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Budget Implementation Act, 2016, No. 2 (S.C. 2016, c. 12)

Assented to 2016-12-15

PART 1Amendments to the Income Tax Act and to Related Legislation (continued)

C.R.C., c. 945Income Tax Regulations (continued)

  • 79 (1) Subparagraphs 1219(2)(b)(iv) and (v) of the Regulations are replaced by the following:

    • (iv) included in the capital cost of property that, but for this section, would be depreciable property (other than property that would be included in Class 14.1 of Schedule II), except as provided by paragraph (1)(b), (d), (e), (f), or (g),

    • (v) included in the capital cost of property that, but for this section, would be property included in Class 14.1 of Schedule II, except as provided by any of paragraphs (1)(a) to (e),

  • (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.

  • 80 (1) The description of A in subsection 2411(4) of the Regulations is amended by adding “and” at the end of paragraph (g) and by repealing paragraph (h).

  • (2) The description of B in subsection 2411(4) of the Regulations is amended by adding “and” at the end of paragraph (g) and by repealing paragraph (h).

  • (3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.

  • 81 (1) Section 7300 of the Regulations 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) an emissions allowance issued to the taxpayer under the laws of Canada or a province.

  • (2) Subsection (1) applies in respect of emissions allowances acquired in taxation years that begin after 2016. However, if a taxpayer elects under subsection 10(2), subsection (1) applies in respect of emissions allowances acquired by the taxpayer in taxation years that end after 2012.

  • 82 (1) The portion of section 8201 of the Regulations before paragraph (a) is replaced by the following:

    8201 For the purposes of subsection 16.1(1), the definition outstanding debts to specified non-residents in subsection 18(5), subsections 100(1.3) and 112(2), the definition qualified Canadian transit organization in subsection 118.02(1), subsections 125.4(1) and 125.5(1), the definition taxable supplier in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), section 233.8, the definitions Canadian banking business and tax-indifferent investor in subsection 248(1) and paragraph 260(5)(a) of the Act, a permanent establishment of a person or partnership (either of whom is referred to in this section as the person) means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, where the person does not have any fixed place of business, the principal place at which the person’s business is conducted, and

  • (2) Subsection (1) is deemed to have come into force on January 1, 2016.

  • 83 (1) The Regulations are amended by adding the following after section 9004:

    Prescribed Non-reporting Financial Institution

    9005 For the purposes of the definition non-reporting financial institution in subsection 270(1) of the Act, the following entities are prescribed:

    • (a) a labour-sponsored venture capital corporation as prescribed in section 6701;

    • (b) a registered retirement savings plan;

    • (c) a registered retirement income fund;

    • (d) a pooled registered pension plan;

    • (e) a deferred profit sharing plan;

    • (f) a registered disability savings plan;

    • (g) a registered education savings plan;

    • (h) a registered pension plan;

    • (i) a trust governed by a registered pension plan;

    • (j) a trust described in paragraph 149(1)(o.4) of the Act, if all of the interests in the trust as a beneficiary are held by one or more registered pension plans;

    • (k) a corporation described in clause 149(1)(o.1)(i)(A) or subparagraph 149(1)(o.1)(ii) or (o.2)(i) of the Act;

    • (l) a corporation described in any of subparagraphs 149(1)(o.2)(ii) to (iii) of the Act, if all of the shares of the corporation are held by

      • (i) one or more registered pension plans or trusts governed by registered pension plans,

      • (ii) one or more trusts described in paragraph (j), or

      • (iii) one or more corporations described in this paragraph or paragraph (k);

    • (m) a trust, if all of the interests in the trust as a beneficiary are held by one or more plans, trusts or corporations described in paragraph (i), (k) or (l);

    • (n) a central cooperative credit society, as defined in section 2 of the Cooperative Credit Associations Act and whose accounts are maintained for member financial institutions; and

    • (o) a TFSA.

    Prescribed Excluded Accounts

    9006 For the purposes of the definition excluded account in subsection 270(1) of the Act, the following accounts are prescribed:

    • (a) a registered retirement savings plan;

    • (b) a registered retirement income fund;

    • (c) a pooled registered pension plans;

    • (d) a registered pension plan;

    • (e) a registered disability savings plan;

    • (f) a registered education savings plan;

    • (g) a deferred profit sharing plan;

    • (h) a net income stabilization account, including a NISA Fund No. 2;

    • (i) an eligible funeral arrangement;

    • (j) a dormant account if the balance or value of the account does not exceed 1,000 USD; and

    • (k) a TFSA.

  • (2) Subsection (1) comes into force on July 1, 2017.

  • 84 (1) Schedule II to the Regulations is amended by adding the following after Class 14:

    CLASS 14.1
    (5 per cent)

    Property of a taxpayer that, in respect of a business of the taxpayer,

    • (a) is goodwill;

    • (b) was eligible capital property of the taxpayer immediately before January 1, 2017 and is owned by the taxpayer at the beginning of that day; or

    • (c) is acquired after 2016, other than

      • (i) property that is tangible or, for civil law, corporeal property,

      • (ii) property that is not acquired for the purpose of gaining or producing income from business,

      • (iii) property in respect of which any amount is deductible (otherwise than as a result of being included in this class) in computing the taxpayer’s income from the business,

      • (iv) property in respect of which any amount is not deductible in computing the taxpayer’s income from the business because of any provision of the Act (other than paragraph 18(1)(b)) or these Regulations,

      • (v) an interest in a trust,

      • (vi) an interest in a partnership,

      • (vii) a share, bond, debenture, mortgage, hypothecary claim, note, bill or other similar property, or

      • (viii) property that is an interest in, or for civil law a right in, or a right to acquire, a property described in any of subparagraphs (i) to (vii).

  • (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.

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