Budget Implementation Act, 2016, No. 2 (S.C. 2016, c. 12)
Full Document:
Assented to 2016-12-15
62 (1) Paragraph (a) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is amended by adding “or” at the end of subparagraph (i) and by repealing subparagraph (ii).
(2) Paragraph (b) of the definition transfer pricing capital adjustment in subsection 247(1) of the Act is amended by adding “and” at the end of subparagraph (i) and by repealing subparagraph (ii).
(3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.
63 (1) The definitions adjustment time, cumulative eligible capital, eligible capital amount, eligible capital expenditure and eligible capital property in subsection 248(1) of the Act are repealed.
(2) The definition inventory in subsection 248(1) of the Act is replaced by the following:
- inventory
inventory means a description of property the cost or value of which is relevant in computing a taxpayer’s income from a business for a taxation year or would have been so relevant if the income from the business had not been computed in accordance with the cash method and includes
(3) Paragraph (a) of the definition balance-due day in subsection 248(1) of the Act is replaced by the following:
(a) if the taxpayer is a trust,
(i) in the case where the time at which the taxation year ends is determined under paragraph 249(4)(a), the day that is
(A) in the case where that time occurs in a calendar year after the end of the trust’s particular taxation year that ends on December 15 of that calendar year because of an election made under paragraph 132.11(1)(a), the balance-due day of the trust for the particular taxation year,
(B) in the case where clause (A) does not apply and the trust’s particular taxation year that begins immediately after that time ends in the calendar year that includes that time, the balance-due day of the trust for the particular taxation year, and
(C) in any other case, 90 days after the end of the calendar year that includes that time, and
(ii) in any other case, the day that is 90 days after the end of the taxation year,
(4) Paragraph (d) of the definition cost amount in subsection 248(1) of the Act is repealed.
(5) The definition property in subsection 248(1) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) the goodwill of a business, as referred to in subsection 13(34); (biens)
(6) The portion of paragraph (b) of the definition taxable Canadian property in subsection 248(1) of the Act before subparagraph (i) is replaced by the following:
(b) property used or held by the taxpayer in, property included in Class 14.1 of Schedule II to the Income Tax Regulations in respect of, or property described in an inventory of, a business carried on in Canada, other than
(7) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
- emissions allowance
emissions allowance means an allowance, credit or similar instrument that represents a unit of emissions that can be used to satisfy a requirement under the laws of Canada or a province governing emissions of a regulated substance, such as greenhouse gas emissions; (droit d’émissions)
- emissions obligation
emissions obligation means an obligation to surrender an emissions allowance, or an obligation that can otherwise be satisfied through the use of an emissions allowance, under a law of Canada or a province governing emissions of a regulated substance; (obligation d’émissions)
(8) The portion of subsection 248(39) of the Act before paragraph (a) is replaced by the following:
Marginal note:Substantive gift
(39) If a taxpayer disposes of a property (in this subsection referred to as the substantive gift) that is a capital property of the taxpayer, to a recipient that is a registered party, a registered association or a candidate, as those terms are defined in the Canada Elections Act, or that is a qualified donee, subsection (35) would have applied in respect of the substantive gift if it had been the subject of a gift by the taxpayer to a qualified donee, and all or a part of the proceeds of disposition of the substantive gift are (or are substituted, directly or indirectly in any manner whatever, for) property that is the subject of a gift or monetary contribution by the taxpayer to the recipient or any person dealing not at arm’s length with the recipient, the following rules apply:
(9) Subsection 248(39) of the Act is amended by adding “and” at the end of paragraph (a), by striking out “and” at the end of paragraph (b) and by repealing paragraph (c).
(10) Subsections (1), (4) to (6), (8) and (9) come into force or are deemed to have come into force on January 1, 2017.
(11) Subsections (2) and (7) come into force or are deemed to have come into force on January 1, 2017, except that paragraph (b) of the definition inventory in subsection 248(1) of the Act, as enacted by subsection (2), does not apply in respect of emissions allowances acquired in taxation years that begin before 2017. In addition, if a taxpayer elects under subsection 10(2), subsections (2) and (7) apply in respect of emissions allowances acquired by the taxpayer in taxation years that end after 2012.
(12) Subsection (3) is deemed to have come into force on March 21, 2013.
64 (1) Paragraph 249(4)(b) of the Act is replaced by the following:
(b) subject to paragraph 128(1)(d), section 128.1 and paragraphs 142.6(1)(a) and 149(10)(a), and notwithstanding subsections (1) and (3), if the taxpayer is a corporation and the taxpayer’s taxation year that would, but for this subsection, have been its last taxation year that ended before that time, would, but for this paragraph, have ended within the seven-day period that ended immediately before that time, that taxation year is, except if the taxpayer is subject to a loss restriction event within that period, deemed to end immediately before that time, provided that the taxpayer so elects in its return of income under Part I for that taxation year.
(2) Subsection (1) is deemed to have come into force on March 21, 2013.
65 (1) The definition portfolio investment fund in subsection 251.2(1) of the Act is repealed.
(2) The definitions investment fund and majority-interest beneficiary in subsection 251.2(1) of the Act are replaced by the following:
- investment fund
investment fund, at any time, means a trust, if
(a) at all times throughout the period that begins at the later of March 21, 2013 and the end of the calendar year in which it is created and that ends at that time, the trust has a class of units outstanding that complies with the conditions prescribed for the purposes of paragraph 132(6)(c) determined without reference to paragraph 4801(b) of the Income Tax Regulations; and
(b) at all times throughout the period that begins at the later of March 21, 2013 and the time of its creation and that ends at that time, the trust
(i) is resident in Canada,
(ii) has no beneficiaries who may for any reason receive directly from the trust any of the income or capital of the trust, other than beneficiaries whose interests as beneficiaries under the trust are fixed interests described by reference to units of the trust,
(iii) follows a reasonable policy of investment diversification,
(iv) limits its undertaking to the investing of its funds in property,
(v) does not alone, or as a member of a group of persons, control a corporation, and
(vi) does not hold
(A) property that the trust, or a person with which the trust does not deal at arm’s length, uses in carrying on a business,
(B) real or immovable property, an interest in real property or an immovable, or a real right in an immovable,
(C) Canadian resource property, foreign resource property, or an interest or right in Canadian resource property or foreign resource property, or
(D) more than 20% of the securities of any class of securities of a person (other than an investment fund or a mutual fund corporation that would meet the conditions in this paragraph, other than in subparagraph (ii), if it were a trust), unless at that time
(I) the securities (other than liabilities) of the person held by the trust have a total fair market value that is no more than 10% of the equity value of the person, and
(II) the liabilities of the person held by the trust have a total fair market value that is no more than 10% of the fair market value of all of the liabilities of the person. (fiducie de placement déterminée)
- majority-interest beneficiary
majority-interest beneficiary has the same meaning as in subsection 251.1(3) read without reference to the expression “, if any,” in the definition majority-interest beneficiary in that subsection. (bénéficiaires détenant une participation majoritaire)
(3) Paragraph 251.2(3)(f) of the Act is replaced by the following:
(f) the acquisition or disposition of equity of the particular trust at any time if
(4) Subsection 251.2(5) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and’’ at the end of paragraph (b) and by adding the following after paragraph (b):
(c) if, at any time as part of a series of transactions or events a person acquires a security (as defined in subsection 122.1(1)) and it can reasonably be concluded that one of the reasons for the acquisition, or for making any agreement or undertaking in respect of the acquisition, is to cause a condition in subparagraph (b)(v) or clause (b)(vi)(D) of the definition investment fund in subsection (1) to be satisfied at a particular time in respect of a trust, the condition is deemed not to be satisfied at the particular time in respect of the trust.
(5) Subsection 251.2(7) of the Act is replaced by the following:
Marginal note:Filing and other deadlines
(7) If at any time a trust is subject to a loss restriction event, in respect of the trust for its taxation year that ends immediately before that time,
(a) the reference in paragraph 132(2.1)(a) to “the day that is 90 days after the end of the year” is to be read as “the balance-due day of the trust for the year”;
(b) the reference in subsection 132(6.1) to “before the 91st day after the end of” is to be read as “on or before the balance-due day of the trust for”;
(c) the reference in paragraph 150(1)(c) to “within 90 days from the end of” is to be read as “on or before the balance-due day of the trust for”;
(d) the reference in subsection 204.7(1) to “Within 90 days from the end of each taxation year commencing after 1980” is to be read as “On or before the balance-due day of the trust for each taxation year”;
(e) the reference in subsection 210.2(5), and in subsection 221(2) of the Income Tax Regulations, to “within 90 days after the end of” is to be read as “on or before the balance-due day of the trust for”; and
(f) the references in subsections 202(8) and 204(2) of the Income Tax Regulations to “within 90 days from the end of” are to be read as “on or before the balance-due day of the trust for”.
(6) Subsections (1) to (5) are deemed to have come into force on March 21, 2013, except that
(a) if a trust elects in writing to have paragraph 251.2(3)(f) of the Act, as enacted by subsection (3), apply as of the first day of the trust’s 2014 taxation year and files the election with the Minister of National Revenue on or before the trust’s filing-due date for its last 2014 taxation year, then subsections (1) to (4) are deemed to have come into force in respect of that trust on the first day of the trust’s first 2014 taxation year;
(b) if a trust elects in writing to have paragraph 251.2(3)(f) of the Act, as enacted by subsection (3), apply as of the first day of the trust’s 2015 taxation year and files the election with the Minister of National Revenue on or before the trust’s filing-due date for its last 2014 taxation year, then subsections (1) to (4) are deemed to have come into force in respect of that trust on the first day of the trust’s first 2015 taxation year; and
(c) in applying paragraph (a) of the definition investment fund in subsection 251.2(1) of the Act, as enacted by subsection (1), to a trust created before 2016, the expression “and the end of the calendar year” is to be read as “and 90 days after the end of the calendar year”.
- Date modified: