Coming into Force

Marginal note:Newfoundland and Labrador

• 175. (1) Section 172 comes into force, or is deemed to have come into force, on April 1 of the first fiscal year in respect of which Newfoundland and Labrador makes the election under subsection 3.7(3) of the Federal-Provincial Fiscal Arrangements Act.

• Marginal note:Notice

  (2) The Minister of Finance shall publish in the Canada Gazette the date on which section 172 comes into force.

PART 122004, c. 26AMENDMENTS TO THE CANADA EDUCATION SAVINGS ACT

176. The Canada Education Savings Act is amended by adding the following after section 12:

177. Section 13 of the Act is amended by striking out the word “and” at the end of paragraph (j), by adding the word “and” at the end of paragraph (k) and by adding the following after paragraph (k):

PART 13PRIVATE-PUBLIC PARTNERSHIPS

Marginal note:Payments

178. There may be paid out of the Consolidated Revenue Fund, on the requisition of the Minister of Finance, a sum not exceeding five million dollars, to an entity designated by the Minister of Finance, to facilitate public-private partnership projects in respect of that entity’s operating and capital expenditures for each of fiscal years 2007-2008 and 2008-2009.

PART 14TAX AMENDMENTS TO IMPLEMENT THE 2007 ECONOMIC STATEMENT

Amendments Relating to Income Tax

R.S., c. 1 (5th Supp.)Income Tax Act

• 179. (1) Paragraph 117(2)(a) of the Income Tax Act is replaced by the following:

  • (a) 15% of the amount taxable, if the amount taxable is equal to or less than the amount determined for the taxation year in respect of $36,378;

• (2) Subsection (1) applies to the 2007 and subsequent taxation years.

• 180. (1) Paragraphs 118(3.1)(c) to (f) of the Act are replaced by the following:

  • (c) for the 2007 and 2008 taxation years, to be replaced by $9,600;

  • (d) for the 2009 taxation year, to be replaced by $10,100; and

  • (e) for each of the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under this subsection in respect of the amount for the immediately preceding taxation year.

• (2) Paragraphs 118(3.2)(c) to (f) of the Act are replaced by the following:

  • (c) for the 2007 and 2008 taxation years, to be replaced by $9,600;

  • (d) for the 2009 taxation year, to be replaced by $10,100; and

  • (e) for each of the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under this subsection in respect of the amount for the immediately preceding taxation year.

• (3) Subsections (1) and (2) apply to the 2007 and subsequent taxation years.

• 181. (1) Paragraphs (b) to (e) of the definition “general rate reduction percent-age” in subsection 123.4(1) of the Act are replaced by the following:

  • (b) that proportion of 8.5% 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 9% that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year,

  • (d) that proportion of 10% that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year,

  • (e) that proportion of 11.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and

  • (f) that proportion of 13% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year.

• (2) Subsection (1) applies to the 2008 and subsequent taxation years.

• 182. (1) Paragraphs 125(1.1)(b) and (c) of the Act are replaced by the following:

  • (b) that proportion of 17% that the number of days in the taxation year that are after 2007 is of the number of days in the taxation year.

• (2) Subsection (1) applies to the 2008 and subsequent taxation years.

Amendments to Implement the GST/HST Rate Reduction

R.S., c. E-15Excise Tax Act

Marginal note:2006, c. 4, s. 2(1)

• 183. (1) The description of G in paragraph (a) of the definition “basic tax content” in subsection 123(1) of the Excise Tax Act is amended by striking out the word “and” at the end of clause (A) and by replacing clause (B) with the following:

  • (B) 6%, if the amount determined for D is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends after June 30, 2006, but before January 1, 2008, and

  • (C) 5%, in any other case,

• Marginal note:2006, c. 4, s. 2(2)

  (2) The description of P in paragraph (b) of the definition “basic tax content” in subsection 123(1) of the Act is amended by striking out the word “and” at the end of clause (A) and by replacing clause (B) with the following:

  • (B) 6%, if the amount determined for M is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends after June 30, 2006, but before January 1, 2008, and

  • (C) 5%, in any other case,

• (3) Subsections (1) and (2) come into force, or are deemed to have come into force, on January 1, 2008.

Marginal note:2006, c. 4, s. 3(1)

• 184. (1) Subsection 165(1) of the Act is replaced by the following:

  Marginal note:Imposition of goods and services tax

  • 165. (1) Subject to this Part, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply.

• (2) Subsection (1) applies

  • (a) to any supply (other than a supply deemed under section 191 of the Act to have been made) made on or after January 1, 2008;

  • (b) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before January 1, 2008, but only in respect of the portion of the tax that

    • (i) becomes payable on or after January 1, 2008, without having been paid before that day, or

    • (ii) is paid on or after January 1, 2008, without having become payable;

  • (c) for the purposes of calculating tax in respect of any supply (other than a supply deemed under Part IX of the Act to have been made) by way of sale of real property made before January 1, 2008, if ownership and possession of the property are transferred on or after January 1, 2008, to the recipient under the agreement for the supply, unless the supply is a supply of a residential complex pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before October 30, 2007;

  • (d) for the purposes of determining, under section 181.1 of the Act, tax or an input tax credit in respect of a supply of property or a service in respect of which tax became payable on or after January 1, 2008;

  • (e) for the purposes of the description of A in clause 184.1(2)(d)(i)(A) of the Act in respect of a person acting as a surety under a performance bond in respect of a contract for a particular taxable supply of construction services if a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act) becomes due or is paid without having become due to the person on or after January 1, 2008, by reason of the person carrying on the particular construction;

  • (f) to any supply by way of sale of a residential complex, which is a single unit residential complex (as defined in subsection 123(1) of the Act) or a residential condominium unit, deemed under subsection 191(1) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of the complex to a person under an agreement, entered into on or before October 30, 2007, for the supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated;

  • (g) to any supply by way of sale of a residential condominium unit deemed under subsection 191(2) of the Act to have been made on or after January 1, 2008, unless possession of the unit was given to the particular person referred to in that subsection before January 1, 2008;

  • (h) to any supply by way of sale of a residential complex deemed under subsection 191(3) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the complex to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

    • (i) the agreement was entered into on or before October 30, 2007, or

    • (ii) another agreement for the supply by way of sale of the building or part of it forming part of the complex was entered into by the builder and another person

      • (A) on or before May 2, 2006, and that other agreement was not terminated before July 1, 2006, or

      • (B) on or before October 30, 2007, and that other agreement was not terminated before January 1, 2008;

  • (i) to any supply by way of sale of an addition to a residential complex deemed under subsection 191(4) of the Act to have been made on or after January 1, 2008, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the addition to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

    • (i) the agreement was entered into on or before October 30, 2007, or

    • (ii) another agreement for the supply by way of sale of the building or part of it forming part of the addition was entered into by the builder and another person

      • (A) on or before May 2, 2006, and that other agreement was not terminated before July 1, 2006, or

      • (B) on or before October 30, 2007, and that other agreement was not terminated before January 1, 2008;

  • (j) for the purposes of calculating tax on the cost to another person of supplying property or a service to a financial institution under paragraph (c) of the description of A in subsection 225.2(2) of the Act for a reporting period of the financial institution that ends on or after January 1, 2008;

  • (k) for the purposes of the description of E in subsection 225.2(2) of the Act in determining the net tax of a financial institution for a reporting period that ends on or after January 1, 2008;

  • (l) for the purposes of the description of A in subsection 253(1) and subparagraphs 253(2)(a)(ii) and (c)(ii) of the Act in determining the amount of a rebate payable under subsection 253(1) of the Act for a calendar year after 2007;

  • (m) for the purposes of subparagraphs (i) and (ii) of the description of C in subsection 21.3(2) of the Streamlined Accounting (GST/HST) Regulations in determining, pursuant to that subsection, an amount of tax that became payable, or was paid without having become payable, by a registrant during reporting periods ending after 2007, except that for the reporting period of the registrant that includes January 1, 2008, the formula and the descriptions of A, B, C and D in that subsection shall be read as follows:

    (A × B) + (C × D)

    where

    A 

    is

    • (a) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the supply or importation, 14/114, and

    • (b) in any other case, 6/106,

    B 

    is the total of all amounts each of which is

    • (a) the consideration that became due, or was paid without having become due, by the registrant during that period but before January 1, 2008, in respect of the supply of the property or service to the registrant,

    • (b) the tax under Division II or III that became payable, or was paid without having become payable, by the registrant during that period but before January 1, 2008, in respect of the supply or importation of the property or service,

    • (c) in the case of tangible personal property that was imported by the registrant, the amount of a tax or duty imposed in respect of the property under the Act (other than Part IX), the Customs Act, the Special Import Measures Act or any other law relating to customs, that became due or was paid without having become due, by the registrant during that period but before January 1, 2008,

    • (d) the amount of a tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that became due, or was paid without having become due, by the registrant during that period but before January 1, 2008, in respect of the property or service, other than tax imposed under an Act of a legislature of a province to the extent that the tax is recoverable by the registrant under that Act,

    • (e) a reasonable gratuity paid by the registrant during that period but before January 1, 2008, in connection with the supply, or

    • (f) interest, a penalty or other amount paid by the registrant during that period but before January 1, 2008, if the amount was charged to the registrant by the supplier because an amount of consideration, or an amount of a tax, duty or fee referred to in paragraph (c) or (d), that was payable in respect of the supply or importation was overdue,

    C 

    is

    • (a) if tax under subsection 165(2) or section 212.1 of the Act was payable in respect of the supply or importation, 13/113, and

    • (b) in any other case, 5/105, and

    D 

    is the total of all amounts each of which is

    • (a) the consideration that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008, in respect of the supply of the property or service to the registrant,

    • (b) the tax under Division II or III that became payable, or was paid without having become payable, by the registrant during that period but on or after January 1, 2008, in respect of the supply or importation of the property or service,

    • (c) in the case of tangible personal property that was imported by the registrant, the amount of a tax or duty imposed in respect of the property under the Act (other than Part IX), the Customs Act, the Special Import Measures Act or any other law relating to customs, that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008,

    • (d) the amount of a tax, duty or fee prescribed by paragraph 3(b) or (c) of the Taxes, Duties and Fees (GST/HST) Regulations that became due, or was paid without having become due, by the registrant during that period but on or after January 1, 2008, in respect of the property or service, other than tax imposed under an Act of a legislature of a province to the extent that the tax is recoverable by the registrant under that Act,

    • (e) a reasonable gratuity paid by the registrant during that period but on or after January 1, 2008, in connection with the supply, or

    • (f) interest, a penalty or other amount paid by the registrant during that period but on or after January 1, 2008, if the amount was charged to the registrant by the supplier because an amount of consideration, or an amount of a tax, duty or fee referred to in paragraph (c) or (d), that was payable in respect of the supply or importation was overdue.

  • (n) for the purposes of subparagraphs (i) and (ii) of the description of C in paragraph 21.3(4)(b) of the Streamlined Accounting (GST/HST) Regulations in determining an amount excluded under subsection 21.3(4) of those Regulations from the determination of an input tax credit in respect of a passenger vehicle for which tax on the acquisition or importation first became payable or was first paid without having become payable after 2007; and

  • (o) for the purposes of determining or calculating any of the following amounts if none of paragraphs (a) to (n) applies:

    • (i) tax on or after January 1, 2008,

    • (ii) tax that is not payable but would have been payable on or after January 1, 2008, in the absence of certain circumstances described in the Act, and

    • (iii) an amount or a number, at any time on or after January 1, 2008, by or in accordance with an algebraic formula that makes reference to the rate set out in subsection 165(1) of the Act.

• (3) Despite paragraph (2)(e) and for the purposes of the description of A in clause 184.1(2)(d)(i)(A) of the Act in determining the total amount of all input tax credits in respect of direct inputs (within the meaning of paragraph 184.1(2)(c) of the Act), where a surety is carrying on a particular construction of real property situated in Canada as full or partial satisfaction of the surety’s obligation under a bond, a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due or is paid without having become due before January 1, 2008, and another contract payment (within the meaning of paragraph 184.1(2)(a) of the Act), other than a contract payment that is not in respect of the particular construction, becomes due on or after that day, without having been paid before that day, or is paid without having become due on or after that day, clause 184.1(2)(d)(i)(A) of the Act shall be read as follows:

  • (A) the amount determined by the formula

    (A × B) + (C × D) + (E × F)

    where

    A 

    is

    • (I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 7% and the rate of tax for that participating province, and

    • (II) in any other case, 7%,

    B 

    is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due before July 1, 2006, or are paid, without having become due, to the surety before that day,

    C 

    is

    • (I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 6% and the rate of tax for the participating province, and

    • (II) in any other case, 6%,

    D 

    is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due on or after July 1, 2006, and before January 1, 2008, without having been paid before July 1, 2006, or are paid, without having become due, to the surety on or after that day and before January 1, 2008,

    E 

    is

    • (I) if the supply deemed under subparagraph (a)(i) to be made by the surety is made in a participating province, the total of 5% and the rate of tax for the participating province, and

    • (II) in any other case, 5%, and

    F 

    is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due on or after January 1, 2008, without having been paid before that day, or are paid, without having become due, to the surety on or after that day