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.

• 13. (1) Section 118.2 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Cosmetic purposes

    (2.1) The medical expenses referred to in subsection (2) do not include amounts paid for medical or dental services, nor any related expenses, provided purely for cosmetic purposes, unless necessary for medical or reconstructive purposes.

• (2) Subsection (1) applies to expenses incurred after March 4, 2010.

• 14. (1) 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 March 2010 and before 2012 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2012) 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),

• (2) 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 March 2010 and before April 2011, 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 March 2010 and before April 2011;

• (3) Subsections (1) and (2) apply to expenses renounced under a flow-through share agreement made after March 2010.

• 15. (1) Section 128.1 of the Act is amended by adding the following after subsection (6):

  • Marginal note:Deemed taxable Canadian property

    (6.1) For the purposes of paragraph (6)(a), a property is deemed to be taxable Canadian property of the individual throughout the period that began at the emigration time and that ends at the particular time if

    • (a) the emigration time is before March 5, 2010; and

    • (b) the property was taxable Canadian property of the individual on March 4, 2010.

• (2) Subsection (1) applies in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.

• 16. (1) The definition “contribution” in subsection 146.1(1) of the Act is replaced by the following:

  “contribution”

  « cotisation »

  “contribution” to an education savings plan does not include an amount paid into the plan under or because of

  • (a) the Canada Education Savings Act or a designated provincial program, or

  • (b) any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by a public primary caregiver in its capacity as subscriber under the plan);

• (2) Paragraph (b) of the definition “designated provincial program” in subsection 146.1(1) of the Act is replaced by the following:

  • (b) a program established under the laws of a province to encourage the financing of children’s post-secondary education through savings in registered education savings plans.

• (3) Subsection (1) applies to the 2009 and subsequent taxation years.

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

• 17. (1) The definition “contribution” in subsection 146.4(1) of the Act is replaced by the following:

  “contribution”

  « cotisation »

  “contribution” to a disability savings plan does not include (other than for the purpose of paragraph (b) of the definition “disability savings plan”)

  • (a) an amount paid into the plan under or because of the Canada Disability Savings Act or a designated provincial program;

  • (b) an amount paid into the plan under or because of any other program that has a similar purpose to a designated provincial program and that is funded, directly or indirectly, by a province (other than an amount paid into the plan by an entity described in subparagraph (a)(iii) of the definition “qualifying person” in its capacity as holder of the plan); or

  • (c) an amount transferred to the plan in accordance with subsection (8).

• (2) Subsection 146.4(1) of the Act is amended by adding the following in alphabetical order:

  “designated provincial program”

  « programme provincial désigné »

  “designated provincial program” means a program that is established under the laws of a province and that supports savings in registered disability savings plans.

• (3) Paragraph 146.4(4)(g) of the Act is replaced by the following:

  • (g) the plan prohibits a contribution from being made to the plan at any time if

    • (i) the beneficiary attained the age of 59 years before the calendar year that includes that time,

    • (ii) the beneficiary is not resident in Canada at that time, or

    • (iii) the total of the contribution and all other contributions made at or before that time to the plan or to any other registered disability savings plan of the beneficiary would exceed $200,000;

• (4) Subparagraph 146.4(4)(i)(iii) of the Act is replaced by the following:

  • (iii) repayments under the Canada Disability Savings Act or a designated provincial program;

• (5) The portion of paragraph 146.4(4)(n) of the Act before subparagraph (i) is replaced by the following:

  • (n) the plan provides that when the total of all amounts paid under the Canada Disability Savings Act before the beginning of a calendar year to any registered disability savings plan of the beneficiary exceeds the total of all contributions made before the beginning of the calendar year to any registered disability savings plan of the beneficiary,

• (6) The portion of paragraph 146.4(4)(p) of the Act before subparagraph (i) is replaced by the following:

  • (p) the plan provides for any amounts remaining in the plan (after taking into consideration any repayments under the Canada Disability Savings Act or a designated provincial program) to be paid to the beneficiary or the beneficiary’s estate, as the case may be, and for the plan to be terminated, by the end of the calendar year following the earlier of

• (7) Paragraph (a) of the description of B in subsection 146.4(7) of the Act is replaced by the following:

  • (a) the total of all amounts each of which is the amount of a contribution made before the particular time to any registered disability savings plan of the beneficiary

• (8) Subsections (1) to (7) apply to the 2009 and subsequent taxation years.

• 18. (1) Paragraph 147.2(2)(d) of the Act is replaced by the following:

  • (d) a recommendation with respect to the contributions required to be made by an employer in respect of the defined benefit provisions of a pension plan may be prepared without regard to such portion of the assets of the plan apportioned to the employer in respect of the employer’s employees and former employees as does not exceed the lesser of

    • (i) the amount of actuarial surplus in respect of the employer, and

    • (ii) 25% of the amount of actuarial liabilities apportioned to the employer in respect of the employer’s employees and former employees.

• (2) Subsection (1) applies to contributions made after 2009 to fund benefits provided in respect of periods of pensionable service after 2009.

• 19. (1) Subsection 164(1.5) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or’’ at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) to the extent that the overpayment relates to an assessment of another taxpayer under subsection 227(10) or (10.1) (in this paragraph referred to as the “other assessment”), if the taxpayer’s return of income under this Part for the taxation year is filed on or before the day that is two years after the date of the other assessment and if the other assessment relates to

    • (i) in the case of an amount assessed under subsection 227(10), a payment to the taxpayer of a fee, commission or other amount in respect of services rendered in Canada by a non-resident person or partnership, and

    • (ii) in the case of an amount assessed under subsection 227(10.1), an amount payable under subsection 116(5) or (5.3) in respect of a disposition of property by the taxpayer.

• (2) Subsection (1) applies to overpayments in respect of which applications for refunds are made after March 4, 2010.

• 20. (1) Paragraph (d) of the definition “advantage” in subsection 205(1) of the Act is replaced by the following:

  • (d) an amount paid under or because of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1);

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 21. (1) Subparagraph 241(4)(d)(vii.1) of the Act is replaced by the following:

  • (vii.1) to an official solely for the purpose of the administration or enforcement of the Canada Education Savings Act or a designated provincial program as defined in subsection 146.1(1),

• (2) Subparagraph 241(4)(d)(vii.5) of the Act is replaced by the following:

  • (vii.5) to an official solely for the purposes of the administration or enforcement of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1),

• (3) Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

• 22. (1) The definition “taxable Canadian property” in subsection 248(1) of the Act is replaced by the following:

  “taxable Canadian property”

  « bien canadien imposable »

  “taxable Canadian property” of a taxpayer at any time in a taxation year means a property of the taxpayer that is

  • (a) real or immovable property situated in Canada,

  • (b) property used or held by the taxpayer in, eligible capital property in respect of, or property described in an inventory of, a business carried on in Canada, other than

    • (i) property used in carrying on an insurance business, and

    • (ii) where the taxpayer is non-resident, ships and aircraft used principally in international traffic and personal or movable property pertaining to their operation if the country in which the taxpayer is resident does not impose tax on gains of persons resident in Canada from dispositions of such property,

  • (c) if the taxpayer is an insurer, its designated insurance property for the year,

  • (d) a share of the capital stock of a corporation (other than a mutual fund corporation) that is not listed on a designated stock exchange, an interest in a partnership or an interest in a trust (other than a unit of a mutual fund trust or an income interest in a trust resident in Canada), if, at any particular time during the 60-month period that ends at that time, more than 50% of the fair market value of the share or interest, as the case may be, was derived directly or indirectly from one or any combination of

    • (i) real or immovable property situated in Canada,

    • (ii) Canadian resource properties,

    • (iii) timber resource properties, and

    • (iv) options in respect of, or interests in, or for civil law rights in, property described in any of subparagraphs (i) to (iii), whether or not the property exists,

  • (e) a share of the capital stock of a corporation that is listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation or a unit of a mutual fund trust, if, at any particular time during the 60-month period that ends at that time,

    • (i) 25% or more of the issued shares of any class of the capital stock of the corporation, or 25% or more of the issued units of the trust, as the case may be, were owned by or belonged to one or any combination of

      • (A) the taxpayer, and

      • (B) persons with whom the taxpayer did not deal at arm’s length, and

    • (ii) more than 50% of the fair market value of the share or unit, as the case may be, was derived directly or indirectly from one or any combination of properties described under subparagraphs (d)(i) to (iv), or

  • (f) an option in respect of, or an interest in, or for civil law a right in, a property described in any of paragraphs (a) to (e), whether or not the property exists,

  and, for the purposes of section 2, subsection 107(2.001) and sections 128.1 and 150, and for the purpose of applying paragraphs 85(1)(i) and 97(2)(c) to a disposition by a non-resident person, includes

  • (g) a Canadian resource property,

  • (h) a timber resource property,

  • (i) an income interest in a trust resident in Canada,

  • (j) a right to a share of the income or loss under an agreement referred to in paragraph 96(1.1)(a), and

  • (k) a life insurance policy in Canada;

• (2) Subsection 248(25.1) of the Act is replaced by the following:

  • Marginal note:Trust-to-trust transfers

    (25.1) If, at any time, a particular trust transfers property to another trust (other than a trust governed by a registered retirement savings plan or by a registered retirement income fund) in circumstances to which paragraph (f) of the definition “disposition” in subsection (1) applies, without affecting the personal liabilities under this Act of the trustees of either trust or the application of subsection 104(5.8) and paragraph 122(2)(f),

    • (a) the other trust is deemed to be after that time the same trust as, and a continuation of, the particular trust; and

    • (b) for greater certainty, if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the particular trust by any of paragraphs 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 other trust.

• (3) Subsections (1) and (2) apply in determining after March 4, 2010 whether a property is taxable Canadian property of a taxpayer.

C.R.C., c. 945Income Tax Regulations

• 23. (1) Subparagraph 4301(b)(ii) of the Income Tax Regulations is replaced by the following:

  • (ii) if the taxpayer is a corporation, zero per cent, and in any other case, 2 per cent; and

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

• 24. (1) Subparagraph 8510(9)(c)(i) of the Regulations is replaced by the following:

  • (i) the contribution is a current service contribution that would be an eligible contribution under subsection 147.2(2) of the Act if no contributions were prescribed for the purposes of that subsection and if that subsection were read without reference to its subparagraph (d)(ii), and

• (2) Clause 8510(9)(c)(ii)(A) of the Regulations is replaced by the following:

  • (A) where the amount of actuarial surplus in respect of the employer is greater than the amount determined under subparagraph 147.2(2)(d)(ii) of the Act, 50% of the current service contribution that would be required to be made by the employer if there were no actuarial surplus under the provisions, and

• (3) Subsections (1) and (2) apply to contributions made after 2009 to fund benefits provided in respect of periods of pensionable service after 2009.

• 25. (1) Subsection 8516(1) of the Regulations is replaced by the following:

  • 8516. (1) For the purposes of subsection 147.2(2) of the Act, a contribution described in subsection (2) or (3) is a prescribed contribution.

• (2) Subsection 8516(4) of the Regulations and the heading before it are repealed.

• (3) Subsections (1) and (2) apply to contributions made after 2009 to fund benefits provided in respect of periods of pensionable service after 2009.

2007, c. 35, s. 136Canada Disability Savings Act

• 26. (1) The definition “contribution” in subsection 2(1) of the Canada Disability Savings Act is repealed.

• (2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

  “first threshold”

  « premier seuil »

  “first threshold” for a particular year means the dollar amount referred to in paragraph 117(2)(a) of the Income Tax Act, as adjusted under that Act for the particular year;

  “phase-out income”

  « revenu de transition »

  “phase-out income” for a particular year means the amount determined by the formula

  A – (B/0.122)

  where

  A

  is the first threshold for the particular year, and

  B

  is the amount referred to in paragraph (a) of the description of F in subsection 122.61(1) of the Income Tax Act, as adjusted under that Act for the particular year;

  “second threshold”

  « deuxième seuil »

  “second threshold” for a particular year means the higher dollar amount referred to in paragraph 117(2)(b) of the Income Tax Act, as adjusted under the Act for the particular year.

• (3) Paragraph 2(2)(b) of the Act is replaced by the following:

  • (b) the expressions “contribution”, “designated provincial program”, “holder”, “issuer” and “registered disability savings plan” have the same meanings as in section 146.4 of that Act; and

• (4) Subsections (1) to (3) apply to the 2009 and subsequent years.

• 27. (1) Subparagraphs 6(2)(a)(i) and (ii) of the Act are replaced by the following:

  • (i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is less than or equal to the second threshold for the particular year,

  • (ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is less than or equal to the second threshold for the particular year, or

• (2) Subsection 6(6) of the Act is repealed.

• (3) Subsections (1) and (2) apply to the 2009 and subsequent years.

• 28. (1) Subparagraphs 7(2)(a)(i) and (ii) of the Act are replaced by the following:

  • (i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is less than or equal to the phase-out income for the particular year,

  • (ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is less than or equal to the phase-out income for the particular year, or

• (2) Subparagraphs 7(2)(b)(i) and (ii) of the Act are replaced by the following:

  • (i) an individual who is at least 18 years of age on December 31 of the year preceding the particular year and whose family income for the particular year is more than the phase-out income for the particular year but less than the first threshold for the particular year, or

  • (ii) a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is more than the phase-out income for the particular year but less than the first threshold for the particular year.

• (3) The descriptions of B and C in subsection 7(4) of the Act are replaced by the following:

  B

  is the phase-out income for the particular year; and

  C

  is the first threshold for the particular year.

• (4) Subsection 7(8) of the Act is repealed.

• (5) Subsections (1) to (4) apply to the 2009 and subsequent years.

SOR/2008-186Canada Disability Savings Regulations

• 29. (1) Subparagraph 4(d)(i) of the Canada Disability Savings Regulations is replaced by the following:

  • (i) all contributions, payments and transfers to, and all payments and transfers from, an RDSP,

• (2) Subsection (1) applies to the 2009 and subsequent years.

2004, c. 26Canada Education Savings Act

• 30. (1) Subsection 2(1) of the Canada Education Savings Act is amended by adding the following in alphabetical order:

  “first threshold”

  « premier seuil »

  “first threshold” for a particular year means the dollar amount referred to in paragraph 117(2)(a) of the Income Tax Act, as adjusted under that Act for the particular year;

  “second threshold”

  « deuxième seuil »

  “second threshold” for a particular year means the higher dollar amount referred to in paragraph 117(2)(b) of the Income Tax Act, as adjusted under that Act for the particular year.

• (2) Paragraph 2(2)(b) of the Act is replaced by the following:

  • (b) the expressions “beneficiary”, “contribution”, “designated provincial program”, “promoter”, “registered education savings plan”, “subscriber” and “trust” have the meanings assigned by section 146.1 of the Income Tax Act; and

• (3) Subsection (1) applies to 2009 and subsequent years.

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

• 31. (1) Clause 5(4)(a)(i)(A) of the Act is replaced by the following:

  • (A) is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is the first threshold for the particular year or less, or

• (2) Subparagraph 5(4)(a)(ii) of the Act is replaced by the following:

  • (ii) 10% of the contribution, if the beneficiary is a qualified dependant of an eligible individual whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year is more than the first threshold for the particular year but not more than the second threshold for the particular year, and

• (3) Subsection 5(8) of the Act is repealed.

• (4) Subsections (1) to (3) apply to 2009 and subsequent years.

SOR/2005-151Canada Education Savings Regulations

• 32. (1) The description of G in paragraph 10(1)(b) of the Canada Education Savings Regulations is replaced by the following:

  G

  is the total of all amounts paid into the RESP under a designated provincial program.

• (2) The description of G in paragraph 10(2)(b) of the Regulations is replaced by the following:

  G

  is the total of all amounts paid into the RESP under a designated provincial program, and

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

• 33. (1) Subsection 16(2) of the Regulations is replaced by the following:

  • (2) If less than all of the property, other than the property in a CLB account, held in connection with an RESP is transferred to another RESP, the assisted contributions, unassisted contributions, CES grants, any amount paid under a designated provincial program and accumulated income are considered to be transferred in the same proportion as the value of the property transferred is to the total value of the property, other than the value of the property in a CLB account, in the RESP at the time of the transfer.

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

C.R.C., c. 385Canada Pension Plan Regulations

• 34. (1) Subparagraph 36(2)(b)(ii) of the Canada Pension Plan Regulations is replaced by the following:

  • (ii) if the amount is payable to a corporation, zero per cent, and in any other case, 2 per cent.

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

SOR/97-33Insurable Earnings and Collection of Premiums Regulations

• 35. (1) Subparagraph 18(2)(b)(ii) of the Insurable Earnings and Collection of Premiums Regulations is replaced by the following:

  • (ii) if the amount is payable to a corporation, zero per cent, and in any other case, 2 per cent.

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

SOR/2002-63Regulations Excluding Certain Indictable Offences from the Definition of “Designated Offence”

• 36. (1) Paragraph 1(a) of the Regulations Excluding Certain Indictable Offences from the Definition of “Designated Offence” is repealed.

• (2) Paragraphs 1(d) and (e) of the Regulations are repealed.

• (3) Paragraph 1(j) of the Regulations is repealed.

PART 2AMENDMENTS IN RESPECT OF EXCISE DUTIES AND SALES AND EXCISE TAXES

R.S., c. E-14Excise Act

Marginal note:1996, c. 21, s. 62(1)

• 37. (1) Paragraph 110.1(1)(b) of the Excise Act is replaced by the following:

  • (b) interest at such rates per annum prescribed under the Income Tax Act for amounts payable by the Minister under that Act as refunds of overpayments of tax to a person that is not a corporation, as are in effect from time to time, in respect of each day between the expiration of that time and the day on which the total duty, penalty and interest outstanding is paid, calculated on the total duty, penalty and interest outstanding on that day.

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

Amendments in Respect of the Excise Act, 2001

2002, c. 22Excise Act, 2001

• 38. (1) The definition “stamped” in section 2 of the Excise Act, 2001 is replaced by the following:

  “stamped”

  « estampillé »

  “stamped”, in respect of a tobacco product, means that an excise stamp, and all prescribed information in a prescribed format, are stamped, impressed, printed or marked on, indented into or affixed to the product or its container in the prescribed manner to indicate that duty, other than special duty, has been paid on the product.

• (2) Section 2 of the Act is amended by adding the following in alphabetical order:

  “excise stamp”

  « timbre d’accise »

  “excise stamp” means a stamp that is issued by the Minister under subsection 25.1(1) and that has not been cancelled under section 25.5.

Marginal note:2008, c. 28, s. 51(1)

• 39. (1) Subsection 5(1) of the Act is replaced by the following:

  Marginal note:Constructive possession

  • 5. (1) For the purposes of section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61, subsections 70(1) and 88(1), sections 230 and 231 and subsection 238.1(1), if one of two or more persons, with the knowledge and consent of the rest of them, has anything in the person’s possession, it is deemed to be in the custody and possession of each and all of them.

• Marginal note:2008, c. 28, s. 51(2)

  (2) The portion of subsection 5(2) of the Act before paragraph (a) is replaced by the following:

  • Meaning of “possession”

    (2) In this section and in section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61 and subsections 70(1), 88(1) and 238.1(1), “possession” means not only having in one’s own personal possession but also knowingly

40. The Act is amended by adding the following after section 25:

41. The Act is amended by adding the following after subsection 206(2.1):

Marginal note:2008, c. 28, s. 60

42. The portion of section 214 of the Act before paragraph (a) is replaced by the following:

Marginal note:2007, c. 18, s. 121

43. Section 234 of the Act is replaced by the following:

44. The Act is amended by adding the following after section 238:

Marginal note:2007, c. 18, s. 127(1)

45. Section 264 of the Act is replaced by the following:

46. Section 266 of the Act is amended by adding the following after subsection (1):

• 47. (1) Paragraph 304(1)(c) of the Act is replaced by the following:

  • (c) respecting the types of security that are acceptable for the purposes of paragraph 23(3)(b) or subsection 25.1(3), and the manner by which the amount of the security is to be determined but that amount must not be less than $5,000;

• (2) Paragraph 304(1)(d) of the French version of the Act is replaced by the following:

  • d) régir la durée, la modification, la suspension, le renouvellement, la révocation, le retrait et le rétablissement des licences, agréments et autorisations;

• (3) Subsection 304(1) of the Act is amended by adding the following after paragraph (f):

  • (f.1) respecting the issuance of excise stamps;

• (4) Paragraph 304(1)(i) of the French version of the Act is replaced by the following:

  • i) régir le dépôt de produits du tabac et d’alcool dans un entrepôt d’accise ou un entrepôt d’accise spécial et leur sortie d’un tel entrepôt;

• Marginal note:2007, c. 18, s. 130(1)

  (5) Paragraph 304(1)(n) of the French version of the Act is replaced by the following:

  • n) régir la vente, en vertu de l’article 266, d’alcool, de produits du tabac, de tabac en feuilles, d’alcool spécialement dénaturé ou de préparations assujetties à des restrictions saisis en vertu de l’article 260;

R.S., c. 1 (2nd Supp.)Customs Act

48. Subsection 2(1) of the Customs Act is amended by adding the following in alphabetical order:

49. Section 97.25 of the Act is amended by adding the following after subsection (3):

Marginal note:2007, c. 18, s. 137(1)

50. Subsection 117(2) of the Act is replaced by the following:

51. Section 119.1 of the Act is amended by adding the following after subsection (1):

Marginal note:2007, c. 18, s. 139(1)

52. The portion of subsection 142(1) of the Act before paragraph (a) is replaced by the following:

53. Section 142.1 of the Act is amended by adding the following after subsection (1):

Application

Meaning of “implementation date”

• 54. (1) In this section, “implementation date” means the first day of the month that follows the thirtieth day after the day on which this Act receives Royal Assent.

• Marginal note:Application

  (2) Sections 38 to 46, subsections 47(1) and (3) and sections 48 to 53 apply as of the implementation date, except that, for the purposes of section 34 or 35 of the Excise Act, 2001, a tobacco product may, on or after the implementation date but before April 2011, be entered into the duty-paid market or be released under the Customs Act for entry into the duty-paid market, as the case may be, if it is stamped in one of the following manners:

  • (a) in accordance with the rules applicable under the Excise Act, 2001 as those rules read on the day before the day on which this Act receives Royal Assent;

  • (b) in accordance with the rules applicable under the Excise Act, 2001 as those rules read on the implementation date or as they are amended from time to time after that date; or

  • (c) in the manner described in paragraphs (a) and (b).

• Marginal note:Effect — paragraph (2)(a)

  (3) If a tobacco product is stamped in the manner described in paragraph (2)(a), the rules applicable under the Excise Act, 2001 as those rules read on the day before the day on which this Act receives Royal Assent apply in respect of the tobacco product.

• Marginal note:Effect — paragraph (2)(b) or (c)

  (4) If a tobacco product is stamped in the manner described in paragraph (2)(b) or (c), the rules applicable under the Excise Act, 2001 as those rules read on the implementation date, or as they are amended from time to time after that date, apply in respect of the tobacco product.

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

Marginal note:1990, c. 45, s. 12(1)

• 55. (1) Paragraph (l) of the definition “financial service” in subsection 123(1) of the Excise Tax Act is replaced by the following:

  • (l) the agreeing to provide, or the arranging for, a service that is

    • (i) referred to in any of paragraphs (a) to (i), and

    • (ii) not referred to in any of paragraphs (n) to (t), or

• (2) The definition “financial service” in subsection 123(1) of the Act is amended by adding the following after paragraph (q):

  • (q.1) an asset management service,

• (3) The definition “financial service” in subsection 123(1) of the Act is amended by adding the following after paragraph (r.2):

  • (r.3) a service (other than a prescribed service) of managing credit that is in respect of credit cards, charge cards, credit accounts, charge accounts, loan accounts or accounts in respect of any advance and is provided to a person granting, or potentially granting, credit in respect of those cards or accounts, including a service provided to the person of

    • (i) checking, evaluating or authorizing credit,

    • (ii) making decisions on behalf of the person in relation to a grant, or an application for a grant, of credit,

    • (iii) creating or maintaining records for the person in relation to a grant, or an application for a grant, of credit or in relation to the cards or accounts, or

    • (iv) monitoring another person’s payment record or dealing with payments made, or to be made, by the other person,

  • (r.4) a service (other than a prescribed service) that is preparatory to the provision or the potential provision of a service referred to in any of paragraphs (a) to (i) and (l), or that is provided in conjunction with a service referred to in any of those paragraphs, and that is

    • (i) a service of collecting, collating or providing information, or

    • (ii) a market research, product design, document preparation, document processing, customer assistance, promotional or advertising service or a similar service,

  • (r.5) property (other than a financial instrument or prescribed property) that is delivered or made available to a person in conjunction with the rendering by the person of a service referred to in any of paragraphs (a) to (i) and (l),

• (4) Subsection 123(1) of the Act is amended by adding the following in alphabetical order:

  “asset management service”

  « service de gestion des actifs »

  “asset management service” means a service (other than a prescribed service) rendered by a particular person in respect of the assets or liabilities of another person that is a service of

  • (a) managing or administering the assets or liabilities, irrespective of the level of discretionary authority the particular person has to manage some or all of the assets or liabilities,

  • (b) providing research, analysis, advice or reports in respect of the assets or liabilities,

  • (c) determining which assets or liabilities are to be acquired or disposed of, or

  • (d) acting to realize performance targets or other objectives in respect of the assets or liabilities;

  “management or administrative service”

  « service de gestion ou d’administration »

  “management or administrative service” includes an asset management service;

• (5) Subsections (1) to (4) are deemed to have come into force on December 17, 1990, except that, for the purposes of Part IX of the Act, other than Division IV of that Part, those subsections do not apply in respect of a service rendered under an agreement, evidenced in writing, for a supply if

  • (a) all of the consideration for the supply became due or was paid on or before December 14, 2009;

  • (b) the supplier did not, on or before December 14, 2009, charge, collect or remit any amount as or on account of tax under Part IX of the Act in respect of the supply; and

  • (c) the supplier did not, on or before December 14, 2009, charge, collect or remit any amount as or on account of tax under Part IX of the Act in respect of any other supply that is made under the agreement and that includes the provision of a service referred to in any of paragraphs (q), (q.1) and (r.3) to (r.5) of the definition “financial service” in subsection 123(1) of the Act, as amended by subsections (1) to (4).

• (6) Despite section 298 of the Act, the Minister of National Revenue may assess, reassess or make an additional assessment of any amount payable or remittable by a person in respect of a supply of a service referred to in any of paragraphs (q), (q.1) and (r.3) to (r.5) of the definition “financial service” in subsection 123(1) of the Act, as amended by subsections (2) to (4), at any time on or before the later of the day that is one year after the day on which this Act is assented to and the last day of the period otherwise allowed under that section for making the assessment, reassessment or additional assessment.

Marginal note:1994, c. 9, s. 4(1)

• 56. (1) The portion of subsection 141.01(5) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Method of determining extent of use, etc.

    (5) Subject to section 141.02, the methods used by a person in a fiscal year to determine

• (2) Subsection (1) is deemed to have come into force on April 1, 2007.

• 57. (1) The Act is amended by adding the following after section 141.01:

  Marginal note:Definitions

  • 141.02 (1) The definitions in this subsection apply in this section.

    “adjusted tax credit amount”

    « montant de crédit de taxe rajusté »

    “adjusted tax credit amount” means the amount determined, for a fiscal year of a person, by the formula

    A × 365/B

    where

    A

    is the tax credit amount of the person for the fiscal year; and

    B

    is the number of days in the fiscal year.

    “adjusted total tax amount”

    « montant total de taxe rajusté »

    “adjusted total tax amount” means the amount determined, for a fiscal year of a person, by the formula

    A × 365/B

    where

    A

    is the total tax amount of the person for the fiscal year; and

    B

    is the number of days in the fiscal year.

    “business input”

    « intrant d’entreprise »

    “business input” means an excluded input, an exclusive input or a residual input.

    “direct attribution method”

    « méthode d’attribution directe »

    “direct attribution method” means a method, conforming to criteria, rules, terms and conditions specified by the Minister, of determining in the most direct manner the operative extent and the procurative extent of property or a service.

    “direct input”

    « intrant direct »

    “direct input” means property or a service, other than

    • (a) an excluded input;

    • (b) an exclusive input; or

    • (c) a non-attributable input.

    “excluded input”

    « intrant exclu »

    “excluded input” of a person means

    • (a) property that is for use by the person as capital property;

    • (b) property or a service that is acquired, imported or brought into a participating province by the person for use as an improvement to property described in paragraph (a); or

    • (c) a prescribed property or service.

    “exclusive input”

    « intrant exclusif »

    “exclusive input” of a person means property or a service (other than an excluded input) that is acquired, imported or brought into a participating province by the person for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration or directly and exclusively for purposes other than making taxable supplies for consideration.

    “non-attributable input”

    « intrant non attribuable »

    “non-attributable input” of a person means property or a service that is

    • (a) not an excluded input or an exclusive input of the person;

    • (b) acquired, imported or brought into a participating province by the person; and

    • (c) not attributable to the making of any particular supply by the person.

    “operative extent”

    « mesure d’utilisation »

    “operative extent” of property or a service means, as the case may be, the extent to which the consumption or use of the property or service is for the purpose of making taxable supplies for consideration or the extent to which the consumption or use of the property or service is for purposes other than making taxable supplies for consideration.

    “procurative extent”

    « mesure d’acquisition »

    “procurative extent” of property or a service means, as the case may be, the extent to which the property or service is acquired, imported or brought into a participating province for the purpose of making taxable supplies for consideration or the extent to which the property or service is acquired, imported or brought into a participating province for purposes other than making taxable supplies for consideration.

    “qualifying institution”

    « institution admissible »

    “qualifying institution” for a particular fiscal year means a person that

    • (a) is a financial institution of a prescribed class throughout the particular fiscal year of the person; and

    • (b) has two fiscal years immediately preceding the particular fiscal year and, for each of those two fiscal years,

      • (i) the adjusted tax credit amount of the person equals or exceeds the prescribed amount for that prescribed class for the particular fiscal year, and

      • (ii) the tax credit rate of the person equals or exceeds the prescribed percentage for that prescribed class for the particular fiscal year.

    “requested information”

    « renseignement demandé »

    “requested information” means any information, additional information or document in respect of an application made by a person under subsection (18) that the Minister requests in writing from the person.

    “residual input”

    « intrant résiduel »

    “residual input” means a direct input or a non-attributable input.

    “residual input tax amount”

    « montant de taxe pour intrant résiduel »

    “residual input tax amount” of a person for a fiscal year means

    • (a) if the person is a selected listed financial institution at any time in the fiscal year, an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01 in respect of a supply or importation of a residual input that became payable by the person during the fiscal year without having been paid before the fiscal year or was paid by the person during the fiscal year without having become payable; and

    • (b) in any other case, an amount of tax in respect of a supply, importation or bringing into a participating province of a residual input that became payable by the person during the fiscal year without having been paid before the fiscal year or was paid by the person during the fiscal year without having become payable.

    “specified method”

    « méthode déterminée »

    “specified method” means a method, conforming to criteria, rules, terms and conditions specified by the Minister, of determining the operative extent and the procurative extent of property or a service.

    “tax credit amount”

    « montant de crédit de taxe »

    “tax credit amount” of a person for a fiscal year of the person means

    • (a) if the person has made an election under subsection (9) in respect of the fiscal year, the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person would, in the absence of that subsection, be entitled to claim under this Part;

    • (b) if the person is a qualifying institution for the fiscal year, has not made an election under subsection (7) or (27) in respect of the fiscal year and has not received an authorization from the Minister to use for the fiscal year the particular methods set out in an application made under subsection (18), the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person would, if the person were not a qualifying institution for the fiscal year and did not make an election under subsection (9) in respect of the fiscal year, be entitled to claim under this Part; and

    • (c) in any other case, the total of all amounts each of which is an input tax credit for the fiscal year in respect of a residual input tax amount of the person for the fiscal year that the person is entitled to claim under this Part.

    “tax credit rate”

    « taux de crédit de taxe »

    “tax credit rate” of a person for a fiscal year of the person means the quotient, expressed as a percentage, determined by dividing the tax credit amount of the person for the fiscal year by the total tax amount of the person for the fiscal year.

    “total tax amount”

    « montant total de taxe »

    “total tax amount” of a person for a fiscal year of the person means the total of all amounts each of which is a residual input tax amount of the person for the fiscal year.

  • Marginal note:Meaning of “consideration”

    (2) In this section, “consideration” does not include nominal consideration.

  • Marginal note:Financial institution throughout a year

    (3) For the purposes of this section, a person is a financial institution of a prescribed class throughout a particular fiscal year of the person if the person is a financial institution of that class at any time in the particular fiscal year.

  • Marginal note:Mergers and amalgamations

    (4) If two or more corporations (each of which is referred to in this subsection as a “predecessor”) are merged or amalgamated to form one corporation (in this subsection referred to as the “new corporation”), otherwise than as the result of the acquisition of property of one corporation by another corporation pursuant to the purchase of the property by the other corporation or as the result of the distribution of the property to the other corporation on the winding-up of the corporation, despite section 271 and for the purposes of determining the tax credit amount and the tax credit rate of the new corporation for a fiscal year of the new corporation, the following rules apply:

    • (a) the new corporation is deemed to have had two fiscal years, each of 365 days, immediately preceding the first fiscal year of the new corporation;

    • (b) the tax credit amount of the new corporation for the fiscal year of the new corporation (in this subsection referred to as the “prior year of the new corporation”) immediately preceding the first fiscal year of the new corporation is deemed to be equal to the total of all amounts each of which is the adjusted tax credit amount of a predecessor for the last fiscal year, if any, of the predecessor (in this subsection referred to as the “prior year of the predecessor”) ending before the time of the merger or amalgamation otherwise than as a result of the merger or amalgamation;

    • (c) the tax credit amount of the new corporation for the fiscal year of the new corporation (in this subsection referred to as the “second prior year of the new corporation”) immediately preceding the prior year of the new corporation is deemed to be equal to the total of all amounts each of which is the adjusted tax credit amount of a predecessor for the fiscal year, if any, of the predecessor (in this subsection referred to as the “second prior year of the predecessor”) immediately preceding the prior year of the predecessor;

    • (d) the total tax amount of the new corporation for the prior year of the new corporation is deemed to be the total of all amounts, each of which is the adjusted total tax amount of a predecessor for the prior year of the predecessor, if any; and

    • (e) the total tax amount of the new corporation for the second prior year of the new corporation is deemed to be the total of all amounts, each of which is the adjusted total tax amount of a predecessor for the second prior year of the predecessor, if any.

  • Marginal note:Winding-up

    (5) If at any time a particular corporation is wound up and not less than 90% of the issued shares of each class of the capital stock of the particular corporation were, immediately before that time, owned by another corporation, despite section 272 and for the purposes of determining the tax credit amount and the tax credit rate of the other corporation for a fiscal year of the other corporation, the following rules apply:

    • (a) the tax credit amount of the other corporation for the fiscal year of the other corporation (in this subsection referred to as the “specified year of the other corporation”) that includes the day on which the particular corporation is wound up is deemed to be equal to the total of

      • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted tax credit amount of the other corporation for the specified year of the other corporation, and

      • (ii) the amount that is the adjusted tax credit amount of the particular corporation for the last fiscal year, if any, of the particular corporation (in this subsection referred to as the “prior year of the particular corporation”) ending before the day on which the particular corporation is wound up;

    • (b) the tax credit amount of the other corporation for the fiscal year, if any, of the other corporation (in this subsection referred to as the “prior year of the other corporation”) immediately preceding the specified year of the other corporation is deemed to be equal to the total of

      • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted tax credit amount of the other corporation for the prior year of the other corporation, and

      • (ii) the amount that is the adjusted tax credit amount of the particular corporation for the fiscal year, if any, of the particular corporation (in this subsection referred to as the “second prior year of the particular corporation”) immediately preceding the prior year of the particular corporation;

    • (c) the total tax amount of the other corporation for the specified year of the other corporation is deemed to be the total of

      • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted total tax amount of the other corporation for the specified year of the other corporation, and

      • (ii) the amount that is the adjusted total tax amount of the particular corporation for the prior year of the particular corporation, if any; and

    • (d) the total tax amount of the other corporation for the prior year of the other corporation, if any, is deemed to be the total of

      • (i) the amount that would, if this subsection did not apply to the winding-up of the particular corporation, be the adjusted total tax amount of the other corporation for the prior year of the other corporation, and

      • (ii) the amount that is the adjusted total tax amount of the particular corporation for the second prior year of the particular corporation, if any.

  • Marginal note:Allocation of exclusive inputs

    (6) For the purposes of this Part, the following rules apply in respect of any exclusive input of a financial institution:

    • (a) if the exclusive input is acquired, imported or brought into a participating province for consumption or use directly and exclusively for the purpose of making taxable supplies for consideration, the financial institution is deemed to have acquired, imported or brought into the participating province the exclusive input for consumption or use exclusively in the course of commercial activities of the financial institution; and

    • (b) if the exclusive input is acquired, imported or brought into a participating province for consumption or use directly and exclusively for purposes other than making taxable supplies for consideration, the financial institution is deemed to have acquired, imported or brought into the participating province the exclusive input for consumption or use exclusively otherwise than in the course of commercial activities of the financial institution.

  • Marginal note:Residual inputs — election for transitional year

    (7) If a person is a qualifying institution for the first fiscal year of the person that begins after March 2007, the Minister has assessed the net tax of the person for any reporting period included in any of the four fiscal years immediately preceding that first fiscal year, the notice of assessment, subsequent assessment or reassessment in respect of the reporting period does not reflect any inappropriateness in respect of the methods used by the person for the purpose of determining input tax credits in respect of residual inputs of the person and those methods would be fair and reasonable if used in the same manner by the person in that first fiscal year for the purposes of determining the operative extent and the procurative extent of all residual inputs of the person, the person may elect to use those methods in that same manner for that first fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of all residual inputs of the person.

  • Marginal note:Residual inputs — prescribed extent of use

    (8) For the purposes of this Part, if a financial institution is a qualifying institution for a fiscal year of the financial institution and has not made an election under subsection (7) for the fiscal year, the following rules apply for the fiscal year in respect of each residual input of the financial institution:

    • (a) the extent to which the consumption or use of the residual input is for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution;

    • (b) the extent to which the consumption or use of the residual input is for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class of the financial institution;

    • (c) the extent to which the residual input is acquired, imported or brought into a participating province by the qualifying institution for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution;

    • (d) the extent to which the residual input is acquired, imported or brought into a participating province by the qualifying institution for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class of the financial institution; and

    • (e) for the purpose of determining an input tax credit in respect of the residual input, the description of B in the formula in subsection 169(1) is deemed to be equal to the prescribed percentage for the prescribed class of the financial institution.

  • Marginal note:Residual inputs — elected extent of use

    (9) For the purposes of this Part, if a person is a financial institution (other than a qualifying institution) of a prescribed class throughout a particular fiscal year of the person and the tax credit rate of the person for each of the two fiscal years immediately preceding the particular fiscal year equals or exceeds the prescribed percentage for the prescribed class of financial institutions of the person for the particular fiscal year, the person may elect to have the following rules apply for the particular fiscal year in respect of each residual input of the person:

    • (a) the extent to which the consumption or use of the residual input is for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class;

    • (b) the extent to which the consumption or use of the residual input is for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class;

    • (c) the extent to which the residual input is acquired, imported or brought into a participating province by the person for the purpose of making taxable supplies for consideration is deemed to be equal to the prescribed percentage for the prescribed class;

    • (d) the extent to which the residual input is acquired, imported or brought into a participating province by the person for purposes other than making taxable supplies for consideration is deemed to be equal to the difference between 100% and the prescribed percentage for the prescribed class; and

    • (e) for the purpose of determining an input tax credit in respect of the residual input, the description of B in the formula in subsection 169(1) is deemed to be equal to the prescribed percentage for the prescribed class.

  • Marginal note:Non-attributable inputs — specified method

    (10) For the purposes of this Part, if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution, the financial institution shall use a specified method to determine for the fiscal year the operative extent and the procurative extent of each non-attributable input of the financial institution.

  • Marginal note:Non-attributable inputs — exception

    (11) For the purposes of this Part, despite subsection (10), if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution and no specified method applies during the fiscal year to a particular non-attributable input of the financial institution, the financial institution shall use another attribution method to determine for the fiscal year the operative extent and the procurative extent of the particular non-attributable input.

  • Marginal note:Direct inputs — direct attribution method

    (12) For the purposes of this Part, if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution, the financial institution shall use a direct attribution method to determine for the fiscal year the operative extent and the procurative extent of each direct input of the financial institution.

  • Marginal note:Direct inputs — exception

    (13) For the purposes of this Part, despite subsection (12), if a financial institution (other than a qualifying institution) has not made an election under subsection (9) in respect of a fiscal year of the financial institution and no direct attribution method applies during the fiscal year to a particular direct input of the financial institution, the financial institution shall use another attribution method to determine in the most direct manner for the fiscal year the operative extent and the procurative extent of the particular direct input.

  • Marginal note:Excluded inputs — specified method

    (14) For the purposes of this Part, a financial institution shall use a specified method to determine for a fiscal year of the financial institution the operative extent and the procurative extent of each excluded input of the financial institution.

  • Marginal note:Excluded inputs — exception

    (15) For the purposes of this Part, despite subsection (14), if no specified method applies during a fiscal year of a financial institution to a particular excluded input of the financial institution, the financial institution shall use another attribution method to determine for the fiscal year the operative extent and the procurative extent of the particular excluded input.

  • Marginal note:Attribution method — conditions

    (16) Any method that a financial institution is required in accordance with any of subsections (10) to (15) to use in respect of a fiscal year of the financial institution shall be

    • (a) fair and reasonable;

    • (b) used consistently by the financial institution throughout the fiscal year; and

    • (c) subject to subsection (17), determined by the financial institution no later than the day on or before which the financial institution is required to file a return under Division V with the Minister for the first reporting period in the fiscal year.

  • Marginal note:Alteration or substitution of method

    (17) Any method used by a financial institution under any of subsections (10) to (15) in respect of a fiscal year of the financial institution shall not, after the day on or before which the financial institution is required to file a return under Division V with the Minister for the first reporting period in the fiscal year, be altered or be substituted with another method by the financial institution for the fiscal year without the written consent of the Minister.

  • Marginal note:Application for pre-approved method

    (18) A person that is, or is reasonably expected to be, a qualifying institution for a fiscal year may apply to the Minister to use particular methods to determine for the fiscal year the operative extent and the procurative extent of each business input of the person.

  • Marginal note:Form and manner of application

    (19) An application made by a person under subsection (18) shall

    • (a) be made in prescribed form containing prescribed information, including the particular method to be used in respect of each direct input, excluded input, exclusive input and non-attributable input of the person; and

    • (b) be filed by the person with the Minister in prescribed manner on or before

      • (i) the day that is 180 days before the first day of the fiscal year to which the application applies, or

      • (ii) any later day that the Minister may allow on application by the person.

  • Marginal note:Authorization

    (20) On receipt of an application made under subsection (18), the Minister shall

    • (a) consider the application and authorize or deny the use of the particular methods; and

    • (b) notify the person in writing of the decision on or before

      • (i) the later of

        • (A) the day that is 180 days after that receipt, and

        • (B) the day that is 180 days before the first day of the fiscal year to which the application applies, or

      • (ii) any later day that the Minister may specify, if the day is set out in a written application filed by the person with the Minister.

  • Marginal note:Effect of authorization

    (21) For the purposes of this Part, if the Minister under subsection (20) authorizes the use of particular methods for a fiscal year of the person,

    • (a) the particular methods shall be used consistently, and as indicated in the application, by the person throughout the fiscal year to determine the operative extent and the procurative extent of each business input of the person; and

    • (b) subsections (6) to (15) and (27) do not apply, for the fiscal year, in respect of any business input of the person.

  • Marginal note:Reasons for denial

    (22) If the Minister denies under subsection (20) the use of the particular methods specified in an application made under subsection (18) and the person has, in respect of the application, complied with the requirements set out in subsection (19) and provided to the Minister all requested information within any reasonable time set out in the written notice requesting the information, the Minister shall notify the person in writing of the reasons for not authorizing the use of the particular methods on or before the particular day that is the later of

    • (a) the day that is 60 days after the day the person last provided any requested information to the Minister; and

    • (b) the day on or before which the notification of the decision is required to be given to the person under subsection (20).

  • Marginal note:Revocation

    (23) An authorization granted under subsection (20) to a person in respect of a fiscal year of the person ceases to have effect on the first day of the fiscal year and, for the purposes of this Part, is deemed never to have been granted, if

    • (a) the Minister revokes the authorization and sends a notice of revocation to the person on or before the day that is 60 days before the day that is the first day of the fiscal year;

    • (b) the person files in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information on or before the day that is 60 days before the first day of the fiscal year; or

    • (c) the person is not a qualifying institution for the fiscal year.

  • Marginal note:Application to be designated a qualifying institution

    (24) A person may apply to the Minister, in prescribed form containing prescribed information, to be designated as a qualifying institution for a particular fiscal year of the person if

    • (a) the person is, or is reasonably expected to be, a financial institution of a prescribed class throughout the particular fiscal year; and

    • (b) it is the case that

      • (i) the person has two fiscal years immediately preceding the particular fiscal year and, for each of those two fiscal years, the adjusted tax credit amount of the person equals or exceeds, or is reasonably expected to equal or exceed, the prescribed amount for that class for the particular fiscal year, or

      • (ii) an authorization under subsection (20) for the particular fiscal year has ceased to have effect only because of the application of paragraph (23)(c).

  • Marginal note:Effect of approval

    (25) On receipt of the application made under subsection (24) in respect of a fiscal year of a person, the Minister shall, with all due dispatch, consider the application and notify the person in writing of the decision and, if the Minister makes the designation, the person is deemed for the purposes of subsection (18) and paragraph (23)(c) to be a qualifying institution for the fiscal year.

  • Marginal note:Revocation of designation as a qualifying institution

    (26) A designation made under subsection (25) in respect of a fiscal year of a person ceases to have effect on the first day of the fiscal year and is deemed, for the purposes of this Part, to have never been granted if, on or before the day that is 60 days before the first day of the fiscal year

    • (a) the Minister revokes the designation and sends a notice of revocation to the person; or

    • (b) the person files in prescribed manner with the Minister a notice of revocation of the designation in prescribed form containing prescribed information.

  • Marginal note:Qualifying institution’s own methods

    (27) Despite subsections (6), (8), (14) and (15), a qualifying institution for a fiscal year may elect to use particular methods for the fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of every business input of the qualifying institution, if

    • (a) the particular methods were specified in an application filed under subsection (18) by the qualifying institution for the fiscal year that

      • (i) complies with the requirements set out in subsection (19), and

      • (ii) is the last such application filed by the qualifying institution for the fiscal year;

    • (b) the use of the particular methods was not authorized by the Minister under paragraph (20)(a);

    • (c) the qualifying institution has provided all requested information within the time set out in the written notice requesting the information;

    • (d) the Minister has not complied with the notification requirements set out in paragraph (20)(b) and subsection (22) in respect of the application; and

    • (e) if the Minister has provided modifications in writing to the particular methods on or before the particular day described in subsection (22), the particular methods with those modifications (in this section referred to as the “modified methods”) are not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year.

  • Marginal note:Elected method — conditions

    (28) If a qualifying institution makes an election under subsection (27), the particular methods shall be

    • (a) fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year; and

    • (b) used consistently, and as indicated in the application referred to in paragraph (27)(a), by the qualifying institution throughout the fiscal year.

  • Marginal note:Making of election

    (29) An election under subsection (7), (9) or (27) in respect of a fiscal year of a person shall be

    • (a) made in prescribed form containing prescribed information; and

    • (b) filed by the person with the Minister in prescribed manner on or before the day that is

      • (i) the day on or before which a return under Division V for the first reporting period of the fiscal year is required to be filed, or

      • (ii) any later day that the Minister may allow on application by the person.

  • Marginal note:Revocation of election

    (30) An election under subsection (7), (9) or (27) in respect of a fiscal year of a person ceases to have effect on the first day of the fiscal year and is deemed, for the purposes of this Part, never to have been made if

    • (a) a notice of revocation of the election in prescribed form containing prescribed information is filed in prescribed manner with the Minister on or before the day on or before which the return under Division V is required to be filed for the first reporting period of the fiscal year;

    • (b) in the case of an election under subsection (7) to use methods for the fiscal year to determine, for the purposes of this Part, the operative extent and the procurative extent of all residual inputs of the person,

      • (i) the person is not a qualifying institution for the fiscal year, or

      • (ii) the methods are

        • (A) not fair and reasonable for the purpose of determining the operative extent and the procurative extent of those residual inputs, or

        • (B) not used consistently by the financial institution throughout the fiscal year;

    • (c) in the case of an election made under subsection (9),

      • (i) the person is not a financial institution of a prescribed class throughout the fiscal year, or

      • (ii) the tax credit rate of the person for each of the two fiscal years immediately preceding the fiscal year does not equal or exceed the prescribed percentage for the prescribed class of financial institutions of the person for the fiscal year; or

    • (d) in the case of an election made under subsection (27),

      • (i) any of the requirements to make the election that are set out in that subsection is not met, or

      • (ii) the particular methods referred to in that subsection are

        • (A) not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the qualifying institution for the fiscal year, or

        • (B) not used consistently, or as indicated in the application referred to in paragraph (27)(a), by the financial institution throughout the fiscal year.

  • Marginal note:Burden of proof

    (31) If a financial institution appeals an assessment under this Part for a reporting period in a fiscal year of the financial institution in respect of an issue relating to the determination, under any of subsections (7), (10) to (15), (21) and (27), of the operative extent or the procurative extent of a business input, the financial institution must establish on a balance of probabilities in any court proceeding relating to the assessment that

    • (a) in the case of the determination, under subsection (7), of the operative extent or the procurative extent of the business input, the methods used by the financial institution to determine the operative extent and the procurative extent of all residual inputs of the financial institution for the fiscal year were

      • (i) fair and reasonable, and

      • (ii) used consistently by the financial institution throughout the fiscal year;

    • (b) in the case of the determination, under subsection (10) or (14), of the operative extent or the procurative extent of the business input, the financial institution used a specified method consistently throughout the fiscal year to determine that extent;

    • (c) in the case of the determination, under subsection (11) or (15), of the operative extent or the procurative extent of the business input, no specified method applied to the business input and the other attribution method used by the financial institution to determine that extent was fair and reasonable and used consistently by the financial institution throughout the fiscal year;

    • (d) in the case of the determination, under subsection (12), of the operative extent or the procurative extent of the business input, the financial institution used a direct attribution method consistently throughout the fiscal year to determine that extent;

    • (e) in the case of the determination, under subsection (13), of the operative extent or the procurative extent of the business input, no direct attribution method applied to the business input and the other attribution method used by the financial institution to determine that extent was fair and reasonable and used consistently by the financial institution throughout the fiscal year; and

    • (f) in the case of the determination, under subsection (21), of the operative extent or the procurative extent of the business input, the particular methods referred to in that subsection were used consistently, and as indicated in the application referred to in that subsection, throughout the fiscal year.

    • (g) in the case of the determination, under subsection (27), of the operative extent or the procurative extent of the business input,

      • (i) the methods specified by the financial institution in the application referred to in that subsection were

        • (A) fair and reasonable, and

        • (B) used consistently, and as indicated in the application referred to in paragraph (27)(a), by the financial institution throughout the fiscal year, and

      • (ii) if the Minister has provided modifications to those methods as described in paragraph (27)(e), the modified methods are not fair and reasonable for the purpose of determining the operative extent and the procurative extent of the business inputs of the financial institution for the fiscal year.

  • Marginal note:Ministerial direction

    (32) If a financial institution is required to use a method (in this subsection referred to as the “previous method”) in accordance with any of subsections (10) to (15) in respect of a fiscal year of the financial institution, the Minister may at any time, by notice in writing, direct the financial institution to use, for the purposes of determining for the fiscal year, and any subsequent fiscal year, the operative extent and the procurative extent of each business input referred to in that subsection, another method that is fair and reasonable and, if the Minister so directs, the other method, and not the previous method, shall apply for those purposes.

  • Marginal note:Method directed by the Minister — appeals

    (33) If under subsection (32) the Minister directs a financial institution to use a method in respect of a business input for a fiscal year, the Minister assesses the net tax of the financial institution for a reporting period included in the fiscal year and the financial institution appeals the assessment under this Part in respect of an issue relating to the application of that subsection,

    • (a) the Minister shall establish on a balance of probabilities that the method is fair and reasonable; and

    • (b) if the final determination of the courts is that the method is not fair and reasonable, the Minister shall not direct the financial institution under subsection (32) to use another method for the fiscal year in respect of the business input.

• (2) Subsections 141.02(1) to (17) and (29), (30) and (32) of the Act, as enacted by subsection (1), apply for the purpose of determining the net tax of a person for any reporting period of the person included in a fiscal year of the person beginning after March 2007, except that, for the purposes of the definition “qualifying institution” in subsection 141.02(1) of the Act and of subsection 141.02(9) of the Act, as enacted by subsection (1), paragraph (b) of that definition and subsection 141.02(9) of the Act shall be read as if subsections (1) and 56(1) had come into force on April 1, 2005.

• (3) Subsections 141.02(18) to (28) of the Act, as enacted by subsection (1), apply for the purpose of determining the net tax of a person for any reporting period of the person included in a fiscal year of the person beginning after March 2008.

• 58. (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

• 59. (1) The Act is amended by adding the following after section 177:

  Network Sellers

  Marginal note:Definitions

  • 178. (1) The following definitions apply in this section and section 236.5.

    “network commission”

    « commission de réseau »

    “network commission” of a sales representative of a person means an amount that is payable by the person to the sales representative under an agreement between the person and the sales representative

    • (a) as consideration for a supply of a service, made by the sales representative, of arranging for the sale of a select product or a sales aid of the person; or

    • (b) solely as a consequence of a supply of a service, made by any sales representative of the person described in paragraph (a) of the definition “sales representative”, of arranging for the sale of a select product or a sales aid of the person.

    “network seller”

    « vendeur de réseau »

    “network seller” means a person notified by the Minister of an approval under subsection (5).

    “sales aid”

    « matériel de promotion »

    “sales aid” of a particular person that is a network seller or a sales representative of a network seller means property (other than a select product of any person) that

    • (a) is a customized business form or a sample, demonstration kit, promotional or instructional item, catalogue or similar personal property acquired, manufactured or produced by the particular person for sale to assist in the promotion, sale or distribution of select products of the network seller; and

    • (b) is neither sold nor held for sale by the particular person to a sales representative of the network seller that is acquiring the property for use as capital property.

    “sales representative”

    « représentant commercial »

    “sales representative” of a particular person means

    • (a) a person (other than a person that is an employee of the particular person or that acts, in the course of its commercial activities, as agent in making supplies of select products of the particular person on behalf of the particular person) that

      • (i) has a contractual right under an agreement with the particular person to arrange for the sale of select products of the particular person, and

      • (ii) does not arrange for the sale of select products of the particular person primarily at a fixed place of business of the person other than a private residence; or

    • (b) a person (other than a person that is an employee of the particular person or that acts, in the course of its commercial activities, as agent in making supplies of select products of the particular person on behalf of the particular person) that has a contractual right under an agreement with the particular person to be paid an amount by the particular person solely as a consequence of a supply of a service, made by a person described in paragraph (a), of arranging for the sale of a select product or a sales aid of the particular person.

    “select product”

    « produit déterminé »

    “select product” of a person means tangible personal property that

    • (a) is acquired, manufactured or produced by the person for supply by the person for consideration, otherwise than as used property, in the ordinary course of business of the person; and

    • (b) is ordinarily acquired by consumers by way of sale.

  • Marginal note:Qualifying network seller

    (2) For the purposes of this section, a person is a qualifying network seller throughout a fiscal year of the person if

    • (a) all or substantially all of the total of all consideration, included in determining the income from a business of the person for the fiscal year, for supplies made in Canada by way of sale is for

      • (i) supplies of select products of the person, made by the person, by way of sales that are arranged for by sales representatives of the person (in this subsection referred to as “select supplies”), or

      • (ii) where the person is a direct seller (as defined in section 178.1), supplies by way of sale of exclusive products (as defined in that section) of the person made by the person to independent sales contractors (as defined in that section) of the person at any time when an approval of the Minister for the application of section 178.3 to the person is in effect;

    • (b) all or substantially all of the total of all consideration, included in determining the income from a business of the person for the fiscal year, for select supplies is for select supplies made to consumers;

    • (c) all or substantially all of the sales representatives of the person to which network commissions become payable by the person during the fiscal year are sales representatives, each having a total of such network commissions of not more than the amount determined by the formula

      $30,000 × A/365

      where

      A

      is the number of days in the fiscal year; and

    • (d) the person and each of its sales representatives have made joint elections under subsection (4).

  • Marginal note:Application

    (3) A person may apply to the Minister, in prescribed form containing prescribed information, to have subsection (7) apply to the person and each of its sales representatives, beginning on the first day of a fiscal year of the person, if the person

    • (a) is registered under Subdivision d of Division V and is reasonably expected to be, throughout the fiscal year,

      • (i) engaged exclusively in commercial activities, and

      • (ii) a qualifying network seller; and

    • (b) files the application in prescribed manner before

      • (i) in the case of a person that has never made a supply of a select product of the person, the day in the fiscal year on which the person first makes a supply of a select product of the person, and

      • (ii) in any other case, the first day of the fiscal year.

  • Marginal note:Joint election

    (4) If subsection (3) applies to a person or a person is a network seller, the person and a sales representative of the person may jointly elect, in prescribed form containing prescribed information, to have subsection (7) apply to them at all times when an approval granted under subsection (5) is in effect.

  • Marginal note:Approval or refusal

    (5) If the Minister receives an application under subsection (3) from a person, the Minister may approve the application of subsection (7) to the person and each of its sales representatives beginning on the first day of a fiscal year of the person or may refuse the application and the Minister shall notify the person in writing of the approval and the day on which it becomes effective or of the refusal.

  • Marginal note:Evidence of joint elections

    (6) Every network seller shall maintain evidence satisfactory to the Minister that the network seller and each of its sales representatives have made joint elections under subsection (4).

  • Marginal note:Effect of approval

    (7) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, a network commission becomes payable by the network seller to a sales representative of the network seller as consideration for a taxable supply (other than a zero-rated supply) of a service made in Canada by the sales representative, the taxable supply is deemed not to be a supply.

  • Marginal note:Sales aids

    (8) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, the network seller or a sales representative of the network seller makes in Canada a taxable supply by way of sale of a sales aid of the network seller or of the sales representative, as the case may be, to a sales representative of the network seller, the taxable supply is deemed not to be a supply.

  • Marginal note:Host gifts

    (9) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, the network seller or a particular sales representative of the network seller makes a supply of property to an individual as consideration for the supply by the individual of a service of acting as a host at an occasion that is organized for the purpose of allowing a sales representative of the network seller or the particular sales representative, as the case may be, to promote, or to arrange for the sale of, select products of the network seller, the individual is deemed not to have made a supply of the service and the service is deemed not to be consideration for a supply.

  • Marginal note:Notification of refusal

    (10) If the Minister notifies a person of a refusal under subsection (5) at any time when the person and a sales representative of the person have made a joint election under subsection (4), the person shall forthwith notify the sales representative of the refusal in a manner satisfactory to the Minister.

  • Marginal note:Revocation by Minister

    (11) The Minister may revoke an approval granted under subsection (5) in respect of a network seller and each of its sales representatives, effective on the first day of a fiscal year of the network seller, if, before that day, the Minister notifies the network seller of the revocation and the day on which it becomes effective and if

    • (a) the network seller fails to comply with any provision of this Part;

    • (b) it can reasonably be expected that the network seller will not be a qualifying network seller throughout the fiscal year;

    • (c) the network seller requests in writing that the Minister revoke the approval;

    • (d) the notice referred to in subsection 242(1) has been given to, or the request referred to in subsection 242(2) has been filed by, the network seller; or

    • (e) it can reasonably be expected that the network seller will not be engaged exclusively in commercial activities throughout the fiscal year.

  • Marginal note:Deemed revocation

    (12) If an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect at any time in a particular fiscal year of the network seller and, at any time during the particular fiscal year, the network seller ceases to be engaged exclusively in commercial activities or the Minister cancels the registration of the network seller, the approval is deemed to be revoked, effective on the first day of the fiscal year of the network seller immediately following the particular fiscal year, unless, on that first day, the network seller is registered under Subdivision d of Division V and it is reasonably expected that the network seller will be engaged exclusively in commercial activities throughout that following fiscal year.

  • Marginal note:Effect of revocation

    (13) If an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is revoked under subsection (11) or (12), the following rules apply:

    • (a) the approval ceases to have effect immediately before the day on which the revocation becomes effective;

    • (b) the network seller shall forthwith notify each of its sales representatives in a manner satisfactory to the Minister of the revocation and the day on which it becomes effective; and

    • (c) a subsequent approval granted under subsection (5) in respect of the network seller and each of its sales representatives shall not become effective before the first day of a fiscal year of the network seller that is at least two years after the day on which the revocation became effective.

  • Marginal note:Failure to notify on revocation

    (14) For the purposes of this Part, a taxable supply (other than a zero-rated supply) of a service made in Canada by a sales representative of a network seller is deemed not to be a supply if

    • (a) the consideration for the taxable supply is a network commission that becomes payable by the network seller to the sales representative at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation on the basis of any of paragraphs (11)(a) to (c);

    • (b) the approval could not have been revoked on the basis of paragraph (11)(d) or (e) and would not have otherwise been revoked under subsection (12);

    • (c) at the time the network commission becomes payable, the sales representative

      • (i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and

      • (ii) neither knows, nor ought to know, that the approval ceased to have effect; and

    • (d) an amount has not been charged or collected as or on account of tax in respect of the taxable supply.

  • Marginal note:Failure to notify on revocation

    (15) Subsection (16) applies if the following conditions are satisfied:

    • (a) the consideration for a taxable supply (other than a zero-rated supply) of a service made in Canada by a sales representative of a network seller is a network commission that becomes payable by the network seller to the sales representative at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection (11) or (12);

    • (b) the approval was, or could at any time otherwise have been, revoked on the basis of paragraph (11)(d) or (e) or was, or would at any time otherwise have been, revoked under subsection (12);

    • (c) at the time the network commission becomes payable, the sales representative

      • (i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and

      • (ii) neither knows, nor ought to know, that the approval ceased to have effect; and

    • (d) an amount has not been charged or collected as or on account of tax in respect of the taxable supply.

  • Marginal note:Failure to notify on revocation

    (16) If the conditions described in paragraphs (15)(a) to (d) are satisfied, the following rules apply for the purposes of this Part:

    • (a) section 166 shall not apply in respect of the taxable supply described in paragraph (15)(a);

    • (b) tax that becomes payable or that would, in the absence of section 166, become payable in respect of the taxable supply shall not be included in determining the net tax of the sales representative referred to in paragraph (15)(a); and

    • (c) the consideration for the taxable supply shall not, in determining whether the sales representative is a small supplier, be included in the total referred to in paragraph 148(1)(a) or (2)(a).

  • Marginal note:Sales aids on revocation

    (17) For the purposes of this Part, a taxable supply of a sales aid of a particular sales representative of a network seller made in Canada by way of sale to another sales representative of the network seller is deemed not to be a supply if

    • (a) the consideration for the taxable supply becomes payable at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection (11) or (12);

    • (b) at the time the consideration becomes payable, the particular sales representative

      • (i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and

      • (ii) neither knows, nor ought to know, that the approval ceased to have effect; and

    • (c) an amount has not been charged or collected as or on account of tax in respect of the taxable supply.

  • Marginal note:Restriction on input tax credits

    (18) If

    • (a) a registrant that is a network seller in respect of which an approval granted under subsection (5) is in effect acquires or imports property (other than a select product of the network seller) or a service or brings it into a participating province for supply to a sales representative of the network seller or an individual related to the sales representative,

    • (b) tax becomes payable in respect of the acquisition, importation or bringing in, as the case may be,

    • (c) the property or service is so supplied by the registrant for no consideration or for consideration that is less than the fair market value of the property or service, and

    • (d) the sales representative or individual is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the sales representative or individual, as the case may be,

    the following rules apply:

    • (e) no tax is payable in respect of the supply, and

    • (f) in determining an input tax credit of the registrant, no amount shall be included in respect of tax that becomes payable, or is paid without having become payable, by the registrant in respect of the property or service.

  • Marginal note:Appropriations for sales representatives

    (19) For the purposes of this Part, if a registrant that is a network seller in respect of which an approval granted under subsection (5) is in effect appropriates, at any time, property (other than a select product of the network seller) that was acquired, manufactured or produced, or any service acquired or performed, in the course of commercial activities of the registrant, to or for the benefit of a sales representative of the network seller, or any individual related to the sales representative, that is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the sales representative or individual, in any manner (otherwise than by way of supply for consideration equal to the fair market value of the property or service), the registrant shall be deemed

    • (a) to have made a supply of the property or service for consideration paid at that time equal to the fair market value of the property or service at that time; and

    • (b) except where the supply is an exempt supply, to have collected, at that time, tax in respect of the supply calculated on that consideration.

  • Marginal note:Exception

    (20) Subsection (19) does not apply to property or a service appropriated by a registrant if the registrant was not entitled to claim an input tax credit in respect of the property or service because of section 170.

  • Marginal note:Ceasing to be a registrant

    (21) If, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, a sales representative of the network seller ceases to be a registrant, paragraph 171(3)(a) does not apply to sales aids of the sales representative that were supplied to the sales representative by the network seller or another sales representative of the network seller at any time when the approval was in effect.

  • Marginal note:Non-arm’s length supply

    (22) Section 155 does not apply to the supply described in subsection (9) made to an individual acting as a host.

• (2) Subsection (1) applies in respect of any fiscal year of a person that begins on or after January 1, 2010, except that, for the purposes of applying section 178 of the Act, as enacted by subsection (1), in respect of a fiscal year of a person that begins during 2010, the following rules also apply:

  • (a) a person may, despite subparagraphs 178(3)(b)(i) and (ii) of the Act, as enacted by subsection (1), apply under subsection 178(3) of the Act, as enacted by subsection (1), to have subsection 178(7) of the Act, as enacted by subsection (1), apply to the person and each of its sales representatives, beginning on a day in 2010 that the person specifies in the application, if the person files the application before that day and that day is the first day of a reporting period of the person that begins during the fiscal year;

  • (b) if the person makes an application in accordance with paragraph (a),

    • (i) each reference in subsections 178(2), (3), (5) and (11) of the Act, as enacted by subsection (1), to “fiscal year” is to be read as a reference to “qualifying period”, and

    • (ii) each reference in subsection 178(12) of the Act, as enacted by subsection (1), to “particular fiscal year” is to be read as a reference to “qualifying period”; and

  • (c) “qualifying period” of a person means the period beginning on the day specified in an application made by the person in accordance with paragraph (a) and ending on the last day of the fiscal year.

Marginal note:1997, c. 10, s. 179(1)

• 60. (1) Subsection 185(1) of the Act is replaced by the following:

  Marginal note:Financial services — input tax credits

  • 185. (1) If tax in respect of property or a service acquired, imported or brought into a participating province by a registrant becomes payable by the registrant at a time when the registrant is neither a listed financial institution nor a person that is a financial institution because of paragraph 149(1)(b), for the purpose of determining an input tax credit of the registrant in respect of the property or service and for the purposes of Subdivision d, to the extent (determined in accordance with subsections 141.01(2) and 141.02(6)) that the property or service was acquired, imported or brought into the province, as the case may be, for consumption, use or supply in the course of making supplies of financial services that relate to commercial activities of the registrant,

    • (a) if the registrant is a financial institution because of paragraph 149(1)(c), the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities except to the extent that the property or service was so acquired, imported or brought into the province for consumption, use or supply in the course of activities of the registrant that relate to

      • (i) credit cards or charge cards issued by the registrant, or

      • (ii) the making of any advance, the lending of money or the granting of any credit; and

    • (b) in any other case, the property or service is deemed, despite subsections 141.01(2) and 141.02(6), to have been so acquired, imported or brought into the province for consumption, use or supply in the course of those commercial activities.

• (2) Subsection (1) is deemed to have come into force on April 1, 2007.

Marginal note:1997, c. 10, s. 42(1); 1999, c. 31, s. 86(F)

• 61. (1) The portion of section 217 of the Act before paragraph (a) is replaced by the following:

  Marginal note:Definitions

  217. The following definitions apply in this Division.

  “imported taxable supply”

  « fourniture taxable importée »

  “imported taxable supply” means

• (2) Section 217 of the Act is amended by adding the following in alphabetical order:

  “Canadian activity”

  « activité au Canada »

  “Canadian activity” of a person means an activity of the person carried on, engaged in or conducted in Canada.

  “duty”

  « tâche »

  “duty” means anything done by an employee in the course of, or in relation to, the office or employment of the employee.

  “employee”

  « salarié »

  “employee” includes an individual who agrees to become an employee.

  “external charge”

  « frais externes »

  “external charge” for a specified year of a qualifying taxpayer in respect of an outlay or expense described in any of paragraphs 217.1(2)(a) to (c) means the amount in respect of the outlay or expense determined by the formula

  A – B

  where

  A

  is the amount of the outlay or expense that

  • (a) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for the specified year, or would be so allowed if

    • (i) the qualifying taxpayer’s income were computed in accordance with that Act,

    • (ii) the qualifying taxpayer carried on a business in Canada, and

    • (iii) that Act applied to the qualifying taxpayer, and

  • (b) may reasonably be regarded as being applicable to a Canadian activity of the qualifying taxpayer; and

  B

  is the total of all amounts, each of which is included in the amount determined under the description of A and is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer.

  “loading”

  « chargement »

  “loading” means any part of the value of the consideration for a supply of a financial service that is attributable to administrative expenses, an error or profit margin, business handling costs, commissions, communications expenses, claims handling costs, employee compensation or benefits, execution or clearing costs, management fees, marketing or advertising costs, occupancy or equipment expenses, operating expenses, acquisition costs, premium collection costs, processing costs or any other costs or expenses of a person that makes the supply, other than commissions for a specified financial service or the part of the value of the consideration that is equal to

  • (a) if the financial service includes the issuance, renewal, variation or transfer of ownership of an insurance policy but not of any other qualifying instrument, the estimate of the net premium of the insurance policy;

  • (b) if the financial service includes the issuance, renewal, variation or transfer of ownership of a qualifying instrument (other than an insurance policy), the estimate of the default risk premium that is directly associated with the qualifying instrument; and

  • (c) if the financial service includes the issuance, renewal, variation or transfer of ownership of an insurance policy and a qualifying instrument (other than an insurance policy), the amount determined by the formula

    A + B

    where

    A

    is the estimate of the net premium of the insurance policy, and

    B

    is the estimate of the default risk premium that is directly associated with the qualifying instrument.

  “permitted deduction”

  « déduction autorisée »

  “permitted deduction” for a specified year of a qualifying taxpayer means an amount that is

  • (a) consideration for a supply of property or a service, or the value of imported goods, upon which tax under this Part (other than section 218.01 or subsection 218.1(1.2)) became payable during the specified year by the qualifying taxpayer;

  • (b) tax referred to in paragraph (a) in respect of a supply or importation referred to in that paragraph;

  • (c) a provincial levy that is prescribed for the purposes of section 154 and is in respect of a supply referred to in paragraph (a);

  • (d) an amount that is deemed, under subsection 248(18) or (18.1) of the Income Tax Act, to be assistance repaid by the qualifying taxpayer in respect of property or a service referred to in paragraph (a);

  • (e) consideration for a supply of property or a service (other than a financial service) made to the qualifying taxpayer as part of a transaction or series of transactions in which all participants deal at arm’s length with the qualifying taxpayer, unless

    • (i) that consideration is included in paragraph (a), or

    • (ii) an activity carried on, engaged in or conducted outside Canada, through a qualifying establishment of the qualifying taxpayer or of a person related to the qualifying taxpayer, relates in any manner to the supply;

  • (f) qualifying compensation of an employee of the qualifying taxpayer that is paid in the specified year by the qualifying taxpayer if the employee was primarily in Canada while performing its duties during the specified year;

  • (g) interest that is paid or payable by the qualifying taxpayer as the consideration for a supply of a financial service made to the qualifying taxpayer (other than an amount paid or credited by the qualifying taxpayer, or deemed by Part I of the Income Tax Act to have been paid or credited in the specified year by the qualifying taxpayer, to a person as, on account or in lieu of payment of, or in satisfaction of, a management or administration fee or charge (within the meaning of subsection 212(4) of that Act));

  • (h) dividends;

  • (i) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified arm’s length supply made to the qualifying taxpayer;

  • (j) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a supply (other than a specified derivative supply) of a specified financial service made to the qualifying taxpayer;

  • (k) consideration (other than interest referred to in paragraph (g), dividends referred to in paragraph (h) or loading) for a specified non-arm’s length supply made to the qualifying taxpayer;

  • (l) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified derivative supply made to the qualifying taxpayer; or

  • (m) a prescribed amount.

  “qualifying compensation”

  « rétribution admissible »

  “qualifying compensation” of an employee means any salary, wages and other remuneration of the employee and any other amount that is required to be included as income from an office or employment in computing the income of the employee for the purposes of the Income Tax Act.

  “qualifying consideration”

  « contrepartie admissible »

  “qualifying consideration” for a specified year of a qualifying taxpayer in respect of an outlay made, or expense incurred, outside Canada means the amount in respect of the outlay or expense determined by the formula

  A – B

  where

  A

  is the amount of the outlay or expense that

  • (a) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for the specified year, or would be so allowed if

    • (i) the qualifying taxpayer’s income were computed in accordance with that Act,

    • (ii) the qualifying taxpayer carried on a business in Canada, and

    • (iii) that Act applied to the qualifying taxpayer, and

  • (b) may reasonably be regarded as being applicable to a Canadian activity of the qualifying taxpayer; and

  B

  is the total of all amounts each of which is included in the amount determined under the description of A and is

  • (a) an amount (other than an amount included in paragraph (b)) that is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer, or

  • (b) an amount that represents a cost to a qualifying establishment of the qualifying taxpayer in a country other than Canada, or a share of a profit of the qualifying taxpayer that is redistributed from a qualifying establishment of the qualifying taxpayer in Canada to a qualifying establishment of the qualifying taxpayer in a country other than Canada, that is solely attributable to the issuance, renewal, variance or transfer of ownership by the qualifying taxpayer of a financial instrument that is a derivative, provided that all or substantially all of the amount is

    • (i) an error or profit margin, or employee compensation or benefits, that is reasonably attributable to the issuance, renewal, variance or transfer of ownership, or

    • (ii) the estimate of the default risk premium that is directly associated with the derivative.

  “qualifying establishment”

  « établissement admissible »

  “qualifying establishment” means a permanent establishment as defined in subsection 123(1) or a permanent establishment as defined in subsection 132.1(2).

  “qualifying instrument”

  « instrument admissible »

  “qualifying instrument” means money, a credit card voucher, a charge card voucher or a financial instrument.

  “qualifying service”

  « service admissible »

  “qualifying service” means a service or duty.

  “specified arm’s length supply”

  « fourniture déterminée entre personnes sans lien de dépendance »

  “specified arm’s length supply” means a supply (other than a specified derivative supply) of a financial service (other than a specified financial service) made to a qualifying taxpayer as part of a transaction or series of transactions in which all participants deal at arm’s length with the qualifying taxpayer.

  “specified derivative supply”

  « fourniture déterminée d’instrument dérivé »

  “specified derivative supply” means a supply

  • (a) that is a supply of a financial service of issuing, renewing, varying or transferring the ownership of a financial instrument that is a derivative, or that is a supply made by an agent, salesperson or broker of arranging for the issuance, renewal, variance or transfer of ownership of a financial instrument that is a derivative; and

  • (b) for which all or substantially all of the value of the consideration is attributable to

    • (i) any error or profit margin, or employee compensation or benefits, reasonably attributable to the supply, and

    • (ii) amounts that are not loading.

  “specified financial service”

  « service financier déterminé »

  “specified financial service” means a financial service supplied to a qualifying taxpayer by an agent, salesperson or broker of arranging for the issuance, renewal, variation or transfer of ownership of a financial instrument that is property of a person other than the agent, salesperson or broker.

  “specified non-arm’s length supply”

  « fourniture déterminée entre personnes ayant un lien de dépendance »

  “specified non-arm’s length supply” means a supply (other than a specified derivative supply) of a financial service (other than a specified financial service) that includes the issuance, renewal, variation or transfer of ownership of a qualifying instrument, made to a qualifying taxpayer as part of a transaction or series of transactions in which any participant does not deal at arm’s length with the qualifying taxpayer.

  “specified year”

  « année déterminée »

  “specified year” of a person means

  • (a) in the case of a person that is described in paragraph (a) or (b) of the definition “taxation year” in subsection 123(1), the taxation year of the person;

  • (b) in the case of a person that is a registrant but is not described in paragraph (a) or (b) of the definition “taxation year” in subsection 123(1), the fiscal year of the person; and

  • (c) in any other case, the calendar year.

  “taxing statute”

  « loi fiscale »

  “taxing statute” of a country means a statute of the country, or of a state, province or other political subdivision of the country, that imposes a levy or charge of general application that is an income or profits tax.

  “transaction”

  « opération »

  “transaction” includes an arrangement or event.

• (3) Subsections (1) and (2) apply to any specified year of a person that ends after November 16, 2005, except that, for the purposes of applying the definition “permitted deduction” in section 217 of the Act, as enacted by subsection (2), in respect of an amount of consideration for a specified non-arm’s length supply that became due, or was paid without having become due, on or before that day, paragraph (k) of that definition shall be read without reference to the words “or loading”.

• 62. (1) The Act is amended by adding the following after section 217:

  Marginal note:Qualifying taxpayer

  • 217.1 (1) For the purposes of this Division, a person is a qualifying taxpayer throughout a specified year of the person if

    • (a) the person is a financial institution at any time in the specified year; and

    • (b) the person, at any time in the specified year

      • (i) is resident in Canada,

      • (ii) has a qualifying establishment in Canada,

      • (iii) where a majority of the persons having beneficial ownership of the person’s property in Canada are resident in Canada, carries on, engages in or conducts an activity in Canada, or

      • (iv) is a prescribed person or a person of a prescribed class.

  • Marginal note:Outlay made, or expense incurred, outside Canada

    (2) For the purposes of this Division, an outlay made, or expense incurred, outside Canada includes any amount representing

    • (a) an outlay made, or expense incurred, by a qualifying taxpayer in respect of

      • (i) property that is, in whole or in part, transferred outside Canada to the qualifying taxpayer,

      • (ii) property, the possession or use of which is, in whole or in part, given or made available outside Canada to the qualifying taxpayer, or

      • (iii) a service that is performed, in whole or in part, outside Canada for the benefit of the qualifying taxpayer or is rendered, in whole or in part, outside Canada to the qualifying taxpayer;

    • (b) an adjustment (within the meaning of subsection 247(2) of the Income Tax Act) to an outlay or expense described in paragraph (a);

    • (c) an expenditure or purchase in respect of a reportable transaction (as defined in section 233.1 of the Income Tax Act) in respect of which a qualifying taxpayer is required under that section to file with the Minister a return in prescribed form containing prescribed information, or would be so required if the qualifying taxpayer carried on a business in Canada and that Act applied to the qualifying taxpayer;

    • (d) in the case of a qualifying taxpayer that is resident in Canada, qualifying compensation of an employee paid in a specified year by the qualifying taxpayer if

      • (i) in the specified year, a duty is performed by the employee outside Canada (in this subsection referred to as a “duty performed outside Canada”) at a qualifying establishment of the qualifying taxpayer or of a person related to the qualifying taxpayer, and

      • (ii) it is not the case that all or substantially all of the duties performed outside Canada by the employee in the specified year are performed elsewhere than at such qualifying establishments; and

    • (e) in the case of a qualifying taxpayer that is not resident in Canada,

      • (i) an allocation by the qualifying taxpayer of an outlay or expense as an amount in respect of a business carried on in Canada by the qualifying taxpayer for the purpose of computing the qualifying taxpayer’s income under the Income Tax Act, or an amount that would be such an allocation if

        • (A) the qualifying taxpayer’s income were computed in accordance with that Act,

        • (B) anything done by the qualifying taxpayer through a qualifying establishment in Canada of the qualifying taxpayer were the carrying on of a business in Canada by the qualifying taxpayer, and

        • (C) that Act applied to the qualifying taxpayer,

      • (ii) an outlay or expense that may reasonably be regarded under the Income Tax Act as an amount that is applicable to a qualifying establishment in Canada of the qualifying taxpayer, or that would reasonably be so regarded if the qualifying establishment were a permanent establishment for purposes of that Act, the qualifying taxpayer carried on a business in Canada and that Act applied to the qualifying taxpayer, and

      • (iii) qualifying compensation of an employee paid in a specified year by the qualifying taxpayer.

  • Marginal note:Series of transactions

    (3) For the purposes of this Division, if there is a reference to a series of transactions, the series is deemed to include any related transactions completed in contemplation of the series.

  • Marginal note:Internal charge

    (4) For the purposes of this Division, any part of an amount in respect of a transaction or dealing between a particular qualifying establishment of a qualifying taxpayer in Canada and another qualifying establishment of the qualifying taxpayer in a particular country other than Canada is an internal charge for a specified year of the qualifying taxpayer if

    • (a) the amount meets the following criteria:

      • (i) the amount would be allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the income of the particular qualifying establishment for the specified year if

        • (A) that Act applied to the particular qualifying establishment,

        • (B) the income of the particular qualifying establishment were computed in accordance with that Act, and

        • (C) for the purposes of that Act,

          • (I) anything done by the qualifying taxpayer through the particular qualifying establishment were the carrying on of a business in Canada,

          • (II) the particular qualifying establishment were a permanent establishment, and

          • (III) the specified year were the particular qualifying establishment’s taxation year,

      • (ii) where the qualifying taxpayer has not specified pursuant to paragraph 217.2(2)(c) that subparagraph (iii) is to apply in all cases in determining the internal charges for the specified year and the particular country is a taxing country (as defined in subsection 126(7) of the Income Tax Act) that has a tax treaty (as defined in subsection 248(1) of that Act) with Canada, the amount would be required to be included in computing, under a taxing statute of the particular country that applies to the qualifying taxpayer, or that would apply if the other qualifying establishment were a permanent establishment for the purposes of that statute, the other qualifying establishment’s income or profits for any period (in this paragraph referred to as a “taxing period”) that ends during the specified year if

        • (A) the taxing statute applied to the other qualifying establishment,

        • (B) the other qualifying establishment’s income or profits were computed in accordance with the taxing statute, and

        • (C) for the purposes of the taxing statute,

          • (I) anything done by the qualifying taxpayer through the other qualifying establishment were the carrying on of a business in the particular country, and

          • (II) the other qualifying establishment were a permanent establishment and had the same taxing periods that the qualifying taxpayer would have under the taxing statute, and

      • (iii) where subparagraph (ii) does not apply, the amount would be required to be included in computing under the Income Tax Act the other qualifying establishment’s income for the specified year if

        • (A) the laws of Canada, and not the laws of the particular country, applied, with any modifications that the circumstances require, in the particular country,

        • (B) that Act applied to the other qualifying establishment,

        • (C) the other qualifying establishment’s income were computed in accordance with that Act, and

        • (D) for the purposes of that Act,

          • (I) anything done by the qualifying taxpayer through the other qualifying establishment were the carrying on of a business in the particular country,

          • (II) the other qualifying establishment were a permanent establishment, and

          • (III) the specified year were the other qualifying establishment’s taxation year; and

    • (b) the part of the amount is not

      • (i) an amount determined under the description of A in the formula in the definition “external charge” in section 217 in calculating an external charge of the qualifying taxpayer for the specified year or a preceding specified year of the qualifying taxpayer,

      • (ii) a permitted deduction of the qualifying taxpayer for the specified year or a preceding specified year of the qualifying taxpayer, other than a permitted deduction of the qualifying taxpayer that is included in determining an amount under the description of B in the formula in the definition “external charge” in section 217 in calculating an external charge of the qualifying taxpayer for the specified year or a preceding specified year of the qualifying taxpayer,

      • (iii) an amount that represents a cost to the other qualifying establishment, or a share of a profit of the qualifying taxpayer that is redistributed from the particular qualifying establishment to the other qualifying establishment, that is solely attributable to the issuance, renewal, variance or transfer of ownership by the qualifying taxpayer of a financial instrument that is a derivative, provided that all or substantially all of the amount is

        • (A) an error or profit margin, or employee compensation or benefits, that is reasonably attributable to the issuance, renewal, variance or transfer of ownership, or

        • (B) the estimate of the default risk premium that is directly associated with the derivative, or

      • (iv) a prescribed amount.

  • Marginal note:Separate entities

    (5) For the purposes of applying paragraph (4)(a) in respect of a particular qualifying establishment of a qualifying taxpayer in a country other than Canada and another qualifying establishment of the qualifying taxpayer in Canada, the following rules apply:

    • (a) the particular qualifying establishment is deemed to be a distinct and separate enterprise from the qualifying taxpayer, engaged in the same or similar activities under the same or similar conditions as the particular qualifying establishment and dealing wholly independently with the other qualifying establishment and with the part (in this subsection referred to as the “remainder of the qualifying taxpayer”) of the qualifying taxpayer, if any, that is neither the particular qualifying establishment nor the other qualifying establishment;

    • (b) the other qualifying establishment is deemed to be a distinct and separate enterprise from the qualifying taxpayer, engaged in the same or similar activities under the same or similar conditions as the other qualifying establishment and dealing wholly independently with the particular qualifying establishment and with the remainder of the qualifying taxpayer; and

    • (c) any transactions or dealings between any of the particular qualifying establishment, the other qualifying establishment and the remainder of the qualifying taxpayer are deemed to be supplies made on such terms as would have been agreed upon between parties dealing at arm’s length.

  • Marginal note:Qualifying rule for credits

    (6) If an amount (in this subsection referred to as a “qualifying expenditure”) of qualifying consideration, or of an external charge, of a qualifying taxpayer in respect of an outlay made, or expense incurred, outside Canada is greater than zero and, during a reporting period of the qualifying taxpayer during which the qualifying taxpayer is a registrant, tax under section 218.01 or subsection 218.1(1.2) in respect of the qualifying expenditure becomes payable by the qualifying taxpayer or is paid by the qualifying taxpayer without having become payable, the following rules apply for the purpose of determining an input tax credit of the qualifying taxpayer:

    • (a) the whole or part of property (in this subsection and subsection (8) referred to as “attributable property”) or of a qualifying service (in this subsection and subsection (8) referred to as an “attributable service”) to which the qualifying expenditure is attributable is deemed to have been acquired by the qualifying taxpayer at the time at which the outlay was made or the expense was incurred;

    • (b) the tax is deemed to be tax in respect of a supply of the attributable property or attributable service; and

    • (c) the extent to which the qualifying taxpayer acquired the attributable property or attributable service for consumption, use or supply in the course of commercial activities of the qualifying taxpayer is deemed to be the same extent as that to which the whole or part of the outlay or expense, which corresponds to the qualifying expenditure, was made or incurred to consume, use or supply the attributable property or attributable service in the course of commercial activities of the qualifying taxpayer.

  • Marginal note:Qualifying rule for credits — internal charge

    (7) If tax (in this subsection referred to as “internal tax”) under section 218.01 or subsection 218.1(1.2) in respect of an internal charge becomes payable by a qualifying taxpayer, or is paid by the qualifying taxpayer without having become payable, and the internal charge is determined based in whole or in part on the inclusion of an outlay made, or an expense incurred, outside Canada by the qualifying taxpayer, the following rules apply for the purpose of determining an input tax credit of the qualifying taxpayer:

    • (a) the whole or part of property (in this subsection and subsection (8) referred to as “internal property”) or of a qualifying service (in this subsection and subsection (8) referred to as an “internal service”) to which the outlay or expense is attributable is deemed to have been supplied to the qualifying taxpayer at the time the outlay was made or the expense was incurred;

    • (b) the amount of the internal tax that can reasonably be attributed to the outlay or expense is deemed to be tax (in this paragraph referred to as “attributed tax”) in respect of the supply of the internal property or the internal service, and the attributed tax is deemed to have become payable at the time the internal tax becomes payable by the qualifying taxpayer or is paid by the qualifying taxpayer without having become payable; and

    • (c) the extent to which the qualifying taxpayer acquired the internal property or internal service for consumption, use or supply in the course of commercial activities of the qualifying taxpayer is deemed to be the same extent as that to which the outlay or expense was made or incurred to consume, use or supply the internal property or internal service in the course of commercial activities of the qualifying taxpayer.

  • Marginal note:Input tax credits

    (8) For the purpose of determining an input tax credit of a qualifying taxpayer under section 169

    • (a) in respect of attributable property or an attributable service, the reference in that section to “property or a service” is to be read as a reference to “attributable property or an attributable service, within the meaning of those terms in paragraph 217.1(6)(a)”; and

    • (b) in respect of internal property or an internal service, the reference in that section to “property or a service” is to be read as a reference to “internal property or an internal service, within the meaning of those terms in paragraph 217.1(7)(a)”.

  Marginal note:Election

  • 217.2 (1) A qualifying taxpayer that is resident in Canada may elect to determine tax under section 218.01 in accordance with paragraph 218.01(a) and tax under subsection 218.1(1.2) in accordance with paragraph 218.1(1.2)(a) for each specified year of the qualifying taxpayer during which the election is in effect.

  • Marginal note:Form and contents of election

    (2) An election made under subsection (1) by a qualifying taxpayer shall

    • (a) be made in prescribed form containing prescribed information;

    • (b) set out the first specified year of the qualifying taxpayer during which the election is to be in effect;

    • (c) specify if subparagraph 217.1(4)(a)(iii) is to apply in all cases in determining the internal charges for all specified years of the qualifying taxpayer during which the election is to be in effect; and

    • (d) be filed with the Minister in prescribed manner on or before the day on or before which the qualifying taxpayer’s return under section 219 in respect of tax under section 218.01 or subsection 218.1(1.2) for the first specified year is required to be filed.

  • Marginal note:Effective date

    (3) An election made under subsection (1) by a qualifying taxpayer shall become effective on the first day of the specified year set out in the form.

  • Marginal note:Cessation

    (4) An election made under subsection (1) by a qualifying taxpayer ceases to have effect on the earlier of

    • (a) the first day of the specified year of the qualifying taxpayer in which the qualifying taxpayer ceases to be resident in Canada; and

    • (b) the day on which a revocation of the election becomes effective.

  • Marginal note:Revocation

    (5) A qualifying taxpayer that has made an election under subsection (1) may revoke the election, effective on the first day of a specified year of the qualifying taxpayer that begins at least two years after the election became effective, by filing in prescribed manner with the Minister a notice of revocation in prescribed form containing prescribed information not later than the day on which the revocation is to become effective.

  • Marginal note:Restriction

    (6) If a revocation of an election made under subsection (1) becomes effective on a particular date, any subsequent election under that subsection is not a valid election unless the first day of the specified year set out in the subsequent election is at least two years after the day on which the revocation became effective.

• (2) Subsection (1) applies to any specified year of a person that ends after November 16, 2005.

• (3) If a return under section 219 of the Act, as amended by subsection 66(1), in respect of tax under section 218.01 of the Act, as enacted by section 63, or tax under subsection 218.1(1.2) of the Act, as enacted by subsection 64(2), for a specified year of a qualifying taxpayer is required to be filed on or before the day on which this Act is assented to, the qualifying taxpayer may, despite paragraph 217.2(2)(d) of the Act, as enacted by subsection (1), make an election under subsection 217.2(1) of the Act, as enacted by subsection (1), that becomes effective on the first day of the specified year, provided that the qualifying taxpayer files the election with the Minister of National Revenue in prescribed manner on or before the day that is sixty days after the day on which this Act is assented to.

• (4) If a qualifying taxpayer makes an election under subsection 217.2(1) of the Act, as enacted by subsection (1), that is in effect for a specified year of the qualifying taxpayer that ends before the day on which this Act is assented to,

  • (a) if an amount (in this paragraph referred to as the “paid amount”) was paid on or before that day by the qualifying taxpayer to the Receiver General as or on account of tax for the specified year under section 218.01 of the Act, as enacted by section 63, or under subsection 218.1(1.2) of the Act, as enacted by subsection 64(2), and, by reason of the election being in effect for the specified year, the total amount of tax payable for the specified year under those provisions is less than the paid amount,

    • (i) the qualifying taxpayer may request in writing on or before the day that is two years after the day on which this Act is assented to that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that the election was in effect for the specified year, and

    • (ii) on receipt of a request under subparagraph (i), the Minister shall, with all due dispatch,

      • (A) consider the request, and

      • (B) despite section 298 of the Act, as amended by section 79, assess, reassess or make an additional assessment under section 296 of the Act of tax payable by the qualifying taxpayer for the specified year under section 218.01 of the Act, as enacted by section 63, or under subsection 218.1(1.2) of the Act, as enacted by subsection 64(2), and of any interest, penalty or other obligation of the qualifying taxpayer, but only to the extent that the assessment, reassessment or additional assessment may reasonably be regarded as being for the purpose of taking into account that the election was in effect for the specified year; and

  • (b) despite paragraph 298(1)(d) of the Act, as amended by section 79, the Minister of National Revenue may assess, reassess or make an additional assessment under section 296 of the Act of tax payable by the qualifying taxpayer for the specified year under section 218.01 of the Act, as enacted by section 63, or under subsection 218.1(1.2) of the Act, as enacted by subsection 64(2), on or before the day that is seven years after the later of

    • (i) the day on which the election is filed with the Minister,

    • (ii) the day on or before which the qualifying taxpayer was required to file the return in which that tax payable was required to be reported, and

    • (iii) the day on which that return was filed.

• 63. (1) The Act is amended by adding the following after section 218:

  Marginal note:Imposition of goods and services tax

  218.01 Subject to this Part, every qualifying taxpayer shall, for each specified year of the qualifying taxpayer, pay to Her Majesty in right of Canada tax equal to

  • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

    [(A + B) × (C/D) × E] + [(A + B) × ((D – C)/D) × F]

    where

    A

    is the total of all amounts, each of which is an internal charge for the specified year that is greater than zero,

    B

    is the total of all amounts, each of which is an external charge for the specified year that is greater than zero,

    C

    is the number of days in the specified year before

    • (i) if the specified year begins before July 2006, July 2006, and

    • (ii) in any other case, January 2008,

    D

    is the total number of days in the specified year,

    E

    is

    • (i) if the specified year begins before July 2006, 7%, and

    • (ii) in any other case, 6%, and

    F

    is

    • (i) if the specified year begins before July 2006, 6%, and

    • (ii) in any other case, 5%; and

  • (b) in any other case, the amount determined by the formula

    [G × (H/I) × J] + [G × ((I – H)/I) × K]

    where

    G

    is the total of all amounts, each of which is qualifying consideration for the specified year that is greater than zero,

    H

    is the number of days in the specified year before

    • (i) if the specified year begins before July 2006, July 2006, and

    • (ii) in any other case, January 2008,

    I

    is the total number of days in the specified year,

    J

    is

    • (i) if the specified year begins before July 2006, 7%, and

    • (ii) in any other case, 6%, and

    K

    is

    • (i) if the specified year begins before July 2006, 6%, and

    • (ii) in any other case, 5%.

• (2) Section 218.01 of the Act, as enacted by subsection (1), is replaced by the following:

  Marginal note:Imposition of goods and services tax

  218.01 Subject to this Part, every qualifying taxpayer shall, for each specified year of the qualifying taxpayer, pay to Her Majesty in right of Canada tax calculated at the rate of 5% on

  • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

    A + B

    where

    A

    is the total of all amounts, each of which is an internal charge for the specified year that is greater than zero, and

    B

    is the total of all amounts, each of which is an external charge for the specified year that is greater than zero; and

  • (b) in any other case, the total of all amounts, each of which is qualifying consideration for the specified year that is greater than zero.

• (3) Subsection (1) applies to any specified year of a qualifying taxpayer that ends after November 16, 2005 and begins before January 2008.

• (4) Subsection (2) applies to any specified year of a qualifying taxpayer that begins after December 2007.

Marginal note:2000, c. 30, s. 46(2); 2007, c. 35, s. 3(1)

• 64. (1) Paragraphs 218.1(1)(c) and (d) of the Act are replaced by the following:

  • (c) every person that is the recipient of a supply, included in any of paragraphs (b.1) to (b.3) of the definition “imported taxable supply” in section 217, of property that is delivered or made available to the person in a particular participating province and that is either resident in that province or is a registrant, and

  • (d) every person that is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition “imported taxable supply” in section 217 and that is made in a particular participating province

• (2) Section 218.1 of the Act is amended by adding the following after subsection (1.1):

  • Marginal note:Tax in a participating province

    (1.2) Subject to this Part, every qualifying taxpayer that is resident in a participating province shall, for each specified year of the qualifying taxpayer and for each particular participating province in which the qualifying taxpayer is resident at any time in the specified year, pay to Her Majesty in right of Canada, in addition to the tax payable under section 218.01, tax calculated at the tax rate for the particular participating province on

    • (a) if an election under subsection 217.2(1) is in effect for the specified year, the amount determined by the formula

      A + B

      where

      A

      is the total of all amounts, each of which is an amount in respect of an internal charge for the specified year that is greater than zero determined by the formula

      A₁ × A₂

      where

      A₁

      is the internal charge, and

      A₂

      is the extent (expressed as a percentage) to which the internal charge is attributable to outlays or expenses that were made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the internal charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province, and

      B

      is the total of all amounts, each of which is an amount in respect of an external charge for the specified year that is greater than zero determined by the formula

      B₁ × B₂

      where

      B₁

      is the external charge, and

      B₂

      is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the external charge, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the external charge is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province; and

    • (b) in any other case, the total of all amounts, each of which is an amount in respect of qualifying consideration for the specified year that is greater than zero determined by the formula

      C × D

      where

      C

      is the qualifying consideration, and

      D

      is the extent (expressed as a percentage) to which the whole or part of the outlay or expense, which corresponds to the qualifying consideration, was made or incurred to consume, use or supply the whole or part of property or of a qualifying service, in respect of which the qualifying consideration is attributable, in carrying on, engaging in or conducting an activity of the qualifying taxpayer in the particular participating province.

  • Marginal note:Qualifying taxpayer resident in a province

    (1.3) Despite section 132.1 and for the purposes of subsection (1.2), a qualifying taxpayer is deemed to be resident in a province at any time if, at that time,

    • (a) the qualifying taxpayer has a qualifying establishment in the province; or

    • (b) in the case of a qualifying taxpayer that is resident in Canada, the qualifying taxpayer is

      • (i) a corporation incorporated or continued under the laws of the province and not continued elsewhere,

      • (ii) an entity that is a partnership, an unincorporated society, a club, an association or an organization, or a branch of such an entity, in respect of which a majority of the members having management and control of the entity or branch are resident in the province, or

      • (iii) a trust, carrying on activities as a trust in the province, that has a local office or branch in the province.

• (3) The portion of subsection 218.1(1.2) of the Act, as enacted by subsection (2), before paragraph (a) is replaced by the following:

  • Marginal note:Tax in a participating province

    (1.2) Subject to this Part, every qualifying taxpayer that is resident in a participating province shall, for each specified year of the qualifying taxpayer and for each particular participating province, pay to Her Majesty in right of Canada, in addition to the tax payable under section 218.01, tax calculated at the tax rate for the particular participating province on

• Marginal note:2000, c. 30, s. 46(3)

  (4) The portion of subsection 218.1(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Selected listed financial institutions

    (2) If tax under subsection (1) or (1.2) would, in the absence of this subsection, become payable by a person when the person is a selected listed financial institution, that tax is not payable unless it is an amount of tax that

• (5) Subsections (1), (2) and (4) apply to any specified year of a person that ends after November 16, 2005, except that for supplies made on or before March 19, 2007, paragraph 218.1(1)(d) of the Act, as amended by subsection (1), shall be read without reference to “(c.1)”.

• (6) Subsection (3) applies to any specified year of a person that ends after June 2010.

• (7) Despite subsections (5) and (6), the amount of tax payable by a person under subsection 218.1(1.2) of the Act, as enacted by subsections (2) and (3), for the specified year of the person that begins before July 1, 2010 and ends on or after that day and for Ontario or British Columbia is equal to the amount determined by the formula

  A × (B/C)

  where

  A

  is the amount that, in the absence of this subsection, would be tax payable under subsection 218.1(1.2) of the Act, as enacted by subsections (2) and (3), for the specified year and for Ontario or British Columbia, as the case may be;

  B

  is the number of days in the specified year that are after June 2010; and

  C

  is the number of days in the specified year.

Marginal note:1997, c. 10, s. 203(1)

• 65. (1) Section 218.2 of the Act is replaced by the following:

  Marginal note:When tax payable

  218.2 Tax under this Division (other than tax under section 218.01 or subsection 218.1(1.2)) that is calculated on an amount of consideration for a supply that becomes due at any time, or is paid at any time without having become due, becomes payable at that time.

  Marginal note:When tax payable

  218.3 Tax under section 218.01 and subsection 218.1(1.2) that is determined for a specified year of a qualifying taxpayer becomes payable by the qualifying taxpayer on

  • (a) if the specified year is a taxation year of the qualifying taxpayer for the purposes of the Income Tax Act and the qualifying taxpayer is required under Division I of that Act to file a return of income for the specified year, the filing-due date for the specified year for the purposes of that Act; and

  • (b) in any other case, the day that is six months after the end of the specified year.

• (2) Subsection (1) applies to any specified year of a qualifying taxpayer that ends after November 16, 2005.

Marginal note:1997, c. 10, s. 43(1)

• 66. (1) Paragraph 219(a) of the Act is replaced by the following:

  • (a) if the person is a registrant, the person shall, on or before the day on or before which the person’s return under section 238 for the reporting period in which the tax became payable is required to be filed, pay the tax to the Receiver General and

    • (i) if the person is not a qualifying taxpayer, report the tax in that return, or

    • (ii) if the person is a qualifying taxpayer, file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information; and

• (2) Subsection (1) applies in respect of any reporting period that ends after November 16, 2005.

Marginal note:1990, c. 45, s. 12(1); 1993, c. 27, s. 84(1) and (2)

• 67. (1) Section 220 of the Act is replaced by the following:

  Marginal note:Definitions

  • 220. (1) The following definitions apply in this section.

    “intangible capital”

    « capital incorporel »

    “intangible capital” of a specified person means any of the following that is consumed or used by the specified person in the process of creating, developing or bringing into existence intangible personal property:

    • (a) all or part of a labour activity of the specified person;

    • (b) all or part of property (other than intangible personal property described in paragraph (a) of the definition “intangible resource”); or

    • (c) all or part of a service.

    “intangible resource”

    « ressource incorporelle »

    “intangible resource” of a specified person means

    • (a) all or part of intangible personal property supplied to, or created, developed or brought into existence by, the specified person that is not support capital of the specified person;

    • (b) intangible capital of the specified person; or

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

    “labour activity”

    « activité de main-d’oeuvre »

    “labour activity” of a specified person means anything done by an employee of the specified person in the course of, or in relation to, the office or employment of the employee.

    “support capital”

    « capital d’appui »

    “support capital” of a specified person means all or part of intangible personal property that is consumed or used by the specified person in the process of creating, developing or bringing into existence property (other than intangible personal property) or in supporting, assisting or furthering a labour activity of the specified person.

    “support resource”

    « ressource d’appui »

    “support resource” of a specified person means

    • (a) all or part of property (other than intangible personal property) supplied to, or created, developed or brought into existence by, the specified person that is not intangible capital of the specified person;

    • (b) all or part of a service supplied to the specified person that is not intangible capital of the specified person;

    • (c) all or part of a labour activity of the specified person that is not intangible capital of the specified person;

    • (d) support capital of the specified person; or

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

  • Marginal note:Specified person and specified business

    (2) For the purposes of this section,

    • (a) a person is a specified person throughout a taxation year of the person if the person

      • (i) carries on, at any time in the taxation year, a business through a permanent establishment of the person outside Canada, and

      • (ii) carries on, at any time in the taxation year, a business through a permanent establishment of the person in Canada; and

    • (b) a business of a person is a specified business of the person throughout a taxation year of the person if the business is carried on, at any time in the taxation year, in Canada through a permanent establishment of the person.

  • Marginal note:Internal use

    (3) For the purposes of this section, internal use of a support resource, or of an intangible resource, of a specified person occurs during a taxation year of the specified person if

    • (a) the specified person at any time in the taxation year uses outside Canada any part of the resource in relation to the carrying on of a specified business of the specified person; or

    • (b) the specified person is permitted under the Income Tax Act, or would be so permitted if that Act applied to the specified person, to allocate for the taxation year, as an amount in respect of a specified business of the specified person,

      • (i) any part of an outlay made, or expense incurred, by the specified person in respect of any part of the resource, or

      • (ii) any part of an allowance, or allocation for a reserve, in respect of any part of such an outlay or expense.

  • Marginal note:Dealings between permanent establishments

    (4) If internal use of a support resource of a specified person occurs during a taxation year of the specified person, the following rules apply:

    • (a) for the purposes of this Division, the specified person is deemed

      • (i) to have rendered, during the taxation year, a service of internally using the support resource at a permanent establishment of the specified person outside Canada in the course of carrying on a specified business of the specified person, and to be the person to which the service was rendered,

      • (ii) to be the recipient of a supply made outside Canada of the service, and

      • (iii) to be, in the case of a non-resident specified person, resident in Canada;

    • (b) for the purposes of this Division, the supply is deemed not to be a supply of a service that is in respect of

      • (i) real property situated outside Canada, or

      • (ii) tangible personal property that is situated outside Canada at the time the service is performed;

    • (c) for the purposes of this Division, the value of the consideration for the supply is deemed to be the total of all amounts, each of which is the fair market value of a part, or of the use of a part, as the case may be, of the support resource referred to in subsection (3)

      • (i) if the part is only referred to in paragraph (3)(a), at the time referred to in that paragraph, and

      • (ii) otherwise, on the last day of the taxation year;

    • (d) for the purposes of this Division, the consideration for the supply is deemed to have become due and to have been paid, on the last day of the taxation year, by the specified person; and

    • (e) for the purposes of section 217 and of determining an input tax credit of the specified person under this Part, the specified person is deemed to have acquired the service for the same purpose as that for which the part of the support resource referred to in subsection (3) was acquired, consumed or used by the specified person.

  • Marginal note:Dealings between permanent establishments

    (5) If internal use of an intangible resource of a specified person occurs during a taxation year of the specified person, the following rules apply:

    • (a) for the purposes of this Division, the specified person is deemed

      • (i) to have made available, during the taxation year, at a permanent establishment of the specified person outside Canada intangible personal property in the course of carrying on a specified business of the specified person and to be the person to which the property was made available,

      • (ii) to be the recipient of a supply made outside Canada of the property, and

      • (iii) to be, in the case of a non-resident specified person, resident in Canada;

    • (b) for the purposes of this Division, the supply is deemed not to be a supply of property that relates to real property situated outside Canada, to a service to be performed wholly outside Canada or to tangible personal property situated outside Canada;

    • (c) for the purposes of this Division, the value of the consideration for the supply is deemed to be the total of all amounts, each of which is the fair market value of a part, or of the use of a part, as the case may be, of the intangible resource referred to in subsection (3)

      • (i) if the part is only referred to in paragraph (3)(a), at the time referred to in that paragraph, and

      • (ii) otherwise, on the last day of the taxation year;

    • (d) for the purposes of this Division, the consideration for the supply is deemed to have become due and to have been paid, on the last day of the taxation year, by the specified person; and

    • (e) for the purposes section 217 and of determining an input tax credit of the specified person under this Part, the specified person is deemed to have acquired the property for the same purpose as that for which the part of the intangible resource referred to in subsection (3) was acquired, consumed or used by the specified person.

• (2) The portion of paragraph 220(2)(a) of the Act before subparagraph (i), as enacted as by subsection (1), is replaced by the following:

  • (a) a person (other than a financial institution) is a specified person throughout a taxation year of the person if the person

• (3) Subsection (1) is deemed to have come into force on December 17, 1990.

• (4) Subsection (2) applies to any taxation year of a person that ends after November 16, 2005.

• 68. (1) Section 220.05 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Pension entities

    (3.1) No tax is payable under subsection (1) in respect of property if a person that is a pension entity of a pension plan (as those terms are defined in subsection 172.1(1)) is the recipient of a particular supply of the property made by a participating employer (as defined in that subsection) of the pension plan and

    • (a) the amount determined for B in the formula in paragraph 172.1(5)(c) in respect of a supply of the same property that is deemed to have been made by the participating employer under paragraph 172.1(5)(a) is greater than zero; or

    • (b) the amount determined for B in the formula in paragraph 172.1(6)(c) in respect of every supply deemed to have been made under paragraph 172.1(6)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero.

• (2) Subsection (1) is deemed to have come into force on September 23, 2009.

• 69. (1) Section 220.08 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Pension entities

    (3.1) No tax is payable under subsection (1) in respect of a particular supply of property or a service made by a participating employer of a pension plan (as those terms are defined in subsection 172.1(1)) to a person that is a pension entity (as defined in that subsection) of the pension plan if

    • (a) the amount determined for B in the formula in paragraph 172.1(5)(c) in respect of a supply of the same property or service that is deemed to have been made by the participating employer under paragraph 172.1(5)(a) is greater than zero; or

    • (b) the amount determined for B in the formula in paragraph 172.1(6)(c) in respect of every supply deemed to have been made under paragraph 172.1(6)(a) of an employer resource (as defined in subsection 172.1(1)) consumed or used for the purpose of making the particular supply is greater than zero.

• (2) Subsection (1) is deemed to have come into force on September 23, 2009.

Marginal note:1997, c. 10, s. 208(1)

• 70. (1) Paragraph (a) in the description of A in subsection 225.2(2) of the Act is replaced by the following:

  • (a) all tax (other than a prescribed amount of tax) that became payable under any of subsection 165(1) and sections 212, 218 and 218.01 by the financial institution during the particular reporting period or that was paid by the financial institution during the particular reporting period without having become payable,

• (2) Subsection (1) applies to any taxation year of a qualifying taxpayer that ends after November 16, 2005.

• 71. (1) The Act is amended by adding the following after section 232:

  Marginal note:Definitions

  • 232.01 (1) In this section and in section 232.02,

    • (a) “employer resource”, “participating employer”, “pension entity”, “pension plan” and “specified resource” have the same meanings as in section 172.l;

    • (b) “claim period” has the meaning assigned by subsection 259(1); and

    • (c) “eligible amount”, “non-qualifying pension entity”, “pension rebate amount”, “provincial pension rebate amount”, “qualifying employer” and “qualifying pension entity” have the same meanings as in section 26l.01.

  • “Total tax amount”

    (2) In this section, “total tax amount” of a tax adjustment note issued under subsection (3) means the total of the federal component amount and the provincial component amount of the tax adjustment note.

  • Marginal note:Tax adjustment note — subsection 172.1(5)

    (3) A person may, on a particular day, issue to a pension entity a note (in this section referred to as a “tax adjustment note”) in respect of all or part of a specified resource, specifying an amount determined in accordance with paragraph (4)(a) (in this section referred to as the “federal component amount” of the tax adjustment note) and an amount determined in accordance with paragraph (4)(b) (in this section referred to as the “provincial component amount” of the tax adjustment note), if

    • (a) the person is deemed under paragraph 172.1(5)(b) to have collected tax, on or before the particular day, in respect of a taxable supply of the specified resource or part deemed to have been made by the person under paragraph 172.1(5)(a);

    • (b) a supply of the specified resource or part is deemed to have been received by the pension entity under subparagraph 172.1(5)(d)(i) and tax in respect of that supply is deemed to have been paid under subparagraph 172.1(5)(d)(ii) by the pension entity; and

    • (c) an amount of tax becomes payable, or is paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of a taxable supply of the specified resource or part on or before the particular day.

  • Marginal note:Federal and provincial component amounts

    (4) For a tax adjustment note issued under subsection (3) on a particular day in respect of a specified resource or part,

    • (a) the federal component amount shall not exceed the amount determined by the formula

      A – B

      where

      A

      is the lesser of

      • (i) the amount determined for A in the formula in paragraph 172.1(5)(c) in respect of the specified resource or part, and

      • (ii) the total of all amounts, each of which is an amount of tax under subsection 165(1) that became payable, or was paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of a taxable supply of the specified resource or part on or before the particular day, and

      B

      is the total of all amounts, each of which is the federal component amount of another tax adjustment note issued under subsection (3) on or before the particular day in respect of the specified resource or part; and

    • (b) the provincial component amount shall not exceed the amount determined by the formula

      C – D

      where

      C

      is the lesser of

      • (i) the amount determined for B in the formula in paragraph 172.1(5)(c) in respect of the specified resource or part, and

      • (ii) the total of all amounts, each of which is an amount of tax under subsection 165(2) that became payable, or was paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of a taxable supply of the specified resource or part on or before the particular day, and

      D

      is the total of all amounts, each of which is the provincial component amount of another tax adjustment note issued under subsection (3) on or before the particular day in respect of the specified resource or part.

  • Marginal note:Effect of tax adjustment note

    (5) If a person issues a tax adjustment note to a pension entity under subsection (3) in respect of all or part of a specified resource, a supply of the specified resource or part is deemed to have been received by the pension entity under subparagraph 172.1(5)(d)(i) and tax (in this subsection referred to as “deemed tax”) in respect of that supply is deemed to have been paid on a particular day under subparagraph 172.1(5)(d)(ii) by the pension entity, the following rules apply:

    • (a) the total tax amount of the tax adjustment note may be deducted in determining the net tax of the person for its reporting period that includes the day on which the tax adjustment note is issued;

    • (b) the pension entity shall add, in determining its net tax for its reporting period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × (B/C)

      where

      A

      is the total of all input tax credits that the pension entity is entitled to claim in respect of the deemed tax,

      B

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day, the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note, and

      C

      is the amount of the deemed tax;

    • (c) if any part of the amount of the deemed tax is an eligible amount of the pension entity for a particular claim period of the pension entity and the pension entity was a qualifying pension entity on the last day of the particular claim period, the pension entity shall pay to the Receiver General, on or before the last day of its claim period that immediately follows its claim period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × B × (C/D) × [(E – F)/E]

      where

      A

      is that part of the amount of the deemed tax,

      B

      is 33%,

      C

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day, the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note,

      D

      is the amount of the deemed tax,

      E

      is the pension rebate amount of the pension entity for the particular claim period, and

      F

      is the total determined for B in the formula in subsection 261.01(2) in respect of the pension entity for the particular claim period; and

    • (d) if any part of the amount of the deemed tax is an eligible amount of the pension entity for a claim period of the pension entity for which an election under any of subsections 261.01(5), (6) or (9) was made jointly by the pension entity and all participating employers of the pension plan that were, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan, each of those participating employers shall add, in determining its net tax for its reporting period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × B × (C/D) × (E/F)

      where

      A

      is that part of the amount of the deemed tax,

      B

      is 33%,

      C

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day, the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note,

      D

      is the amount of the deemed tax,

      E

      is the amount of the deduction determined for the participating employer under subsection 261.01(5), paragraph 261.01(6)(b) or subsection 261.01(9), as the case may be, for the claim period, and

      F

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day, the total of the pension rebate amount of the pension entity for the claim period and the provincial pension rebate amount of the pension entity for the claim period, and

      • (ii) in any other case, the pension rebate amount of the pension entity for the claim period.

  • Marginal note:Prescribed form and manner

    (6) A tax adjustment note issued under subsection (3) shall be issued in prescribed form containing prescribed information and in a manner satisfactory to the Minister.

  • Marginal note:Notification

    (7) If a tax adjustment note is issued under subsection (3) to a pension entity of a pension plan and, as a consequence of that issuance, paragraph (5)(d) applies to a participating employer of the pension plan, the pension entity shall, in prescribed form containing prescribed information and in a manner satisfactory to the Minister, forthwith notify the participating employer of that issuance.

  • Marginal note:Joint and several liability

    (8) If a participating employer of a pension plan is required to add an amount to its net tax under paragraph (5)(d) as a consequence of the issuance of a tax adjustment note under subsection (3) to a pension entity of the pension plan, the participating employer and the pension entity are jointly and severally, or solidarily, liable to pay the amount to the Receiver General.

  • Marginal note:Assessment

    (9) The Minister may assess a person for any amount for which the person is liable under subsection (8) and, if the Minister sends a notice of assessment, sections 296 to 311 apply, with such modifications as the circumstances require.

  • Marginal note:Liability where participating employer ceases to exist

    (10) If a participating employer of a pension plan has ceased to exist on or before the day on which a tax adjustment note is issued under subsection (3) to a pension entity of the pension plan and the participating employer would have been required, had it not ceased to exist, to add an amount to its net tax under paragraph (5)(d) as a consequence of that issuance, the pension entity shall pay the amount to the Receiver General on or before the last day of its claim period that immediately follows its claim period that includes the day on which the tax adjustment note is issued.

  • Marginal note:Requirement to maintain records

    (11) Despite section 286, every person that issues a tax adjustment note under subsection (3) shall maintain, for a period of six years from the day on which the tax adjustment note was issued, evidence satisfactory to the Minister that the person was entitled to issue the tax adjustment note for the amount for which it was issued.

  “Total tax amount”

  • 232.02 (1) In this section, “total tax amount” of a tax adjustment note issued under subsection (2) means the total of the federal component amount and the provincial component amount of the tax adjustment note.

  • Marginal note:Tax adjustment note — subsection 172.1(6)

    (2) A person may, on a particular day, issue to a pension entity a note (in this section referred to as a “tax adjustment note”) in respect of employer resources consumed or used for the purpose of making a supply (in this section referred to as the “actual pension supply”) of property or a service to the pension entity, specifying an amount determined in accordance with paragraph (3)(a) (in this section referred to as the “federal component amount” of the tax adjustment note) and an amount determined in accordance with paragraph (3)(b) (in this section referred to as the “provincial component amount” of the tax adjustment note), if

    • (a) the person is deemed under paragraph 172.1(6)(b) to have collected tax, on or before the particular day, in respect of one or more taxable supplies, deemed to have been made by the person under paragraph 172.1(6)(a), of the employer resources;

    • (b) a supply of each of those employer resources is deemed to have been received by the pension entity under subparagraph 172.1(6)(d)(i) and tax in respect of each of those supplies is deemed to have been paid under subparagraph 172.1(6)(d)(ii) by the pension entity; and

    • (c) an amount of tax becomes payable, or is paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of the actual pension supply on or before the particular day.

  • Marginal note:Federal and provincial component amounts

    (3) For a tax adjustment note issued under subsection (2) on a particular day in respect of employer resources consumed or used for the purpose of making an actual pension supply,

    • (a) the federal component amount shall not exceed the amount determined by the formula

      A – B

      where

      A

      is the lesser of

      • (a) the total of all amounts, each of which is an amount determined for A in the formula in paragraph 172.1(6)(c) in determining an amount of tax that is in respect of one of those employer resources and that is deemed under paragraph 172.1(6)(b) to have become payable and to have been collected on or before the particular day, and

      • (b) the total of all amounts, each of which is an amount of tax under subsection 165(1) that became payable, or was paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of the actual pension supply on or before the particular day, and

      B

      is the total of all amounts, each of which is the federal component amount of another tax adjustment note issued under subsection (2) on or before the particular day in respect of employer resources consumed or used for the purpose of making the actual pension supply; and

    • (b) the provincial component amount shall not exceed the amount determined by the formula

      C – D

      where

      C

      is the lesser of

      • (a) the total of all amounts, each of which is an amount determined for B in the formula in paragraph 172.1(6)(c) in determining an amount of tax that is in respect of one of those employer resources and that is deemed under paragraph 172.1(6)(b) to have become payable and to have been collected on or before the particular day, and

      • (b) the total of all amounts, each of which is an amount of tax under subsection 165(2) that became payable, or was paid without having become payable, to the person (otherwise than by the operation of section 172.1) by the pension entity in respect of the actual pension supply on or before the particular day; and

      D

      is the total of all amounts, each of which is the provincial component amount of another tax adjustment note issued under subsection (2) on or before the particular day in respect of employer resources consumed or used for the purpose of making the actual pension supply.

  • Marginal note:Effect of tax adjustment note

    (4) If a person issues a tax adjustment note to a pension entity under subsection (2) in respect of particular employer resources consumed or used for the purpose of making an actual pension supply, a supply of each of those particular employer resources (each of which in this subsection is referred to as a “particular supply”) is deemed to have been received by the pension entity under subparagraph 172.1(6)(d)(i) and tax (in this subsection referred to as “deemed tax”) in respect of each of the particular supplies is deemed to have been paid under subparagraph 172.1(6)(d)(ii) by the pension entity, the following rules apply:

    • (a) the total tax amount of the tax adjustment note may be deducted in determining the net tax of the person for its reporting period that includes the day on which the tax adjustment note is issued;

    • (b) the pension entity shall add, in determining its net tax for its reporting period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × (B/C)

      where

      A

      is the total of all amounts, each of which is the total of all input tax credits that the pension entity is entitled to claim in respect of deemed tax in respect of a particular supply,

      B

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day that is the first day on which an amount of deemed tax is deemed to have been paid, the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note, and

      C

      is the total of all amounts, each of which is an amount of deemed tax in respect of a particular supply;

    • (c) for each particular claim period of the pension entity for which any part of an amount of deemed tax in respect of a particular supply is an eligible amount of the pension entity and for which the pension entity was a qualifying pension entity on the last day of the particular claim period, the pension entity shall pay to the Receiver General, on or before the last day of its claim period that immediately follows its claim period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × B × (C/D) × [(E – F)/E]

      where

      A

      is the total of all amounts, each of which is the part of an amount of deemed tax in respect of a particular supply that is an eligible amount of the pension entity for the particular claim period,

      B

      is 33%,

      C

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day referred to in paragraph (b), the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note,

      D

      is the total of all amounts, each of which is an amount of deemed tax in respect of a particular supply,

      E

      is the pension rebate amount of the pension entity for the particular claim period, and

      F

      is the total determined for B in the formula in subsection 261.01(2) in respect of the pension entity for the particular claim period; and

    • (d) for each claim period of the pension entity for which any part of an amount of deemed tax in respect of a particular supply is an eligible amount of the pension entity and for which an election under any of subsections 261.01(5), (6) or (9) was made jointly by the pension entity and all participating employers of the pension plan that were, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan, each of those participating employers shall add, in determining its net tax for its reporting period that includes the day on which the tax adjustment note is issued, the amount determined by the formula

      A × B × (C/D) × (E/F)

      where

      A

      is the total of all amounts, each of which is the part of an amount of deemed tax in respect of a particular supply that is an eligible amount of the pension entity for the claim period,

      B

      is 33%,

      C

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day referred to in paragraph (b), the federal component amount of the tax adjustment note, and

      • (ii) in any other case, the total tax amount of the tax adjustment note,

      D

      is the total of all amounts, each of which is an amount of deemed tax in respect of a particular supply,

      E

      is the amount of the deduction determined for the participating employer under subsection 261.01(5), paragraph 261.01(6)(b) or subsection 261.01(9), as the case may be, for the claim period, and

      F

      is

      • (i) if the pension entity was a selected listed financial institution on the particular day referred to in paragraph (b), the total of the pension rebate amount of the pension entity for the claim period and the provincial pension rebate amount of the pension entity for the claim period, and

      • (ii) in any other case, the pension rebate amount of the pension entity for the claim period.

  • Marginal note:Prescribed form and manner

    (5) A tax adjustment note issued under subsection (2) shall be issued in prescribed form containing prescribed information and in a manner satisfactory to the Minister.

  • Marginal note:Notification

    (6) If a tax adjustment note is issued under subsection (2) to a pension entity of a pension plan and, as a consequence of that issuance, paragraph (4)(d) applies to a participating employer of the pension plan, the pension entity shall, in prescribed form containing prescribed information and in a manner satisfactory to the Minister, forthwith notify the participating employer of that issuance.

  • Marginal note:Joint and several liability

    (7) If a participating employer of a pension plan is required to add an amount to its net tax under paragraph (4)(d) as a consequence of the issuance of a tax adjustment note under subsection (2) to a pension entity of the pension plan, the participating employer and the pension entity are jointly and severally, or solidarily, liable to pay the amount to the Receiver General.

  • Marginal note:Assessment

    (8) The Minister may assess a person for any amount for which the person is liable under subsection (7) and, if the Minister sends a notice of assessment, sections 296 to 311 apply, with such modifications as the circumstances require.

  • Marginal note:Liability where participating employer ceases to exist

    (9) If a participating employer of a pension plan has ceased to exist on or before the day on which a tax adjustment note is issued under subsection (2) to a pension entity of the pension plan and the participating employer would have been required, had it not ceased to exist, to add an amount to its net tax under paragraph (4)(d) as a consequence of that issuance, the pension entity shall pay the amount to the Receiver General on or before the last day of its claim period that immediately follows its claim period that includes the day on which the tax adjustment note is issued.

  • Marginal note:Requirement to maintain records

    (10) Despite section 286, every person that issues a tax adjustment note under subsection (2) shall maintain, for a period of six years from the day on which the tax adjustment note was issued, evidence satisfactory to the Minister that the person was entitled to issue the tax adjustment note for the amount for which it was issued.

• (2) Subsection (1) is deemed to have come into force on September 23, 2009.

• 72. (1) The Act is amended by adding the following after section 236.4:

  Marginal note:First and second variant years

  • 236.5 (1) For the purposes of this section, a fiscal year of a network seller in respect of which an approval granted under 178(5) is in effect is

    • (a) the first variant year of the network seller if the network seller

      • (i) fails to meet the condition referred to in paragraph 178(2)(c) in respect of the fiscal year, and

      • (ii) meets the condition referred to in paragraph 178(2)(c) for each fiscal year of the network seller, in respect of which an approval granted under 178(5) is in effect, preceding the fiscal year; and

    • (b) the second variant year of the network seller if

      • (i) the fiscal year is after the first variant year of the network seller,

      • (ii) the network seller fails to meet the condition referred to in paragraph 178(2)(c) in respect of the fiscal year, and

      • (iii) the network seller meets the condition referred to in paragraph 178(2)(c) for each fiscal year (other than the first variant year) of the network seller, in respect of which an approval granted under 178(5) is in effect, preceding the fiscal year.

  • Marginal note:Adjustment by network seller if conditions not met

    (2) Subject to subsections (3) and (4), if a network seller fails to satisfy any condition referred to in paragraphs 178(2)(a) to (c) for a fiscal year of the network seller in respect of which an approval granted under subsection 178(5) is in effect and, at any time during the fiscal year, a network commission would, if this Part were read without reference to subsection 178(7), become payable by the network seller to a sales representative of the network seller as consideration for a taxable supply (other than a zero-rated supply) made in Canada by the sales representative, the network seller shall, in determining the net tax for the first reporting period of the network seller following the fiscal year, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on the earliest day on which consideration for the taxable supply is paid or becomes due and ending on the day on or before which the network seller is required to file a return for the reporting period that includes that earliest day.

  • Marginal note:No adjustment for first variant year

    (3) In determining the net tax for the first reporting period of a network seller following the first variant year of the network seller, the network seller is not required to add an amount in accordance with subsection (2) if

    • (a) the network seller satisfies the conditions referred to in paragraphs 178(2)(a) and (b) for the first variant year and for each fiscal year, in respect of which an approval granted under subsection 178(5) is in effect, preceding the first variant year; and

    • (b) the network seller would meet the condition referred to in paragraph 178(2)(c) for the first variant year if the reference in that paragraph to “all or substantially all” were read as a reference to “at least 80%”.

  • Marginal note:No adjustment for second variant year

    (4) In determining the net tax for the first reporting period of the network seller following the second variant year of the network seller, the network seller is not required to add an amount in accordance with subsection (2) if

    • (a) the network seller satisfies the conditions referred to in paragraphs 178(2)(a) and (b) for the second variant year and for each fiscal year, in respect of which an approval granted under subsection 178(5) is in effect, preceding the second variant year;

    • (b) the network seller would meet the condition referred to in paragraph 178(2)(c) for each of the first variant year and the second variant year if the reference in that paragraph to “all or substantially all” were read as a reference to “at least 80%”; and

    • (c) within 180 days after the beginning of the second variant year, the network seller requests in writing that the Minister revoke the approval.

  • Marginal note:Adjustment by network seller due to notification failure

    (5) If, at any time after an approval granted under subsection 178(5) in respect of a network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection 178(11) or (12), a network commission would, if this Part were read without reference to subsection 178(7), become payable as consideration for a taxable supply (other than a zero-rated supply) made in Canada by a sales representative of the network seller that has not been notified, as required under paragraph 178(13)(b), of the revocation and an amount is not charged or collected as, or on account of, tax in respect of the taxable supply, the network seller shall, in determining the net tax for the particular reporting period of the network seller that includes the earliest day on which consideration for the taxable supply is paid or becomes due, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on that earliest day and ending on the day on or before which the network seller is required to file a return for the particular reporting period.

• (2) Subsection (1) applies in respect of any fiscal year of a person that begins on or after January 1, 2010, except that, if the person makes an application in accordance with paragraph 59(2)(a) in respect of a qualifying period (as defined in paragraph 59(2)(c)), for the purposes of applying subsections 236.5(1) to (4) of the Act, as enacted by subsection (1), each reference in those subsections to “fiscal year” is to be read, in respect of a fiscal year of the person that begins in 2010, as a reference to “qualifying period”.

Marginal note:1996, c. 21, s. 66(1)

• 73. (1) Paragraph 238(1)(a) of the Act is replaced by the following:

  • (a) where the registrant’s reporting period is or would, in the absence of subsection 251(1), be the fiscal year,

    • (i) if the registrant is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x), within six months after the end of the year,

    • (ii) if subparagraph (i) does not apply, the registrant is an individual, the fiscal year is a calendar year and, for the purposes of the Income Tax Act, the individual carried on a business in the year and the filing-due date of the individual for the year is June 15 of the following year, on or before that day, and

    • (iii) in any other case, within three months after the end of the year; and

• Marginal note:1997, c. 10, s. 217(1)

  (2) The portion of subsection 238(2.1) of the English version of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Filing by certain selected listed financial institutions

    (2.1) Despite paragraph (1)(b) and subsection (2), if a selected listed financial institution’s reporting period is a fiscal month or fiscal quarter, the financial institution shall

• Marginal note:1997, c. 10, s. 217(1)

  (3) Paragraph 238(2.1)(b) of the Act is replaced by the following:

  • (b) file a final return for the period with the Minister within six months after the end of the fiscal year in which the period ends.

• (4) Subsections (1) and (3) apply in respect of reporting periods in any fiscal year that begins after September 23, 2009.

• 74. (1) Section 242 of the Act is amended by adding the following after subsection (2.2):

  • Marginal note:Request for cancellation

    (2.3) If, at any time when an approval granted under subsection 178(5) in respect of a network seller (as defined in subsection 178(1)) and each of its sales representatives (as defined in that subsection) is in effect, a sales representative of the network seller would be a small supplier if the approval had been in effect at all times before that time and the sales representative files with the Minister in prescribed manner a request, in prescribed form containing prescribed information, to have the registration of the sales representative cancelled, the Minister shall cancel the registration of the sales representative.

• (2) Subsection (1) is deemed to have come into force on January 1, 2010.

Marginal note:2000, c. 30, s. 77(1)

• 75. (1) The definition “multi-employer plan” in subsection 261.01(1) of the Act is repealed.

• (2) Subsection 261.01(1) of the Act is amended by adding the following in alphabetical order:

  “active member”

  « participant actif »

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

  “eligible amount”

  « montant admissible »

  “eligible amount” of a pension entity for a claim period of the pension entity means an amount of tax, other than a recoverable amount in respect of the claim period, that

  • (a) became payable by the pension entity during the claim period, or was paid by the pension entity during the claim period without having become payable, in respect of a supply, importation or bringing into a participating province of property or a service that the pension entity acquired, imported or brought into the participating province, as the case may be, for consumption, use or supply in respect of a pension plan, other than an amount of tax that

    • (i) is deemed to have been paid by the pension entity under this Part (other than section 191),

    • (ii) became payable, or was paid without having become payable, by the pension entity at a time when it was entitled to claim a rebate under section 259,

    • (iii) was payable under subsection 165(1), or is deemed under section 191 to have been paid, by the pension entity in respect of a taxable supply to the pension entity of a residential complex, an addition to a residential complex or land if, in respect of that supply, the pension entity was entitled to claim a rebate under section 256.2 or would be so entitled after paying the tax payable in respect of that supply, or

    • (iv) if the pension entity is a selected listed financial institution throughout the claim period, was payable under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1; or

  • (b) is deemed to have been paid by the pension entity under section 172.1 during the claim period.

  “non-qualifying pension entity”

  « entité de gestion non admissible »

  “non-qualifying pension entity” means a pension entity that is not a qualifying pension entity.

  “participating employer”

  « employeur participant »

  “participating employer” has the meaning assigned by subsection 172.1(1).

  “pension contribution”

  « cotisation »

  “pension contribution” means a contribution by a person to a pension plan that may be deducted by the person under paragraph 20(1)(q) of the Income Tax Act in computing its income.

  “pension entity”

  « entité de gestion »

  “pension entity” has the meaning assigned by subsection 172.1(1).

  “pension plan”

  « régime de pension »

  “pension plan” has the meaning assigned by subsection 172.1(1).

  “pension rebate amount”

  « montant de remboursement de pension »

  “pension rebate amount” of a pension entity for a claim period of the pension entity means the amount determined by the formula

  A × B

  where

  A

  is 33%; and

  B

  is the total of all amounts each of which is an eligible amount of the pension entity for the claim period.

  “provincial pension rebate amount”

  « montant de remboursement de pension provincial »

  “provincial pension rebate amount” of a pension entity for a claim period of the pension entity in a fiscal year that ends in a taxation year of the pension entity means the amount equal to

  • (a) if the pension entity is a selected listed financial institution throughout the claim period, the total of all amounts, each of which is determined for a participating province by the formula

    A × B × C/D

    where

    A

    is the pension rebate amount of the pension entity for the claim period,

    B

    is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),

    C

    is the tax rate for the participating province, and

    D

    is the rate set out in subsection 165(1); and

  • (b) in any other case, zero.

  “qualifying employer”

  « employeur admissible »

  “qualifying employer” of a pension plan for a calendar year means a participating employer of the pension plan that is a registrant and that

  • (a) if pension contributions were made to the pension plan in the immediately preceding calendar year, made pension contributions to the pension plan in that year; and

  • (b) in any other case, was the employer of one or more active members of the pension plan in the immediately preceding calendar year.

  “qualifying pension entity”

  « entité de gestion admissible »

  “qualifying pension entity” means a pension entity of a pension plan other than a pension plan in respect of which

  • (a) listed financial institutions made 10% or more of the total pension contributions to the pension plan in the last preceding calendar year in which pension contributions were made to the pension plan; or

  • (b) it can reasonably be expected that listed financial institutions will make 10% or more of the total pension contributions to the pension plan in the next calendar year in which pension contributions will be required to be made to the pension plan.

  “recoverable amount”

  « montant recouvrable »

  “recoverable amount” in respect of a claim period of a person means an amount of tax

  • (a) that is included in determining an input tax credit of the person for the claim period;

  • (b) for which it can reasonably be regarded that the person has obtained or is entitled to obtain a rebate, refund or remission under any other section of this Act or under any other Act of Parliament; or

  • (c) that can reasonably be regarded as having been included in an amount adjusted, refunded or credited to or in favour of the person for which a credit note referred to in subsection 232(3) has been received by the person or a debit note referred to in that subsection has been issued by the person.

  “tax recovery rate”

  « taux de recouvrement de taxe »

  “tax recovery rate” of a person for a fiscal year of the person means the lesser of

  • (a) 100%; and

  • (b) the amount (expressed as a percentage) determined by the formula

    (A + B) / C

    where

    A

    is the total of all amounts, each of which is

    • (i) if the person is a selected listed financial institution at any time in the fiscal year, an input tax credit of the person, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a reporting period of the person included in the fiscal year, and

    • (ii) in any other case, an input tax credit of the person for a reporting period of the person included in the fiscal year,

    B

    is the total of all amounts, each of which is

    • (i) if the person is a selected listed financial institution at any time in the fiscal year, a rebate to which the person is entitled under section 259, in respect of an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01, for a claim period of the person included in the fiscal year, and

    • (ii) in any other case, a rebate to which the person is entitled under section 259 for a claim period of the person included in the fiscal year, and

    C

    is the total of all amounts, each of which is

    • (i) if the person is a selected listed financial institution at any time in the fiscal year, an amount of tax under any of subsection 165(1) and sections 212, 218 and 218.01 that became payable, or was paid without having become payable, by the person during the fiscal year, and

    • (ii) in any other case, an amount of tax that became payable, or was paid without having become payable, by the person during the fiscal year.

• Marginal note:2000, c. 30, s. 77(1); 2001, c. 15, s. 17(1)

  (3) Subsections 261.01(2) to (5) of the Act are replaced by the following:

  • Marginal note:Rebate for qualifying pension entities

    (2) If a pension entity is a qualifying pension entity on the last day of a claim period of the pension entity, the Minister shall pay a rebate to the pension entity for the claim period equal to the amount determined by the formula

    A – B

    where

    A

    is the pension rebate amount of the pension entity for the claim period; and

    B

    is the total of all amounts, each of which is an amount

    • (a) determined by the formula

      C × D

      where

      C

      is an amount determined for A in the formula in subsection (5) for a qualifying employer as a consequence of an election made under that subsection for the claim period, and

      D

      is the percentage specified for the qualifying employer in the election, or

    • (b) determined under paragraph (6)(a) in respect of a qualifying employer as a consequence of an election made under subsection (6) for the claim period.

  • Marginal note:Application for rebate

    (3) A rebate under subsection (2) shall not be paid for a claim period of a pension entity, unless the pension entity files an application for the rebate within two years after the day that is

    • (a) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period; and

    • (b) in any other case, the last day of the claim period.

  • Marginal note:Limitation

    (4) A pension entity shall not make more than one application for a rebate under subsection (2) for any claim period of the pension entity.

  • Marginal note:Election to share rebate — engaged exclusively in commercial activities

    (5) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and each of those qualifying employers is engaged exclusively in commercial activities throughout the claim period, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula

    (A + B) × C

    where

    A

    is the pension rebate amount of the pension entity for the claim period;

    B

    is the provincial pension rebate amount of the pension entity for the claim period; and

    C

    is the percentage specified for the qualifying employer in the election.

  • Marginal note:Election to share rebate — not engaged exclusively in commercial activities

    (6) If a pension entity of a pension plan is a qualifying pension entity on the last day of a claim period of the pension entity, the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan and any of those qualifying employers is not engaged exclusively in commercial activities throughout the claim period, the following rules apply:

    • (a) an amount (in this subsection referred to as a “shared portion”) shall be determined for the purposes of this section in respect of each of those qualifying employers by the formula

      A × B × C

      where

      A

      is the pension rebate amount of the pension entity for the claim period,

      B

      is the percentage specified for the qualifying employer in the election, and

      C

      is

      • (i) in the case where pension contributions were made to the pension plan in the calendar year that immediately precedes the calendar year that includes the last day of the claim period (in this paragraph referred to as the “preceding calendar year”), the amount determined by the formula

        D/E

        where

        D

        is the total of all amounts, each of which is a pension contribution made by the qualifying employer to the pension plan in the preceding calendar year, and

        E

        is the total of all amounts, each of which is a pension contribution made to the pension plan in the preceding calendar year,

      • (ii) in the case where subparagraph (i) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula

        F/G

        where

        F

        is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and

        G

        is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and

      • (iii) in any other case, zero; and

    • (b) each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister an amount determined by the formula

      (A + B) × C

      where

      A

      is the shared portion in respect of the qualifying employer as determined under paragraph (a),

      B

      is the amount determined by the formula

      D × E × F

      where

      D

      is the provincial pension rebate amount of the pension entity for the claim period,

      E

      is the percentage specified for the qualifying employer in the election, and

      F

      is the amount determined for C in the formula in paragraph (a), and

      C

      is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.

  • Marginal note:Engaged exclusively in commercial activities

    (7) For the purposes of subsections (5) and (6), a qualifying employer of a pension plan is engaged exclusively in commercial activities throughout a claim period of a pension entity of the pension plan if

    • (a) in the case of a qualifying employer that is a financial institution at any time in the claim period, all of the activities of the qualifying employer for the claim period are commercial activities; and

    • (b) in any other case, all or substantially all of the activities of the qualifying employer for the claim period are commercial activities.

  • Marginal note:Form and manner of filing

    (8) An election made under subsection (5) or (6) by a pension entity of a pension plan and the qualifying employers of the pension plan shall

    • (a) be made in prescribed form containing prescribed information;

    • (b) be filed by the pension entity with the Minister in prescribed manner at the same time the application for the rebate under subsection (2) for the claim period is filed by the pension entity;

    • (c) in the case of an election under subsection (5), indicate the percentage specified for each qualifying employer, the total of which for all qualifying employers shall not exceed 100%; and

    • (d) in the case of an election under subsection (6), indicate for each qualifying employer the percentage specified for the qualifying employer, which shall not exceed 100%.

  • Marginal note:Non-qualifying pension entities

    (9) If a pension entity of a pension plan is a non-qualifying pension entity on the last day of a claim period of the pension entity and the pension entity makes an election for the claim period jointly with all persons that are, for the calendar year that includes the last day of the claim period, qualifying employers of the pension plan, each of those qualifying employers may deduct in determining its net tax for the reporting period that includes the day on which the election is filed with the Minister the amount determined by the formula

    (A + B) × C × D

    where

    A

    is the pension rebate amount of the pension entity for the claim period;

    B

    is the provincial pension rebate amount of the pension entity for the claim period;

    C

    is

    • (a) in the case where pension contributions were made to the pension plan in the calendar year (in this subsection referred to as the “preceding calendar year”) that immediately precedes the calendar year that includes the last day of the claim period, the amount determined by the formula

      E/F

      where

      E

      is the total of all amounts, each of which is a pension contribution made by the qualifying employer to the pension plan in the preceding calendar year, and

      F

      is the total of all amounts, each of which is a pension contribution made to the pension plan in the preceding calendar year,

    • (b) in the case where subparagraph (a) does not apply and one or more qualifying employers of the pension plan was the employer of one or more active members of the pension plan in the preceding calendar year, the amount determined by the formula

      G/H

      where

      G

      is the total number of employees of the qualifying employer in the preceding calendar year who were active members of the pension plan in that year, and

      H

      is the sum of the total number of employees of each of those qualifying employers in the preceding calendar year who were active members of the pension plan in that year, and

    • (c) in any other case, zero; and

    D

    is the tax recovery rate of the qualifying employer for the fiscal year of the qualifying employer that ended on or before the last day of the claim period.

  • Marginal note:Form and manner of filing

    (10) An election made under subsection (9) for a claim period of a pension entity shall

    • (a) be made in prescribed form containing prescribed information; and

    • (b) be filed by the pension entity with the Minister in prescribed manner within two years after the day that is

      • (i) if the pension entity is a registrant, the day on or before which the pension entity is required to file a return under Division V for the claim period, and

      • (ii) in any other case, the last day of the claim period.

  • Marginal note:Limitation

    (11) Not more than one election under subsection (9) shall be filed for a claim period of a pension entity.

  • Marginal note:Joint and several liability

    (12) If, in determining the net tax for a reporting period of a qualifying employer of a pension plan, the qualifying employer deducts an amount under subsection (5), paragraph (6)(b) or subsection (9) and either the qualifying employer or the pension entity of the pension plan knows or ought to know that the qualifying employer is not entitled to the amount or that the amount exceeds the amount to which the qualifying employer is entitled, the qualifying employer and the pension entity are jointly and severally, or solidarily, liable to pay the amount or excess to the Receiver General.

• (4) Subsections (1) to (3) apply in respect of any claim period of a pension entity beginning on or after September 23, 2009, except that for the purposes of determining a provincial pension rebate amount of a pension entity for a claim period of the pension entity that begins before July 1, 2010 and ends on or after that day, the formula in paragraph (a) of the definition “provincial pension rebate amount” in subsection 261.01(1) of the Act and the descriptions in that formula, as enacted by subsection (2), shall be read as follows:

  A × B × C/D x (E – F)/E

  where

  A

  is the pension rebate amount of the pension entity for the claim period,

  B

  is the pension entity’s percentage for the participating province for the taxation year for the purposes of C in the formula in subsection 225.2(2),

  C

  is the tax rate for the participating province,

  D

  is the rate set out in subsection 165(1),

  E

  is the number of days in the claim period, and

  F

  is

  • (i) if the participating province is Ontario or British Columbia, the number of days in the claim period that are before July 1, 2010, and

  • (ii) in any other case, zero; and

• 76. (1) The Act is amended by adding the following after section 273.1:

  Subdivision b.3Information Return for Financial Institutions

  Marginal note:Definitions

  • 273.2 (1) The following definitions apply in this section and section 284.1.

    “actual amount”

    « montant réel »

    “actual amount” means any amount that is required to be reported in an information return that a person is required to file under subsection (3) for a fiscal year of the person and that is

    • (a) a tax amount for the fiscal year or a previous fiscal year of the person; or

    • (b) an amount calculated using only tax amounts for the fiscal year or a previous fiscal year of the person, unless all of those tax amounts are required to be reported in the information return.

    “tax amount”

    « montant de taxe »

    “tax amount” for a fiscal year of a person means an amount that

    • (a) is tax paid or payable (other than tax paid or payable under Division II), or is tax that is deemed under this Part to have been paid or become payable, by the person at any time during the fiscal year;

    • (b) became collectible or was collected, or is deemed under this Part to have become collectible or to have been collected, by the person as or on account of tax under Division II in a reporting period of the person in the fiscal year;

    • (c) is an input tax credit for a reporting period of the person in the fiscal year;

    • (d) is an amount that is required to be added or that may be deducted in determining net tax for a reporting period of the person in the fiscal year; or

    • (e) is required under this Part to be used in calculating or determining any amount described in paragraph (b) or (d), other than

      • (i) an amount that is consideration for a supply,

      • (ii) an amount that is the value of property or a service, or

      • (iii) a percentage.

  • Marginal note:Reporting institution

    (2) For the purposes of this section and section 284.1, a person, other than a prescribed person or a person of a prescribed class, is a reporting institution throughout a fiscal year of the person if

    • (a) the person is a financial institution at any time in the fiscal year;

    • (b) the person is a registrant at any time in the fiscal year; and

    • (c) the total of all amounts each of which is an amount included in computing, for the purposes of the Income Tax Act, the person’s income, or, if the person is an individual, the person’s income from a business, for the last taxation year of the person that ends in the fiscal year, exceeds the amount determined by the formula

      $1,000,000 × A/365

      where

      A

      is the number of days in the taxation year.

  • Marginal note:Information return for reporting institution

    (3) A reporting institution shall file an information return with the Minister for a fiscal year of the reporting institution in prescribed form containing prescribed information on or before the day that is six months after the end of the fiscal year.

  • Marginal note:Estimates

    (4) Every reporting institution that is required to report, in an information return filed under subsection (3), an amount (other than an actual amount) that is not reasonably ascertainable at the time on or before which the information return is required to be filed shall provide a reasonable estimate of the amount in the information return.

  • Marginal note:Ministerial exemption

    (5) The Minister may exempt any reporting institution or class of reporting institutions from the requirement, under subsection (3), to provide any prescribed information or may allow any reporting institution or class of reporting institutions to provide a reasonable estimate of any actual amount that is required to be reported in an information return under that subsection.

• (2) Subsection (1) applies in respect of fiscal years of a person that begin after 2007.

Marginal note:1990, c. 45, s. 12(1)

77. The portion of subsection 281(2) of the Act before paragraph (a) is replaced by the following:

• 78. (1) The Act is amended by adding the following after section 284.01:

  Marginal note:Failure to report actual amounts

  • 284.1 (1) In addition to any other penalty under this Part, every reporting institution that fails to report an actual amount (other than an actual amount for which the reporting institution is allowed to provide a reasonable estimate pursuant to subsection 273.2(5)) when and as required in an information return required to be filed under subsection 273.2(3), or that misstates such an actual amount in the information return, and that does not exercise due diligence in attempting to report the actual amount is liable to a penalty, for each such failure or misstatement, equal to the lesser of $1,000 and 1% of the absolute value of the difference between the actual amount and

    • (a) if the reporting institution failed to report the actual amount when and as required, zero; or

    • (b) if the reporting institution misstated the actual amount, the amount reported by the reporting institution in the information return.

  • Marginal note:Failure to provide reasonable estimates

    (2) In addition to any other penalty under this Part, every reporting institution that fails to provide a reasonable estimate for an amount that is not an actual amount, or for an actual amount for which the reporting institution is allowed to provide a reasonable estimate pursuant to subsection 273.2(5), when and as required in an information return required to be filed under subsection 273.2(3) for a fiscal year and that does not exercise due diligence in attempting to report such a reasonable estimate is liable to a penalty, for each such failure, equal to the lesser of $1,000 and 1% of the total of

    • (a) all amounts, each of which is an amount that became collectible by the reporting institution, or that was collected by the reporting institution, as or on account of tax under Division II in a reporting period in the fiscal year; and

    • (b) all amounts, each of which is an amount that the reporting institution claimed as an input tax credit in a return under Division V filed by the reporting institution for a reporting period in the fiscal year.

  • Marginal note:Waiving or cancelling penalties

    (3) The Minister may waive or cancel all or any portion of a penalty payable under this section.

• (2) Subsections 284.1(1) and (2) of the Act, as enacted by subsection (1), apply in respect of any amount required to be reported in an information return required under the Act to be filed on or before a particular day that is after June 29, 2010, except that if the particular day is on or before the day on which this Act is assented to, those subsections only apply if the amount is not reported in an information return filed on or before the day that is six months after the day on which this Act is assented to.

Marginal note:1997, c. 10, s. 79(2)

• 79. (1) Paragraph 298(1)(d) of the Act is replaced by the following:

  • (d) in the case of an assessment of tax payable by the person under Division IV,

    • (i) if the tax is payable under section 218.01 or subsection 218.1(1.2), more than seven years after the later of the day on or before which the person was required to file the return in which that tax was required to be reported and the day the return was filed, and

    • (ii) in any other case, more than four years after the later of the day on or before which the person was required to file the return in which that tax was required to be reported and the day the return was filed;

• (2) Subsection (1) applies in respect of tax that becomes payable after November 16, 2005.

• 80. (1) Section 301 of the Act is amended by adding the following after subsection 301(1.2):

  • Marginal note:Input tax allocation

    (1.21) If a financial institution to which subsection (1.2) does not apply objects to an assessment and the objection relates in any manner to the application of section 141.02, the notice of objection shall

    • (a) reasonably describe each issue to be decided in respect of that section;

    • (b) specify in respect of each of those issues the relief sought, expressed as the change in any amount that is relevant for the purposes of the assessment; and

    • (c) provide the facts and reasons relied on by the financial institution in respect of each of those issues.

• Marginal note:1997, c. 10, s. 82(2)

  (2) Subsection 301(1.3) of the Act is replaced by the following:

  • Marginal note:Late compliance

    (1.3) Despite subsection (1.2) or (1.21), if a notice of objection filed by a person to which one of those subsections applies does not include the information required by paragraph (1.2)(b) or (c), or (1.21)(b) or (c), as the case may be, in respect of an issue to be decided that is described in the notice, the Minister may in writing request the person to provide the information, and those paragraphs shall be deemed to be complied with in respect of the issue if, within 60 days after the request is made, the person submits the information in writing to the Minister.

• Marginal note:1997, c. 10, s. 82(2)

  (3) The portion of subsection 301(1.4) of the Act before paragraph (b) is replaced by the following:

  • Marginal note:Limitation on objections

    (1.4) Despite subsection (1.1), if a person to which subsection (1.2) or (1.21) applies has filed a notice of objection to an assessment (in this subsection referred to as the “earlier assessment”) and the Minister makes a particular assessment under subsection (3) pursuant to the notice of objection, except where the earlier assessment was made under subsection 274(8) or in accordance with an order of a court vacating, varying or restoring an assessment or referring an assessment back to the Minister for reconsideration and reassessment, the person may object to the particular assessment in respect of an issue

    • (a) only if the person complied with subsection (1.2) or (1.21) in the notice with respect to that issue; and

Marginal note:1997, c. 10, s. 83(1)

81. The portion of subsection 306.1(1) of the Act before paragraph (b) is replaced by the following:

Marginal note:2009, c. 32, s. 42

82. Subsection 326(3) of the Act is replaced by the following:

• 83. (1) Section 1 of Part II of Schedule V to the Act is amended by adding the following in alphabetical order:

  “cosmetic service supply”

  « fourniture de services esthétiques »

  “cosmetic service supply” means a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes;

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

• 84. (1) Part II of Schedule V to the Act is amended by adding the following after section 1:

  1.1 For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

Marginal note:2000, c. 30, s. 114(1)

• 85. (1) Section 2 of Part II of Schedule V to the Act is replaced by the following:

  2. A supply of an institutional health care service made by the operator of a health care facility if the institutional health care service is rendered to a patient or resident of the facility.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

Marginal note:2008, c. 28, s. 80(1)

• 86. (1) Section 5 of Part II of Schedule V to the Act is replaced by the following:

  5. A supply of a consultative, diagnostic, treatment or other health care service that is rendered by a medical practitioner to an individual.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

• 87. (1) Section 2 of Part VI of Schedule V to the Act is amended by striking out “or” at the end of paragraph (n), by adding “or” at the end of paragraph (o) and by adding the following after paragraph (o):

  • (p) property or a service

    • (i) the supply of which

      • (A) is a cosmetic service supply (as defined in section 1 of Part II of this Schedule), or

      • (B) is in respect of a cosmetic service supply referred to in clause (A) and is not made for medical or reconstructive purposes, and

    • (ii) the supply of which would be included in Part II of this Schedule or Part II of Schedule VI if Part II of this Schedule were read without reference to section 1.1 or Part II of Schedule VI were read without reference to section 1.2, as the case may be.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

• 88. (1) Part II of Schedule VI to the Act is amended by adding the following after section 1.1:

  1.2. For the purposes of this Part, a cosmetic service supply (as defined in section 1 of Part II of Schedule V) and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

Marginal note:2008, c. 28, s. 92(1)

• 89. (1) Section 34 of Part II of Schedule VI to the Act is replaced by the following:

  34. A supply of a service (other than a service the supply of which is included in any provision of Part II of Schedule V except section 9 of that Part) of installing, maintaining, restoring, repairing or modifying a property the supply of which is included in any of sections 2 to 32 and 37 to 41 of this Part, or any part for such a property if the part is supplied in conjunction with the service.

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

SOR/91-23; SOR/2002-277, s. 2Health Care Services (GST/HST) Regulations

Marginal note:SOR/94-368, s. 4(F)

• 90. (1) The portion of section 2 of the Health Care Services (GST/HST) Regulations before paragraph (a) is replaced by the following:

  2. For the purposes of section 10 of Part II of Schedule V to the Excise Tax Act, the following services are prescribed:

• (2) Subsection (1) applies in respect of

  • (a) a supply made after March 4, 2010; and

  • (b) a supply made on or before that day if

    • (i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without having become due, or

    • (ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.

Input Tax Credit Allocation Methods (GST/HST) Regulations

Making of Regulations

Marginal note:Making

91. The Input Tax Credit Allocation Methods (GST/HST) Regulations are made as follows:

Coming into Force

Marginal note:April 1, 2007

92. The Input Tax Credit Allocation Methods (GST/HST) Regulations, as made by section 91, are deemed to have come into force on April 1, 2007.

SOR/2006-229Interest Rates (Excise Act, 2001) Regulations

• 93. (1) Paragraph 2(2)(b) of the Interest Rates (Excise Act, 2001) Regulations is replaced by the following:

  • (b) if the person is a corporation, 0%, and in any other case, 2%.

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

SOR/2006-230Interest Rates (Excise Tax Act) Regulations

• 94. (1) Paragraph 2(b) of the Interest Rates (Excise Tax Act) Regulations is replaced by the following:

  • (b) in the case of interest to be paid or applied on an amount payable by the Minister to a person (other than a corporation), the sum of the basic rate in respect of the particular quarter and 2%;

  • (b.1) in the case of interest to be paid or applied on an amount payable by the Minister to a corporation, the basic rate in respect of the particular quarter; and

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

Coordinating Amendment

Marginal note:2009, c. 32

• 95. (1) In this section, “other Act” means An Act to amend the Excise Tax Act, chapter 32 of the Statutes of Canada, 2009.

• (2) If this Act receives royal assent on a day that is before July 1, 2010, then on that day, subparagraphs 218.1(1)(b)(ii) and (iii) of the Excise Tax Act, as enacted by section 14 of the other Act, are replaced by the following:

  • (ii) is the recipient of a supply, included in any of paragraphs (b.1) to (b.3) of the definition “imported taxable supply” in section 217, of property that is delivered or made available to the person in a particular participating province and is either resident in that province or is a registrant, or

  • (iii) is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition “imported taxable supply” in section 217 and that is made in a particular participating province

• (3) If this Act receives royal assent on July 1, 2010, then

  • (a) this Act is deemed to have received royal assent at a particular time that is immediately before the time on which section 14 of the other Act comes into force; and

  • (b) at the particular time referred to in  paragraph (a), subparagraphs 218.1(1)(b)(ii) and (iii) of the Excise Tax Act, as enacted by section 14 of the other Act, are replaced by the following:

    • (ii) is the recipient of a supply, included in any of paragraphs (b.1) to (b.3) of the definition “imported taxable supply” in section 217, of property that is delivered or made available to the person in a particular participating province and is either resident in that province or is a registrant, or

    • (iii) is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition “imported taxable supply” in section 217 and that is made in a particular participating province

• (4) If this Act receives royal assent after July 1, 2010, then

  • (a) subsection 64(1) of this Act is deemed never to have come into force and is repealed;

  • (b) subsection 64(5) of this Act shall be read as follows:

    • (5) Subsections (2) and (4) apply to any specified year of a person that ends after November 16, 2005.

  • (c) for a specified year of a person that ends after November 16, 2005, subsection 218.1(1) of the Excise Tax Act shall, before July 1, 2010, be read as follows:

    Marginal note:Tax in participating province

    • 218.1 (1) Subject to this Part,

      • (a) every person that is a resident in a particular participating province and is the recipient of an imported taxable supply that is a supply of intangible personal property or a service that is acquired by the person for consumption, use or supply primarily in participating provinces,

      • (b) every registrant that is the recipient of a supply, included in paragraph (b) of the definition “imported taxable supply” in section 217, of property the physical possession of which is transferred to the registrant in a particular participating province,

      • (c) every person that is the recipient of a supply, included in any of paragraphs (b.1) to (b.3) of the definition “imported taxable supply” in section 217, of property that is delivered or made available to the person in a particular participating province and who is either resident in that province or is a registrant, and

      • (d) every person that is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition “imported taxable supply” in section 217 and that is made in a particular participating province

      shall pay to Her Majesty in right of Canada, each time an amount of consideration for the supply becomes due or is paid without having become due, in addition to the tax imposed by section 218, tax equal to the amount determined by the formula

      A × B × C

      where

      A

      is the tax rate for the particular participating province,

      B

      is the value of that consideration that is paid or becomes due at that time, and

      C

      is

      • (a) in the case of an imported taxable supply of tangible personal property, 100%, and

      • (b) in any other case, the extent (expressed as a percentage) to which the person acquired the property or service for consumption, use or supply in the province.

  • (d) for supplies made on or before March 19, 2007, paragraph 218.1(1)(d) of the Excise Tax Act, as it reads by the operation of paragraph (c), shall be read without reference to “(c.1)”;

  • (e) subparagraphs 218.1(1)(b)(ii) and (iii) of the Excise Tax Act, as enacted by subsection 14(1) of the other Act, are replaced by the following:

    • (ii) is the recipient of a supply, included in any of paragraphs (b.1) to (b.3) of the definition “imported taxable supply” in section 217, of property that is delivered or made available to the person in a particular participating province and is either resident in that province or is a registrant, or

    • (iii) is the recipient of a supply that is included in paragraph (c.1), (d) or (e) of the definition “imported taxable supply” in section 217 and that is made in a particular participating province

  • (f) the replacement of subparagraphs 218.1(1)(b)(ii) and (iii) of the Excise Tax Act by the operation of paragraph (e) is deemed to have come into force on July 1, 2010.

PART 3AMENDMENTS IN RESPECT OF THE AIR TRAVELLERS SECURITY CHARGE

2002, c. 9, s. 5Air Travellers Security Charge Act

Marginal note:2007, c. 35, s. 196(1)

• 96. (1) The portion of paragraph 12(1)(a) of the Air Travellers Security Charge Act before subparagraph (i) is replaced by the following:

  • (a) $7.12 for each chargeable emplanement included in the service, to a maximum of $14.25, if

• Marginal note:2007, c. 35, s. 196(2)

  (2) The portion of paragraph 12(1)(b) of the Act before subparagraph (i) is replaced by the following:

  • (b) $7.48 for each chargeable emplanement included in the service, to a maximum of $14.96, if

• Marginal note:2005, c. 30, s. 20(3)

  (3) The portion of paragraph 12(1)(c) of the Act before subparagraph (i) is replaced by the following:

  • (c) $12.10 for each chargeable emplanement included in the service, to a maximum of $24.21, if

• Marginal note:2007, c. 35, s. 196(3)

  (4) The portion of paragraph 12(1)(d) of the Act before subparagraph (i) is replaced by the following:

  • (d) $12.71 for each chargeable emplanement included in the service, to a maximum of $25.42, if

• Marginal note:2005, c. 30, s. 20(5)

  (5) Paragraph 12(1)(e) of the Act is replaced by the following:

  • (e) $25.91, if the service includes transportation to a destination outside the continental zone.

• Marginal note:2005, c. 30, s. 20(6)

  (6) The portion of paragraph 12(2)(a) of the Act before subparagraph (i) is replaced by the following:

  • (a) $12.10 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $24.21, if

• Marginal note:2007, c. 35, s. 196(4)

  (7) The portion of paragraph 12(2)(b) of the Act before subparagraph (i) is replaced by the following:

  • (b) $12.71 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $25.42, if

• Marginal note:2005, c. 30, s. 20(8)

  (8) Paragraph 12(2)(c) of the Act is replaced by the following:

  • (c) $25.91, if the service includes transportation to a destination outside the continental zone.

• (9) Subsections (1) to (8) apply in respect of an air transportation service that includes a chargeable emplanement on or after April 1, 2010 unless,

  • (a) if any consideration is paid or payable in respect of the service, all of the consideration is paid before April 1, 2010; or

  • (b) if no consideration is paid or payable in respect of the service, a ticket is issued before April 1, 2010.

SOR/2007-267Interest Rates (Air Travellers Security Charge Act) Regulations

• 97. (1) Section 3 of the Interest Rates (Air Travellers Security Charge Act) Regulations is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:

  • (b) in the case of interest to be paid or applied on an amount payable by the Minister to a person other than a corporation, the sum of the basic rate in respect of the particular quarter and 2%; and

  • (c) in the case of interest to be paid or applied on an amount payable by the Minister to a corporation, the basic rate in respect of the particular quarter.

• (2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2010.

PART 42006, c. 13SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT, 2006

Amendments to the Act

98. Paragraph 4(2)(b) of the Softwood Lumber Products Export Charge Act, 2006 is replaced by the following:

99. Subsection 12(1) of the Act is replaced by the following:

100. The Act is amended by adding the following after section 12:

101. Section 14 of the Act is amended by adding the following after subsection (1):

102. Section 40 of the Act is amended by adding the following after subsection (3):

Coming into Force

Marginal note:Order in council

• 103. (1) This Part, other than section 98, comes into force or is deemed to have come into force on a day to be fixed by order of the Governor in Council, which day may not be earlier than April 15, 2009.

• Marginal note:July 1, 2010

  (2) Section 98 comes into force, or is deemed to have come into force, on July 1, 2010.

PART 5CUSTOMS TARIFF

Amendments to the Act

104. Tariff item Nos. 1513.19.00, 5516.11.00, 5516.12.90, 5909.00.00 and 6001.22.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff are repealed.

105. Tariff item No. 2511.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4.5% (A)” with a reference to “Free (F)”.

106. Tariff item No. 2514.00.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

107. Tariff item No. 2515.20.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

108. Tariff item No. 2516.12.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

109. Tariff item No. 2516.20.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

110. Tariff item No. 2516.90.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

111. Tariff item No. 2517.30.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.

112. Tariff item No. 2518.20.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

113. Tariff item No. 2530.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.

114. Tariff item No. 2705.00.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.

115. Tariff item No. 2707.40.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

116. Tariff item No. 2707.99.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

117. Tariff item No. 2710.11.19 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

118. Tariff item No. 2710.19.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

119. Tariff item No. 2710.91.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

120. Tariff item No. 2710.91.91 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

121. Tariff item No. 2710.99.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “8% (A)” with a reference to “Free (F)”.

122. Tariff item No. 2710.99.91 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

123. Tariff item No. 2711.11.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “12.5% (A)” with a reference to “Free (F)”.

124. Tariff item No. 2712.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.

125. Tariff item No. 2713.20.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4.5% (A)” with a reference to “Free (F)”.

126. Tariff item No. 2714.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.

127. Tariff item No. 2715.00.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6% (A)” with a reference to “Free (F)”.

128. Tariff item No. 2804.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

129. Tariff item No. 2804.21.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

130. Tariff item No. 2804.29.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

131. Tariff item No. 2804.30.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

132. Tariff item No. 2804.40.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

133. Tariff item No. 2804.69.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

134. Tariff item No. 2805.12.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

135. Tariff item No. 2805.19.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

136. Tariff item No. 2805.30.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

137. Tariff item No. 2811.19.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

138. Tariff item No. 2811.21.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

139. Tariff item No. 2811.29.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

140. Tariff item No. 2811.29.99 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

141. Tariff item No. 2812.10.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

142. Tariff item No. 2812.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

143. Tariff item No. 2817.00.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (E)” with a reference to “Free (F)”.

144. Tariff item No. 2819.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

145. Tariff item No. 2821.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

146. Tariff item No. 2821.20.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

147. Tariff item No. 2823.00.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (A)” with a reference to “Free (F)”.

148. Tariff item No. 2824.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “2% (A)” with a reference to “Free (F)”.

149. Tariff item No. 2824.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

150. Tariff item No. 2824.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4.5% (A)” with a reference to “Free (F)”.

151. Tariff item No. 2825.70.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

152. Tariff item No. 2825.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4% (A)” with a reference to “Free (F)”.

153. Tariff item No. 2826.19.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

154. Tariff item No. 2826.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

155. Tariff item No. 2826.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

156. Tariff item No. 2827.10.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “2.5% (A)” with a reference to “Free (F)”.

157. Tariff item No. 2827.20.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (E)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (J)” after the abbreviation “GPT” with a reference to “Free (F)”.

158. Tariff item No. 2827.35.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

159. Tariff item No. 2827.39.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4% (A)” with a reference to “Free (F)”.

160. Tariff item No. 2827.39.30 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

161. Tariff item No. 2827.39.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

162. Tariff item No. 2827.41.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

163. Tariff item No. 2827.49.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

164. Tariff item No. 2827.60.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

165. Tariff item No. 2827.60.99 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

166. Tariff item No. 2829.19.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

167. Tariff item No. 2829.90.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

168. Tariff item No. 2830.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

169. Tariff item No. 2833.21.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

170. Tariff item No. 2833.24.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

171. Tariff item No. 2833.25.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (A)” with a reference to “Free (F)”.

172. Tariff item No. 2833.40.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

173. Tariff item No. 2834.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (A)” with a reference to “Free (F)”.

174. Tariff item No. 2834.29.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

175. Tariff item No. 2835.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

176. Tariff item No. 2835.22.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

177. Tariff item No. 2835.22.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (E)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (J)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (E)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “3% (E)” after the abbreviation “NZT” with a reference to “Free (F)”.

178. Tariff item No. 2835.24.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “0.5% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “0.5% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

179. Tariff item No. 2835.26.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (E)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (J)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (E)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “3% (E)” after the abbreviation “NZT” with a reference to “Free (F)”.

180. Tariff item No. 2835.29.21 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

181. Tariff item No. 2835.29.29 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

182. Tariff item No. 2835.29.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “1.5% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “1.5% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

183. Tariff item No. 2835.31.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

184. Tariff item No. 2835.39.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”;

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”;

• (c) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “AUT” with a reference to “Free (F)”; and

• (d) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “NZT” with a reference to “Free (F)”.

185. Tariff item No. 2836.20.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (F)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

186. Tariff item No. 2836.91.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

187. Tariff item No. 2836.92.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4% (A)” with a reference to “Free (F)”.

188. Tariff item No. 2836.99.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

189. Tariff item No. 2839.19.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (E)” with a reference to “Free (F)”.

190. Tariff item No. 2839.90.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

191. Tariff item No. 2841.50.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3.5% (A)” with a reference to “Free (F)”.

192. Tariff item No. 2841.50.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

193. Tariff item No. 2841.61.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

194. Tariff item No. 2841.69.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

195. Tariff item No. 2841.70.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

196. Tariff item No. 2841.80.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

197. Tariff item No. 2841.90.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

198. Tariff item No. 2841.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

199. Tariff item No. 2842.10.10 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “6.5% (F)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

200. Tariff item No. 2842.90.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

201. Tariff item No. 2842.90.91 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

202. Tariff item No. 2843.10.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

203. Tariff item No. 2843.21.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

204. Tariff item No. 2843.29.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

205. Tariff item No. 2843.30.91 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

206. Tariff item No. 2843.30.99 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5% (A)” with a reference to “Free (F)”.

207. Tariff item No. 2843.90.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

208. Tariff item No. 2846.10.90 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

209. Tariff item No. 2846.90.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “2% (A)” with a reference to “Free (F)”.

210. Tariff item No. 2847.00.00 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “5.5% (A)” with a reference to “Free (F)”.

211. Tariff item No. 2850.00.19 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

212. Tariff item No. 2852.00.20 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “3% (A)” with a reference to “Free (F)”.

213. Tariff item No. 2852.00.30 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “3.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

214. Tariff item No. 2852.00.40 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “4% (A)” with a reference to “Free (F)”.

215. Tariff item No. 2852.00.50 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “4% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

216. Tariff item No. 2852.00.60 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing

• (a) in the column “Most-Favoured-Nation Tariff / Final Rate”, the reference to “5.5% (A)” with a reference to “Free (F)”; and

• (b) in the column “Preferential Tariff / Final Rate”, the reference to “3% (A)” after the abbreviation “GPT” with a reference to “Free (F)”.

217. Tariff item No. 2852.00.70 in the List of Tariff Provisions set out in the schedule to the Act is amended by replacing in the column “Most-Favoured-Nation Tariff / Final Rate” the reference to “6.5% (A)” with a reference to “Free (F)”.