Budget Implementation Act, 2016, No. 1 (S.C. 2016, c. 7)

Assented to 2016-06-22

  •  (1) Part XCIV of the Regulations is repealed.

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

  •  (1) The Regulations are amended by adding the following after Part XCV:

    PART XCVISchool Supplies Tax Credit

    Marginal note:Prescribed durable goods

    9600 For the purpose of the definition teaching supplies in subsection 122.9(1) of the Act, the following are prescribed durable goods:

    • (a) books;

    • (b) games and puzzles;

    • (c) containers (such as plastic boxes or banker boxes); and

    • (d) educational support software.

  • (2) Subsection (1) applies to the 2016 and subsequent taxation years.

2013, c. 40Coordinating Amendments

Marginal note:2013, c. 40
  •  (1) If this Act receives royal assent before January 1, 2017, then subsections 59(1), (4), (6) and (7) of the Economic Action Plan 2013 Act, No. 2 are deemed never to have produced their effects and are repealed.

  • (2) If this Act receives royal assent on or after January 1, 2017, then

    • (a) section 127.4 of the Income Tax Act is amended by adding the following after subsection (1.1):

      • Marginal note:Deduction of labour-sponsored funds tax credit

        (2) There may be deducted from the tax otherwise payable by an individual (other than a trust) for a taxation year such amount as the individual claims not exceeding the individual’s labour-sponsored funds tax credit limit for the year.

    • (b) paragraphs 36(2) and (3) of this Act are replaced by the following:

      • (2) Section 127.4 of the Act is amended by adding the following before subsection (5.1):

        • Marginal note:Labour-sponsored funds tax credit limit

          (5) For the purpose of subsection (2), an individual’s labour-sponsored funds tax credit limit for a taxation year is the lesser of

          • (a) $750, and

          • (b) the amount, if any, by which

            • (i) the total of all amounts each of which is the individual’s labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved share

            exceeds

            • (ii) the portion of the total described in subparagraph (i) that was deducted under subsection (2) in computing the individual’s tax payable under this Part for the preceeding taxation year.

      • (3) Section 127.4 of the Act is amended by adding the following after subsection (5.1):

        • Marginal note:Labour-sponsored funds tax credit

          (6) For the purpose of subsection (5), an individual’s labour-sponsored funds tax credit in respect of an original acquisition of an approved share is equal to the least of

          • (a) 15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation),

          • (a.1) 5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if

            • (i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and

            • (ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,

          • (a.2) nil, if

            • (i) the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and

            • (ii) the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,

          • (b) nil, if the share was issued by a registered labour-sponsored venture capital corporation unless the information return described in paragraph 204.81(6)(c) is filed with the individual’s return of income for the taxation year for which a claim is made under subsection (2) in respect of the original acquisition of the share (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)),

          • (c) nil, if the individual dies after December 5, 1996 and before the original acquisition of the share,

          • (d) nil, if a payment in respect of the disposition of the share has been made under section 211.9, and

          • (e) nil, if the share is issued in exchange for another share of the corporation.

Marginal note:Bill C-2
  •  (1) Subsections (2) to (17) apply if Bill C-2, introduced in the 1st session of the 42nd Parliament and entitled An Act to amend the Income Tax Act, receives royal assent.

  • (2) Paragraph (b) of the definition relevant tax factor in subsection 95(1) of the Income Tax Act is replaced by the following:

    • (b) in any other case, 1.9; (facteur fiscal approprié)

  • (3) Subsection 118.1(3) of the Income Tax Act is replaced by the following:

    • Marginal note:Deduction by individuals for gifts

      (3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted such amount as the individual claims not exceeding the amount determined by the formula

      A × B + C × D + E × F

      where

      A
      is the appropriate percentage for the year;
      B
      is the lesser of $200 and the individual’s total gifts for the year;
      C
      is the highest individual percentage for the year;
      D
      is
      • (a) in the case of a trust (other than a graduated rate estate or a qualified disability trust as defined in subsection 122(3)), the amount, if any, by which its total gifts for the year exceeds $200, and

      • (b) in any other case, the lesser of

        • (i) the amount, if any, by which the individual’s total gifts for the year exceeds $200, and

        • (ii) the amount, if any, by which the individual’s amount taxable for the year for the purposes of subsection 117(2) exceeds the first dollar amount for the year referred to in paragraph 117(2)(e);

      E
      is 29%; and
      F
      is the amount, if any, by which the individual’s total gifts for the year exceeds the total of $200 and the amount determined for D.
  • (4) Subparagraph (i) of the description of A in paragraph 122(1)(c) of the Income Tax Act is replaced by the following:

    • (i) the rate of tax payable under this Part by the trust for each taxation year referred to in the description of B were the highest individual percentage for the taxation year, and

  • (5) The Income Tax Act is amended by adding the following after section 123.4:

    Marginal note:Tax on personal services business income

    123.5 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation an amount equal to 5% of the corporation’s taxable income for the year from a personal services business.

  • (6) Clauses 132(1)(a)(i)(A) and (B) of the Income Tax Act are replaced by the following:

    • (A) 16.5% of the total of the trust’s capital gains redemptions for the year, and

    • (B) the positive or negative amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the trust’s capital gains refunds for the year or any previous taxation year and the percentages applicable in determining the trust’s refundable capital gains tax on hand at the end of the year, and

  • (7) The description of C in the definition capital gains redemptions in subsection 132(4) of the Income Tax Act is replaced by the following:

    C
    is 100/16.5 of the trust’s refundable capital gains tax on hand at the end of the year,
  • (8) Paragraphs (a) and (b) of the description of A in the definition refundable capital gains tax on hand in subsection 132(4) of the Income Tax Act are replaced by the following:

    • (a) the highest individual percentage for the year multiplied by its taxable income for the year,

    • (b) the highest individual percentage for the year multiplied by its taxed capital gains for the year, and

  • (9) Paragraph 143.1(3)(c) of the Income Tax Act is replaced by the following:

    • (c) if the trust is liable to pay tax under Part XII.2 in respect of the particular year, 60% of the fair market value of all property held by it at that time, and

  • (10) Paragraph 143.1(4)(a) of the Income Tax Act is replaced by the following:

    • (a) if the trust is liable to pay tax under Part XII.2 in respect of the year, 60% of the fair market value of all property held by it at that time; and

  • (11) The description of A in subsection 207.8(2) of the Income Tax Act is replaced by the following:

    A
    is the highest individual percentage for the year;
  • (12) The portion of subsection 210.2(1) of the Income Tax Act before paragraph (a) is replaced by the following:

    Marginal note:Tax on income of trust
    • 210.2 (1) Subject to section 210.3, if a trust deducts an amount under paragraph 104(6)(b) in computing its income under Part I for a taxation year, the trust shall pay a tax under this Part in respect of the year equal to 40% of the least of

  • (13) Paragraph 210.2(1)(c) of the Income Tax Act is replaced by the following:

    • (c) 100/60 of the amount deducted.

  • (14) The portion of subsection 210.2(2) of the Income Tax Act before paragraph (a) is replaced by the following:

    • Marginal note:Amateur athlete trusts

      (2) Notwithstanding subsection 210(2), a trust shall pay a tax under this Part in respect of a particular taxation year of the trust equal to 2/3 of the amount that is required by subsection 143.1(2) to be included in computing the income under Part I for a taxation year of a beneficiary under the trust, if

  • (15) Subsections (2), (4) and (6) to (14) apply to the 2016 and subsequent taxation years and, for the purpose of determining the amount for A in the definition refundable capital gains tax on hand in subsection 132(4) of the Income Tax Act, as amended by subsection (8), in respect of previous taxation years prior to 2016, the references to “the highest individual percentage for the year” in paragraphs (a) and (b) of that description are to be read as “29%”.

  • (16) Subsection 118.1(3) of the Income Tax Act, as enacted by subsection (3), applies to the 2016 and subsequent taxation years and, for the purpose of calculating the amount determined for D in subsection 118.1(3) of that Act, as enacted by subsection (3), an individual’s total gifts for the year are determined without reference to gifts made before the 2016 taxation year.

  • (17) Subsection (5) applies to taxation years that end after 2015 except that, for taxation years that end after 2015 and begin before 2016, the reference to 5% in section 123.5 of the Income Tax Act, as enacted by subsection (5), is to be read as a reference to the percentage determined by the formula

    5% (A/B)

    where

    A
    is the number of days in the taxation year that are after 2015; and
    B
    is the total number of days in the taxation year.
 
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