Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)
Full Document:
Assented to 2017-12-14
6 (1) Subsection 20(1) of the Act is amended by adding the following after paragraph (m.2):
(m.3) the unamortized amount at the end of the year in respect of the amount that was received in excess of the principal amount of a bond (in this paragraph referred to as the “premium”) received by the issuer in the year, or a previous year, for issuing the bond (in this paragraph referred to as the “new bond”) if
(i) the terms of the new bond are identical to the terms of bonds previously issued by the taxpayer (in this paragraph referred to as the “old bonds”), except for the date of issuance and total principal amount of the bonds,
(ii) the old bonds were part of an issuance (in this paragraph referred to as the “original issuance”) of bonds by the taxpayer,
(iii) the interest rate on the old bonds was reasonable at the time of the original issuance,
(iv) the new bond is issued on the re-opening of the original issuance,
(v) the amount of the premium at the time of issuance of the new bond is reasonable, and
(vi) the amount of the premium has been included in the taxpayer’s income for the year or a previous taxation year;
(2) Clauses (i)(A) and (B) of the description of A in paragraph 20(1)(xx) of the Act are replaced by the following:
(A) if the taxpayer acquires a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the cost to the taxpayer of the property exceeds the fair market value of the property at the time it is acquired by the taxpayer that is attributable to an underlying interest other than an underlying interest referred to in subparagraphs (b)(i) to (iii) of the definition derivative forward agreement in subsection 248(1), or
(B) if the taxpayer disposes of a property under the agreement in the year or a preceding taxation year, the portion of the amount by which the fair market value of the property at the time the agreement is entered into by the taxpayer exceeds the proceeds of disposition (within the meaning assigned by subdivision c) of the property that is attributable to an underlying interest other than an underlying interest referred to in clauses (c)(i)(A) to (C) of the definition derivative forward agreement in subsection 248(1), and
(3) Subsection (1) applies in respect of bonds issued after 2000.
(4) Subsection (2) applies in respect of acquisitions and dispositions of property that occur after September 15, 2016.
7 (1) Paragraph 34(a) of the Act is replaced by the following:
(a) if the taxpayer so elects in the taxpayer’s return of income under this Part for the year and the year begins before March 22, 2017, there shall not be included any amount in respect of work in progress at the end of the year; and
(2) Section 34 of the Act, as amended by subsection (1), is repealed.
(3) Subsection (1) applies to taxation years ending after March 21, 2017.
(4) Subsection (2) comes into force on January 1, 2024.
8 (1) Subclause 37(8)(a)(ii)(B)(II) of the English version of the Act is replaced by the following:
(II) an expenditure of a current nature for the prosecution of scientific research and experimental development in Canada directly undertaken on behalf of the taxpayer,
(2) Subsection 37(11) of the Act is replaced by the following:
Marginal note:Filing requirement
(11) A prescribed form must be filed by a taxpayer with the Minister in respect of any expenditure, that would be incurred by the taxpayer in a taxation year that begins after 1995 if this Act were read without reference to subsection 78(4), that is claimed by the taxpayer for the year as a deduction under this section, on or before the day that is 12 months after the taxpayer’s filing due-date for the taxation year, containing
Marginal note:Failure to file
(11.1) Subject to subsection (12), if the prescribed information in respect of an expenditure referred to in paragraph (11)(a) is not contained in the form referred to in subsection (11), no amount in respect of the expenditure may be deducted under subsection (1).
(3) Subsection (1) applies in respect of expenditures incurred after September 16, 2016.
9 (1) Clause 39(1)(c)(iv)(B) of the Act is replaced by the following:
(B) a bankrupt that was a small business corporation at the time it last became a bankrupt, or
(2) Subsection 39(2.1) of the Act is replaced by the following:
Marginal note:Upstream loan — transitional set-off
(2.1) If at any time a corporation resident in Canada or a partnership of which such a corporation is a member (such corporation or partnership referred to in this subsection and subsections (2.2) and (2.3) as the “borrowing party”) has received a loan from, or become indebted to, a creditor that is a foreign affiliate (referred to in this subsection and subsections (2.2) and (2.3) as a “creditor affiliate”) of a qualifying entity, or that is a partnership (referred to in this subsection and subsection (2.3) as a “creditor partnership”) of which such an affiliate is a member, and the loan or indebtedness is at a later time repaid, in whole or in part, then the amount of the borrowing party’s capital gain or capital loss determined, in the absence of this subsection, under subsection (2) in respect of the repayment, is to be reduced
(a) in the case of a capital gain
(i) if the creditor is a creditor affiliate, by an amount, not exceeding that capital gain, that is equal to twice the amount that would — in the absence of subparagraph 40(2)(g)(ii) and paragraph 95(2)(g.04) and on the assumption that the creditor affiliate’s capital loss in respect of the repayment of the loan or indebtedness were a capital gain of the creditor affiliate, the creditor affiliate had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the creditor affiliate that includes the later time, or
(ii) if the creditor is a creditor partnership, by an amount, not exceeding that capital gain, that is equal to twice the amount that is the total of each amount, determined in respect of a particular member of the creditor partnership that is a foreign affiliate of a qualifying entity, that would — in the absence of subparagraph 40(2)(g)(ii) and paragraph 95(2)(g.04) and on the assumption that the creditor partnership’s capital loss in respect of the repayment of the loan or indebtedness were a capital gain of the creditor partnership, the particular member had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the particular member that includes the last day of the creditor partnership’s fiscal period that includes that later time; and
(b) in the case of a capital loss
(i) if the creditor is a creditor affiliate, by an amount, not exceeding that capital loss, that is equal to twice the amount, in respect of the creditor affiliate’s capital gain in respect of the repayment of the loan or indebtedness, that would — in the absence of paragraph 95(2)(g.04) and on the assumption that the creditor affiliate had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the creditor affiliate that includes the later time, or
(ii) if the creditor is a creditor partnership, by an amount, not exceeding that capital loss, that is equal to twice the amount, in respect of the creditor partnership’s capital gain in respect of the repayment of the loan or indebtedness, that is the total of each amount, determined in respect of a particular member of the creditor partnership that is a foreign affiliate of a qualifying entity, that would — in the absence of paragraph 95(2)(g.04) and on the assumption that the particular member had no other income, loss, capital gain or capital loss for any taxation year, and no other foreign affiliate of a qualifying entity had any income, loss, capital gain or capital loss for any taxation year — be the total of all amounts each of which is an amount that would be included in computing a qualifying entity’s income under subsection 91(1) for its taxation year that includes the last day of the taxation year of the particular member that includes the last day of the creditor partnership’s fiscal period that includes the later time.
Marginal note:Definition of qualifying entity
(2.2) For purposes of subsections (2.1) and (2.3), qualifying entity means
(a) in the case of a borrowing party that is a corporation,
(i) the borrowing party,
(ii) a corporation resident in Canada of which
(iii) a corporation resident in Canada
(iv) a partnership each member of which is
(b) in the case of a borrowing party that is a partnership,
(i) the borrowing party,
(ii) if each member — determined as if each member of a partnership that is a member of another partnership is a member of that other partnership — of the borrowing party is either a particular corporation resident in Canada (in this paragraph referred to as the “parent”) or a corporation resident in Canada that is a subsidiary wholly-owned corporation, as defined in subsection 87(1.4), of the parent,
(iii) a partnership each member of which is any of
Marginal note:Upstream loan — transitional set-off election
(2.3) Subsection (2.1) and paragraph 95(2)(g.04) do not apply in respect of a repayment, in whole or in part, of a loan or indebtedness if an election has been filed with the Minister before 2019 jointly by
(3) Subsection (1) applies in respect of bankruptcies that occur after April 26, 1995.
(4) Subsection (2) applies in respect of portions of loans received and indebtedness incurred before August 20, 2011 that remain outstanding on August 19, 2011 and that are repaid, in whole or in part, before August 20, 2016.
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