Economic Action Plan 2013 Act, No. 1 (S.C. 2013, c. 33)
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Assented to 2013-06-26
Economic Action Plan 2013 Act, No. 1
S.C. 2013, c. 33
Assented to 2013-06-26
An Act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures
SUMMARY
Part 1 implements certain income tax measures proposed in the March 21, 2013 budget. Most notably, it
(a) allows certain adoption-related expenses incurred before a child’s adoption file is opened to be eligible for the Adoption Expense Tax Credit;
(b) introduces an additional credit for first-time claimants of the Charitable Donations Tax Credit;
(c) makes expenses for the use of safety deposit boxes non-deductible;
(d) adjusts the Dividend Tax Credit and gross-up factor applicable in respect of dividends other than eligible dividends;
(e) allows collection action for 50% of taxes, interest and penalties in dispute in respect of a tax shelter that involves a charitable donation;
(f) extends, for one year, the Mineral Exploration Tax Credit for flow-through share investors;
(g) extends, for two years, the temporary accelerated capital cost allowance for eligible manufacturing and processing machinery and equipment;
(h) clarifies that the income tax reserve for future services is not available in respect of reclamation obligations;
(i) phases out the additional deduction available to credit unions over five years;
(j) amends rules regarding the judicial authorization process for imposing a requirement on a third party to provide information or documents related to an unnamed person or persons; and
(k) repeals the rules relating to international banking centres.
Part 1 also implements other income tax measures and tax-related measures. Most notably, it
(a) amends rules relating to caseload management of the Tax Court of Canada;
(b) streamlines the process for approving tax relief for Canadian Forces members and police officers;
(c) addresses a technical issue in relation to the temporary measure that allows certain family members to open a Registered Disability Savings Plan for an adult individual who might not be able to enter into a contract; and
(d) simplifies the determination of the Canadian-source income of non-resident pilots employed by Canadian airlines.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) reducing the compliance burden for employers under the GST/HST pension plan rules;
(b) providing the Minister of National Revenue the authority to withhold GST/HST refunds claimed by a business where the business has failed to provide certain GST/HST registration information;
(c) expanding the GST/HST exemption for publicly funded homemaker services to include personal care services provided to individuals who require such assistance at home;
(d) clarifying that reports, examinations and other services that are supplied for a non-health-care-related purpose do not qualify for the GST/HST exemption for basic health care services; and
(e) ending the current GST/HST point-of-sale relief for the Governor General.
Part 2 also amends the Excise Tax Act and Excise Act, 2001 to modify the rules regarding the judicial authorization process for imposing a requirement on a third party to provide information or documents related to an unnamed person or persons.
In addition, Part 2 amends the Excise Act, 2001 to ensure that the excise duty rate applicable to manufactured tobacco other than cigarettes and tobacco sticks is consistent with that applicable to other tobacco products.
Part 3 implements various measures, including by enacting and amending several Acts.
Division 1 of Part 3 amends the Customs Tariff to extend for ten years, until December 31, 2024, provisions relating to Canada’s preferential tariff treatments for developing and least-developed countries. Also, Division 1 reduces the rate of duty under tariff treatments in respect of a number of items relating to baby clothing and certain sports and athletic equipment imported into Canada on or after April 1, 2013.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to remove some residency requirements to provide flexibility for financial institutions to efficiently structure the committees of their boards of directors.
Division 3 of Part 3 amends the Federal-Provincial Fiscal Arrangements Act to renew the equalization and territorial formula financing programs until March 31, 2019 and to implement total transfer protection for the 2013-2014 fiscal year. That Act is also amended to clarify the time of calculation of the growth rate of the Canada Health Transfer for each fiscal year beginning after March 31, 2017.
Division 4 of Part 3 authorizes payments to be made out of the Consolidated Revenue Fund to certain entities or for certain purposes.
Division 5 of Part 3 amends the Canadian Securities Regulation Regime Transition Office Act to remove the statutory dissolution date of the Canadian Securities Regulation Regime Transition Office and to provide authority for the Governor in Council, on the Minister of Finance’s recommendation, to set another date for the dissolution of that Office.
Division 6 of Part 3 amends the Investment Canada Act to clarify how proposed investments in Canada by foreign state-owned enterprises and WTO investors will be assessed and to allow for the extension, when necessary, of timelines associated with national security reviews.
Division 7 of Part 3 amends the Canada Pension Plan to ensure that the Canada Revenue Agency can accurately identify, calculate and refund overpayments made to the Canada Pension Plan and the Quebec Pension Plan in a particular year by contributors who live outside Quebec.
Division 8 of Part 3 amends the Pension Act and the War Veterans Allowance Act to ensure that veterans’ disability benefits are no longer deducted when calculating war veterans allowance.
Division 9 of Part 3 amends the Immigration and Refugee Protection Act to authorize the revocation of temporary foreign worker permits, the revocation and suspension of opinions provided by the Department of Human Resources and Skills Development with respect to an application for a work permit and the refusal to process requests for such opinions. It authorizes fees to be paid for rights and privileges conferred by means of a work permit and exempts, from the application of the User Fees Act, those fees as well as fees for the provision of services in relation to the processing of applications for a temporary resident visa, work permit, study permit or extension of an authorization to remain in Canada as a temporary resident or in relation to requests for an opinion with respect to an application for a work permit.
It also provides that decisions made by the Refugee Protection Division under the Immigration and Refugee Protection Act in respect of claims for refugee protection that were referred to that Division during a specified period are not subject to appeal to the Refugee Appeal Division if they take effect after a certain date.
Division 10 of Part 3 amends the Citizenship Act to expand the Governor in Council’s authority to make regulations respecting fees for services provided in the administration of that Act and cases in which those fees may be waived. It also exempts, from the application of the User Fees Act, fees for services provided in the administration of the Citizenship Act.
Division 11 of Part 3 amends the Nuclear Safety and Control Act to authorize the Canadian Nuclear Safety Commission to spend for its purposes the revenue it receives from the fees it charges for licences.
Division 12 of Part 3 enacts the Department of Foreign Affairs, Trade and Development Act, sets out the powers, duties and functions of the Minister of Foreign Affairs, the Minister for International Trade and the Minister for International Development and provides for the amalgamation of the Department of Foreign Affairs and International Trade and the Canadian International Development Agency.
Division 13 of Part 3 authorizes the taking of measures with respect to the reorganization and divestiture of all or any part of Ridley Terminals Inc.
Division 14 of Part 3 amends the National Capital Act and the Department of Canadian Heritage Act to transfer certain powers, duties and functions to the Minister of Canadian Heritage from the National Capital Commission. It also makes consequential amendments to the National Holocaust Monument Act to change the Minister responsible for the construction of the monument to the Minister of Canadian Heritage from the Minister responsible for the National Capital Act.
Division 15 of Part 3 amends the Salaries Act to add ministerial positions for regional development responsibilities for northern Canada, and northern and southern Ontario. It also amends the Salaries Act to replace a reference to the Solicitor General of Canada with a reference to the Minister of Public Safety and Emergency Preparedness. It also makes an amendment to the Parliament of Canada Act to provide that the maximum number of Parliamentary Secretaries who may be appointed is equal to the number of ministers for whom salaries are provided in the Salaries Act.
Division 16 of Part 3 amends the Department of Public Works and Government Services Act to remove the requirement for the Minister of Public Works and Government Services to obtain a request from a government, body or person in Canada or elsewhere in order for the Minister to do certain things for or on their behalf. It also amends that Act to specify that the Governor in Council’s approval relating to those things may be given on a general or a specific basis.
Division 17 of Part 3 amends the Financial Administration Act to give the Governor in Council the authority to direct a Crown corporation to have its negotiating mandate approved by the Treasury Board for the purpose of the Crown corporation entering into a collective agreement with a bargaining agent. It also gives the Treasury Board the authority to require that an employee under the jurisdiction of the Secretary of the Treasury Board observe the collective bargaining between the Crown corporation and the bargaining agent. It requires that a Crown corporation that is directed to have its negotiating mandate approved obtain the Treasury Board’s approval before entering into a collective agreement. It also gives the Governor in Council the authority to direct a Crown corporation to obtain the Treasury Board’s approval before the Crown corporation fixes the terms and conditions of employment of certain of its non-unionized employees. Finally, it makes consequential amendments to other Acts.
Division 18 of Part 3 amends the Keeping Canada’s Economy and Jobs Growing Act to provide for increases to the sums that may be paid out of the Consolidated Revenue Fund for municipal, regional and First Nations infrastructure through the Gas Tax Fund. It also provides that the sums may be paid on the requisition of the Minister of Indian Affairs and Northern Development.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Economic Action Plan 2013 Act, No. 1.
PART 1AMENDMENTS TO THE INCOME TAX ACT, THE TAX COURT OF CANADA ACT AND THE INCOME TAX REGULATIONS
R.S., c. 1 (5th Supp.)Income Tax Act
2. (1) Subsection 18(1) of the Income Tax Act is amended by adding the following after paragraph (l):
Marginal note:Safety deposit box
(l.1) an amount paid or payable in respect of the use of a safety deposit box of a financial institution;
(2) Subsection (1) applies to taxation years that begin after March 20, 2013.
3. (1) Subsection 20(7) 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) as a reserve in respect of a reclamation obligation.
(2) Subsection (1) applies in respect of amounts received after March 20, 2013. However, that subsection does not apply in respect of an amount received that is directly attributable to a reclamation obligation, that was authorized by a government or regulatory authority before March 21, 2013 and that is received
(a) under a written agreement between the taxpayer and another party (other than a government or regulatory authority) that was entered into before March 21, 2013 and not extended or renewed on or after that day; or
(b) before 2018.
4. (1) Section 33.1 of the Act is repealed.
(2) Subsection (1) applies to taxation years that begin after March 20, 2013.
5. (1) Subparagraph 82(1)(b)(i) of the Act is replaced by the following:
(i) 18% of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year, and
(2) Subsection (1) applies to dividends paid after 2013.
6. (1) Paragraph 87(2)(j.8) of the Act is repealed.
(2) Subsection (1) applies to taxation years that begin after March 20, 2013.
7. (1) Clause 110(1)(f)(v)(A) of the Act is replaced by the following:
(A) the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed operational mission (as determined by the Department of National Defence) that is
(I) assessed for risk allowance at level 3 or higher (as determined by the Department of National Defence), or
(II) assessed at a risk score greater than 1.99 and less than 2.50 (as determined by the Department of National Defence) and designated by the Minister of Finance, and
(2) Section 110 of the Act is amended by adding the following after subsection (1.2):
Marginal note:Designated mission
(1.3) The Minister of Finance may, on the recommendation of the Minister of National Defence (in respect of members of the Canadian Forces) or the Minister of Public Safety (in respect of police officers), designate a deployed operational mission for the purposes of subclause (1)(f)(v)(A)(II). The designation shall specify the day on which it comes into effect, which may precede the day on which the designation is made.
(3) Subsections (1) and (2) apply in respect of missions initiated after September 2012 and in respect of missions initiated before October 2012 that were not prescribed under Part LXXV of the Income Tax Regulations as that Part read on February 28, 2013.
8. (1) Section 115 of the Act is amended by adding the following after subsection (2.3):
Marginal note:Non-resident employed as aircraft pilot
(3) For the purpose of applying subparagraph (1)(a)(i) to a non-resident person employed as an aircraft pilot, income of the non-resident person that is attributable to a flight (including a leg of a flight) and paid directly or indirectly by a person resident in Canada is attributable to duties performed in Canada in the following proportions:
(a) all of the income attributable to the flight if the flight departs from a location in Canada and arrives at a location in Canada;
(b) one-half of the income attributable to the flight if the flight departs from a location in Canada and arrives at a location outside Canada;
(c) one-half of the income attributable to the flight if the flight departs from a location outside Canada and arrives at a location in Canada; and
(d) none of the income attributable to the flight if the flight departs from a location outside Canada and arrives at a location outside Canada.
(2) Subsection (1) applies to the 2013 and subsequent taxation years.
9. (1) Paragraph (a) of the definition “adoption period” in subsection 118.01(1) of the Act is replaced by the following:
(a) begins at the earlier of the time that an application is made for registration with a provincial ministry responsible for adoption (or with an adoption agency licensed by a provincial government) and the time, if any, that an application related to the adoption is made to a Canadian court; and
(2) Subsection (1) applies to the 2013 and subsequent taxation years.
10. (1) Subsection 118.1(1) of the Act is amended by adding the following in alphabetical order:
“first-time donor”
« premier donateur »
“first-time donor”, for a taxation year, means an individual (other than a trust)
(a) who has not deducted an amount under subsection (3) for a preceding taxation year that ends after 2007, and
(b) who is not, at the end of the year, married to a person (other than a person who was at that time separated from the individual by reason of a breakdown of their marriage), or in a common-law partnership with a person, who has deducted an amount under subsection (3) for a preceding taxation year that ends after 2007;
(2) The definition “first-time donor” in subsection 118.1(1) of the Act, as enacted by subsection (1), is repealed.
(3) Section 118.1 of the Act is amended by adding the following after subsection (3):
Marginal note:First-time donor credit
(3.1) For the purpose of computing the tax payable under this Part by a first-time donor for a taxation year that begins after 2012 and ends before 2018, the first-time donor may deduct an amount not exceeding the lesser of $250 and the amount that is 25% of the total of all amounts, each of which is an eligible amount of a gift of money in the year or in any of the four preceding taxation years and in respect of which the first-time donor — or a person who is, at the end of the year, the first-time donor’s spouse (other than a person who was at that time separated from the first-time donor by reason of a breakdown of their marriage) or common-law partner — has deducted an amount for the year under subsection (3).
Marginal note:Apportionment of credit
(3.2) If, at the end of a taxation year, both an individual and a person with whom the individual is married (other than a person who was at that time separated from the individual by reason of a breakdown of their marriage) or is in a common-law partnership may deduct an amount under subsection (3.1) for the year, the total of all amounts so deductible by the individual and the other person shall not exceed the maximum amount that would be deductible for the year by either person if the individual were the only one entitled to deduct an amount under subsection (3.1), and where the individual and the other person cannot agree as to what portion of the amount each can deduct, the Minister may fix the portions.
(4) Subsections 118.1(3.1) and (3.2) of the Act, as enacted by subsection (3), are repealed.
(5) Subsections (1) and (3) apply in respect of gifts made after March 20, 2013.
(6) Subsections (2) and (4) apply to the 2018 and subsequent taxation years.
11. (1) Paragraph 121(a) of the Act is replaced by the following:
(a) 13/18 of the amount, if any, that is required by subparagraph 82(1)(b)(i) to be included in computing the individual’s income for the year; and
(2) Subsection (1) applies to dividends paid after 2013.
12. (1) Subparagraph (a)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following:
(iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, determined for B in subsection 137(3) in respect of the corporation for the year;
(2) Subsection (1) applies to taxation years that end after March 20, 2013.
13. (1) The definition “non-business-income tax” in subsection 126(7) of the Act is amended by adding “or” at the end of paragraph (g) and by repealing paragraph (h).
(2) Subsection (1) applies to taxation years that begin after March 20, 2013.
14. (1) Paragraph (a) of the definition “flow-through mining expenditure” in subsection 127(9) of the Act is replaced by the following:
(a) that is a Canadian exploration expense incurred by a corporation after March 2013 and before 2015 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2015) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition “mineral resource” in subsection 248(1),
(2) Paragraphs (c) and (d) of the definition “flow-through mining expenditure” in subsection 127(9) of the Act are replaced by the following:
(c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2013 and before April 2014, and
(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2013 and before April 2014;
(3) Subsections (1) and (2) apply to expenses renounced under a flow-through share agreement entered into after March 2013.
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