertake research, including research on trends and emerging consumer protection issues. Finally, the Part makes consequential amendments to other Acts.
Part 14 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to confer on the Minister of Finance the power to issue directives imposing measures with respect to certain financial transactions. The amendments also confer on the Governor in Council the power to make regulations that limit or prohibit certain financial transactions. This Part also makes a consequential amendment to another Act.
Part 15 amends the Canada Post Corporation Act to modify the exclusive privilege of the Canada Post Corporation so as to permit letter exporters to collect letters in Canada for transmittal and delivery outside Canada.
Part 16 amends the Canada Deposit Insurance Corporation Act to allow the Governor in Council to specify when a bridge institution will assume a federal member institution’s deposit liabilities and allow the Canada Deposit Insurance Corporation to make by-laws with respect to information and capabilities it can require of its member institutions. This Part also amends that Act to establish the rules that apply to the assignment, by the Canada Deposit Insurance Corporation to a bridge institution, of eligible financial contracts to which a federal member institution is a party.
Part 17 amends the Bank Act and other related statutes to provide a framework enabling credit unions to incorporate and continue as banks. The model is based on the framework applicable to other federally regulated financial institutions, adjusted to give effect to cooperative principles and governance.
Part 18 authorizes the taking of a number of measures with respect to the reorganization and divestiture of all or any part of Atomic Energy of Canada Limited’s business.
Part 19 amends the National Energy Board Act in order to give the National Energy Board the power to create a participant funding program to facilitate the participation of the public in hearings that are held under section 24 of that Act. It also amends the Nuclear Safety and Control Act to give the Canadian Nuclear Safety Commission the power to create a participant funding program to facilitate the participation of the public in proceedings under that Act and the power to prescribe fees for that program.
Part 20 amends the Canadian Environmental Assessment Act to streamline certain process requirements for comprehensive studies, to give the Canadian Environmental Assessment Agency authority to conduct most comprehensive studies and to give the Minister of the Environment the power to establish the scope of any project in relation to which an environmental assessment is to be conducted. It also amends that Act to provide, in legislation rather than by regulations, that an environmental assessment is not required for certain federally funded infrastructure projects and repeals sunset clauses in the Regulations Amending the Exclusion List Regulations, 2007.
Part 21 amends the Canada Labour Code with respect to the appointment of appeals officers and the appeal hearing procedures.
Part 22 authorizes payments to be made out of the Consolidated Revenue Fund for various purposes.
Part 23 amends the Telecommunications Act to make a carrier that is not a Canadian-owned and controlled corporation eligible to operate as a telecommunications common carrier if it owns or operates certain transmission facilities.
Part 24 amends the Employment Insurance Act to establish an account in the accounts of Canada to be known as the Employment Insurance Operating Account and to close the Employment Insurance Account and remove it from the accounts of Canada. It also repeals sections 76 and 80 of that Act and makes consequential amendments in relation to the creation of the new Account. This Part also makes technical amendments to clarify provisions of the Budget Implementation Act, 2008 and the Canada Employment Insurance Financing Board Act that deal with the Canada Employment Insurance Financing Board.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Jobs and Economic Growth Act.
PART 1AMENDMENTS TO THE INCOME TAX ACT AND RELATED ACTS AND REGULATIONS
R.S., c. 1 (5th Supp.)Income Tax Act
2. (1) Paragraph 44.1(2)(c) of the Act is replaced by the following:
(c) where the qualifying disposition was a disposition of a share that was taxable Canadian property of the individual, the replacement share of the individual in respect of the qualifying disposition is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the individual.
(2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
3. (1) Paragraph 51(1)(f) of the Act is replaced by the following:
(f) where the convertible property is taxable Canadian property of the taxpayer, the share acquired by the taxpayer on the exchange is deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the taxpayer.
(2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
4. (1) Subsection 56(6) of the Act is replaced by the following:
Marginal note:Child care benefit
(6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts each of which is a benefit paid under section 4 of the Universal Child Care Benefit Act that is received in the taxation year by
(a) the taxpayer, if
(i) the taxpayer does not have a “cohabiting spouse or common-law partner” (within the meaning assigned by section 122.6) at the end of the year and the taxpayer does not make a designation under subsection (6.1) for the taxation year, or
(ii) the income, for the taxation year, of the person who is the taxpayer’s cohabiting spouse or common-law partner at the end of the taxation year is equal to or greater than the income of the taxpayer for the taxation year;
(b) the taxpayer’s cohabiting spouse or common-law partner at the end of the taxation year, if the income of the cohabiting spouse or common-law partner for the taxation year is greater than the taxpayer’s income for the taxation year; or
(c) an individual who makes a designation under subsection (6.1) in respect of the taxpayer for the taxation year.
Marginal note:Designation
(6.1) If, at the end of the taxation year, a taxpayer does not have a “cohabiting spouse or common-law partner” (within the meaning assigned by section 122.6), the taxpayer may designate, in the taxpayer’s return of income for the taxation year, the total of all amounts, each of which is a benefit received in the taxation year by the taxpayer under section 4 of the Universal Child Care Benefit Act, to be income of
(a) if the taxpayer deducts an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of an individual, the individual; or
(b) in any other case, a child who is a “qualified dependant” (as defined in section 2 of the Universal Child Care Benefit Act) of the taxpayer.
(2) Subsection (1) applies to 2010 and subsequent years.
5. (1) Paragraph 60(z) of the Act is replaced by the following:
Marginal note:Repayment under the Canada Disability Savings Act
(z) the total of all amounts each of which is an amount paid in the taxation year as a repayment, under or because of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1), of an amount that was included because of section 146.4 in computing the taxpayer’s income for the taxation year or a preceding taxation year.
(2) Subsection (1) applies to the 2009 and subsequent taxation years.
6. (1) Paragraph 85(1)(i) of the Act is replaced by the following:
(i) where the property so disposed of is taxable Canadian property of the taxpayer, all of the shares of the capital stock of the Canadian corporation received by the taxpayer as consideration for the property are deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer.
(2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
7. (1) The portion of paragraph 85.1(1)(a) of the Act after subparagraph (ii) is replaced by the following:
and where the exchanged shares were taxable Canadian property of the vendor, the shares of the purchaser so acquired by the vendor are deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the vendor; and
(2) The portion of subsection 85.1(5) of the Act after paragraph (b) is replaced by the following:
and where the exchanged foreign shares were taxable Canadian property of the vendor, the issued foreign shares so acquired by the vendor are deemed to be, at any time that is within 60 months after the exchange, taxable Canadian property of the vendor.
(3) Paragraph 85.1(8)(b) of the Act is replaced by the following:
(b) if the particular unit was immediately before the disposition taxable Canadian property of the taxpayer, the exchange share is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer;
(4) Subsections (1) to (3) apply in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
8. (1) The portion of subsection 87(4) of the Act after paragraph (e) is replaced by the following:
and where the old shares were taxable Canadian property of the shareholder, the new shares are deemed to be, at any time that is within 60 months after the amalgamation, taxable Canadian property of the shareholder.
(2) The portion of subsection 87(5) of the Act after paragraph (b) is replaced by the following:
and where the old option was taxable Canadian property of the taxpayer, the new option is deemed to be, at any time that is within 60 months after the amalgamation, taxable Canadian property of the taxpayer.
(3) Subsections (1) and (2) apply in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
9. (1) Paragraph 97(2)(c) of the Act is replaced by the following:
(c) where the property so disposed of by the taxpayer to the partnership is taxable Canadian property of the taxpayer, the interest in the partnership received by the taxpayer as consideration for the property is deemed to be, at any time that is within 60 months after the disposition, taxable Canadian property of the taxpayer.
(2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
10. (1) Subparagraph 107(2)(d.1)(iii) of the Act is replaced by the following:
(iii) the property was deemed by paragraph 51(1)(f), 85(1)(i) or 85.1(1)(a), subsection 85.1(5) or 87(4) or (5) or paragraph 97(2)(c) to be taxable Canadian property of the trust; and
(2) Paragraph 107(2)(d.1) of the Act, as amended by subsection (1), is repealed.
(3) Paragraph 107(3.1)(d) of the Act is replaced by the following:
(d) if the taxpayer’s interest as a beneficiary under the trust was immediately before the disposition taxable Canadian property of the taxpayer, the property is deemed to be, at any time that is within 60 months after the distribution, taxable Canadian property of the taxpayer; and
(4) Subsection (1) applies in determining after October 1, 1996 whether a property is taxable Canadian property of a taxpayer.
(5) Subsections (2) and (3) apply in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
11. (1) Paragraph 107.4(3)(f) of the Act is replaced by the following:
(f) if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the transferor by this paragraph or any of paragraphs 44.1(2)(c), 51(1)(f), 85(1)(i) and 85.1(1)(a), subsection 85.1(5), paragraph 85.1(8)(b), subsections 87(4) and (5) and paragraphs 97(2)(c) and 107(3.1)(d), the property is also deemed to be, at any time that is within 60 months after the transaction or event, taxable Canadian property of the transferee trust;
(2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.
12. (1) Subsection 110(1) of the Act is amended by adding the following after paragraph (g):
(h) 35 per cent of the total of all benefits (in this paragraph referred to as “U.S. social security benefits”) that are received by the taxpayer in the taxation year and to which paragraph 5 of Article XVIII of the Convention between Canada and the United States of America with respect to Taxes on Income and on Capital as set out in Schedule I to the Canada-United States Tax Convention Act, 1984, S.C. 1984, c. 20, applies, if
(i) the taxpayer has continuously during a period that begins before 1996 and ends in the taxation year, been resident in Canada, and has received U.S. social security benefits in each taxation year that ends in that period, or
(ii) in the case where the benefits are payable to the taxpayer in respect of a deceased individual,
(A) the taxpayer was, immediately before the deceased individual’s death, the deceased individual’s spouse or common-law partner,
(B) the taxpayer has continuously during a period that begins at the time of the deceased individual’s death and ends in the taxation year, been resident in Canada,
(C) the deceased individual was, in respect of the taxation year in which the deceased individual died, a taxpayer described in subparagraph (i), and
(D) in each taxation year that ends in a period that begins before 1996 and that ends in the taxation year, the taxpayer, the deceased individual, or both of them, received U.S. social security benefits.
(2) Subsection (1) applies to the 2010 and subsequent taxation years.
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