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Jobs and Economic Growth Act (S.C. 2010, c. 12)

Assented to 2010-07-12

  •  (1) The Act is amended by adding the following after section 172:

    Pension Plans
    Marginal note:Definitions
    • 172.1 (1) The following definitions apply in this section.

      “active member”

      « participant actif »

      “active member” has the meaning assigned by subsection 8500(1) of the Income Tax Regulations.

      “employer resource”

      « ressource d’employeur »

      “employer resource” of a person means

      • (a) all or part of a labour activity of the person, other than the part of the labour activity consumed or used by the person in the process of creating, developing or bringing into existence property;

      • (b) all or part of property or a service supplied to the person, other than the part of the property or service consumed or used by the person in the process of creating, developing or bringing into existence property;

      • (c) all or part of property created, developed or brought into existence by the person; or

      • (d) any combination of the items referred to in paragraphs (a) to (c).

      “excluded activity”

      « activité exclue »

      “excluded activity”, in respect of a pension plan, means an activity undertaken exclusively for

      • (a) compliance by a participating employer of the pension plan as an issuer, or prospective issuer, of securities with reporting requirements under a law of Canada or of a province in respect of the regulation of securities;

      • (b) evaluating the feasibility or financial impact on a participating employer of the pension plan of establishing, altering or winding-up the pension plan, other than an activity that relates to the preparation of an actuarial report in respect of the plan required under a law of Canada or of a province;

      • (c) evaluating the financial impact of the pension plan on the assets and liabilities of a participating employer of the pension plan;

      • (d) negotiating changes to the benefits under the pension plan with a union or similar organization of employees; or

      • (e) prescribed purposes.

      “labour activity”

      « activité de main-d’oeuvre »

      “labour activity” of a person means anything done by an individual who is or agrees to become an employee of the person in the course of, or in relation to, the office or employment of that individual.

      “participating employer”

      « employeur participant »

      “participating employer” of a pension plan means an employer that has made, or is required to make, contributions to the pension plan in respect of the employer’s employees or former employees, or payments under the pension plan to the employer’s employees or former employees, and includes an employer prescribed for the purposes of the definition “participating employer” in subsection 147.1(1) of the Income Tax Act.

      “pension activity”

      « activité de pension »

      “pension activity”, in respect of a pension plan, means an activity (other than an excluded activity) that relates to

      • (a) the establishment, management or administration of the pension plan or a pension entity of the pension plan; or

      • (b) the management or administration of assets in respect of the pension plan.

      “pension entity”

      « entité de gestion »

      “pension entity” of a pension plan means a person in respect of the pension plan that is

      • (a) a person referred to in paragraph (a) of the definition “pension plan”;

      • (b) a corporation referred to in paragraph (b) of that definition; or

      • (c) a prescribed person.

      “pension plan”

      « régime de pension »

      “pension plan” means a registered pension plan (as defined in subsection 248(1) of the Income Tax Act)

      • (a) that governs a person that is a trust or that is deemed to be a trust for the purposes of that Act;

      • (b) in respect of which a corporation is

        • (i) incorporated and operated either

          • (A) solely for the administration of the registered pension plan, or

          • (B) for the administration of the registered pension plan and for no other purpose other than acting as trustee of, or administering, a trust governed by a retirement compensation arrangement (as defined in subsection 248(1) of that Act), where the terms of the arrangement provide for benefits only in respect of individuals who are provided with benefits under the registered pension plan, and

        • (ii) accepted by the Minister, under subparagraph 149(1)(o.1)(ii) of that Act, as a funding medium for the purpose of the registration of the registered pension plan; or

      • (c) in respect of which a person is prescribed for the purposes of the definition “pension entity”.

      “provincial factor”

      « facteur provincial »

      “provincial factor” in respect of a pension plan and a participating province, for a fiscal year of a person that is a participating employer of the pension plan, means the amount (expressed as a percentage) determined by the formula

      A × B

      where

      A 
      is the tax rate for the participating province on the last day of the fiscal year; and
      B 
      is
      • (a) if the person made contributions to the pension plan during the fiscal year that may be deducted by the person under paragraph 20(1)(q) of the Income Tax Act in computing its income (in this paragraph referred to as “pension contributions”) and the number of active members of the pension plan who were employees of the person on the particular day that is the last day of the last calendar year ending on or before the last day of the fiscal year is greater than zero, the amount determined by the formula

        [(C/D) + (E/F)]/2

        where

        C 
        is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person who were resident in the participating province on the particular day,
        D 
        is the total of all pension contributions made to the pension plan by the person during the fiscal year in respect of employees of the person,
        E 
        is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in the participating province, and
        F 
        is the number of active members of the pension plan who were, on the particular day, employees of the person;
      • (b) if paragraph (a) does not apply and the number of active members of the pension plan who were employees of the person on the particular day that is the last day of the last calendar year ending on or before the last day of the fiscal year is greater than zero, the amount determined by the formula

        G/H

        where

        G 
        is the number of active members of the pension plan who were, on the particular day, employees of the person and resident in the participating province, and
        H 
        is the number of active members of the pension plan who were, on the particular day, employees of the person; or
      • (c) in any other case, zero.

    • Marginal note:Excluded resource

      (2) For the purposes of this section, property or a service that is supplied to a particular person that is a participating employer of a pension plan by another person is an excluded resource of the particular person in respect of the pension plan if

      • (a) for each pension entity of the pension plan, no tax would become payable under this Part in respect of the supply if

        • (i) the supply were made by the other person to the pension entity and not to the particular person, and

        • (ii) the pension entity and the other person were dealing at arm’s length; and

      • (b) where the supply is a supply of tangible personal property made outside Canada, the supply would not be an imported taxable supply (as defined in section 217) if the particular person were a registrant not engaged exclusively in commercial activities.

    • Marginal note:Time of acquisition

      (3) For the purposes of this section, if, at a particular time, a supply of property described in paragraph 142(2)(a) or (b) is made to a person who is a participating employer of a pension plan and, at a later time, tax under section 212 becomes payable by the person in respect of the property

      • (a) the supply is deemed to have been made to the person at the later time and not at the particular time; and

      • (b) tax is deemed to have been payable in respect of the supply at the later time.

    • Marginal note:Specified pension entity

      (4) If a person is a participating employer of a pension plan and the pension plan has,

      • (a) at all times in a fiscal year of the person, no more than one pension entity, that pension entity is the specified pension entity of the pension plan in respect of the person for the fiscal year; and

      • (b) in the fiscal year, two or more pension entities, the person and one of those pension entities may jointly elect, in prescribed form containing prescribed information, for that pension entity to be the specified pension entity of the pension plan in respect of the person for the fiscal year.

    • Marginal note:Acquisition of property or a service for supply

      (5) If a person that is a registrant and a participating employer of a pension plan acquires property or a service (in this subsection referred to as the “specified resource”) for the purpose of making a supply of all or part of the specified resource to a pension entity of the pension plan for consumption, use or supply by the pension entity in the course of pension activities in respect of the pension plan and the specified resource is not an excluded resource of the person in respect of the pension plan, the following rules apply:

      • (a) for the purposes of this Part, the person is deemed to have made a taxable supply of the specified resource or part on the last day of the particular fiscal year of the person in which the person acquired the specified resource;

      • (b) for the purposes of this Part, tax in respect of the taxable supply is deemed to have become payable on the last day of the particular fiscal year and the person is deemed to have collected that tax on that day;

      • (c) for the purposes of this Part, the tax referred to in paragraph (b) is deemed to be equal to the amount determined by the formula

        A + B

        where

        A 
        is the amount determined by the formula

        C × D

        where

        C 
        is the fair market value of the specified resource or part at the time it was acquired by the person, and
        D 
        is the rate set out in subsection 165(1), and
        B 
        is the total of all amounts, each of which is determined for a participating province by the following formula

        E × F

        where

        E 
        is the fair market value of the specified resource or part at the time it was acquired by the person, and
        F 
        is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year; and
      • (d) for the purpose of determining an input tax credit of the pension entity under this Part and for the purposes of sections 232.01, 232.02 and 261.01, the pension entity is deemed

        • (i) to have received a supply of the specified resource or part on the last day of the particular fiscal year,

        • (ii) to have paid tax in respect of that supply on that day equal to

          • (A) if the pension entity is a selected listed financial institution on that day, the amount determined for A in the formula in paragraph (c) in determining the amount of tax under that paragraph, and

          • (B) in any other case, the amount of tax determined under paragraph (c), and

        • (iii) to have acquired the specified resource or part for consumption, use or supply in the course of its commercial activities to the same extent that the specified resource or part was acquired by the person for the purpose of making a supply of the specified resource or part to the pension entity for consumption, use or supply by the pension entity in the course of pension activities in respect of the pension plan that are commercial activities of the pension entity.

    • Marginal note:Consumption or use of employer resource for supply

      (6) If a person is both a registrant and a participating employer of a pension plan at any time in a particular fiscal year of the person, the person consumes or uses at that time an employer resource of the person for the purpose of making a supply of property or a service (in this subsection referred to as the “pension supply”) to a pension entity of the pension plan for consumption, use or supply by the pension entity in the course of pension activities in respect of the pension plan, and the employer resource is not an excluded resource of the person in respect of the pension plan, the following rules apply:

      • (a) for the purposes of this Part, the person is deemed to have made a taxable supply of the employer resource (in this subsection referred to as the “employer resource supply”) on the last day of the particular fiscal year;

      • (b) for the purposes of this Part, tax in respect of the employer resource supply is deemed to have become payable on the last day of the particular fiscal year and the person is deemed to have collected that tax on that day;

      • (c) for the purposes of this Part, the tax referred to in paragraph (b) is deemed to be equal to the amount determined by the formula

        A + B

        where

        A 
        is the amount determined by the formula

        C × D

        where

        C 
        is
        • (i) if the employer resource was consumed by the person during the particular fiscal year for the purpose of making the pension supply, the product obtained when the fair market value of the employer resource at the time the person began consuming it in the particular fiscal year is multiplied by the extent to which that consumption (expressed as a percentage of the total consumption of the employer resource by the person during the particular fiscal year) occurred when the person was both a registrant and a participating employer of the pension plan, or

        • (ii) otherwise, the product obtained when the fair market value of the use of the employer resource during the particular fiscal year as determined on the last day of the particular fiscal year is multiplied by the extent to which the employer resource was used during the particular fiscal year (expressed as a percentage of the total use of the employer resource by the person during the particular fiscal year) for the purpose of making the pension supply when the person was both a registrant and a participating employer of the pension plan, and

        D 
        is the rate set out in subsection 165(1), and
        B 
        is the total of all amounts, each of which is determined for a participating province by the following formula

        E × F

        where

        E 
        is the amount determined for C, and
        F 
        is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year; and
      • (d) for the purpose of determining an input tax credit of the pension entity under this Part and for the purposes of sections 232.01, 232.02 and 261.01, the pension entity is deemed

        • (i) to have received a supply of the employer resource on the last day of the particular fiscal year,

        • (ii) to have paid tax in respect of that supply on that day equal to

          • (A) if the pension entity is a selected listed financial institution on that day, the amount determined for A in the formula in paragraph (c) in determining the amount of tax under that paragraph, and

          • (B) in any other case, the amount of tax determined under paragraph (c), and

        • (iii) to have acquired the employer resource for consumption, use or supply in the course of its commercial activities to the same extent that the property or service supplied in the pension supply was acquired by the pension entity for consumption, use or supply by the pension entity in pension activities in respect of the pension plan that are commercial activities of the pension entity.

    • Marginal note:Consumption or use of employer resource otherwise than for supply

      (7) If a person is both a registrant and a participating employer of a pension plan at any time in a particular fiscal year of the person, the person consumes or uses at that time an employer resource of the person in the course of pension activities in respect of the pension plan, the employer resource is not an excluded resource of the person in respect of the pension plan, and subsection (6) does not apply to that consumption or use, the following rules apply:

      • (a) for the purposes of this Part, the person is deemed to have made a taxable supply of the employer resource (in this subsection referred to as the “employer resource supply”) on the last day of the particular fiscal year;

      • (b) for the purposes of this Part, tax in respect of the employer resource supply is deemed to have become payable on the last day of the particular fiscal year and the person is deemed to have collected that tax on that day;

      • (c) for the purposes of this Part, the tax referred to in paragraph (b) is deemed to be equal to the amount determined by the formula

        A + B

        where

        A 
        is the amount determined by the formula

        C × D

        where

        C 
        is
        • (i) if the employer resource was consumed by the person during the particular fiscal year in the course of pension activities in respect of the pension plan, the product obtained when the fair market value of the employer resource at the time the person began consuming it in the particular fiscal year is multiplied by the extent to which that consumption (expressed as a percentage of the total consumption of the employer resource by the person during the particular fiscal year) occurred when the person was both a registrant and a participating employer of the pension plan, or

        • (ii) otherwise, the product obtained when the fair market value of the use of the employer resource during the particular fiscal year as determined on the last day of the particular fiscal year is multiplied by the extent to which the employer resource was used during the particular fiscal year (expressed as a percentage of the total use of the employer resource by the person during the particular fiscal year) in the course of pension activities in respect of the pension plan when the person was both a registrant and a participating employer of the pension plan, and

        D 
        is the rate set out in subsection 165(1), and
        B 
        is the total of all amounts, each of which is determined for a participating province by the following formula

        E × F

        where

        E 
        is the amount determined for C, and
        F 
        is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year; and
      • (d) for the purposes of determining, under section 261.01, an eligible amount of the specified pension entity of the pension plan in respect of the person for the particular fiscal year, the specified pension entity is deemed to have paid tax on the last day of the particular fiscal year equal to

        • (i) if the specified pension entity is a selected listed financial institution on that day, the amount determined for A in the formula in paragraph (c) in determining the amount of tax under that paragraph, and

        • (ii) in any other case, the amount of tax determined under paragraph (c).

    • Marginal note:Provision of information to pension entity

      (8) If subsection (5), (6) or (7) applies in respect of a person that is a participating employer of a pension plan, the person shall, in prescribed form and in a manner satisfactory to the Minister, provide prescribed information to the pension entity of the pension plan that is deemed to have paid tax under that subsection.

  • (2) Subsection (1) applies in respect of fiscal years of a person beginning on or after September 23, 2009, except that

    • (a) if a person that is a participating employer of a pension plan acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity of the pension plan but not for the purpose of making a supply of any part of the property or service to a pension entity of the pension plan after June 2010, the amount determined for B in the formula in paragraph 172.1(5)(c) of the Act, as enacted by subsection (1), for Ontario or British Columbia in respect of a taxable supply of all or part of the property or service that is deemed to have been made under paragraph 172.1(5)(a) of the Act, as enacted by subsection (1), shall be zero; and

    • (b) if a fiscal year of a person begins before July 1, 2010 and ends on or after that day, the third formula in paragraph 172.1(6)(c) of the Act and the descriptions in that formula, as enacted by subsection (1), and the third formula in paragraph 172.1(7)(c) of the Act and the descriptions in that formula, as enacted by subsection (1), shall be read as follows:

      E × F × G/H

      where

      E 
      is the amount determined for C,
      F 
      is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year,
      G 
      is
      • (i) if the participating province is Ontario or British Columbia, the number of days in the particular fiscal year that are after June 2010, and

      • (ii) in any other case, the number of days in the particular fiscal year, and

      H 
      is the number of days in the particular fiscal year; and
 

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