SHORT TITLE

Marginal note:Short title

1. This Act may be cited as the Sustaining Canada’s Economic Recovery Act.

PART 1AMENDMENTS TO THE INCOME TAX ACT AND RELATED ACTS AND REGULATIONS

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

• 2. (1) Subparagraph 6(1)(a)(i) of the Income Tax Act is replaced by the following:

  • (i) derived from the contributions of the taxpayer’s employer to or under a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan,

• (2) Paragraph 6(1)(f) of the Act is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

  • (iii.1) a plan described in any of subparagraphs (i) to (iii) that is administered or provided by an employee life and health trust,

• (3) Paragraph 6(1)(g) of the Act is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

  • (iv) a designated employee benefit (as defined in subsection 144.1(1));

• (4) Subsections (1) to (3) apply after 2009.

• 3. (1) The portion of subsection 7(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Agreement to issue securities to employees

  • 7. (1) Subject to subsection (1.1), where a particular qualifying person has agreed to sell or issue securities of the particular qualifying person (or of a qualifying person with which the particular qualifying person does not deal at arm’s length) to an employee of the particular qualifying person (or of a qualifying person with which the particular qualifying person does not deal at arm’s length),

• (2) Subsection 7(1) of the Act is amended by adding the following after paragraph (b):

  • (b.1) if the employee has transferred or otherwise disposed of rights under the agreement in respect of some or all of the securities to the particular qualifying person (or a qualifying person with which the particular qualifying person does not deal at arm’s length) with whom the employee was not dealing at arm’s length, a benefit equal to the amount, if any, by which

    • (i) the value of the consideration for the disposition

    exceeds

    • (ii) the amount, if any, paid by the employee to acquire those rights

    is deemed to have been received, in the taxation year in which the employee made the disposition, by the employee because of the employee’s employment;

• (3) Subsection 7(1) of the Act is amended by adding the following after paragraph (d):

  • (d.1) if rights of the employee under the agreement have, by one or more transactions between persons not dealing at arm’s length, become vested in a particular person who has transferred or otherwise disposed of rights under the agreement to a particular qualifying person (or a qualifying person with which the particular qualifying person does not deal at arm’s length) with whom the particular person was not dealing at arm’s length, a benefit equal to the amount, if any, by which

    • (i) the value of the consideration for the disposition

    exceeds

    • (ii) the amount, if any, paid by the employee to acquire those rights

    is deemed to have been received, in the taxation year in which the particular person made the disposition, by the employee because of the employee’s employment, unless at the time of the disposition the employee was deceased, in which case such a benefit is deemed to have been received by the particular person in that year as income from the duties of an employment performed by the particular person in that year in the country in which the employee primarily performed the duties of the employee’s employment; and

• (4) Subsection 7(1.3) of the Act is replaced by the following:

  • Marginal note:Order of disposition of securities

    (1.3) For the purposes of this subsection, subsection (1.1), subdivision c, paragraph 110(1)(d.01), subparagraph 110(1)(d.1)(ii) and subsections 110(2.1) and 147(10.4), and subject to subsection (1.31), a taxpayer is deemed to dispose of securities that are identical properties in the order in which the taxpayer acquired them and, for this purpose,

    • (a) if a taxpayer acquires a particular security (other than under circumstances to which subsection (1.1) or 147(10.1) applies) at a time when the taxpayer also acquires or holds one or more other securities that are identical to the particular security and are, or were, acquired under circumstances to which subsection (1.1) or 147(10.1) applied, the taxpayer is deemed to have acquired the particular security at the time immediately preceding the earliest of the times at which the taxpayer acquired those other securities; and

    • (b) if a taxpayer acquires, at the same time, two or more identical securities under circumstances to which subsection (1.1) applied, the taxpayer is deemed to have acquired the securities in the order in which the agreements under which the taxpayer acquired the rights to acquire the securities were made.

• (5) Paragraph 7(1.5)(a) of the Act is replaced by the following:

  • (a) a taxpayer disposes of or exchanges securities of a particular qualifying person that were acquired by the taxpayer under circumstances to which subsection (1.1) applied (in this subsection referred to as the “exchanged securities”),

• (6) Subsection 7(1.7) of the Act is replaced by the following:

  • Marginal note:Rights ceasing to be exercisable

    (1.7) For the purposes of subsections (1) and 110(1), if a taxpayer receives at a particular time one or more particular amounts in respect of rights of the taxpayer to acquire securities under an agreement referred to in subsection (1) ceasing to be exercisable in accordance with the terms of the agreement, and the cessation would not, if this Act were read without reference to this subsection, constitute a transfer or disposition of those rights by the taxpayer,

    • (a) the taxpayer is deemed to have disposed of those rights at the particular time to a person with whom the taxpayer was dealing at arm’s length and to have received the particular amounts as consideration for the disposition; and

    • (b) for the purpose of determining the amount, if any, of the benefit that is deemed to have been received as a consequence of the disposition referred to in paragraph (a), the taxpayer is deemed to have paid an amount to acquire those rights equal to the amount, if any, by which

      • (i) the amount paid by the taxpayer to acquire those rights (determined without reference to this subsection)

      exceeds

      • (ii) the total of all amounts each of which is an amount received by the taxpayer before the particular time in respect of the cessation.

• (7) The portion of subsection 7(7) of the Act before the definition “qualifying person” is replaced by the following:

  • Marginal note:Definitions

    (7) The following definitions apply in this section and in subsection 47(3), paragraphs 53(1)(j) and 110(1)(d) and (d.01) and subsections 110(1.1), (1.2), (1.5), (1.6) and (2.1).

• (8) Subsections 7(8) and (9) of the Act are repealed.

• (9) Section 7 of the Act is amended by adding the following after subsection (9):

  • Marginal note:Reorganization

    (9.1) If, in the course of a reorganization that gives rise to a dividend that would, in the absence of paragraph 55(3)(b), be subject to subsection 55(2), rights to acquire securities listed on a designated stock exchange (referred to in this subsection as “public options”) under an agreement to sell or issue securities referred to in subsection (1) are exchanged for rights to acquire securities that are not listed on a designated stock exchange (referred to in this subsection as “private options”), and the private options are subsequently exchanged for public options, the private options are deemed to be rights to acquire shares that are listed on a designated stock exchange for the purposes of subparagraph 7(9)(d)(ii).

• (10) Subsection 7(9.1) of the Act, as enacted by subsection (9), and subsections (10) to (15) of the Act are repealed.

• (11) Subsections (1), (4) to (8) and (10) apply in respect of rights exercised after 4:00 p.m. Eastern Standard Time, March 4, 2010.

• (12) Subsections (2) and (3) apply to dispositions of rights occurring after 4:00 p.m. Eastern Standard Time, March 4, 2010.

• (13) Subsection (9) applies after 1999 and before 4:00 p.m. Eastern Standard Time, March 4, 2010, except that, for the period before December 14, 2007, the reference in subsection 7(9.1) of the Act, as enacted by subsection (9), to “designated stock exchange” shall be read as a reference to “prescribed stock exchange”.

• 4. (1) Paragraph 12(1)(z.5) of the Act is replaced by the following:

  • Marginal note:TFSA amounts

    (z.5) any amount required by subsection 146.2(9) or section 207.061 to be included in computing the taxpayer’s income for the year; and

• (2) Subsection (1) applies after October 16, 2009.

• 5. (1) Subsection 18(1) of the Act is amended by adding the following after paragraph (l):

  • Marginal note:Limitation re employee stock option expenses

    (m) an amount in respect of which an election was made by or on behalf of the taxpayer under subsection 110(1.1);

• (2) Subsection 18(1) of the Act is amended by adding the following after paragraph (o.2):

  • Marginal note:Employee life and health trust

    (o.3) except as expressly permitted by paragraph 20(1)(s), contributions to an employee life and health trust;

• (3) Paragraph 18(9)(a) of the Act is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

  • (iv) subject to clause (iii)(B) and subsections 144.1(4) to (7), as consideration for a “designated employee benefit” (as defined in subsection 144.1(1)) to be provided after the end of the year (other than consideration payable in the year, to a corporation that is licensed to provide insurance, for insurance coverage in respect of the year);

• (4) Subsection (1) applies in respect of transfers or dispositions of rights occurring after 4:00 p.m. Eastern Standard Time, March 4, 2010.

• (5) Subsections (2) and (3) apply after 2009.

• 6. (1) Subsection 20(1) of the Act is amended by adding the following after paragraph (r):

  • Marginal note:Employer’s contributions under employee life and health trust

    (s) such amount in respect of employer contributions paid to a trustee under an employee life and health trust as is permitted by subsections 144.1(4) to (7);

• (2) Subsection (1) applies after 2009.

7. Subsection 33.1(6) of the Act is replaced by the following:

• 8. (1) Section 40 of the Act is amended by adding the following after subsection (3.2):

  • Marginal note:Deemed capital gain under section 180.01

    (3.21) If, in respect of a taxation year, a taxpayer has made an election under subsection 180.01(1), the amount deemed to be a capital gain under paragraph 180.01(2)(b) is deemed to be a gain from the disposition of property for the taxation year.

• (2) Subsection (1) is deemed to have come into force on March 4, 2010.

• 9. (1) Subsection 56(1) of the Act is amended by striking-out “and” at the end of paragraph (z), by renumbering paragraph (aa) as paragraph (z.1), by adding “and” at the end of paragraph (z.1) and by adding the following after paragraph (z.1):

  • Marginal note:Employee life and health trust

    (z.2) the total of all amounts, each of which is an amount received in the year by the taxpayer that is required to be included in income under subsection 144.1(11) except to the extent that the amount was required under subsection 70(2) to be included in computing the income for the year by the taxpayer or other person resident in Canada.

• (2) Subsection (1) applies after 2009.

• 10. (1) Paragraph 60(m) of the Act is replaced by the following:

  • (m) such amount in respect of payments to a registered disability savings plan as is permitted under section 60.02;

• (2) Subsection (1) applies after March 3, 2010.

• 11. (1) Section 60.02 of the Act is replaced by the following:

  Marginal note:Definitions

  • 60.02 (1) The definitions in this subsection apply in this section and section 146.4,

    “eligible individual”

    « particulier admissible »

    “eligible individual” means a child or grandchild of a deceased annuitant under a registered retirement savings plan or a registered retirement income fund, or of a deceased member of a registered pension plan, who was financially dependent on the deceased for support, at the time of the deceased’s death, by reason of mental or physical infirmity.

    “eligible proceeds”

    « produit admissible »

    “eligible proceeds” means an amount (other than an amount that was deducted under paragraph 60(l) in computing the eligible individual’s income) received by an eligible individual as a consequence of the death after March 3, 2010 of a parent or grandparent of the eligible individual that is

    • (a) a refund of premiums (as defined in subsection 146(1));

    • (b) an eligible amount under subsection 146.3(6.11); or

    • (c) a payment (other than a payment that is part of a series of periodic payments or that relates to an actuarial surplus) out of or under a registered pension plan.

    “specified RDSP payment”

    « paiement de REEI déterminé »

    “specified RDSP payment” in respect of an eligible individual means a payment that

    • (a) is made to a registered disability savings plan under which the eligible individual is the beneficiary;

    • (b) complies with the conditions set out in paragraphs 146.4(4)(f) to (h);

    • (c) is made after June 2011; and

    • (d) has been designated in prescribed form for a taxation year by the holder of the plan and the eligible individual at the time that the payment is made.

    “transitional eligible proceeds”

    « produit admissible transitoire »

    “transitional eligible proceeds” of a taxpayer means

    • (a) any amount (other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income) that is received by the taxpayer as a consequence of the death of an individual after 2007 and before 2011 out of or under

      • (i) a registered retirement savings plan or registered retirement income fund, or

      • (ii) a registered pension plan (other than an amount that is received as part of a series of periodic payments or that relates to an actuarial surplus); or

    • (b) an amount withdrawn from the taxpayer’s registered retirement savings plan or a registered retirement income fund (in this subsection referred to as the “RRSP withdrawal”) if

      • (i) the taxpayer previously deducted an amount under paragraph 60(l) in respect of an amount that would be described by paragraph (a) if it were read without reference to “other than an amount that is eligible proceeds or an amount that was deducted under paragraph 60(l) in computing the taxpayer’s income”,

      • (ii) the RRSP withdrawal is included in computing the taxpayer’s income for the year of the withdrawal, and

      • (iii) the RRSP withdrawal does not exceed the amount deducted under subparagraph (i).

  • Marginal note:Rollover to RDSP on death

    (2) There may be deducted in computing the income for a taxation year of a taxpayer who is an eligible individual an amount that

    • (a) does not exceed the lesser of

      • (i) the total specified RDSP payments made in the year or within 60 days after the end of the year (or within any longer period after the end of the year that is acceptable to the Minister) in respect of the taxpayer; and

      • (ii) the total amount of eligible proceeds that is included in computing the taxpayer’s income in the year; and

    • (b) was not deducted in computing the taxpayer’s income for a preceding taxation year.

  • Marginal note:Application of subsections (4) and (5)

    (3) Subsections (4) and (5) do not apply unless

    • (a) a taxpayer who was the annuitant under a registered retirement savings plan or a registered retirement income fund or was a member of a registered pension plan died after 2007 and before 2011;

    • (b) the taxpayer was, immediately before the taxpayer’s death, the parent or grandparent of an eligible individual;

    • (c) transitional eligible proceeds were received from the plan or fund by

      • (i) an eligible individual in respect of the taxpayer,

      • (ii) a person who was the spouse or common-law partner of the taxpayer immediately before the taxpayer’s death, or

      • (iii) a person who is a beneficiary of the taxpayer’s estate or who directly received transitional eligible proceeds as a consequence of the death of the taxpayer; and

    • (d) the transitional eligible proceeds were included in computing the income of a person for a taxation year.

  • Marginal note:Transitional rule

    (4) There may be deducted in computing the income of a taxpayer described in paragraph (3)(c) for a taxation year an amount approved by the Minister that does not exceed the lesser of

    • (a) the total specified RDSP payments made by the taxpayer before 2012, and

    • (b) the amount of transitional eligible proceeds included in computing the taxpayer’s income for the year.

  • Marginal note:Transitional rule — deceased taxpayer

    (5) There may be deducted in computing the income of a taxpayer for the taxation year in which the taxpayer died an amount approved by the Minister that does not exceed the lesser of

    • (a) the total specified RDSP payments made before 2012 by an individual described in subparagraph (3)(c)(iii), and

    • (b) the amount by which the total of all amounts that were included in computing the taxpayer’s income for the year under subsection 146(8.8) or 146.3(6) exceeds the total of all amounts, if any, that were deducted in computing the taxpayer’s income for the year under subsection 146(8.92) or 146.3(6.3).

  • Marginal note:Limitation

    (6) The total amounts that may be deducted under subsections (4) and (5) in respect of transitional eligible proceeds received in respect of the death of a taxpayer shall not exceed the total transitional eligible proceeds received in respect of the deceased taxpayer.

• (2) Subsection (1) applies after March 3, 2010.

• 12. (1) Paragraphs (h) and (i) of the definition “principal-business corporation” in subsection 66(15) of the Act are replaced by the following:

  • (h) the generation or distribution of energy, or the production of fuel, using property described in Class 43.1 or 43.2 of Schedule II to the Income Tax Regulations, and

  • (i) the development of projects for which it is reasonable to expect that at least 50% of the capital cost of the depreciable property to be used in each project would be the capital cost of property described in Class 43.1 or 43.2 of Schedule II to the Income Tax Regulations,

• (2) Subsection (1) applies to 2004 and subsequent taxation years.

13. The portion of subsection 70(2) of the Act before paragraph (a) is replaced by the following:

• 14. (1) Paragraph 75(3)(b) of the Act is replaced by the following:

  • (b) by an employee life and health trust, an employee trust, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1), or a trust described in paragraph 149(1)(y);

• (2) Subsection (1) applies after 2009.

• 15. (1) Paragraph 87(2)(j.3) of the Act is replaced by the following:

  • Marginal note:Employee benefit plans, etc.

    (j.3) for the purposes of paragraphs 12(1)(n.1) to (n.3) and 20(1)(r), (s), (oo) and (pp), section 32.1, paragraph 104(13)(b), subsections 144.1(4) to (7) and Part X1.3, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

• (2) Subsection (1) applies after 2009.

• 16. (1) Subsection 104(6) of the Act is amended by striking out “and” at the end of paragraph (a.3) and by adding the following after that paragraph:

  • (a.4) in the case of an employee life and health trust, an amount that became payable by the trust in the year as a designated employee benefit (as defined in subsection 144.1(1)); and

• (2) Subsection (1) applies after 2009.

• 17. (1) The portion of section 107.1 of the Act before subparagraph (a)(i) is replaced by the following:

  Marginal note:Distribution by certain employment-related trusts

  107.1 If at any time any property of an employee life and health trust, an employee trust, a trust governed by an employee benefit plan or a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1) has been distributed by the trust to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s interest in the trust, the following rules apply:

  • (a) in the case of an employee life and health trust, an employee trust or a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1),

• (2) Subsection (1) applies after 2009.

• 18. (1) Paragraph 107.4(1)(j) of the Act is replaced by the following:

  • (j) if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, an inter vivos trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust.

• (2) Subsection (1) applies after 2009.

• 19. (1) Paragraph (a) of the definition “trust” in subsection 108(1) of the Act is replaced by the following:

  • (a) an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a foreign retirement arrangement, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA,

• (2) Subsection (1) applies after 2009.

• 20. (1) Subparagraph 110(1)(d)(i) of the Act is replaced by the following:

  • (i) the security was acquired under the agreement by the taxpayer or a person not dealing at arm’s length with the taxpayer in circumstances described in paragraph 7(1)(c),

  • (i.1) the security

    • (A) is a prescribed share at the time of its sale or issue, as the case may be,

    • (B) would have been a prescribed share if it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement,

    • (C) would have been a unit of a mutual fund trust at the time of its sale or issue if those units issued by the trust that were not identical to the security had not been issued, or

    • (D) would have been a unit of a mutual fund trust if

      • (I) it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement, and

      • (II) those units issued by the trust that were not identical to the security had not been issued,

• (2) Section 110 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Election by particular qualifying person

    (1.1) For the purpose of computing the taxable income of a taxpayer for a taxation year, paragraph (1)(d) shall be read without reference to its subparagraph (i) in respect of all rights granted to the taxpayer under an agreement to sell or issue securities referred to in subsection 7(1) if

    • (a) the particular qualifying person elects in prescribed form that neither the particular qualifying person nor any person not dealing at arm’s length with the particular qualifying person will deduct in computing its income for a taxation year any amount (other than a designated amount described in subsection (1.2)) in respect of a payment to or for the benefit of a taxpayer for the taxpayer’s transfer or disposition of rights under the agreement;

    • (b) the particular qualifying person files the election with the Minister;

    • (c) the particular qualifying person provides the taxpayer with evidence in writing of the election; and

    • (d) the taxpayer files the evidence with the Minister with the taxpayer’s return of income for the year in which a deduction under paragraph (1)(d) is claimed.

  • Marginal note:Designated amount

    (1.2) For the purposes of subsection (1.1), an amount is a designated amount if the following conditions are met:

    • (a) the amount would otherwise be deductible in computing the income of the particular qualifying person in the absence of subsection (1.1);

    • (b) the amount is payable to a person

      • (i) with whom the particular qualifying person deals at arm’s length, and

      • (ii) who is neither an employee of the particular qualifying person nor of any person not dealing at arm’s length with the particular qualifying person; and

    • (c) the amount is payable in respect of an arrangement entered into for the purpose of managing the particular qualifying person’s financial risk associated with a potential increase in value of the securities under the agreement described in subsection (1.1).

• (3) Subsections (1) and (2) apply in respect of acquisitions of securities and transfers or dispositions of rights occurring after 4:00 p.m. Eastern Standard Time, March 4, 2010.

• 21. (1) The portion of paragraph 111(4)(e) of the Act before subparagraph (i) is replaced by the following:

  • (e) each capital property owned by the corporation immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the corporation or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply) as is designated by the corporation in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the corporation, is deemed to have been disposed of by the corporation immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of

• (2) Section 111 of the Act is amended by adding the following after subsection (7.2):

  • Marginal note:Non-capital losses of employee life and health trusts

    (7.3) Paragraph (1)(a) does not apply in computing the taxable income of a trust for a taxation year if the trust is, in the year, an employee life and health trust.

  • Marginal note:Non-capital losses of employee life and health trusts

    (7.4) For the purposes of computing the taxable income of an employee life and health trust for a taxation year, there may be deducted such portion as the trust may claim of the trust’s non-capital losses for the three taxation years immediately preceding and the three taxation years immediately following the year.

  • Marginal note:Non-capital losses of employee life and health trusts

    (7.5) Notwithstanding paragraph (1)(a) and subsection (7.4), no amount in respect of the trust’s non-capital losses for a taxation year in which the trust was an employee life and health trust may be deducted in computing the trust’s taxable income for another taxation year (referred to in this subsection as the “specified year”) if

    • (a) the trust was not an employee life and health trust for the specified year; or

    • (b) the trust is an employee life and health trust that, because of the application of subsection 144.1(3), is not permitted to deduct any amount under subsection 104(6) for the specified year.

• (3) The description of E in the definition “non-capital loss” in subsection 111(8) of the Act is amended by adding the following after paragraph (a):

  • (a.1) an amount deductible under paragraph 104(6)(a.4) in computing the taxpayer’s income for the year;

• (4) Subsections (2) and (3) apply after 2009.

• 22. (1) The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Annual adjustment

  • 117.1 (1) The amount of $1,000 referred to in the formula in paragraph 8(1)(s), each of the amounts expressed in dollars in subparagraph 6(1)(b)(v.1), subsection 117(2), the description of B in subsection 118(1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1), subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amounts of $925 and $1,680 referred to in the description of A, and the amounts of $10,500 and $14,500 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $462.50 referred to in the description of C, and the amounts of $16,667 and $25,700 referred to in the description of D, in the formula in subsection 122.7(3), and each of the amounts expressed in dollars in Part I.2 in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of

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

• 23. (1) The definition “adjusted income” in subsection 122.5(1) of the Act is replaced by the following:

  “adjusted income”

  « revenu rajusté »

  “adjusted income”, of an individual for a taxation year in relation to a month specified for the taxation year, means the total of the individual’s income for the taxation year and the income for the taxation year of the individual’s qualified relation, if any, in relation to the specified month, both calculated as if in computing that income no amount were

  • (a) included

    • (i) under paragraph 56(1)(q.1) or subsection 56(6),

    • (ii) in respect of any gain from a disposition of property to which section 79 applies, or

    • (iii) in respect of a gain described in subsection 40(3.21); or

  • (b) deductible under paragraph 60(y) or (z).

• (2) Section 122.5 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Shared-custody parent

    (3.01) Notwithstanding subsection (3), if an eligible individual is a shared-custody parent (within the meaning assigned by section 122.6, but with the words “qualified dependant” in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3) to have been paid during a specified month is equal to the amount determined by the following formula:

    1/2 × (A + B)

    where

    A

    is the amount determined by the formula in subsection (3), calculated without reference to this subsection, and

    B

    is the amount determined by the formula in subsection (3), calculated without reference to this subsection and subparagraph (b)(ii) of the definition “eligible individual” in section 122.6.

• (3) Paragraph 122.5(6)(b) of the Act is replaced by the following:

  • (b) in the absence of an agreement referred to in paragraph (a), the person is deemed to be, in relation to that month, a qualified dependant of the individuals, if any, who are, at the beginning of that month, eligible individuals (within the meaning assigned by section 122.6, but with the words “qualified dependant” in that section having the meaning assigned by subsection (1)) in respect of that person; and

• (4) Subsection (1) applies to the 2000 and subsequent taxation years.

• (5) Subsections (2) and (3) apply for amounts that are deemed to be paid during months after June 2011.

• 24. (1) The definition “adjusted income” in section 122.6 of the Act is replaced by the following:

  “adjusted income”

  « revenu modifié »

  “adjusted income”, of an individual for a taxation year, means the total of all amounts each of which would be the income for the year of the individual or of the person who was the individual’s cohabiting spouse or common-law partner at the end of the year if in computing that income no amount were

  • (a) included

    • (i) under paragraph 56(1)(q.1) or subsection 56(6),

    • (ii) in respect of any gain from a disposition of property to which section 79 applies, or

    • (iii) in respect of a gain described in subsection 40(3.21), or

  • (b) deductible under paragraph 60(y) or (z);

• (2) Paragraph (b) of the definition “eligible individual” in section 122.6 of the Act is replaced by the following:

  • (b) is a parent of the qualified dependant who

    • (i) is the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant and who is not a shared-custody parent in respect of the qualified dependant, or

    • (ii) is a shared-custody parent in respect of the qualified dependant,

• (3) Section 122.6 of the Act is amended by adding the following in alphabetical order:

  “shared-custody parent”

  « parent ayant la garde partagée »

  “shared-custody parent” in respect of a qualified dependent at a particular time means, where the presumption referred to in paragraph (f) of the definition “eligible individual” does not apply in respect of the qualified dependant, an individual who is one of the two parents of the qualified dependant who

  • (a) are not at that time cohabitating spouses or common-law partners of each other,

  • (b) reside with the qualified dependant on an equal or near equal basis, and

  • (c) primarily fulfil the responsibility for the care and upbringing of the qualified dependant when residing with the qualified dependant, as determined in consideration of prescribed factors,

• (4) Subsection (1) applies to the 2000 and subsequent taxation years.

• (5) Subsections (2) and (3) apply for overpayments that are deemed to arise after June 2011.

• 25. (1) Section 122.61 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Shared-custody parent

    (1.1) Notwithstanding subsection (1), if an eligible individual is a shared-custody parent in respect of one or more qualified dependants at the beginning of a month, the overpayment deemed by subsection (1) to have arisen during the month is equal to the amount determined by the formula

    1/2 × (A + B)

    where

    A

    is the amount determined by the formula in subsection (1), calculated without reference to this subsection, and

    B

    is the amount determined by the formula in subsection (1), calculated without reference to this subsection and subparagraph (b)(ii) of the definition “eligible individual” in section 122.6.

• (2) Subsection (1) applies for overpayments that are deemed to arise after June 2011.

• 26. (1) Paragraph (b) of the definition “adjusted net income” in subsection 122.7(1) of the Act is replaced by the following:

  • (b) in computing that income, no amount were included under paragraph 56(1)(q.1) or subsection 56(6), in respect of any gain from a disposition of property to which section 79 applies or in respect of a gain described in subsection 40(3.21); and

• (2) Subsection (1) applies to the 2000 and subsequent taxation years.

• 27. (1) Paragraph 127.55(f) of the Act is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

  • (iv) an employee life and health trust.

• (2) Subsection (1) applies after 2009.

• 28. (1) Paragraph 128.1(4)(c) of the Act is replaced by the following:

  • Marginal note:Employee life and health trust

    (b.1) notwithstanding paragraph (b), if the taxpayer is or was at any time an employee life and health trust,

    • (i) the taxpayer is deemed

      • (A) to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and

      • (B) to have carried on a business at the time of disposition, and

    • (ii) each property of the taxpayer is deemed

      • (A) to have been described in the inventory of the business referred to in clause (i)(B), and

      • (B) to have a cost of nil at the time of disposition;

  • Marginal note:Reacquisition

    (c) the taxpayer is deemed to have reacquired, at the particular time, each property deemed by paragraph (b) or (b.1) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property;

• (2) Paragraph (a) of the definition “excluded right or interest” in subsection 128.1(10) of the Act is amended by adding the following after subparagraph (vi):

  • (vi.1) an employee life and health trust,

• (3) Subsections (1) and (2) apply after 2009.

• 29. (1) The portion of paragraph 129(1)(a) of the Act before subparagraph (i) is replaced by the following:

  • (a) may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) equal to the lesser of

• (2) Paragraph 129(1)(b) of the Act is replaced by the following:

  • (b) shall, with all due dispatch, make the dividend refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a).

30. Paragraph 131(2)(b) of the Act is replaced by the following:

31. Paragraph 132(1)(b) of the Act is replaced by the following:

32. Paragraphs 133(6)(a) and (b) of the Act are replaced by the following:

• 33. (1) The definition “transition year” in subsection 138(12) of the Act is replaced by the following:

  “transition year”

  « année transitoire »

  “transition year” of a life insurer means

  • (a) in respect of the accounting standards adopted by the Accounting Standards Board and effective as of October 1, 2006, the life insurer’s first taxation year that begins after September 2006, and

  • (b) in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective as of January 1, 2011, the life insurer’s first taxation year that begins after 2010;

• (2) Subsection 138(12) of the Act is amended by adding the following in alphabetical order:

  “deposit accounting insurance policy”

  « police d’assurance à comptabilité de dépôt »

  “deposit accounting insurance policy” in respect of a life insurer’s taxation year means an insurance policy of the life insurer that, according to generally accepted accounting principles, is not an insurance contract for that taxation year;

  “excluded policy”

  « police exclue »

  “excluded policy” in respect of a life insurer’s base year means an insurance policy of the life insurer that would be a deposit accounting insurance policy for the life insurer’s base year if the International Financial Reporting Standards adopted by the Accounting Standards Board and effective as of January 1, 2011 applied for that base year;

• (3) Section 138 of the Act is amended by adding the following after subsection (17):

  • Marginal note:IFRS transition — reversals

    (17.1) In applying subsections (18) and (19) to a life insurer for a taxation year of the life insurer in respect of the International Financial Reporting Standards adopted by the Accounting Standards Board and effective as of January 1, 2011,

    • (a) the reference to “policy reserve” in B of the formula in the definition “reserve transition amount” in subsection (12) is to be read as a reference to “policy reserve determined without reference to the life insurer’s excluded policies”;

    • (b) the reference in those subsections to “that ends after the beginning of the transition year” is to be read as a reference to “that ends no sooner than two years after the beginning of the transition year”; and

    • (c) the reference in those subsections to “the first day of the transition year” is to be read as a reference to “the first day of the first year that ends no sooner than two years after the beginning of the transition year”.

• (4) Subsections (1) to (3) apply to taxation years that begin after 2010.

• 34. (1) The Act is amended by adding the following after section 144:

  Employee Life and Health Trust

  Marginal note:Definitions

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

    “actuary”

    « actuaire »

    “actuary” means a Fellow of the Canadian Institute of Actuaries.

    “class of beneficiaries”

    « catégorie de bénéficiaires »

    “class of beneficiaries” of a trust means a group of beneficiaries who have identical rights or interests under the trust.

    “designated employee benefit”

    « prestation désignée »

    “designated employee benefit” means a benefit from a group sickness or accident insurance plan, a group term life insurance policy or a private health services plan.

    “employee”

    « employé »

    “employee” means a current or former employee of an employer and includes an individual in respect of whom the employer has assumed responsibility for the provision of designated employee benefits as a result of the acquisition by the employer of a business in which the individual was employed.

    “key employee”

    « employé clé »

    “key employee”, of an employer in respect of a taxation year, means an employee who

    • (a) was at any time in the taxation year or in a preceding taxation year, a specified employee of the employer; or

    • (b) was an employee whose employment income from the employer in any two of the five taxation years preceding the year exceeded five times the Year’s Maximum Pensionable Earnings (as determined under section 18 of the Canada Pension Plan) for the calendar year in which the employment income was earned.

  • Marginal note:Employee life and health trust

    (2) A trust that is established for employees of one or more employers (each referred to in this subsection as a “participating employer”) is an employee life and health trust for a taxation year if, throughout the taxation year, under the terms that govern the trust,

    • (a) the only purpose of the trust is to provide designated employee benefits to, or for the benefit of, persons described in subparagraphs (d)(i) or (ii); and

    • (b) on wind-up or reorganization, the property of the trust may only be distributed to

      • (i) each remaining beneficiary of the trust who is described in subparagraph (d)(i) or (ii) (other than a key employee or an individual who is related to a key employee) on a pro rata basis,

      • (ii) another employee life and health trust, or

      • (iii) after the death of the last beneficiary described in subparagraph (d)(i) or (ii), Her Majesty in right of Canada or a province;

    • (c) the trust is required to be resident in Canada, determined without reference to section 94;

    • (d) the trust may not have any beneficiaries other than persons each of whom is

      • (i) an employee of a participating employer,

      • (ii) an individual who, in respect of an employee of a participating employer, is (or, if the employee is deceased, was, at the time of the employee’s death)

        • (A) the spouse or common law partner of the employee, or

        • (B) related to the employee and either a member of the employee’s household or dependent on the employee for support,

      • (iii) another employee life and health trust, or

      • (iv) Her Majesty in right of Canada or a province;

    • (e) the trust contains at least one class of beneficiaries where

      • (i) the members of the class represent at least 25% of all of the beneficiaries of the trust who are employees of the participating employer, and

      • (ii) at least 75% of the members of the class are not key employees of the participating employer;

    • (f) the rights under the trust of each key employee of a participating employer are not more advantageous than the rights of a class of beneficiaries described in paragraph (e);

    • (g) no participating employer, nor any person who does not deal at arm’s length with a participating employer, has any rights under the trust as a beneficiary or otherwise, except rights to

      • (i) designated employee benefits,

      • (ii) to enforce covenants, warranties or similar provisions regarding

        • (A) the maintenance of the trust as an employee life and health trust, or

        • (B) the operation of the trust in a manner that prevents subsection (3) from applying to prohibit the deduction of an amount by the trust under subsection 104(6), or

      • (iii) prescribed payments;

    • (h) the trust may not make a loan to, or an investment in, a participating employer or a person or partnership with whom the participating employer does not deal at arm’s length;

    • (i) representatives of one or more participating employers do not constitute the majority of the trustees of the trust or otherwise control the trust.

  • Marginal note:Breach of terms, etc.

    (3) No amount may be deducted in a taxation year by an employee life and health trust pursuant to subsection 104(6) if in the taxation year the trust

    • (a) is not operated in accordance with the terms required by subsection (2) to govern the trust, or

    • (b) is operated or maintained primarily for the benefit of one or more key employees or their family members described in subparagraph 2(d)(ii).

  • Marginal note:Deductibility of employer contributions

    (4) In computing the income of an employer,

    • (a) the employer may deduct for a taxation year the portion of its contributions to an employee life and health trust made in the year that may reasonably be regarded as having been contributed to enable the trust to

      • (i) pay premiums to an insurance corporation that is licensed to provide insurance under the laws of Canada or a province for insurance coverage for the year or a prior year in respect of designated employee benefits for beneficiaries described in subparagraph (2)(d)(i) or (ii), or

      • (ii) otherwise provide

        • (A) group term life insurance as described in clause 18(9)(a)(iii)(B), or

        • (B) any designated employee benefits payable in the year or a prior year to, or for the benefit of, beneficiaries described in subparagraph (2)(d)(i) or (ii); and

    • (b) the portion of any contribution made to an employee life and health trust that exceeds the amount deductible under paragraph (a) and that may reasonably be regarded as enabling the trust to provide or pay benefits described in subparagraphs (a)(i) or (ii) in a subsequent taxation year is deductible for that year.

  • Marginal note:Actuarial determination

    (5) For the purposes of subsection (4), if, in respect of an employer’s obligations to fund an employee life and health trust, a report has been prepared by an independent actuary, using accepted actuarial principles and practices, before the time of a contribution by the employer, the portion of the contribution that the report specifies to be the amount that the employee life and health trust is reasonably expected to pay or incur in a taxation year in order to provide designated employee benefits to beneficiaries described in subparagraph (2)(d)(i) or (ii) for a taxation year is, in the absence of evidence to the contrary, presumed to have been contributed to enable the trust to provide those benefits for the year.

  • Marginal note:Multi-employer plans

    (6) Notwithstanding subsection (4) and paragraph 18(9)(a), an employer may deduct in computing its income for a taxation year the amount that it is required to contribute for the year to an employee life and health trust if the following conditions are met at the time that the contribution is made:

    • (a) it is reasonable to expect that

      • (i) at no time in the year will more than 95% of the employees who are beneficiaries of the trust be employed by a single employer or by a related group of employers, and

      • (ii) at least 15 employers will contribute to the trust in respect of the year or at least 10% of the employees who are beneficiaries of the trust will be employed in the year by more than one participating employer and, for the purpose of this condition, all employers who are related to each other are deemed to be a single employer;

    • (b) employers contribute to the trust under a collective bargaining agreement and in accordance with a negotiated contribution formula that does not provide for any variation in contributions determined by reference to the financial experience of the trust; and

    • (c) contributions that are to be made by each employer are determined, in whole or in part, by reference to the number of hours worked by individual employees of the employer or some other measure that is specific to each employee with respect to whom contributions are made to the trust.

  • Marginal note:Maximum deductible

    (7) The amount deducted in a taxation year by an employer in computing its income in respect of contributions made to an employee life and health trust shall not exceed the amount determined by the formula

    A – B

    where

    A

    is the total of all amounts contributed by the employer to the trust in the year or in a preceding taxation year; and

    B

    is the total of all amounts deducted by the employer in a preceding taxation year in respect of amounts contributed by the employer to the trust.

  • Marginal note:Employer promissory note

    (8) If an employer issues a promissory note or provides other evidence of its indebtedness to an employee life and health trust in respect of its obligation to the trust,

    • (a) the issuance of the note or the provision of the evidence of indebtedness to the trust is not a contribution to the trust; and

    • (b) a payment by the employer to the trust in full or partial satisfaction of its liability under the note or the evidence of indebtedness, whether stated to be of principal or interest or any other amount, is deemed to be an employer contribution to the trust that is subject to this section and not a payment of principal or interest on the note or indebtedness.

  • Marginal note:Trust status — subsequent times

    (9) For the purposes of determining whether an amount is deductible by an employer under subsection (4), if a trust was an employee life and health trust at the time that a promissory note or other evidence of indebtedness referred to in subsection (8) was issued or provided, the trust is deemed to be an employee life and health trust at each time that an employer contribution is deemed to have been made under paragraph (8)(b) in respect of the note or other indebtedness.

  • Marginal note:Employee contributions

    (10) For the purposes of paragraph 6(1)(f), subsection 6(4) and paragraph 118.2(2)(q), employee contributions to an employee life and health trust, to the extent that they are, and are identified by the trust at the time of contribution as, contributions in respect of a particular designated employee benefit, are deemed to be payments by the employee in respect of the particular designated employee benefit.

  • Marginal note:Income inclusion

    (11) If a trust that is, or was, at any time, an employee life and health trust pays an amount as a distribution from the trust to any person in a taxation year, the amount of the distribution shall be included in computing the person’s income for the year, except to the extent that the amount is

    • (a) a payment of a designated employee benefit that is not included in the person’s income because of section 6; or

    • (b) a distribution to another employee life and health trust that is a beneficiary of the employee life and health trust.

  • Marginal note:Deemed separate trusts

    (12) Where contributions have been received by an employee life and health trust from more than one employer, the trust is deemed to be a separate trust established in respect of the property held for the benefit of beneficiaries described in subparagraph (2)(d)(i) or (ii) in respect of a particular employer, if

    • (a) the trustee designates the property to be held in a separate trust for the benefit of those beneficiaries in an election made on or before the filing-due date of the first taxation year of the separate trust described in this subsection; and

    • (b) under the terms of the trust, contributions from the employer and the income derived from those contributions accrues solely for the benefit of those beneficiaries.

  • Marginal note:Non-capital losses

    (13) No non-capital loss is deductible by an employee life and health trust in computing its taxable income for a taxation year, except as provided by subsections 111(7.3) to (7.5).

• (2) Subsection (1) applies to trusts established after 2009.

• 35. (1) Subsection 146.2(6) of the Act is amended by striking out the word “and” at the end of paragraph (a), by adding the word “and” at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) the trust’s income shall be computed without reference to subsection 104(6).

• (2) Subsection (1) applies to the 2010 and subsequent taxation years.

• 36. (1) The definition “contribution” in subsection 146.4(1) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) other than for the purposes of paragraphs (4)(f) to (h) and (n), a specified RDSP payment as defined in subsection 60.02(1).

• (2) Subsection (1) applies after June 2011.

• 37. (1) The definitions “capital gains pool”, “enduring property” and “specified gift” in subsection 149.1(1) of the Act are repealed.

• (2) The definition “disbursement quota” in subsection 149.1(1) of the Act is replaced by the following:

  “disbursement quota”

  « contingent des versements »

  “disbursement quota”, for a taxation year of a registered charity, means the amount determined by the formula

  A × B × 0.035/365

  where

  A

  is the number of days in the taxation year, and

  B

  is

  • (a) the prescribed amount for the year, in respect of all or a portion of a property owned by the charity at any time in the 24 months immediately preceding the taxation year that was not used directly in charitable activities or administration, if that amount is greater than

    • (i) if the registered charity is a charitable organization, $100,000, and

    • (ii) in any other case, $25,000, and

  • (b) in any other case, nil;

• (3) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:

  “designated gift”

  « don déterminé »

  “designated gift” means that portion of a gift of property made in a taxation year by a particular registered charity, to another registered charity with which it does not deal at arm’s length, that is designated by the particular registered charity in its information return for the taxation year;

• (4) Paragraph 149.1(1.1)(a) of the Act is replaced by the following:

  • (a) a designated gift;

• (5) The portion of subsection 149.1(1.2) of the Act before paragraph (b) is replaced by the following:

  • Marginal note:Authority of Minister

    (1.2) For the purposes of the determination of B in the definition “disbursement quota” in subsection 149.1(1), the Minister may

    • (a) authorize a change in the number of periods chosen by a registered charity in determining the prescribed amount; and

• (6) Paragraphs 149.1(4.1)(a) and (b) of the Act are replaced by the following:

  • (a) of a registered charity, if it has entered into a transaction (including a gift to another registered charity) and it may reasonably be considered that a purpose of the transaction was to avoid or unduly delay the expenditure of amounts on charitable activities;

  • (b) of a registered charity, if it may reasonably be considered that a purpose of entering into a transaction (including the acceptance of a gift) with another registered charity to which paragraph (a) applies was to assist the other registered charity in avoiding or unduly delaying the expenditure of amounts on charitable activities;

• (7) Subsection 149.1(4.1) of the Act is amended by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) of a registered charity, if it has in a taxation year received a gift of property (other than a designated gift) from another registered charity with which it does not deal at arm’s length and it has expended, before the end of the next taxation year, in addition to its disbursement quota for each of those taxation years, an amount that is less than the fair market value of the property, on charitable activities carried on by it or by way of gifts made to qualified donees with which it deals at arm’s length.

• (8) Subsections 149.1(8) and (9) of the Act are replaced by the following:

  • Marginal note:Accumulation of property

    (8) A registered charity may, with the approval in writing of the Minister, accumulate property for a particular purpose, on terms and conditions and over any period of time that the Minister specifies in the approval. Any property accumulated after receipt of and in accordance with the approval, including any income earned in respect of the accumulated property, is not to be included in calculating the prescribed amount in paragraph (a) of the description of B in the definition “disbursement quota” in subsection (1) for the portion of any taxation year in the period, except to the extent that the registered charity is not in compliance with the terms and conditions of the approval.

• (9) Subparagraph 149.1(12)(b)(i) of the Act is replaced by the following:

  • (i) a designated gift,

• (10) Subsections (1) to (9) apply to taxation years that end on or after March 4, 2010.

• 38. (1) Paragraphs 152(3.1)(a) and (b) of the Act are replaced by the following:

  • (a) if at the end of the year the taxpayer is a mutual fund trust or a corporation other than a Canadian-controlled private corporation, the period that ends four years after the earlier of the day of sending of a notice of an original assessment under this Part in respect of the taxpayer for the year and the day of sending of an original notification that no tax is payable by the taxpayer for the year; and

  • (b) in any other case, the period that ends three years after the earlier of the day of sending of a notice of an original assessment under this Part in respect of the taxpayer for the year and the day of sending of an original notification that no tax is payable by the taxpayer for the year.

• (2) Subparagraph 152(4)(d)(ii) of the Act is replaced by the following:

  • (ii) the day that is 90 days after the day of sending of a notice of the provincial reassessment.

• 39. (1) Paragraph 153(1)(s) of the Act is replaced by the following:

  • (s) an amount described in paragraph 56(1)(r) or (z.2), or

• (2) Section 153 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Withholding — stock option benefits

    (1.01) An amount that is deemed to have been received by a taxpayer as a benefit under or because of any of paragraphs 7(1)(a) to (d.1) is remuneration paid as a bonus for the purposes of paragraph (1)(a), except the portion, if any, of the amount that is

    • (a) deductible by the taxpayer under paragraph 110(1)(d) in computing the taxpayer’s taxable income for a taxation year;

    • (b) deemed to have been received in a taxation year as a benefit because of a disposition of securities to which subsection 7(1.1) applies; or

    • (c) determined under paragraph 110(2.1)(b) to be deductible by the taxpayer under paragraph 110(1)(d.01) in computing the taxpayer’s taxable income for a taxation year.

• (3) Section 153 of the Act is amended by adding the following after subsection (1.3):

  • Marginal note:Non-cash stock option benefit

    (1.31) An amount deemed to have been received as a benefit under or because of any of paragraphs 7(1)(a) to (d.1) shall not be considered a basis on which the Minister may determine a lesser amount under subsection (1.1) solely because it is received as a non-cash benefit.

• (4) Subsection (1) applies after 2009.

• (5) Subsection (2) applies after 2010, except that it does not apply with respect to benefits arising from rights granted before 2011 to a taxpayer under an agreement to sell or issue securities that was entered into in writing before 4:00 p.m. Eastern Standard Time, March 4, 2010 and that included, at that time, a written condition prohibiting the taxpayer from disposing of the securities acquired under the agreement for a period of time after exercise.

• (6) Subsection (3) applies after 2010.

40. Paragraph 161(11)(c) of the Act is replaced by the following:

41. Subparagraphs 161.1(3)(c)(i) to (v) of the Act are replaced by the following:

• 42. (1) Paragraphs 164(1)(a) and (b) of the Act are replaced by the following:

  • (a) may,

    • (i) before sending the notice of assessment for the year, where the taxpayer is, for any purpose of the definition “refundable investment tax credit” (as defined in subsection 127.1(2)), a qualifying corporation (as defined in that subsection) and claims in its return of income for the year to have paid an amount on account of its tax payable under this Part for the year because of subsection 127.1(1) in respect of its refundable investment tax credit (as defined in subsection 127.1(2)), refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the amount by which the total determined under paragraph (f) of the definition “refundable investment tax credit” in subsection 127.1(2) in respect of the taxpayer for the year exceeds the total determined under paragraph (g) of that definition in respect of the taxpayer for the year,

    • (ii) before sending the notice of assessment for the year, where the taxpayer is a qualified corporation (as defined in subsection 125.4(1)) or an eligible production corporation (as defined in subsection 125.5(1)) and an amount is deemed under subsection 125.4(3) or 125.5(3) to have been paid on account of its tax payable under this Part for the year, refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the total of those amounts so deemed to have been paid, and

    • (iii) on or after sending the notice of assessment for the year, refund any overpayment for the year, to the extent that the overpayment was not refunded pursuant to subparagraph (i) or (ii); and

  • (b) shall, with all due dispatch, make the refund referred to in subparagraph (a)(iii) after sending the notice of assessment if application for it is made in writing by the taxpayer within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the taxpayer for the year if that subsection were read without reference to paragraph 152(4)(a).

• (2) The portion of subsection 164(1.5) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Exception

    (1.5) Notwithstanding subsection (1), the Minister may, on or after sending a notice of assessment for a taxation year, refund all or any portion of any overpayment of a taxpayer for the year

• (3) Subsection 164(2.3) of the Act is replaced by the following:

  • Marginal note:Form deemed to be return of income

    (2.3) For the purpose of subsection (1), where a taxpayer files the form referred to in paragraph (b) of the definition “return of income” in section 122.6 for a taxation year, the form is deemed to be a return of the taxpayer’s income for that year and a notice of assessment in respect of that return is deemed to have been sent by the Minister.

• 43. (1) Subparagraph 165(1)(a)(ii) of the Act is replaced by the following:

  • (ii) the day that is 90 days after the day of sending of the notice of assessment; and

• (2) Paragraph 165(1)(b) of the Act is replaced by the following:

  • (b) in any other case, on or before the day that is 90 days after the day of sending of the notice of assessment.

• (3) The portion of subsection 165(1.1) of the Act after paragraph (c) and before paragraph (d) is replaced by the following:

  the taxpayer may object to the assessment or determination within 90 days after the day of sending of the notice of assessment or determination, but only to the extent that the reasons for the objection can reasonably be regarded

44. Subsection 166.1(6) of the Act is replaced by the following:

45. The portion of subsection 169(1) of the Act after paragraph (b) is replaced by the following:

• 46. (1) The Act is amended by adding the following after section 180:

  PART I.01TAX IN RESPECT OF STOCK OPTION BENEFIT DEFERRAL

  Marginal note:Election — special tax and relief for deferral of stock option benefits

  • 180.01 (1) A taxpayer may make an election in prescribed form to have subsection (2) apply for a taxation year in respect of particular securities if

    • (a) the taxpayer elected to have subsection 7(8) apply, as that subsection applied before 4:00 p.m. Eastern Standard Time, March 4, 2010, in respect of the particular securities; and

    • (b) the taxpayer has, in the year and before 2015, disposed of the particular securities; and

    • (c) the election under this subsection is filed

      • (i) if the taxpayer has disposed of the particular securities before 2010, on or before the taxpayer’s filing-due date for 2010, and

      • (ii) in any other case, on or before the taxpayer’s filing-due date for the year of disposition of the particular securities.

  • Marginal note:Effect of election

    (2) If a taxpayer makes an election under subsection (1) for a taxation year in respect of particular securities, the following rules apply:

    • (a) paragraph 110(1)(d) shall be read without reference to the phrase “1/2 of” in respect of the amount of the benefit deemed by subsection 7(1) to have been received by the taxpayer in the year in respect of the particular securities;

    • (b) the taxpayer is deemed to have realized a capital gain for the year equal to the lesser of

      • (i) the amount that is deductible by the taxpayer under paragraph 110(1)(d), as modified by paragraph (a), and

      • (ii) the taxpayer’s capital loss in respect of the disposition of the particular securities;

    • (c) the taxpayer is liable to pay a tax for the year equal to

      • (i) in the case of a taxpayer resident in the Province of Quebec at the end of the year, 2/3 of the taxpayer’s proceeds of disposition (as defined in section 54, but determined without reference to subsection 73(1)) of the particular securities, and

      • (ii) in any other case, the taxpayer’s proceeds of disposition (as defined in section 54, but determined without reference to subsection 73(1)) of the particular securities;

    • (d) to the extent that the taxation year is outside the normal reassessment period (as defined in subsection 152(3.1)), the election is deemed to be an application for reassessment under subsection 152(4.2); and

    • (e) notwithstanding subsection 152(4) and as the circumstances require, the Minister shall re-determine the taxpayer’s “net capital loss” (as defined in subsection 111(8)) for the taxation year and reassess any taxation year in which an amount has been deducted under paragraph 111(1)(b).

  • Marginal note:Non-application for employment insurance purposes

    (3) An amount included under subsection (2)(b) in computing a person’s income under Part I of this Act for a taxation year shall not be included in determining the income of the person for the year under Part VII of the Employment Insurance Act.

  • Marginal note:Provisions applicable to this Part

    (4) Subsection 150(3), sections 150.1 to 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require.

• (2) Subsection (1) is deemed to have come into force on March 4, 2010.

• 47. (1) The definition “adjusted income” in subsection 180.2(1) of the Act is replaced by the following:

  “adjusted income”

  « revenu modifié »

  “adjusted income” of an individual for a taxation year means the amount that would be the individual’s income under Part I for the year if in computing that income no amount were

  • (a) included

    • (i) under paragraph 56(1)(q.1) or subsection 56(6),

    • (ii) in respect of a gain from a disposition of property to which section 79 applies, or

    • (iii) in respect of a gain described in subsection 40(3.21), or

  • (b) deductible under paragraph 60(w), (y) or (z);

• (2) Subsection (1) applies to the 2000 and subsequent taxation years.

48. The portion of subsection 184(3) of the Act before paragraph (a) is replaced by the following:

49. The portion of subsection 185.1(2) of the Act before paragraph (a) is replaced by the following:

• 50. (1) Subsection 188(3.1) of the Act is replaced by the following:

  • Marginal note:Non-application of subsection (3)

    (3.1) Subsection (3) does not apply to a transfer that is a gift to which subsection 188.1(11) or (12) applies.

• (2) Subsection (1) applies to taxation years that end on or after March 4, 2010.

• 51. (1) Subsection 188.1(11) of the Act is replaced by the following:

  • Marginal note:Delay of expenditure

    (11) If, in a taxation year, a registered charity has entered into a transaction (including a gift to another registered charity) and it may reasonably be considered that a purpose of the transaction was to avoid or unduly delay the expenditure of amounts on charitable activities, the registered charity is liable to a penalty under this Act for its taxation year equal to 110% of the amount of expenditure avoided or delayed, and in the case of a gift to another registered charity, both charities are jointly and severally, or solidarily, liable to the penalty.

  • Marginal note:Gifts not at arm’s length

    (12) If a registered charity has in a taxation year received a gift of property (other than a designated gift) from another registered charity with which it does not deal at arm’s length and it has expended, before the end of the next taxation year, in addition to its disbursement quota for each of those taxation years, an amount that is less than the fair market value of the property, on charitable activities carried on by it or by way of gifts made to qualified donees with which it deals at arm’s length, the registered charity is liable to a penalty under this Act for that subsequent taxation year equal to 110% of the difference between the fair market value of the property and the additional amount expended.

• (2) Subsection (1) applies to taxation years that end on or after March 4, 2010.

52. Subparagraph 189(6.2)(a)(i) of the Act is replaced by the following:

53. Subparagraphs 191.2(1)(b)(i) and (ii) of the Act are replaced by the following:

54. Paragraph 191.3(2)(b) of the Act is replaced by the following:

• 55. (1) The portion of clause 204.81(1)(c)(v)(A) of the Act before subclause (I) is replaced by the following:

  • (A) if the share is held by the specified individual in respect of the share, a spouse or common-law partner or former spouse or common-law partner of that individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which that individual, spouse or common-law partner is the annuitant,

• (2) Subclause 204.81(1)(c)(v)(D)(II) of the Act is replaced by the following:

  • (II) an annuitant under a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund that was a holder of the share,

• (3) The portion of subparagraph 204.81(1)(c)(vii) of the Act before clause (A) is replaced by the following:

  • (vii) the corporation shall not register a transfer of a Class A share by the specified individual in respect of the share, a spouse or common-law partner of the specified individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which the specified individual or spouse or common-law partner is the annuitant, unless

• (4) Clause 204.81(1)(c)(vii)(C) of the Act is replaced by the following:

  • (C) the transfer is to the specified individual, a spouse or common-law partner or former spouse or common-law partner of the specified individual or a trust governed by a registered retirement savings plan, TFSA or registered retirement income fund under which the specified individual or the spouse or common-law partner or former spouse or common-law partner of the specified individual is the annuitant,

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

56. Paragraphs 207(2)(a) and (b) of the Act are replaced by the following:

• 57. (1) Paragraph (b) of the definition “advantage” in subsection 207.01(1) of the Act is amended by striking out “or” at the end of subparagraph (i), by striking out “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

  • (iii) a swap transaction, or

  • (iv) specified non-qualified investment income that has not been distributed under the TFSA within 90 days of receipt by the holder of the TFSA of a notice issued by the Minister under subsection 207.06(4); and

• (2) Paragraph (c) of the definition “advantage” in subsection 207.01(1) of the Act is replaced by the following:

  • (c) a benefit that is income (including a capital gain) that is reasonably attributable, directly or indirectly, to

    • (i) a deliberate over-contribution, or

    • (ii) a prohibited investment in respect of the TFSA or any other TFSA of the holder; and

  • (d) a prescribed benefit.

• (3) Paragraph (b) of the description of C in the definition “excess TFSA amount” in subsection 207.01(1) of the Act is replaced by the following:

  • (b) a specified distribution;

• (4) Paragraph (a) of the description of E in the definition “excess TFSA amount” in subsection 207.01(1) of the Act is replaced by the following:

  • (a) nil, if the distribution is a qualifying transfer or a specified distribution, and

• (5) The definition “unused TFSA contribution room” in subsection 207.01(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by adding the following after that paragraph:

  • (a.1) in circumstances where the Minister has, in accordance with section 207.06, waived or cancelled all or part of the liability imposed on the individual, the amount determined by the Minister; and

• (6) Subparagraph (ii) of the description of B in the definition “unused TFSA contribution room” in subsection 207.01(1) of the Act is replaced by the following:

  • (ii) a specified distribution,

• (7) Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:

  “deliberate over-contribution”

  « cotisation excédentaire intentionnelle »

  “deliberate over-contribution” of an individual means a contribution made under a TFSA by the individual that results in, or increases, an excess TFSA amount, unless it is reasonable to conclude that the individual neither knew nor ought to have known that the contribution could result in liability for a penalty, tax or similar consequence under this Act.

  “specified distribution”

  « distribution déterminée »

  “specified distribution” means

  • (a) a distribution made under a TFSA to the extent that it is, or is reasonably attributable to, an amount that is

    • (i) an advantage in respect of the TFSA or any other TFSA of the holder,

    • (ii) specified non-qualified investment income,

    • (iii) an amount in respect of which tax was payable under Part I by a trust governed by the TFSA or any other TFSA of the holder, or

    • (iv) an amount described in subparagraph 207.06(1)(b)(ii); or

  • (b) a prescribed distribution.

  “specified non-qualified investment income”

  « revenu de placement non admissible déterminé »

  “specified non-qualified investment income”, in respect of a TFSA and its holder, means income (including a capital gain) that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the TFSA or any other TFSA of the holder.

  “swap transaction”

  « opération de swap »

  “swap transaction”, in respect of a trust governed by a TFSA, means a transfer of property (other than a transfer that is a distribution or a contribution) occurring between the trust and the holder of the TFSA or a person with whom the holder does not deal at arm’s length.

• (8) Subsections (1) to (6) apply after October 16, 2009, except that subparagraph (c)(ii) of the definition “advantage” in subsection 207.01(1) of the Act, as enacted by subsection (2), does not apply in respect of income (including a capital gain) earned before October 17, 2009.

• (9) The definition “deliberate over-contribution” in subsection 207.01(1) of the Act, as enacted by subsection (7), applies to contributions made after October 16, 2009.

• (10) The definition “specified distribution” in subsection 207.01(1) of the Act, as enacted by subsection (7), applies to distributions that occur after October 16, 2009, other than the portion of a distribution that is, or is reasonably attributable to, an advantage that was extended, or income earned, before October 17, 2009.

• (11) The definition “specified non-qualified investment income” in subsection 207.01(1) of the Act, as enacted by subsection (7), applies to the 2010 and subsequent taxation years.

• (12) The definition “swap transaction” in subsection 207.01(1) of the Act, as enacted by subsection (7), applies to transfers of property that occur after October 16, 2009.

• 58. (1) Subsections 207.04(6) and (7) of the Act are repealed.

• (2) Subsection (1) applies after October 16, 2009.

• 59. (1) Subsection 207.05(1) of the Act is replaced by the following:

  Marginal note:Tax payable in respect of advantage

  • 207.05 (1) A tax is payable under this Part for a calendar year if, in the year, an advantage in relation to a TFSA is extended to, or is received or receivable by, a holder of the TFSA, a trust governed by the TFSA, or any other person who does not deal at arm’s length with the holder of the TFSA.

• (2) Subsection (1) applies after October 16, 2009.

• 60. (1) Paragraph 207.06(1)(b) of the Act is replaced by the following:

  • (b) one or more distributions are made without delay under a TFSA of which the individual is the holder, the total amount of which is not less than the total of

    • (i) the amount in respect of which the individual would otherwise be liable to pay the tax, and

    • (ii) income (including a capital gain) that is reasonably attributable, directly or indirectly, to the amount described in subparagraph (i).

• (2) Section 207.06 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Waiver of tax payable — advantage

    (3) The Minister shall not waive or cancel a liability imposed under subsection 207.05(3) on an individual unless one or more distributions are made without delay under a TFSA of which the individual is the holder, the total amount of which is not less than the amount of the liability waived or cancelled.

  • Marginal note:Other powers of Minister

    (4) The Minister may notify the holder of a TFSA that the holder must cause a distribution to be made under the TFSA within 90 days of receipt of the notice, the amount of which is not less than the amount of the specified non-qualified investment income.

• (3) Subsections (1) and (2) apply after October 16, 2009.

• 61. (1) The Act is amended by adding the following after section 207.06:

  Marginal note:Income inclusion

  207.061 A holder of a TFSA shall include in computing the holder’s income for a taxation year under Part I the total of all amounts each of which is the portion of a distribution made in the year that is described in

  • (a) subparagraph 207.06(1)(b)(ii);

  • (b) subsection 207.06(3); or

  • (c) subparagraph (a)(ii) of the definition “specified distribution”.

  Marginal note:Special limit on tax payable

  207.062 If an individual is liable to pay an amount of tax under section 207.05 and under sections 207.02 or 207.03 in respect of the same contribution for the same calendar year, the tax payable under section 207.05 for the year shall be reduced by the amount of the tax payable under section 207.02 or 207.03, as the case may be, for the year.

• (2) Subsection (1) applies after October 16, 2009.

62. Paragraphs 207.07(2)(a) and (b) of the Act are replaced by the following:

63. Paragraphs 207.7(2)(a) and (b) of the Act are replaced by the following:

• 64. (1) Subsection 212(1) of the Act is amended by striking out “or” at the end of paragraph (u), by adding “or” at the end of paragraph (v) and by adding the following after paragraph (v):

  • (w) a payment out of a trust that is, or was, at any time, an employee life and health trust, except to the extent that it is a payment of a designated employee benefit (as defined by subsection 144.1(1)).

• (2) Subsection (1) applies after 2009.

65. Subparagraph 222(4)(a)(i) of the Act is replaced by the following:

• 66. (1) Paragraphs 225.1(1.1)(b) and (c) of the Act are replaced by the following:

  • (b) in the case of an amount assessed under section 188.1, one year after the day on which the notice of assessment was sent; and

  • (c) in any other case, 90 days after the day on which the notice of assessment was sent.

• (2) Subsection 225.1(2) of the Act is replaced by the following:

  • Marginal note:No action by Minister

    (2) If a taxpayer has served a notice of objection under this Act to an assessment of an amount payable under this Act, the Minister shall not, for the purpose of collecting the amount in controversy, take any of the actions described in paragraphs (1)(a) to (g) until after the day that is 90 days after the day on which notice is sent to the taxpayer that the Minister has confirmed or varied the assessment.

• (3) Paragraph 225.1(7)(a) of the Act is replaced by the following:

  • (a) at any time on or before the particular day that is 90 days after the day of the sending of the notice of assessment, 1/2 of the amount so assessed; and

67. Subsections 244(14) and (15) of the Act are replaced by the following:

68. The portion of subsection 245(6) of the Act after paragraph (b) is replaced by the following:

• 69. (1) The definition “employee benefit plan” in subsection 248(1) of the Act is replaced by the following:

  “employee benefit plan”

  « régime de prestations aux employés »

  “employee benefit plan” means an arrangement under which contributions are made by an employer or by any person with whom the employer does not deal at arm’s length to another person (in this Act referred to as the “custodian” of an employee benefit plan) and under which one or more payments are to be made to or for the benefit of employees or former employees of the employer or persons who do not deal at arm’s length with any such employee or former employee (other than a payment that, if section 6 were read without reference to subparagraph 6(1)(a)(ii) and paragraph 6(1)(g), would not be required to be included in computing the income of the recipient), but does not include any portion of the arrangement that is

  • (a) a fund, plan or trust referred to in subparagraph 6(1)(a)(i) or paragraph 6(1)(d) or (f),

  • (b) a trust described in paragraph 149(1)(y),

  • (c) an employee trust,

  • (c.1) a salary deferral arrangement, in respect of a taxpayer, under which deferred amounts are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income,

  • (c.2) a retirement compensation arrangement,

  • (d) an arrangement the sole purpose of which is to provide education or training for employees of the employer to improve their work or work-related skills and abilities, or

  • (e) a prescribed arrangement;

• (2) The definition “retirement compensation arrangement” in subsection 248(1) of the Act is amended by adding the following after paragraph (f):

  • (f.1) an employee life and health trust,

• (3) The definition “salary deferral arrangement” in subsection 248(1) of the Act is amended by adding the following after paragraph (e):

  • (e.1) an employee life and health trust,

• (4) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:

  “employee life and health trust”

  « fiducie de soins de santé au bénéfice d’employés »

  “employee life and health trust” has the meaning assigned by subsection 144.1(2);

• (5) Subsections (1) to (4) apply after 2009.

R.S., c. C-8Canada Pension Plan

Marginal note:2009, c. 31, s. 30(3)

70. Paragraphs 38(4)(a) and (b) of the Canada Pension Plan are replaced by the following:

1996, c. 23Employment Insurance Act

71. Subsection 85(4) of the Employment Insurance Act is replaced by the following:

72. Subsection 102(14) of the Act is replaced by the following:

Marginal note:2009, c. 33, s. 16

73. Paragraphs 152.3(1)(a) and (b) of the Act are replaced by the following:

2006, c. 4, s. 168Universal Child Care Benefit Act

• 74. (1) Section 2 of the Universal Child Care Benefit Act is amended by adding the following in alphabetical order:

  “shared-custody parent”

  « parent ayant la garde partagée »

  “shared-custody parent” has the meaning assigned by section 122.6 of the Income Tax Act.

• (2) Subsection (1) applies after June 2011.

• 75. (1) Subsection 4(1) of the Act is replaced by the following:

  Marginal note:Amount of payment

  • 4. (1) The Minister shall pay to an eligible individual, for each month at the beginning of which he or she is an eligible individual, for each child who is a qualified dependant of the eligible individual at the beginning of that month,

    • (a) a benefit of $50, if the eligible individual is a shared-custody parent of the qualified dependant; and

    • (b) a benefit of $100 in any other case.

• (2) Subsection (1) applies to payments in respect of months after June 2011.

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

• 76. (1) The definition “food waste” in subsection 1104(13) of the Income Tax Regulations is repealed.

• (2) The definitions “biogas”, “district energy system” and “eligible waste fuel” in subsection 1104(13) of the Regulations are replaced by the following:

  “biogas”

  “biogas” means the gas produced by the anaerobic digestion of organic waste that is sludge from an eligible sewage treatment facility, food and animal waste, manure, plant residue or wood waste. (biogaz)

  “district energy system”

  “district energy system” means a system that is used primarily to provide heating or cooling by continuously circulating, from a central generation unit to one or more buildings through a system of interconnected pipes, an energy transfer medium that is heated or cooled using thermal energy. (réseau énergétique de quartier)

  “eligible waste fuel”

  “eligible waste fuel” means biogas, bio-oil, digester gas, landfill gas, municipal waste, pulp and paper waste and wood waste. (combustible résiduaire admissible)

• (3) Subsection 1104(13) of the Regulations is amended by adding the following in alphabetical order:

  “food and animal waste”

  “food and animal waste” means organic waste that is disposed of in accordance with the laws of Canada or a province and that is

  • (a) generated during the preparation or processing of food for human or animal consumption;

  • (b) food that is no longer fit for human or animal consumption; or

  • (c) animal remains. (déchets alimentaires et animaux)

• (4) Subsections (1) to (3) apply to property acquired after February 25, 2008, except that the definition “district energy system” in subsection 1104(13) of Regulations, as enacted by subsection (2), applies to property acquired after March 3, 2010.

• 77. (1) Paragraph 1219(1)(f) of the Regulations is replaced by the following:

  • (f) for the drilling or completion of a well for the project, other than a well that is, or can reasonably be expected to be, used for the installation of underground piping that is included in paragraph (d) of Class 43.1 or paragraph (b) of Class 43.2 in Schedule II; or

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

• 78. (1) Section 1402 of the Regulations is replaced by the following:

  1402. Any amount determined under section 1400 or 1401 shall be determined

  • (a) net of relevant reinsurance recoverable amounts; and

  • (b) without reference to any amount in respect of a deposit accounting insurance policy.

• (2) Subsection (1) applies to taxation years that begin after 2010.

• 79. (1) Section 1406 of the Regulations is replaced by the following:

  1406. Any amount determined under section 1404 or 1405 shall be determined

  • (a) net of relevant reinsurance recoverable amounts;

  • (b) without reference to any liability in respect of a segregated fund (other than a liability in respect of a guarantee in respect of a segregated fund policy); and

  • (c) without reference to any amount in respect of a deposit accounting insurance policy.

• (2) Subsection (1) applies to taxation years that begin after 2010.

• 80. (1) Subsection 1408(1) of the Regulations is amended by adding the following in alphabetical order:

  “deposit accounting insurance policy”

  “deposit accounting insurance policy” has the meaning assigned by subsection 138(12) of the Act. (police d’assurance à comptabilité de dépôt)

  “reinsurance recoverable amount”

  “reinsurance recoverable amount” of an insurer means an amount reported as a reinsurance asset of the insurer as at the end of a taxation year in respect of an amount recoverable from a reinsurer. (somme à recouvrer au titre de la réassurance)

• (2) Section 1408 of the Regulations is amended by adding the following after subsection (7):

  • (8) A reference in this Part to an amount or item reported as an asset or a liability of an insurer as at the end of a taxation year means

    • (a) if reporting by the insurer to the insurer’s relevant authority is required at the end of the year, an amount or item that is reported, as at the end of the year, as an asset or a liability in the insurer’s non-consolidated balance sheet accepted by the insurer’s relevant authority; and

    • (b) in any other case, an amount or item that is reported as an asset or a liability in a non-consolidated balance sheet that is prepared in a manner consistent with the requirements that would have applied had reporting to the insurer’s relevant authority been required at the end of the year.

• (3) Subsections (1) and (2) apply to taxation years that begin after 2010.

• 81. (1) The definitions “Canadian reserve liabilities” and “reinsurance recoverable” in subsection 2400(1) of the Regulations are replaced by the following:

  “Canadian reserve liabilities”

  “Canadian reserve liabilities” of an insurer as at the end of a taxation year means the amount determined by the formula

  A – B

  where

  A

  is the total of the insurer’s liabilities and reserves (other than liabilities and reserves in respect of a segregated fund) as at the end of the year in respect of

  • (a) life insurance policies in Canada,

  • (b) fire insurance policies issued or effected in respect of property situated in Canada, and

  • (c) insurance policies of any other class covering risks ordinarily within Canada at the time the policy was issued or effected; and

  B

  is the total of the reinsurance recoverable reported as a reinsurance asset by the insurer as at the end of the year relating to its liabilities and reserves in A. (passif de réserve canadienne)

  “reinsurance recoverable”

  “reinsurance recoverable” of an insurer means the total of all amounts each of which is an amount reported as a reinsurance asset of the insurer as at the end of a taxation year in respect of an amount recoverable from a reinsurer. (montant à recouvrer au titre de la réassurance)

• (2) The description of B in subparagraph (a)(i) of the definition “Canadian investment fund” in subsection 2400(1) of the Regulations is replaced by the following:

  B

  is the amount of the insurer’s Canadian outstanding premiums and policy loans as at the end of the year (to the extent that the amount of the premiums and loans are in respect of policies referred to in paragraphs (a) to (c) of the description of A in the definition “Canadian reserve liabilities” and were not otherwise deducted in computing the amount of the insurer’s Canadian reserve liabilities as at the end of the year), and

• (3) Clause (b)(i)(A) of the definition “Canadian investment fund” in subsection 2400(1) of the Regulations is replaced by the following:

  • (A) the amount of the insurer’s Canadian outstanding premiums and policy loans (to the extent that the amount of the premiums or loans are in respect of policies referred to in paragraphs (a) to (c) of the description of A in the definition “Canadian reserve liabilities” and were not otherwise deducted in computing the amount of the insurer’s Canadian reserve liabilities as at the end of the year), and

• (4) Subparagraph (b)(i) of the definition “equity limit” in subsection 2400(1) of the Regulations is replaced by the following:

  • (i) the amount, if any, by which the insurer’s mean Canadian reserve liabilities for the year exceeds 50% of the total of its premiums receivable and deferred acquisition expenses as at the end of the year and its premiums receivable and deferred acquisition expenses as at the end of its preceding taxation year to the extent that those amounts were included in the insurer’s Canadian reserve liabilities for the year or the preceding taxation year, as the case may be, in respect of the insurer’s business in Canada, and

• (5) Subparagraph (a)(ii) of the definition “weighted Canadian liabilities” in subsection 2400(1) of the Regulations is replaced by the following:

  • (ii) the total of

    • (A) the insurer’s policy loans (other than policy loans in respect of annuities) as at the end of the year, and

    • (B) the reinsurance recoverable reported by the insurer as at the end of the year relating to its liabilities described in subparagraph (i), and

• (6) Subparagraph (b)(ii) of the definition “weighted Canadian liabilities” in subsection 2400(1) of the Regulations is replaced by the following:

  • (ii) the total of

    • (A) the insurer’s policy loans in respect of annuities as at the end of the year, and

    • (B) the reinsurance recoverable reported by the insurer as at the end of the year relating to its liabilities described in subparagraph (i). (passif canadien pondéré)

• (7) Subparagraph (a)(ii) of the definition “weighted total liabilities” in subsection 2400(1) of the Regulations is replaced by the following:

  • (ii) the total of

    • (A) the insurer’s policy loans and foreign policy loans (other than policy loans and foreign policy loans in respect of annuities) as at the end of the year, and

    • (B) the reinsurance recoverable reported by the insurer as at the end of the year relating to its liabilities described in subparagraph (i), and

• (8) Subparagraph (b)(ii) of the definition “weighted total liabilities” in subsection 2400(1) of the Regulations is replaced by the following:

  • (ii) the total of

    • (A) the insurer’s policy loans and foreign policy loans in respect of annuities as at the end of the year, and

    • (B) the reinsurance recoverable reported by the insurer as at the end of the year relating to its liabilities described in subparagraph (i). (passif total pondéré)

• (9) Section 2400 of the Regulations is amended by adding the following after subsection (8):

  • (9) A computation that is required to be made under this Part in respect of an insurer’s taxation year that included December 31, 2010 and that is relevant to a computation (in this subsection referred to as the “transition year computation”) that is required to be made under this Part in respect of the insurer’s first taxation year that begins after that date shall, for the purposes only of the transition year computation, be made using the same definitions, rules and methodologies that are used in the transition year computation.

• (10) Subsections (1) to (9) apply to taxation years that begin after 2010.

• 82. (1) Paragraphs 2401(2)(b) and (c) of the Regulations are replaced by the following:

  • (b) shall designate for a taxation year investment property of the insurer for the year with a total value for the year equal to the amount, if any, by which the insurer’s mean Canadian reserve liabilities for the year in respect of its accident and sickness insurance business in Canada exceeds the insurer’s mean Canadian outstanding premiums for the year in respect of that business;

  • (c) shall designate for a taxation year in respect of the insurer’s insurance business in Canada (other than a life insurance business or an accident and sickness insurance business) investment property of the insurer for the year with a total value for the year equal to the amount, if any, by which the insurer’s mean Canadian reserve liabilities for the year in respect of that business exceeds 50% of the total of all amounts each of which is the amount, as at the end of the year or as at the end of its preceding taxation year, of a premium receivable or a deferred acquisition expense (to the extent that it is included in the insurer’s Canadian reserve liabilities as at the end of the year or preceding taxation year, as the case may be) of the insurer in respect of that business;

• (2) Subsection (1) applies to taxation years that begin after 2010.

• 83. (1) Section 3700 of the Regulations and the headings before it are replaced by the following:

  PART XXXVIIREGISTERED CHARITIES

• (2) Subsection (1) applies for taxation years that end on or after March 4, 2010.

• 84. (1) The portion of subsection 3701(1) of the Regulations before paragraph (a) is replaced by the following:

  • 3701. (1) For the purposes of the description of B in the definition “disbursement quota” in subsection 149.1(1) of the Act, the prescribed amount for a taxation year of a registered charity is determined as follows:

• (2) Paragraph 3701(1)(b) of the Regulations is replaced by the following:

  • (b) aggregate for each period chosen under paragraph (a) all amounts, each of which is the value, determined in accordance with section 3702, of a property, or a portion of a property, owned by the registered charity, and not used directly in charitable activities or administration, on the last day of the period;

• (3) Subsections 3701(2) and (3) of the Regulations are replaced by the following:

  • (2) For the purposes of subsection (1) and subject to subsection (3),

    • (a) the number of periods chosen by a registered charity under paragraph (1)(a) shall, unless otherwise authorized by the Minister, be used for the taxation year and for all subsequent taxation years; and

    • (b) a registered charity is deemed to have existed on the last day of each of the periods chosen by it.

  • (3) The number of periods chosen under paragraph (1)(a) may be changed by the registered charity for its first taxation year commencing after 1986 and the new number shall, unless otherwise authorized by the Minister, be used for that taxation year and all subsequent taxation years.

• (4) Subsections (1) to (3) apply to taxation years that end on or after March 4, 2010.

• 85. (1) Subsection 3702(1) of the Regulations is replaced by the following:

  • 3702. (1) For the purposes of subsection 3701(1), the value of a property, or a portion of a property, owned by a registered charity, and not used directly in charitable activities or administration, on the last day of a period is determined as of that day to be

    • (a) in the case of a non-qualified investment of a private foundation, the greater of its fair market value on that day and its cost amount to the private foundation;

    • (b) subject to paragraph (c), in the case of property other than a non-qualified investment that is

      • (i) a share of a corporation that is listed on a designated stock exchange, the closing price or the average of the bid and asked prices of that share on that day or, if there is no closing price or bid and asked prices on that day, on the last preceding day for which there was a closing price or bid and asked prices,

      • (ii) a share of a corporation that is not listed on a designated stock exchange, the fair market value of that share on that day,

      • (iii) an interest in real property or a real right in an immovable, the fair market value on that day of the interest or right less the amount of any debt of the registered charity incurred in respect of the acquisition of the interest or right and secured by the interest or right, where the debt bears a reasonable rate of interest,

      • (iv) a contribution that is the subject of a pledge, nil,

      • (v) an interest, or for civil law a right, in property where the registered charity does not have the present use or enjoyment of the interest or right, nil,

      • (vi) a life insurance policy, other than an annuity contract, that has not matured, nil, and

      • (vii) a property not described in any of subparagraphs (i) to (vi), the fair market value of the property on that day; and

    • (c) in the case of any property described in paragraph (b) that is owned in connection with the charitable activities of the registered charity and is a share of a limited-dividend housing company referred to in paragraph 149(1)(n) of the Act or a loan, that has ceased to be used for charitable purposes and is being held pending disposition or for use in charitable activities, or that has been acquired for use in charitable activities, the lesser of the fair market value of the property on that day and an amount determined by the formula

      (A / 0.035) x (12 / B)

      where

      A

      is the income earned on the property in the period, and

      B

      is the number of months in the period.

• (2) Subsection (1) applies for taxation years that end on or after March 4, 2010.

• 86. (1) The definition “total reserve liabilities” in section 8600 of the Regulations is replaced by the following:

  “total reserve liabilities”

  “total reserve liabilities” of an insurer as at the end of a taxation year means the amount determined by the formula

  A – B

  where

  A

  is the total amount as at the end of the year of the insurer’s liabilities and reserves (other than liabilities and reserves in respect of a segregated fund within the meaning assigned by subsection 138(12) of the Act) in respect of all its insurance policies, as determined for the purposes of the Superintendent of Financial Institutions, if the insurer is required by law to report to the Superintendent of Financial Institutions, or, in any other case, the superintendent of insurance or other similar officer or authority of the province under the laws of which the insurer is incorporated, and

  B

  is the total of the reinsurance recoverable (within the meaning assigned by subsection 2400(1)) reported as a reinsurance asset by the insurer as at the end of the year relating to its liabilities and reserves in A. (passif total de réserve)

• (2) Subsection (1) applies to taxation years that begin after 2010.

• 87. (1) The Regulations are amended by adding the following after section 9400:

  PART XCVEMPLOYEE LIFE AND HEALTH TRUSTS

  Marginal note:Prescribed rights

  9500. For the purpose of subparagraph 144.1(2)(g)(iii) of the Act, prescribed payments are payments to General Motors of Canada Limited or Chrysler Canada Inc. by the employee life and health trust established for the benefit of retired automobile industry workers by the Canadian Auto Workers’ Union that

  • (a) are reasonable in the circumstances;

  • (b) are made as consideration for administrative services provided to or on behalf of the trust or its beneficiaries, or as reimbursement for employee benefit payments made on behalf of, or in contemplation of the establishment of, the trust; and

  • (c) the recipient acknowledges in writing shall be included in computing the recipient’s income in the year that they are receivable, to the extent that the recipient deducts in the year, or deducted in a prior year, in computing its income amounts in respect of the services or benefit payments described in paragraph (b).

• (2) Subsection (1) applies after 2009.

• 88. (1) The portion of paragraph (v) of Class 10 in Schedule II to the Regulations before subparagraph (i) is replaced by the following:

  • (v) property acquired after August 31, 1984 (other than property that is included in Class 30) that is equipment used for the purpose of effecting an interface between a cable distribution system and electronic products used by consumers of that system and that is designed primarily

• (2) Subsection (1) applies in respect of taxation years that end after March 4, 2010.

• 89. (1) Class 30 in Schedule II to the Regulations is replaced by the following:

  Class 30

  Property of a taxpayer that is

  • (a) an unmanned telecommunication spacecraft that was designed to orbit above the earth and that was acquired by the taxpayer

    • (i) before 1988, or

    • (ii) before 1990

      • (A) pursuant to an obligation in writing entered into by the taxpayer before June 18, 1987, or

      • (B) that was under construction by or on behalf of the taxpayer on June 18, 1987; or

  • (b) equipment used for the purpose of effecting an interface between a cable or satellite distribution system (other than a satellite radio distribution system) and electronic products used by consumers of that system if the equipment

    • (i) is designed primarily

      • (A) to augment the channel capacity of a television receiver, or

      • (B) to decode pay television or other signals provided on a discretionary basis,

    • (ii) is acquired by the taxpayer after March 4, 2010, and

    • (iii) has not been used or acquired for use for any purpose by any taxpayer before March 5, 2010.

• (2) Subsection (1) applies in respect of taxation years that end after March 4, 2010.

• 90. (1) Subparagraphs (a)(iii) and (iii.1) of Class 43.1 in Schedule II to the Regulations are replaced by the following:

  • (iii) heat recovery equipment used primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated by equipment referred to in subparagraph (i) or (ii),

  • (iii.1) district energy equipment that is part of a district energy system that uses thermal energy that is primarily supplied by electrical cogeneration equipment that would be property described in paragraphs (a) to (c) if read without reference to this subparagraph,

• (2) Subclause (d)(i)(A)(II) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

  • (II) equipment that is part of a ground source heat pump system that transfers heat to or from the ground or groundwater (but not to or from surface water such as a river, a lake or an ocean) and that, at the time of installation, meets the standards set by the Canadian Standards Association for the design and installation of earth energy systems, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), energy conversion equipment, energy storage equipment, control equipment and equipment designed to enable the system to interface with other heating or cooling equipment, and

• (3) Clause (d)(i)(B) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

  • (B) it is not a building, part of a building (other than a solar collector that is not a window and that is integrated into a building), equipment used to heat water for use in a swimming pool, energy equipment that backs up equipment described in subclause (A)(I) or (II) nor equipment that distributes heated or cooled air or water in a building,

• (4) Subparagraph (d)(iv) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

  • (iv) heat recovery equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated directly in an industrial process (other than an industrial process that generates or processes electrical energy), including such equipment that consists of heat exchange equipment, compressors used to upgrade low pressure steam, vapour or gas, waste heat boilers and other ancillary equipment such as control panels, fans, instruments or pumps, but not including property that is employed in re-using the recovered heat (such as property that is part of the internal heating or cooling system of a building or electrical generating equipment), is a building or is equipment that recovers heat primarily for use for heating water in a swimming pool.

• (5) Subparagraphs (d)(vii) to (ix) of Class 43.1 in Schedule II to the Regulations are replaced by the following:

  • (vii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electrical energy solely from geothermal energy, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), pumps, heat exchangers, steam separators, electrical generating equipment and ancillary equipment used to collect the geothermal heat, but not including buildings, transmission equipment, distribution equipment, equipment designed to store electrical energy, property otherwise included in Class 10 and property that would be included in Class 17 if that Class were read without reference to its subparagraph (a.1)(i),

  • (viii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of collecting landfill gas or digester gas, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), fans, compressors, storage tanks, heat exchangers and other ancillary equipment used to collect gas, to remove non-combustibles and contaminants from the gas or to store the gas, but not including property otherwise included in Class 10 or 17,

  • (ix) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating heat energy from the consumption of eligible waste fuel, and not using any fuel other than eligible waste fuel or fossil fuel, if the heat energy is used directly in an industrial process, or in a greenhouse, including such equipment that consists of fuel handling equipment used to upgrade the combustible portion of the fuel and control, feedwater and condensate systems, and other ancillary equipment, but not including buildings or other structures, heat rejection equipment (such as condensers and cooling water systems), fuel storage facilities, other fuel handling equipment and electrical generating equipment, and property otherwise included in Class 10 or 17,

• (6) Subparagraph (d)(xi) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

  • (xi) equipment used by the taxpayer, or by a lessee of the taxpayer, in a system that converts wood waste or plant residue into bio-oil, if that bio-oil is used primarily for the purpose of generating heat that is used directly in an industrial process or a greenhouse, generating electricity or generating electricity and heat, other than equipment used for the collection, storage or transportation of wood waste or plant residue, buildings or other structures and property otherwise included in Class 10 or 17,

• (7) Subparagraph (d)(xiii) of Class 43.1 in Schedule II to the Regulations is replaced by the following:

  • (xiii) property that is part of a system that is used by the taxpayer, or by a lessee of the taxpayer, primarily to produce and store biogas, which property includes equipment that is an anaerobic digester reactor, a buffer tank, a pre-treatment tank, biogas piping, a biogas storage tank and a biogas scrubbing equipment, but not including

    • (A) property (other than a buffer tank) that is used to collect, move or store organic waste,

    • (B) equipment used to process the residue after digestion or to treat recovered liquids,

    • (C) buildings or other structures, and

    • (D) property otherwise included in Class 10 or 17, or

• (8) Paragraph (d) of Class 43.1 in Schedule II to the Regulations is amended by deleting “or” at the end of subparagraph (xiii), by replacing “and” at the end of subparagraph (xiv) with “or” and by adding the following after subparagraph (xiv):

  • (xv) district energy equipment that

    • (A) is used by the taxpayer or by a lessee of the taxpayer,

    • (B) is part of a district energy system that uses thermal energy that is primarily supplied by equipment that is described in subparagraph (i) or (iv) or would be described in subparagraph (i) or (iv) if owned by the taxpayer, and

    • (C) is not a building, and

• (9) Subsections (1), (4) and (8) apply to property acquired after March 3, 2010.

• (10) Subsections (2), (3) and (5) to (7) apply to property acquired after February 25, 2008, except that in its application to property acquired before May 3, 2010,

  • (a) subclause (d)(i)(A)(II) of Class 43.1 in Schedule II to the Regulations, as enacted by subsection (2), shall be read as follows:

    • (II) equipment that is part of a ground source heat pump system that transfers heat to or from the ground or groundwater (but not to or from surface water such as a river, a lake or an ocean) and that, at the time of installation, meets the standards set by the Canadian Standards Association for the design and installation of earth energy systems, including such equipment that consists of underground piping, energy conversion equipment, energy storage equipment, control equipment and equipment designed to enable the system to interface with other heating or cooling equipment, and

  • (b) subparagraphs (d)(vii) and (viii) of Class 43.1 in Schedule II to the Regulations, as enacted by subsection (5), shall be read as follows:

    • (vii) above-ground equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electrical energy solely from geothermal energy, including such equipment that consists of pumps, heat exchangers, steam separators, electrical generating equipment and ancillary equipment used to collect the geothermal heat, but not including buildings, transmission equipment, distribution equipment, equipment designed to store electrical energy, property otherwise included in Class 10 and property that would be included in Class 17 if that Class were read without reference to its subparagraph (a.1)(i),

    • (viii) above-ground equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of collecting landfill gas or digester gas, including such equipment that consists of fans, compressors, storage tanks, heat exchangers and other ancillary equipment used to collect gas, to remove non-combustibles and contaminants from the gas or to store the gas, but not including property otherwise included in Class 10 or 17,

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

2002, c. 9, s. 5Air Travellers Security Charge Act

• 91. (1) The definition “fiscal month” in section 2 of the Air Travellers Security Charge Act is replaced by the following:

  “fiscal month”

  « mois d’exercice »

  “fiscal month” means a fiscal month as determined under subsection 16(1).

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

  “fiscal half-year”

  « semestre d’exercice »

  “fiscal half-year” means a fiscal half-year as determined under subsection 16(2).

  “fiscal year”

  « exercice »

  “fiscal year” of a designated air carrier means the same period that is the carrier’s fiscal year under Part IX of the Excise Tax Act.

  “reporting period”

  « période de déclaration »

  “reporting period” means a reporting period as determined under section 16.1.

92. The Act is amended by adding the following after section 5:

• 93. (1) The Act is amended by adding the following after section 15:

  Marginal note:No action for collection of charge

  15.1 No person, other than Her Majesty, may bring an action or proceeding against any person for acting in compliance or intended compliance with this Act by collecting an amount as or on account of the charge.

• (2) Subsection (1) applies to any action or proceeding that has not, on or before July 13, 2010, been finally determined by the tribunals or courts of competent jurisdiction.

94. The heading “Fiscal Month” before section 16 and section 16 of the Act are replaced by the following:

95. Subsection 17(2) of the Act is replaced by the following:

Marginal note:2007, c. 18, s. 146

96. Subsection 30(1) of the Act is replaced by the following:

97. Subsection 32(4) of the Act is replaced by the following:

98. Paragraph 33(3)(a) of the Act is replaced by the following:

99. Section 35 of the Act is replaced by the following:

100. Subsection 39(4) of the Act is replaced by the following:

Marginal note:2006, c. 4, s. 105

101. The portion of section 53 of the Act before paragraph (b) is replaced by the following:

Marginal note:2007, c. 18, s. 151

102. Subsection 55(1) of the Act is replaced by the following:

Marginal note:2004, c. 22, s. 45

103. Subparagraphs 72(2.2)(a)(i) and (ii) of the Act are replaced by the following:

104. Subsections 83(9) and (10) of the Act are replaced by the following:

R.S., E-14Excise Act

105. The Excise Act is amended by adding the following after section 36:

Marginal note:R.S., c. 12 (4th Supp.), s. 57

106. Section 37 of the Act is replaced by the following:

2002, c. 22Excise Act, 2001

107. Section 2 of the Excise Act, 2001 is amended by adding the following in alphabetical order:

108. Section 6 of the Act is amended by adding the following after subsection (2):

109. The heading “Fiscal Month” before section 159 of the Act is replaced by the following:

110. Section 159 of the Act is amended by adding the following after subsection (1):

111. The Act is amended by adding the following after section 159:

Marginal note:2007, c. 18, s. 107(1)

112. Section 160 of the Act is replaced by the following:

Marginal note:2006, c. 4, s. 115(1)

113. Subsection 170(4) of the Act is replaced by the following:

114. Paragraph 176(2)(a) of the Act is replaced by the following:

115. Section 178 of the Act is replaced by the following:

• 116. (1) Paragraph 188(1)(a) of the Act is replaced by the following:

  • (a) the duty payable by a person for a reporting period of the person; and

• Marginal note:2006, c. 4, s. 117(1)(F)

  (2) The portion of subsection 188(3) of the Act before subparagraph (a)(ii) is replaced by the following:

  • Marginal note:Allowance of unclaimed amounts

    (3) If, in assessing the duty, interest or other amount payable by a person for a reporting period of the person or other amount payable by a person under this Act, the Minister determines that

    • (a) a refund would have been payable to the person if it had been claimed in an application under this Act filed on the particular day that is

      • (i) if the assessment is in respect of duty payable for the reporting period, the day on which the return for the period was required to be filed, or

• Marginal note:2006, c. 4, s. 117(3)

  (3) The portion of subsection 188(4) of the Act before clause (b)(i)(C) is replaced by the following:

  • Marginal note:Application of overpayment

    (4) If, in assessing the duty payable by a person for a reporting period of the person, the Minister determines that there is an overpayment of duty payable for the period, unless the assessment is made in the circumstances described in paragraph 191(4)(a) or (b) after the time otherwise limited for the assessment under paragraph 191(1)(a), the Minister shall

    • (a) apply

      • (i) all or part of the overpayment

      against

      • (ii) any amount (in this paragraph referred to as the “outstanding amount”) that, on the particular day on which the person was required to file a return for the period, the person defaulted in paying under this Act and that remains unpaid on the day on which notice of the assessment is sent to the person,

      as if the person had, on the particular day, paid the amount so applied on account of the outstanding amount;

    • (b) apply

      • (i) all or part of the overpayment that was not applied under paragraph (a) together with interest on the overpayment at the prescribed rate, computed for the period beginning on the day that is 30 days after the latest of

        • (A) the particular day,

        • (B) the day on which the return for the reporting period was filed, and

• (4) Subparagraph 188(4)(c)(ii) of the Act is replaced by the following:

  • (ii) the day on which the return for the reporting period was filed, and

• Marginal note:2006, c. 4, s. 117(4)

  (5) The portion of subsection 188(5) of the Act before clause (a)(ii)(B) is replaced by the following:

  • Marginal note:Application of payment

    (5) If, in assessing the duty payable by a person for a reporting period of the person or an amount (in this subsection referred to as the “overdue amount”) payable by a person under this Act, all or part of a refund is not applied under subsection (3) against that duty payable or overdue amount, except if the assessment is made in the circumstances described in paragraph 191(4)(a) or (b) after the time otherwise limited for the assessment under paragraph 191(1)(a), the Minister shall

    • (a) apply

      • (i) all or part of the refund that was not applied under subsection (3)

      against

      • (ii) any other amount (in this paragraph referred to as the “outstanding amount”) that, on the particular day that is

        • (A) if the assessment is in respect of duty payable for the reporting period, the day on which the return for the period was required to be filed, or

• (6) Clause 188(5)(b)(i)(B) of the Act is replaced by the following:

  • (B) if the assessment is in respect of duty payable for the reporting period, the day on which the return for the period was filed,

• (7) Subparagraph 188(5)(c)(ii) of the Act is replaced by the following:

  • (ii) if the assessment is in respect of duty payable for the reporting period, the day on which the return for the period was filed,

• Marginal note:2007, c. 18, s. 111(1)

  (8) The portion of subsection 188(6) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Limitation on refunding overpayments

    (6) An overpayment of duty payable for a reporting period of a person and interest on the overpayment shall not be applied under paragraph (4)(b) or refunded under paragraph (4)(c) unless the person has, before the day on which notice of the assessment is sent to the person, filed all returns and other records of which the Minister has knowledge and that the person was required to file with

• (9) The portion of subsection 188(9) of the Act before subparagraph (a)(iii) is replaced by the following:

  • Marginal note:Refund on reassessment

    (9) If a person has paid an amount on account of any duty, interest or other amount assessed under this section in respect of a reporting period and the amount paid exceeds the amount determined on reassessment to have been payable by the person, the Minister may refund to the person the amount of the excess, together with interest on the excess amount at the prescribed rate for the period that

    • (a) begins on the day that is 30 days after the latest of

      • (i) the day on which the person was required to file a return for the reporting period,

      • (ii) the day on which the person filed a return for the reporting period, and

• (10) Subsection 188(10) of the Act is replaced by the following:

  • Meaning of “overpayment of duty payable”

    (10) In this section, “overpayment of duty payable” of a person for a reporting period of the person means the amount, if any, by which the total of all amounts paid by the person on account of duty payable for the period exceeds the total of

    • (a) the duty payable for the period, and

    • (b) all amounts paid to the person under this Act as a refund for the period.

• 117. (1) Paragraph 191(1)(a) of the Act is replaced by the following:

  • (a) in the case of an assessment of the duty payable for a reporting period, more than four years after the later of the day on which the return for the period was required to be filed and the day on which the return was filed;

• (2) Subsections 191(5) and (6) of the Act are replaced by the following:

  • Marginal note:No limitation if payment for another reporting period

    (5) If, in making an assessment, the Minister determines that a person has paid in respect of any matter an amount as or on account of duty payable for a reporting period of the person that was payable for another reporting period of the person, the Minister may at any time make an assessment for that other period in respect of that matter.

  • Marginal note:Reduction of duty — reporting period

    (6) If the result of a reassessment on an objection to, or a decision on an appeal from, an assessment is to reduce the amount of duty payable by a person and, by reason of the reduction, any refund or other payment claimed by the person for a reporting period, or in an application for a refund or other payment, should be decreased, the Minister may at any time assess or reassess that reporting period or that application only for the purpose of taking the reduction of duty into account in respect of the refund or other payment.

118. Subsection 193(2) of the Act is replaced by the following:

• 119. (1) Subparagraph 212(2)(a)(i) of the Act is replaced by the following:

  • (i) the trustee is liable for the payment of any duty, interest or other amount that became payable by the person after the particular day in respect of reporting periods that ended on or before the particular day, or of any duty, interest or other amount that became payable by the person after the particular day, only to the extent of the property of the person in possession of the trustee available to satisfy the liability,

• (2) Paragraphs 212(2)(c) to (e) of the Act are replaced by the following:

  • (c) the reporting period of the person begins and ends on the day on which it would have begun and ended if the bankruptcy had not occurred, except that

    • (i) the reporting period of the person during which the person becomes a bankrupt shall end on the particular day and a new reporting period of the person in relation to the activities of the person to which the bankruptcy relates shall begin on the day immediately after the particular day, and

    • (ii) the reporting period of the person, in relation to the activities of the person to which the bankruptcy relates, during which the trustee in bankruptcy is discharged under the Bankruptcy and Insolvency Act shall end on the day on which the discharge is granted;

  • (d) subject to paragraph (f), the trustee in bankruptcy shall file with the Minister in the prescribed form and manner all returns in respect of the activities of the person to which the bankruptcy relates for the reporting periods of the person ending in the period beginning on the day immediately after the particular day and ending on the day on which the discharge of the trustee is granted under the Bankruptcy and Insolvency Act and that are required under this Act to be filed by the person, as if those activities were the only activities of the person;

  • (e) subject to paragraph (f), if the person has not on or before the particular day filed a return required under this Act to be filed by the person for a reporting period of the person ending on or before the particular day, the trustee in bankruptcy shall, unless the Minister waives in writing the requirement for the trustee to file the return, file with the Minister in the prescribed form and manner a return for that reporting period of the person; and

• (3) Paragraphs 212(3)(c) to (e) of the Act are replaced by the following:

  • (c) the reporting period of the person begins and ends on the day on which it would have begun and ended if the vesting had not occurred, except that

    • (i) the reporting period of the person, in relation to the relevant assets of the receiver, during which the receiver begins to act as receiver of the person, shall end on the particular day and a new reporting period of the person in relation to the relevant assets shall begin on the day immediately after the particular day, and

    • (ii) the reporting period of the person, in relation to the relevant assets, during which the receiver ceases to act as receiver of the person, shall end on the day on which the receiver ceases to act as receiver of the person;

  • (d) the receiver shall file with the Minister in the prescribed form and manner all returns in respect of the relevant assets of the receiver for reporting periods ending in the period during which the receiver is acting as receiver and that are required under this Act to be made by the person, as if the relevant assets were the only businesses, properties, affairs and assets of the person; and

  • (e) if the person has not on or before the particular day filed a return required under this Act to be filed by the person for a reporting period of the person ending on or before the particular day, the receiver shall, unless the Minister waives in writing the requirement for the receiver to file the return, file with the Minister in the prescribed form and manner a return for that reporting period that relates to the businesses, properties, affairs or assets of the person that would have been the relevant assets of the receiver if the receiver had been acting as receiver of the person during that reporting period.

• (4) Paragraphs 212(4)(a) and (b) of the Act are replaced by the following:

  • (a) all duty, interest and other amounts that are payable by the other person under this Act in respect of the reporting period during which the distribution is made, or any previous reporting period; and

  • (b) all duty, interest and other amounts that are, or can reasonably be expected to become, payable under this Act by the representative or receiver in that capacity in respect of the reporting period during which the distribution is made, or any previous reporting period.

Marginal note:2006, c. 4, s. 119(1)

120. The portion of section 251.1 of the Act before paragraph (b) is replaced by the following:

121. The portion of section 253 of the Act before paragraph (a) is replaced by the following:

Marginal note:2007, c. 18, s. 126(1)

122. Section 255.1 of the Act is replaced by the following:

Marginal note:2004, c. 22, s. 47

123. Subparagraphs 284(2.2)(a)(i) and (ii) of the Act are replaced by the following:

124. Subparagraph 297(1)(e)(i) of the Act is replaced by the following:

125. Subsections 301(9) and (10) of the Act are replaced by the following:

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

126. Section 2 of the Excise Tax Act is amended by adding the following after subsection (2.2):

127. Subsection 58.1(1) of the Act is amended by adding the following in alphabetical order:

128. Section 78 of the Act is amended by adding the following after subsection (1):

129. The Act is amended by adding the following after section 78:

Marginal note:2003, c. 15, s. 130

130. Subsections 79(1) to (3) of the Act are replaced by the following:

Marginal note:2004, c. 22, s. 48

131. Subparagraphs 82(2.2)(a)(i) and (ii) of the Act are replaced by the following:

Marginal note:2006, c. 4, s. 135(1)

132. Section 95.1 of the Act before paragraph (b) is replaced by the following:

Marginal note:R.S., c. 7 (2nd Supp.), s. 50(1); 1999, c. 17, par. 155(c)

133. Subsection 104(1) of the Act is replaced by the following:

Marginal note:R.S., c. 7 (2nd Supp.), s. 50(1)

• 134. (1) Subsection 106.1(2) of the Act is replaced by the following:

  • Marginal note:Mailing or sending date

    (2) For the purposes of this Act, a notice referred to in subsection 72(6), 81.13(1), 81.15(5) or 81.17(5) that is sent to a person is, in the absence of any evidence to the contrary, deemed to have been sent on the day appearing from the notice to be the date thereof, unless called into question by the Minister or by some person acting for him or Her Majesty.

• (2) Section 106.1 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Date electronic notice sent

    (3.1) For the purposes of this Act, if a notice or other communication in respect of a person is made available in electronic format such that it can be read or perceived by a person or a computer system or other similar device, the notice or other communication is deemed to be sent to the person and received by the person on the date that an electronic message is sent, to the electronic address most recently provided before that date by the person to the Minister for the purposes of this subsection, informing the person that a notice or other communication requiring the person’s immediate attention is available in the person’s secure electronic account. A notice or other communication is considered to be made available if it is posted by the Minister in the person’s secure electronic account and the person has authorized that notices or other communications may be made available in this manner and has not before that date revoked that authorization in a manner specified by the Minister.

• 135. (1) The Act is amended by adding the following after section 224:

  Marginal note:No action for collection of tax

  224.1 No person, other than Her Majesty in right of Canada, may bring an action or proceeding against any person for acting in compliance or intended compliance with this Part by collecting an amount as or on account of tax.

• (2) Subsection (1) applies to any action or proceeding that has not, on or before July 13, 2010, been finally determined by the tribunals or courts of competent jurisdiction.

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

136. Subsection 274(6) of the Act is replaced by the following:

Marginal note:2006, c. 4, s. 32(1)

137. Subsection 274.2(4) of the Act is replaced by the following:

Marginal note:2004, c. 22, s. 49

138. Subparagraphs 313(2.2)(a)(i) and (ii) of the Act are replaced by the following:

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

139. Subsection 315(2) of the English version of the Act is replaced by the following:

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

140. Subsections 335(10) and (11) of the Act are replaced by the following:

C.R.C., c. 566Brewery Departmental Regulations

141. Section 7 of the Brewery Departmental Regulations is replaced by the following:

C.R.C., c. 565Brewery Regulations

142. Section 5 of the Brewery Regulations is replaced by the following:

SOR/2010-117New Harmonized Value-added Tax System Regulations

143. Subsection 37(4) of the New Harmonized Value-added Tax System Regulations is replaced by the following:

PART 3AMENDMENTS TO THE FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT IN RESPECT OF INCOME TAX

R.S., c. F-8Federal-Provincial Fiscal Arrangements Act

• 144. (1) The Federal-Provincial Fiscal Arrangements Act is amended by adding the following after section 12.01:

  PART IV.01TRANSFER PAYMENTS — TAX IN RESPECT OF STOCK OPTION BENEFIT DEFERRAL UNDER PART I.01 OF THE INCOME TAX ACT

  Marginal note:Transfer payments — Consolidated Revenue Fund

  12.02 Subject to this Act, the Minister may pay to a province, out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount equal to 1/3 of the tax payable under subparagraph 180.01(2)(c)(ii) of the Income Tax Act for a taxation year by a taxpayer who is resident in the province on the last day of that taxation year.

  Marginal note:Eligibility for payment

  12.03 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part I.01 of the Income Tax Act.

• (2) Part IV.01 of the Act, as enacted by subsection (1), is deemed to have come into force on on March 4, 2010.

• 145. (1) The Act is amended by adding the following after section 12.3:

  PART IV.2TRANSFER PAYMENTS — TAX ON PAYMENTS UNDER REGISTERED EDUCATION SAVINGS PLANS UNDER PART X.5 OF THE INCOME TAX ACT

  Marginal note:Transfer payments — Consolidated Revenue Fund

  12.4 Subject to this Act, the Minister may pay to a province, out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount equal to 40% of the tax payable under Part X.5 of the Income Tax Act for a taxation year by a person who is resident in the province on the last day of that taxation year.

  Marginal note:Eligibility for payment

  12.5 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part X.5 of the Income Tax Act.

• (2) Part IV.2 of the Act, as enacted by subsection (1), applies in respect of the 1998 and subsequent taxation years.

PART 4AMENDMENTS RELATING TO EXTERNAL COMPLAINTS BODIES

1991, c. 46Bank Act

146. Section 2 of the Bank Act is amended by adding the following in alphabetical order:

147. The Act is amended by adding the following after section 455:

• 148. (1) Section 455.1 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Effect of designation

    (1.1) If the Minister makes a designation under subsection (1), any approval given under subsection 455.01(1) is revoked.

  • Marginal note:Effect of revocation

    (1.2) If the Minister makes a designation under subsection (1), the body corporate designated under that subsection must deal with any complaint that was made to a body corporate approved under subsection 455.01(1) and that has not been resolved.

• (2) Section 455.1 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Regulations

    (3.1) The Governor in Council may make regulations respecting the requirements to be met by the body corporate designated under subsection (1).

Marginal note:2001, c. 9, s. 125

149. Paragraph 459.5(b) of the Act is replaced by the following:

Marginal note:2001, c. 9, s. 156

150. Section 573.1 of the Act is replaced by the following:

Marginal note:2001, c. 9, s. 183

151. Section 657 of the Act and the headings before it are replaced by the following:

Marginal note:2001, c. 9, s. 183

152. Subsection 658(1) of the Act is replaced by the following:

Marginal note:2001, c. 9, s. 183

• 153. (1) Subsection 659(1) of the French version of the Act is replaced by the following:

  Marginal note:Examen

  • 659. (1) Afin de s’assurer que la banque, la banque étrangère autorisée ou l’organisme externe de traitement des plaintes se conforme aux dispositions visant les consommateurs applicables, le commissaire, à l’occasion, mais au moins une fois par an, procède ou fait procéder à un examen et à une enquête dont il fait rapport au ministre.

• Marginal note:2001, c. 9, s. 183

  (2) Paragraph 659(2)(a) of the Act is replaced by the following:

  • (a) has a right of access to any records, including electronic records, of a bank, authorized foreign bank or external complaints body; and

• Marginal note:2001, c. 9, s. 183

  (3) Paragraph 659(2)(b) of the English version of the Act is replaced by the following:

  • (b) may require the directors or officers of a bank, authorized foreign bank or external complaints body to provide information and explanations, to the extent that they are reasonably able to do so, in respect of any matter subject to examination or inquiry under subsection (1).

Marginal note:2001, c. 9, s. 183

154. Section 661 of the Act is replaced by the following:

Marginal note:2001, c. 9, s. 183

155. Section 974 of the Act is replaced by the following:

2001, c. 9Financial Consumer Agency of Canada Act

156. Section 2 of the Financial Consumer Agency of Canada Act is amended by adding the following in alphabetical order:

Marginal note:2010, c. 12, s. 1851(1)

• 157. (1) Paragraphs 3(2)(a) and (b) of the Act are replaced by the following:

  • (a) supervise financial institutions and external complaints bodies to determine whether the institution or body is in compliance with

    • (i) the consumer provisions applicable to them, and

    • (ii) the terms and conditions or undertakings with respect to the protection of customers of financial institutions that the Minister imposes or requires, as the case may be, under an Act listed in Schedule 1 and the directions that the Minister imposes under this Act;

  • (b) promote the adoption by financial institutions and external complaints bodies of policies and procedures designed to implement the provisions, terms and conditions, undertakings or directions referred to in paragraph (a);

  • (b.1) promote the adoption by financial institutions of policies and procedures designed to implement

    • (i) voluntary codes of conduct that are designed to protect the interests of their customers, that are adopted by financial institutions and that are publicly available, and

    • (ii) any public commitments made by them that are designed to protect the interests of their customers;

• Marginal note:2010, c. 12, s. 1851(2)

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

  • (d) promote consumer awareness about the obligations of financial institutions and of external complaints bodies under consumer provisions applicable to them and about all matters connected with the protection of consumers of financial products and services; and

158. Section 14 of the Act is replaced by the following:

159. Subsection 16(1) of the Act is replaced by the following:

Marginal note:2010, c. 12, s. 1854

160. Subsection 17(1) of the Act is replaced by the following:

Marginal note:2010, c. 12, s. 1842(1)

• 161. (1) Subsection 18(1) of the Act is replaced by the following:

  Marginal note:Commissioner to ascertain expenses

  • 18. (1) The Commissioner shall, before December 31 in each year, ascertain the total amount of expenses incurred during the immediately preceding fiscal year for or in connection with the administration of this Act and the consumer provisions — excluding the expenses incurred in connection with the objects described in subsection 3(3) — and the amounts of any prescribed categories of those expenses in relation to any prescribed group of financial institutions and external complaints bodies.

• Marginal note:2010, c. 12, s. 1855

  (2) Subsection 18(3) of the Act is replaced by the following:

  • Marginal note:Assessment

    (3) As soon as possible after ascertaining the amounts under subsections (1) and (1.1), the Commissioner shall assess a portion of the total amount of expenses against each financial institution and external complaints body to the extent and in the manner that the Governor in Council may, by regulation, prescribe.

• (3) Subsections 18(4) and (5) of the Act are replaced by the following:

  • Marginal note:Interim assessment

    (4) The Commissioner may, during each fiscal year, prepare an interim assessment against any financial institution or external complaints body.

  • Marginal note:Assessment is binding

    (5) Every assessment and interim assessment is final and conclusive and binding on the financial institution or external complaints body against which it is made.

Marginal note:2010, c. 12, s. 1848

162. The portion of section 34 of the Act before paragraph (b) is replaced by the following:

Coordinating Amendments

Marginal note:2009, c. 23

163. On the first day on which both section 306 of the Canada Not-for-profit Corporations Act and section 146 of this Act are in force, subsection 455.01(1) of the Bank Act is replaced by the following:

Marginal note:2010, c. 12

• 164. (1) In this section, “other Act” means the Jobs and Economic Growth Act.

• (2) If section 2116 of the other Act comes into force before section 158 of this Act, then that section 158 is replaced by the following:

  158. Subsection 14(1) of the Act is replaced by the following:

  Marginal note:Ownership

  • 14. (1) No Commissioner, person appointed under subsection 4(4) or Deputy Commissioner shall beneficially own, directly or indirectly, any shares of any financial institution, bank holding company, insurance holding company, external complaints body or of any other body corporate, however created, carrying on any business in Canada that is substantially similar to any business carried on by any financial institution or external complaints body.

• (3) If section 2116 of the other Act and section 158 of this Act come into force on the same day, then that section 158 is deemed to have come into force before that section 2116.

Coming into Force

Marginal note:Order in council

165. This Part, other than sections 163 and 164, comes into force on a day to be fixed by order of the Governor in Council.

PART 52007, c. 35, s. 136CANADA DISABILITY SAVINGS ACT

Amendments to the Act

Marginal note:2010, c. 12, s. 26(3)

166. Paragraph 2(2)(b) of the Canada Disability Savings Act is replaced by the following:

• 167. (1) Section 6 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Deemed year of contribution

    (2.1) For the purposes of subsection (2), a contribution allocated to a year under subsection (2.2) is deemed to have been made in that year.

  • Marginal note:Allocation of contribution

    (2.2) The Minister may allocate a contribution made to the beneficiary’s registered disability savings plan in a year after 2010, in parts — to the year in which it is actually made and to each of the previous 10 years that is after 2007 — in the following order:

    • (a) up to $500 to each year in which the beneficiary is one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question;

    • (b) up to $1500 to each year in which the beneficiary is one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question including those so allocated under paragraph (a); and

    • (c) up to $1000 to each year in which the beneficiary is not one referred to in paragraph (2)(a), beginning with the earliest year, less any contributions allocated to the year in question.

  • Marginal note:Residency and DTC-eligibility

    (2.3) No contribution made to the plan in a year may be allocated to a previous year unless, during that previous year, the beneficiary was resident in Canada and a DTC-eligible individual.

  • Marginal note:Limit

    (2.4) The Minister may allocate only the portion of contributions made to the plan in a year in respect of which, in accordance with subsection (2), a Canada Disability Savings Grant of up to $10,500 may be paid into the plan in that year.

  • Marginal note:Contributions made before 2011

    (2.5) For the purposes of determining the contributions allocated to the year in question under any of paragraphs (2.2)(a) to (c), contributions made to the plan in 2008, 2009 or 2010 are considered to have been allocated to the year in which they were actually made.

• (2) Section 6 of the Act is amended by adding the following after subsection (7):

  • Marginal note:Annual cap

    (8) Not more than $10,500 in Canada Disability Savings Grants may be paid in respect of a beneficiary in a year.

  • Marginal note:Annual statement to plan holders

    (9) Once a year, the Minister shall cause each holder of a registered disability savings plan to be provided with a statement that sets out the amount of Canada Disability Savings Grants that may be paid for particular years on the basis of future contributions.

168. Subsection 7(1) of the Act is replaced by the following:

Transitional Provisions

Marginal note:Canada Disability Savings Grant for 2008

169. For the purposes of calculating the amount of a Canada Disability Savings Grant that may be paid for 2008 under section 6 of the Canada Disability Savings Act, subparagraphs 6(2)(a)(i) and (ii) and subsection 6(6) of that Act are to be read as they did on December 31, 2008.

Marginal note:Canada Disability Savings Bond for 2008

170. For the purposes of calculating the amount of a Canada Disability Savings Bond that may be paid for 2008 under section 7 of the Canada Disability Savings Act, subparagraphs 7(2)(a)(i) and (ii) and (b)(i) and (ii), the descriptions of B and C in subsection 7(4) and subsection 7(8) of that Act are to be read as they did on December 31, 2008.

Coming into Force

Marginal note:January 1, 2011

171. This Part comes into force, or is deemed to have come into force, on January 1, 2011.

PART 6R.S. c. 1 (2nd Supp.)CUSTOMS ACT

172. Section 11.1 of the Customs Act is amended by adding the following after subsection (3):

PART 7R.S., c. F-8; 1995, c.17, s. 45(1)FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

Marginal note:R.S., c. 11 (3rd Supp.), ss. 5(1), (4) and (6)(F); 1995, c. 17, ss. 47(1) and (2); 1999, c. 11, s. 3(3), c. 31, s. 235; 2005, c. 7, ss. 2(1) to (6)

• 173. (1) Subsections 6(1) to (6) of the Federal-Provincial Fiscal Arrangements Act are replaced by the following:

  Marginal note:Computation of payments

  • 6. (1) Subject to subsections (8) to (10), the fiscal stabilization payment that may be paid to a province for a fiscal year is the amount determined by the formula

    (0.95 × A) – B + (C × D) – (E × F)

    where

    A

    is the non-natural resource revenue of the province for the preceding fiscal year;

    B

    is the non-natural resource revenue of the province for the fiscal year;

    C

    is equal to

    • (a) 95%, if the natural resource revenue of the province for the fiscal year is greater than the natural resource revenue of the province for the preceding fiscal year,

    • (b) 50%, if the natural resource revenue of the province for the fiscal year is less than one half of the natural resource revenue of the province for the preceding fiscal year, or

    • (c) zero, in any other case;

    D

    is the natural resource revenue of the province for the preceding fiscal year;

    E

    is equal to

    • (a) one, if the natural resource revenue of the province for the fiscal year is either greater than the natural resource revenue of the province for the preceding fiscal year or less than one half of the natural resource revenue of the province for the preceding fiscal year, or

    • (b) zero, in any other case; and

    F

    is the natural resource revenue of the province for the fiscal year.

  • Marginal note:Adjustment

    (2) For the purposes of determining the amount under subsection (1), the Minister may adjust, in the prescribed manner, the natural resource revenue and the non-natural resource revenue of a province for the fiscal year to offset the amount, as determined by the Minister, of any change in either of those revenues for the fiscal year resulting from changes made by the province in the rates or structure of provincial taxes or of other means of raising the revenue of the province from the rates or structures in effect in the preceding fiscal year.

  • Marginal note:Interpretation

    (2.1) If a province has entered into a tax collection agreement respecting personal income tax or corporation income tax, a change to the Income Tax Act affecting the province’s Common Tax Base as defined in Chapter 2 or 3, as the case may be, of the tax collection agreement is deemed to be a change in the rates or in the structures of provincial taxes for the purposes of subsection (2).

  • Marginal note:Natural resource revenue

    (3) For the purposes of determining the amount under subsection (1), the natural resource revenue of a province for a fiscal year is the aggregate of the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (l) to (w) of the definition “revenue source” in subsection 3.9(1) and from the revenue sources described in paragraph (z.5) of that definition that relate to natural resources.

  • Marginal note:Non-natural resource revenue

    (4) For the purposes of determining the amount under subsection (1), the non-natural resource revenue of a province for a fiscal year is equal to

    • (a) the aggregate of

      • (i) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraphs (a) to (k), (x), (y) and (z.1) to (z.3) of the definition “revenue source” in subsection 3.9(1),

      • (ii) the total revenue, as determined by the Minister, derived by the province for the fiscal year from the revenue sources described in paragraph (z.5) of that definition that do not relate to natural resources,

      • (iii) the fiscal equalization payment made to the province for the fiscal year under Part I, and

      • (iv) the additional cash payment made to the province for the fiscal year under section 24.703,

      minus

    • (b) despite subsection (5), the aggregate of

      • (i) the total equalized tax transfer applicable to the province as if, for that fiscal year, the transfer were determined in the manner described in subsection 24.7(1.22), and

      • (ii) the value of the additional tax abatement units as determined in accordance with subsection 27(2).

  • Marginal note:Non-natural resource revenue

    (5) For the purposes of determining the non-natural resource revenue of a province for a fiscal year,

    • (a) subsection 3.9(2) applies, with any modifications that the circumstances require, in determining the revenue derived by the province for the fiscal year from personal income taxes, described in paragraph (a) of the definition “revenue source” in subsection 3.9(1), except that no deduction may be made in respect of the tax abatement units referred to in subsection 27(2);

    • (b) the province’s revenue for the fiscal year derived from personal income taxes, described in paragraph (a) of the definition “revenue source” in subsection 3.9(1), is deemed to be

      • (i) the total amount, determined in the prescribed manner, of the provincial personal income taxes assessed or reassessed, not later than 24 months after the end of the fiscal year, in respect of the taxation year ending in the fiscal year,

      minus

      • (ii) the total amount, determined in the prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial personal income taxes for that taxation year that have been deducted from those assessed or reassessed provincial personal income taxes; and

    • (c) the province’s revenue for the fiscal year derived from that part of the revenue source described in paragraph (b) of the definition “revenue source” in subsection 3.9(1) that consists of corporation income taxes is deemed to be

      • (i) the total amount, determined in the prescribed manner, of the provincial corporation income taxes assessed or reassessed, not later than 24 months after the end of the fiscal year, in respect of the taxation year of corporations ending in the calendar year that ends in the fiscal year,

      minus

      • (ii) the total amount, determined in the prescribed manner, of the tax credits and rebates claimed by taxpayers in the province against provincial corporation income taxes for that taxation year that have been deducted from those assessed or reassessed provincial corporation income taxes.

  • Marginal note:Fiscal year 2011–2012

    (6) Despite subsection (4), for the purposes of determining the amount under subsection (1) for the fiscal year that begins on April 1, 2011, the payment under section 3.12 and the additional cash payment under section 24.703 are not included in the province’s non-natural resource revenue.

• Marginal note:2005, c. 7, s. 2(7)

  (2) Subsection 6(11) of the Act is repealed.

PART 8R.S., c. 18, Part I (3rd Supp.)OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS ACT

Amendments to the Act

174. The heading before section 23 of the Office of the Superintendent of Financial Institutions Act is replaced by the following:

Marginal note:1997, c. 15, s. 339

• 175. (1) Subsection 23(2) of the Act is replaced by the following:

  • Marginal note:Expenses — pension plans

    (1.1) In every fiscal year, the Superintendent shall

    • (a) estimate the total amount of expenses to be incurred by the Office during the following fiscal year for or in connection with the administration of the Pension Benefits Standards Act, 1985; and

    • (b) ascertain the total amount of expenses incurred by the Office during the preceding fiscal year for or in connection with the administration of the Pension Benefits Standards Act, 1985.

  • Marginal note:Amount conclusive

    (2) Any amount ascertained or estimated by the Superintendent under subsection (1) or (1.1), as the case may be, is final and conclusive for the purposes of this section.

• (2) Section 23 of the Act is amended by adding the following after subsection (4):

  • Marginal note:Assessment — pension plans

    (5) In every fiscal year, the Superintendent shall assess, in the prescribed manner, an amount against the administrator of a pension plan. The amount is to be determined as prescribed.

  • Marginal note:Determination of amount assessed

    (6) The determination of the amount referred to in subsection (5) shall take into account the amounts referred to in subsection (1.1).

Marginal note:2001, c. 9, s. 476

176. The portion of subsection 24(1) of the Act before the definition “entity” is replaced by the following:

177. The Act is amended by adding the following after section 37:

Coming into Force

Marginal note:Order in council

178. Sections 174 and 175 come into force on a day to be fixed by order of the Governor in Council.

PART 9R.S., c. 32 (2nd Supp.)PENSION BENEFITS STANDARDS ACT, 1985

Amendments to the Act

• 179. (1) The definition “designated province” in subsection 2(1) of the Pension Benefits Standards Act, 1985 is replaced by the following:

  “designated province”

  « province désignée »

  “designated province” means a province prescribed as a province in which there is in force pension legislation applicable to private superannuation plans;

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

  “electronic document”

  « document électronique »

  “electronic document” means any form of representation of information or of concepts fixed in any medium by electronic, optical or other similar means that can be read or perceived by a person or by any means;

  “information system”

  « système d’information »

  “information system” means a system used to generate, send, receive, store or otherwise process an electronic document;

  “multilateral agreement”

  « accord multilatéral »

  “multilateral agreement” means an agreement entered into under subsection 6.1(1);

  “negotiated contribution plan”

  « régime à cotisations négociées »

  “negotiated contribution plan” means a multi-employer pension plan that includes at least one defined benefit provision and under which a participating employer’s contributions are limited to an amount determined in accordance with an agreement entered into by the participating employers or a collective agreement, statute or regulation, and which amount does not vary as a function of the prescribed tests and standards for solvency referred to in subsection 9(1);

• (3) Section 2 of the Act is amended by adding the following after subsection (4):

  • Marginal note:Negotiated contribution plan

    (5) Even though a pension plan — established as a negotiated contribution plan — is no longer a negotiated contribution plan because it has only one participating employer or more than 95% of its members are employed by participating employers who are incorporated and are affiliates within the meaning of the Canada Business Corporations Act, that pension plan is deemed to be a negotiated contribution plan for a period of one year after the day it is no longer a negotiated contribution plan, or for any longer period that may be specified by the Superintendent.

180. Subsection 5(2) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and’’ at the end of paragraph (c) and by adding the following after paragraph (c):

Marginal note:1998, c. 12, s. 4

181. Section 6 of the Act and the heading before it are replaced by the following:

Marginal note:1998, c. 12, s. 5

182. Subsection 7.4(3) of the Act is replaced by the following:

183. Section 8 of the Act is amended by adding the following after subsection (4.1):

Marginal note:1998, c. 12, s. 9

184. Section 9.1 of the Act is replaced by the following:

Marginal note:1998, c. 12, s. 9; 2001, c. 34, s. 67(1)(F)

• 185. (1) Subsection 9.2(4) of the Act is replaced by the following:

  • Marginal note:Submission to arbitration

    (4) Subject to subsection (5), if more than one half but fewer than two thirds of the persons in each of the categories referred to in subsection (3) consented to the proposal, the employer may, or if the whole of the pension plan is terminated shall, submit the proposal to arbitration. The employer shall notify the Superintendent, in the form and manner, if any, that the Superintendent directs, and the persons in those categories if the proposal is to be submitted to arbitration.

• Marginal note:2010, c. 12, s. 1796

  (2) The portion of subsection 9.2(5) of the Act after paragraph (b) is replaced by the following:

  The employer shall notify the Superintendent, in the form and manner, if any, that the Superintendent directs, and the persons in the categories referred to in subsection (3) that the claim is to be submitted to arbitration.

Marginal note:1998, c. 12, s. 10

• 186. (1) The portion of subsection 10(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Duty of administrator to file documents

  • 10. (1) The administrator of a pension plan shall file with the Superintendent, within 60 days after the plan is established and in the form and manner, if any, that the Superintendent directs,

• Marginal note:1998, c. 12, s. 10

  (2) Paragraph 10(1)(c) of the Act is replaced by the following:

  • (c) a declaration signed by the administrator that the plan complies with this Act and the regulations.

Marginal note:1998, c. 12, s. 10

187. Subsection 10.1(1) of the Act is replaced by the following:

Marginal note:2010, c. 12, s. 1798

188. Section 10.11 of the Act is replaced by the following:

189. The Act is amended by adding the following after section 10.2:

Marginal note:2010, c. 12, s. 1801(1)

• 190. (1) Subsection 12(1) of the Act is replaced by the following:

  Marginal note:Annual reporting requirements

  • 12. (1) The administrator of a pension plan shall file with the Superintendent — annually or at any other intervals or times that the Superintendent directs — an information return relating to that pension plan, containing the prescribed information.

• Marginal note:2010, c. 12, s. 1801(2)(F)

  (2) Subsection 12(4) of the Act is replaced by the following:

  • Marginal note:Form and manner of filings and time limit

    (4) Every document required to be filed under this section shall be filed in the form and manner, if any, that the Superintendent directs, and unless otherwise directed by the Superintendent, within six months after the end of the plan year to which the document relates.

Marginal note:2000, c. 12, s. 256; 2001, c. 34, s. 69(3)(F)

191. Paragraph 18(2)(c) of the Act is replaced by the following:

• 192. (1) Section 26 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Consent

    (2.1) The transfer of pension benefit credit, referred to in paragraph (2)(b), may be made by a member only if the member’s spouse or common-law partner notifies the administrator, in the prescribed form, of their consent to the transfer.

• Marginal note:2000, c. 12, par. 264(d)

  (2) Paragraph 26(3)(a) of the Act is repealed.

193. Subparagraph 28(1)(a)(i) of the Act is replaced by the following:

Marginal note:1998, c. 12, s. 18(1)(E)

• 194. (1) Subsection 29(4) of the Act is replaced by the following:

  • Marginal note:Adoption of new plan

    (4) If employer contributions to a negotiated contribution plan are suspended or cease as a result of the adoption of a new defined benefit plan, the original plan is deemed not to have been terminated, and the pension benefits and other benefits provided under the original plan are deemed to be benefits provided under the new plan in respect of any period of membership before the adoption of the new plan, whether or not the assets and liabilities of the original plan have been consolidated with those of the new plan.

• Marginal note:2010, c. 12, s. 1816(3)

  (2) Subsection 29(4.2) of the Act is replaced by the following:

  • Marginal note:Termination by administrator or employer

    (4.2) Subject to subsections (1), (2) and (2.1), the whole of a pension plan is terminated only if the administrator or employer notifies the Superintendent, in writing or in the form and manner, if any, that the Superintendent directs, of their decision to terminate the pension plan and the date of the termination.

• Marginal note:2010, c. 12, s. 1816(3)

  (3) Subsection 29(5) of the Act is replaced by the following:

  • Marginal note:Notice of voluntary termination or winding-up

    (5) An administrator or employer who terminates or winds up a pension plan shall notify the Superintendent, in writing or in the form and manner, if any, that the Superintendent directs, not less than 60 and not more than 180 days before the date of the termination or winding-up.

• (4) Subsection 29(9) of the Act is replaced by the following:

  • Marginal note:Report to Superintendent

    (9) On the termination of a pension plan or part of a plan, the administrator of the plan shall file with the Superintendent, in the form and manner, if any, that the Superintendent directs, a report, prepared by a person having the prescribed qualifications, setting out the nature of the pension benefits and other benefits to be provided under the plan and a description of the methods of allocating and distributing those benefits and deciding the priorities in respect of the payment of full or partial benefits to the members.

195. The Act is amended by adding the following after section 31:

Marginal note:2001, c. 34, s. 76

• 196. (1) Paragraph 39(c) of the Act is replaced by the following:

  • (b.1) respecting the implementation of a multilateral agreement;

  • (b.2) exempting a multilateral agreement or any provision of that agreement from the application of subsection 6.2(1);

  • (b.3) respecting transitional matters in the event that the Government of Canada ceases to be a party to a multilateral agreement;

  • (c) prescribing the conditions under which, on the cessation of a member’s membership in a pension plan or on the termination or winding-up of a pension plan, pension benefit credits may be held in trust by the administrator of the plan, or transferred to the administrator of another pension plan or to a registered retirement savings plan of the prescribed kind;

  • (c.1) respecting the transfer of pension benefit credit of any person who cannot be located, as well as the assets relating to that credit to the entity designated under section 10.3, including the circumstances and conditions under which that credit and those assets may be transferred to that entity;

  • (c.2) respecting the entity designated under section 10.3;

  • (c.3) respecting the holding of pension benefit credit of any person who cannot be located, as well as the assets relating to that credit by the entity designated under section 10.3, the making of claims for that credit and the disbursement of that credit;

  • (c.4) respecting the transfer to Her Majesty in right of Canada of assets held by the entity designated under section 10.3;

• (2) Section 39 of the Act is amended by adding the following after paragraph (i.1):

  • (i.2) respecting the establishment of a separate pension plan under section 10.4, the determination of assets to be transferred to that plan and the transfer of assets and liabilities to that plan;

• (3) Section 39 of the Act is amended by adding the following before paragraph (o):

  • (n.2) respecting the process by which investment options are offered by an administrator and choices among those options are made;

  • (n.3) respecting investment options offered by an administrator;

  • (n.4) prescribing any measure necessary for the purposes of sections 31.1 and 31.2, including the time when and circumstances under which an electronic document is to be considered to have been provided or received and the place where it is considered to have been provided or received;

  • (n.5) setting out the requirements under this Act to which subsections 31.1(1) and (2) do not apply;

  • (n.6) authorizing the Superintendent to specify the form of any information — including information in a document — required to be provided to him or her under the regulations, as well as the manner of providing that information;

  • (n.7) respecting the composition of a board of trustees or other similar body referred to in paragraph 7(1)(a);

Transitional Provision

Marginal note:Adoption of new plan

197. If, as a result of the adoption of a new plan, employer contributions to a pension plan are suspended or cease before the day on which subsection 29(4) of the Pension Benefits Standards Act, 1985, as enacted by subsection 194(1), comes into force, the original plan is deemed not to have been terminated, and the pension benefits and other benefits provided under the original plan are deemed to be benefits provided under the new plan in respect of any period of membership before the adoption of the new plan, regardless of whether the assets and liabilities of the original plan have been consolidated with those of the new plan.

Coordinating Amendments

Marginal note:2010, c. 12

• 198. (1) In this section, “other Act” means the Jobs and Economic Growth Act.

• (2) On the first day on which both section 1804 of the other Act and this section are in force, the Pension Benefits Standards Act, 1985 is amended by adding the following before the heading before section 17:

  Marginal note:Cessation

  16.5 Before a pension plan ceases to provide for the payment of a variable benefit referred to in subsection 16.2(1), an administrator must offer a former member or survivor who receives that variable benefit the options referred to in subsection 16.4(1).

• (3) If subsection 194(1) of this Act comes into force before subsection 1816(2) of the other Act, then subsection 1816(2) and section 1826 of the other Act are repealed.

• (4) If subsection 1816(2) of the other Act comes into force before subsection 194(1) of this Act, then section 197 of this Act is replaced by the following:

  Marginal note:Adoption of new plan

  197. If, as a result of the adoption of a new defined benefit plan, employer contributions to a multi-employer pension plan that is a defined benefit plan are suspended or cease before the day on which subsection 29(4) of the Pension Benefits Standards Act, 1985, as enacted by subsection 194(1), comes into force, the original plan is deemed not to have been terminated, and the pension benefits and other benefits provided under the original plan are deemed to be benefits provided under the new plan in respect of any period of membership before the adoption of the new plan, regardless of whether the assets and liabilities of the original plan have been consolidated with those of the new plan.

• (5) If subsection 194(1) of this Act and subsection 1816(2) of the other Act come into force on the same day, then that subsection 194(1) is deemed to have come into force before that subsection 1816(2) and subsection (3) applies as a consequence.

• (6) On the first day on which both subsection 1816(5) of the other Act and this section are in force, the Pension Benefits Standards Act, 1985 is amended by replacing subsection 29(6.1) with the following:

  • Marginal note:Payment by employer of pension benefits

    (6.1) If the whole of a pension plan that is not a negotiated contribution plan is terminated, the employer shall pay into the pension fund, in accordance with the regulations, the amount — calculated periodically in accordance with the regulations — that is required to ensure that any obligation of the plan with respect to pension benefits, as they are determined on the date of the termination, is satisfied.

• (7) On the first day on which both subsection 1816(7) of the other Act and subsection 194(4) of this Act are in force, the Pension Benefits Standards Act, 1985 is amended by replacing subsection 29(9) with the following:

  • Marginal note:Actuarial termination report

    (9) On the termination of the whole or part of a pension plan, the administrator of the plan shall file with the Superintendent, in the form and manner, if any, that the Superintendent directs, a termination report prepared by a person having the prescribed qualifications, setting out the nature of the pension benefits and other benefits to be provided under the plan and a description of the methods of allocating and distributing those benefits and deciding the priorities in respect of the payment of full or partial benefits to the members. The report must also give the amount referred to in subsection (6.1) — calculated as at the date of termination — and contain any prescribed information.

• (8) If subsection 1820(12) of the other Act comes into force before this section, then the references to “39(c)” and “Section 39” in section 196 of this Act are replaced by “39(1)(c)” and “Subsection 39(1)”, respectively.

• (9) If subsection 1820(12) of the other Act comes into force after this section comes into force but before subsection 196(3) of this Act comes into force, then, on the coming into force of that subsection 1820(12), that subsection 196(3) is amended by replacing “Section 39” with “Subsection 39(1)”.

Coming into Force

Marginal note:Order in council

199. Subsection 179(1), section 183, subsection 192(1), section 195 and subsection 196(3) come into force on a day or days to be fixed by order of the Governor in Council.