168. Subparagraphs 253(c)(ii) and (iii) of the Act are replaced by the following:

PART 5OTHER AMENDMENTS TO THE INCOME TAX ACT AND RELATED LEGISLATION

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

• 169. (1) Paragraph 4(3)(a) of the Income Tax Act is replaced by the following:

  • (a) subject to paragraph (b), all deductions permitted in computing a taxpayer’s income for a taxation year for the purposes of this Part, except any deduction permitted by any of paragraphs 60(b) to (o), (p), (r) and (v) to (z), apply either wholly or in part to a particular source or to sources in a particular place; and

• (2) Subsection (1) applies to the 2002 and subsequent taxation years, except that, for taxation years that end before 2007, paragraph 4(3)(a) of the Act, as enacted by subsection (1), is to be read as follows:

  • (a) subject to paragraph (b), all deductions permitted in computing a taxpayer’s income for a taxation year for the purposes of this Part, except any deduction permitted by any of paragraphs 60(b) to (o), (p), (r) and (v) to (x), apply either wholly or in part to a particular source or to sources in a particular place; and

• 170. (1) Paragraph 6(1)(a) of the Act is replaced by the following:

  • Marginal note:Value of benefits

    (a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer, or by a person who does not deal at arm’s length with the taxpayer, in the year in respect of, in the course of, or by virtue of the taxpayer’s office or employment, except any benefit

    • (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,

    • (ii) under a retirement compensation arrangement, an employee benefit plan or an employee trust,

    • (iii) that was a benefit in respect of the use of an automobile,

    • (iv) derived from counselling services in respect of

      • (A) the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or

      • (B) the re-employment or retirement of the taxpayer,

    • (v) under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11), or

    • (vi) that is received or enjoyed by an individual other than the taxpayer under a program provided by the taxpayer’s employer that is designed to assist individuals to further their education, if the taxpayer deals with the employer at arm’s length and it is reasonable to conclude that the benefit is not a substitute for salary, wages or other remuneration of the taxpayer;

• (2) Paragraph 6(1)(l) of the Act is replaced by the following:

  • Marginal note:Where standby charge does not apply

    (l) the value of a benefit in respect of the operation of an automobile (other than a benefit to which paragraph (k) applies or would apply but for subparagraph (k)(iii)) received or enjoyed by the taxpayer, or by a person related to the taxpayer, in the year in respect of, in the course of or because of, the taxpayer’s office or employment.

• (3) Section 6 of the Act is amended by adding the following after subsection (1.1):

  • Marginal note:Deeming rule — amount received

    (1.2) For the purposes of paragraph (1)(g), an amount received by an individual out of or under an employee benefit plan is deemed to have been received by a taxpayer and not by the individual if

    • (a) the individual does not deal at arm’s length with the taxpayer;

    • (b) the amount is received in respect of an office or employment of the taxpayer; and

    • (c) the taxpayer is living at the time the amount is received by the individual.

• (4) Section 6 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Amount receivable for covenant

    (3.1) If an amount (other than an amount to which paragraph (1)(a) applies because of subsection (11)) is receivable at the end of a taxation year by a taxpayer in respect of a covenant, agreed to by the taxpayer more than 36 months before the end of that taxation year, with reference to what the taxpayer is, or is not, to do, and the amount would be included in the taxpayer’s income for the year under this subdivision if it were received by the taxpayer in the year, the amount

    • (a) is deemed to be received by the taxpayer at the end of the taxation year for services rendered as an officer or during the period of employment; and

    • (b) is deemed not to be received at any other time.

• (5) Subsection 6(15.1) of the French version of the Act is replaced by the following:

  • Marginal note:Montant remis

    (15.1) Pour l’application du paragraphe (15), le montant remis à un moment donné sur une dette émise par un débiteur s’entend au sens qui serait donné à cette expression par le paragraphe 80(1) si, à la fois :

    • a) la dette était une dette commerciale, au sens du paragraphe 80(1), émise par le débiteur;

    • b) il n’était pas tenu compte d’un montant inclus dans le calcul du revenu en raison du règlement ou de l’extinction de la dette à ce moment;

    • c) il n’était pas tenu compte des alinéas f) et h) de l’élément B de la formule figurant à la définition de montant remis au paragraphe 80(1);

    • d) il n’était pas tenu compte des alinéas 80(2)b) et q).

• (6) Subsections (1) to (3) apply in respect of benefits received or enjoyed on or after October 31, 2011.

• (7) Subsection (4) applies to amounts receivable in respect of a covenant agreed to after October 7, 2003.

• (8) Subsection (5) applies to taxation years that end after February 21, 1994.

• 171. (1) 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) to (1.8) and (2.1).

• (2) Subsection (1) is deemed to have come into force on January 1, 1999. However,

  • (a) it does not apply to a right under an agreement to which subsection 7(7) of the Act, as enacted by subsection 3(7) of the Income Tax Amendments Act, 1998, does not (except for the purpose of applying paragraph 7(3)(b) of the Act) apply; and

  • (b) before 2000, the portion of subsection 7(7) of the Act, as enacted by subsection (1), before the definition “qualifying person” is to be read as follows:

    • (7) The definitions in this subsection apply in this section and in paragraph 110(1)(d) and subsections 110(1.5) to (1.8).

  • (c) in respect of rights (other than rights referred to in paragraph (a)) exercised after 2000 but on or before 4:00 p.m. Eastern Standard Time, March 4, 2010, the portion of subsection 7(7) of the Act, as enacted by subsection (1), before the definition “qualifying person” is to be read as follows:

    • (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(1.5) to (1.8) and (2.1).

• 172. (1) Paragraph 8(1)(b) of the Act is replaced by the following:

  • Marginal note:Legal expenses of employee

    (b) amounts paid by the taxpayer in the year as or on account of legal expenses incurred by the taxpayer to collect, or to establish a right to, an amount owed to the taxpayer that, if received by the taxpayer, would be required by this subdivision to be included in computing the taxpayer’s income;

• (2) The portion of paragraph 8(1)(i) of the Act before subparagraph (i) is replaced by the following:

  • Marginal note:Dues and other expenses of performing duties

    (i) an amount paid by the taxpayer in the year, or on behalf of the taxpayer in the year if the amount paid on behalf of the taxpayer is required to be included in the taxpayer’s income for the year, as

• (3) Subsection 8(1) of the Act is amended by adding the following after paragraph (l.1):

  • Marginal note:Quebec parental insurance plan

    (l.2) an amount payable by the taxpayer in the year as an employer’s premium under the Act respecting parental insurance, R.S.Q., c. A-29.011 in respect of salary, wages or other remuneration, including gratuities, paid to an individual employed by the taxpayer as an assistant or substitute to perform the duties of the taxpayer’s office or employment if an amount is deductible by the taxpayer for the year under subparagraph (i)(ii) in respect of that individual;

• (4) Subsection (1) applies to amounts paid in the 2001 and subsequent taxation years.

• (5) Subsection (3) applies to the 2006 and subsequent taxation years.

• 173. (1) Paragraph 12(1)(j) of the Act is replaced by the following:

  • Marginal note:Dividends from resident corporations

    (j) any amount of a dividend in respect of a share of the capital stock of a corporation resident in Canada that is required by subdivision h to be included in computing the taxpayer’s income for the year;

• (2) Paragraph 12(1)(s) of the Act is repealed.

• (3) Paragraph 12(1)(x) of the Act is amended by adding the following after subparagraph (v):

  • (v.1) is not an amount received by the taxpayer in respect of a restrictive covenant, as defined by subsection 56.4(1), that was included, under subsection 56.4(2), in computing the income of a person related to the taxpayer,

• (4) Subparagraph 12(1)(x)(vii) of the French version of the Act is replaced by the following:

  • (vii) ne réduit pas, en application du paragraphe (2.2) ou 13(7.4) ou de l’alinéa 53(2)s), le coût ou coût en capital du bien ou le montant de la dépense,

• (5) Section 12 of the Act is amended by adding the following after subsection (2):

  • Marginal note:No deferral of section 9 income under paragraph (1)(g)

    (2.01) Paragraph (1)(g) does not defer the inclusion in income of any amount that would, if this section were read without reference to that paragraph, be included in computing the taxpayer’s income in accordance with section 9.

• (6) Subsection (1) is deemed to have come into force on November 6, 2010.

• (7) Subsection (2) applies to reinsurance commissions paid after 1999.

• (8) Subsection (3) is deemed to have come into force on October 8, 2003.