Budget Implementation Act, 2021, No. 1 (S.C. 2021, c. 23)
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Assented to 2021-06-29
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
19 (1) Subparagraph (a)(i) of the description of B in subsection 118(1) of the Act is replaced by the following:
(i) the basic personal amount of the individual for the year, and
(2) The formula in subparagraph (a)(ii) of the description of B in subsection 118(1) of the Act is replaced by the following:
C + C.01 − C.1
(3) Subparagraph (a)(ii) of the description of B in subsection 118(1) of the Act is amended by striking out “and” at the end of clause (B) of the description of C and by adding the following after the description of C:
- C.01
- is the basic personal amount of the individual for the year, and
(4) Subparagraph (b)(iii) of the description of B in subsection 118(1) of the Act is replaced by the following:
(iii) the basic personal amount of the individual for the year, and
(5) The formula in subparagraph (b)(iv) of the description of B in subsection 118(1) of the Act is replaced by the following:
D + D.01 − D.1
(6) Subparagraph (b)(iv) of the description of B in subsection 118(1) of the Act is amended by striking out “and” at the end of clause (B) of the description of D and by adding the following after the description of D:
- D.01
- is the basic personal amount of the individual for the year, and
(7) Paragraph (c) of the description of B in subsection 118(1) of the Act is replaced by the following:
Marginal note:Single status
(c) except in the case of an individual entitled to a deduction because of paragraph (a) or (b), the basic personal amount of the individual for the year,
(8) Section 118 of the Act is amended by adding the following after subsection (1):
Marginal note:Definition of basic personal amount
(1.1) For the purposes of subsection (1), basic personal amount, of an individual for a taxation year, means the amount determined by the formula
A + B
where
- A
- is $12,298; and
- B
- is the amount determined by the formula
C − D × E
where
- C
- is the amount determined by the formula
F − G
where
- F
- is
(a) for the 2020 taxation year, $13,229,
(b) for the 2021 taxation year, $13,808,
(c) for the 2022 taxation year, $14,398, and
(d) for the 2023 and subsequent taxation years, $15,000, and
- G
- is the amount determined for A,
- D
- is the amount determined for C, and
- E
- is
(a) if the individual’s income for the year is less than or equal to the first dollar amount for the year referred to in paragraph 117(2)(d), nil, and
(b) in any other case, the lesser of 1 and the amount determined by the formula
(H − I)/J
where
- H
- is the individual’s income for the year,
- I
- is the first dollar amount for the year referred to in paragraph 117(2)(d), and
- J
- is the amount determined by the formula
K − L
where
- K
- is the first dollar amount for the year referred to in paragraph 117(2)(e), and
- L
- is the amount determined for I.
(9) Paragraph (a) of the definition pension income in subsection 118(7) of the Act is amended by adding the following after subparagraph (iii.2):
(iii.3) an amount included under subsection 146.5(2),
(10) Subsections (1) to (8) apply to the 2020 and subsequent taxation years.
(11) Subsection (9) is deemed to have come into force on January 1, 2020.
20 (1) Paragraphs (a) and (b) of the definition digital news subscription in subsection 118.02(1) of the Act are replaced by the following:
(a) the agreement entitles an individual to access content of the qualified Canadian journalism organization in digital form and that content is primarily written news; and
(b) the qualified Canadian journalism organization does not hold a licence as defined in subsection 2(1) of the Broadcasting Act. (abonnement aux nouvelles numériques)
(2) Section 118.02 of the Act is amended by adding the following after subsection (3):
Marginal note:Ceasing to qualify
(4) For the purposes of subsection (1), if amounts paid under an agreement cease to be qualifying subscription expenses at any particular time in a calendar year and, at the particular time, the Minister has communicated or otherwise made available pursuant to paragraph 241(3.4)(b) that these amounts qualify as qualifying subscription expenses, amounts paid under that agreement are deemed to be qualifying subscription expenses — to the same extent that the amounts paid were considered to be qualifying subscription expenses immediately before the particular time — until the end of the calendar year in which the Minister communicates or otherwise makes available pursuant to paragraph 241(3.4)(b) that amounts paid under the agreement no longer qualify as qualifying subscription expenses.
Marginal note:Notice to individuals
(5) If an organization enters into a digital news subscription agreement with an individual and amounts paid under the agreement cease to be qualifying subscription expenses, the organization shall inform the individual that amounts paid under the agreement are no longer qualifying subscription expenses.
(3) Subsection (1) is deemed to have come into force on January 1, 2020.
21 (1) Paragraph (b) of the definition shared-custody parent in section 122.6 of the Act is replaced by the following:
(b) reside with the qualified dependant either
(i) at least 40% of the time in the month in which the particular time occurs, or
(ii) on an approximately equal basis, and
(2) Subsection (1) is deemed to have come into force on July 1, 2011.
22 (1) Section 122.7 of the Act is amended by adding the following after subsection (1.2):
Marginal note:Secondary earner exemption
(1.3) For the purposes of subsections (2) and (3),
(a) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was less than the working income for the year of the eligible spouse, the eligible individual’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible individual’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of
(i) the eligible individual’s working income for the year, and
(ii) $14,000; and
(b) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was greater than or equal to the working income for the year of the eligible spouse, the eligible spouse’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible spouse’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of
(i) the eligible spouse’s working income for the year, and
(ii) $14,000.
(2) The descriptions of A and B in subsection 122.7(2) of the Act are replaced by the following:
- A
- is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser of $1,395 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $3,000, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,403 and 27% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $3,000; and
- B
- is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $22,944, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $26,177.
(3) The descriptions of C and D in subsection 122.7(3) of the Act are replaced by the following:
- C
- is the lesser of $720 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $1,150; and
- D
- is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the individual’s adjusted net income for the taxation year exceeds $32,244,
(b) if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount under subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $42,197, and
(c) if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under subsection 118.3(1) for the taxation year, 7.5% of the amount, if any, by which the total of the adjusted net incomes of the individual and of the eligible spouse, for the taxation year, exceeds $42,197.
(4) Subsections (1) to (3) are deemed to have come into force on January 1, 2021.
23 (1) The portion of the definition assistance in subsection 125.6(1) of the Act before paragraph (a) is replaced by the following:
- assistance
assistance means an amount, other than an amount received from the Aid to Publishers component of the Canada Periodical Fund or an amount deemed under subsection (2) to have been paid, that would be included under paragraph 12(1)(x) in computing the income of a taxpayer for any taxation year if that paragraph were read without reference to
(2) Paragraph (d) of the definition eligible newsroom employee in subsection 125.6(1) of the Act is replaced by the following:
(d) spends at least 75% of their time engaged in the production of original written news content, including by researching, collecting information, verifying facts, photographing, writing, editing, designing and otherwise preparing content; and
(3) Paragraphs (a) to (d) of the definition qualifying journalism organization in subsection 125.6(1) of the Act are replaced by the following:
(a) it does not hold a licence, as defined in subsection 2(1) of the Broadcasting Act; and
(b) if it is a corporation having share capital, it meets the conditions in subparagraph (e)(iii) of the definition Canadian newspaper in subsection 19(5). (organisation journalistique admissible)
(4) The description of A in paragraph (a) of the definition qualifying labour expenditure in subsection 125.6(1) of the Act is replaced by the following:
- A
- is the lesser of 365 and the number of days in the taxation year in which the taxpayer is a qualifying journalism organization, and
(5) Subsections 125.6(2) and (3) of the Act are replaced by the following:
Marginal note:Tax credit
(2) A taxpayer (other than a partnership) that is a qualifying journalism organization at any time in a taxation year and that files a prescribed form containing prescribed information with its return of income for the year is deemed to have, on its balance-due day for the year, paid on account of its tax payable under this Part for the year an amount determined by the formula
0.25(A) − B
where
- A
- is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the year in respect of an eligible newsroom employee; and
- B
- is the amount received by the taxpayer from the Aid to Publishers component of the Canada Periodical Fund in the year.
Marginal note:Partnership — tax credit
(2.1) If a taxpayer (other than a partnership) is a member of a partnership (other than a specified member of the partnership) at the end of a fiscal period of the partnership that ends in a taxation year of the taxpayer, the partnership is a qualifying journalism organization at any time in that fiscal period and the partnership files an information return in prescribed form containing prescribed information for that fiscal period, then the taxpayer is deemed to have, on the taxpayer’s balance-due day for the taxation year, paid on account of the taxpayer’s tax payable under this Part for the taxation year an amount determined by the formula
(0.25A – B)C/D
where
- A
- is the total of all amounts each of which is a qualifying labour expenditure of the qualifying journalism organization for the fiscal period in respect of an eligible newsroom employee;
- B
- is the amount received by the qualifying journalism organization from the Aid to Publishers component of the Canada Periodical Fund in the fiscal period;
- C
- is the specified proportion of the taxpayer for the fiscal period; and
- D
- is the total of all specified proportions of members of the partnership for the fiscal period, other than members that are partnerships or specified members of the partnership.
Marginal note:Partnership — application rule
(2.2) In this section, a taxpayer includes a partnership.
Marginal note:When assistance received
(3) For the purposes of this Act other than this section, and for greater certainty, the amount that a taxpayer is deemed under subsection (2) or (2.1) to have paid for a taxation year is assistance received by the taxpayer from a government immediately before the end of the year.
(6) Subsections (1) to (5) are deemed to have come into force on January 1, 2019.
24 (1) The definitions eligible employee and top-up percentage in subsection 125.7(1) of the Act are replaced by the following:
- eligible employee
eligible employee, of an eligible entity in respect of a week in a qualifying period, means an individual employed by the eligible entity primarily in Canada throughout the qualifying period (or the portion of the qualifying period throughout which the individual was employed by the eligible entity), other than, if the qualifying period is any of the first qualifying period to the fourth qualifying period, an individual who is without remuneration by the eligible entity in respect of 14 or more consecutive days in the qualifying period. (employé admissible)
- top-up percentage
top-up percentage, of an eligible entity for a qualifying period, means the percentage determined by regulation for the qualifying period or, if there is no percentage determined by regulation for the qualifying period,
(a) for any of the fifth qualifying period to the tenth qualifying period, the lesser of 25% and the percentage determined by the formula
1.25 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period;
(b) for any of the eleventh qualifying period to the seventeenth qualifying period, the lesser of 35% and the percentage determined by the formula
1.75 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period;
(c) for the eighteenth qualifying period, the lesser of 25% and the percentage determined by the formula
1.25 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period;
(d) for the nineteenth qualifying period, the lesser of 15% and the percentage determined by the formula
0.75 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period;
(e) for the twentieth qualifying period, the lesser of 10% and the percentage determined by the formula
0.5 × (A − 50%)
where
- A
- is the entity’s top-up revenue reduction percentage for the qualifying period; and
(f) for each qualifying period after the twentieth qualifying period, nil. (pourcentage compensatoire)
(2) Subparagraphs (b)(i) to (iv) of the definition baseline remuneration in subsection 125.7(1) of the Act are replaced by the following:
(i) begins on March 1, 2019 and ends on May 31, 2019, in respect of any of the first qualifying period to the third qualifying period,
(ii) begins on March 1, 2019 and ends on June 30, 2019, in respect of the fourth qualifying period, unless the eligible entity elects to use the period that begins on March 1, 2019 and ends on May 31, 2019 for that qualifying period,
(iii) begins on July 1, 2019 and ends on December 31, 2019, in respect of any of the fifth qualifying period to the thirteenth qualifying period,
(iii.1) begins on March 1, 2019 and ends on June 30, 2019, in respect of any of the fourteenth qualifying period to the seventeenth qualifying period, unless the eligible entity elects to use the period that begins on July 1, 2019 and ends on December 31, 2019 for that qualifying period,
(iii.2) begins on July 1, 2019 and ends on December 31, 2019, in respect of the eighteenth qualifying period and any subsequent qualifying period, or
(iv) if the eligible employee was on leave for any reason mentioned in subsection 12(3) of the Employment Insurance Act or section 2 of the Act respecting parental insurance, CQLR, c. A-29.011 throughout the period that begins on July 1, 2019 and ends on March 15, 2020, begins 90 days prior to the date on which the employee commenced that leave and ends on the day prior to the date on which they commenced their leave, in respect of the fifth qualifying period and any subsequent qualifying period. (rémunération de base)
(3) The portion of paragraph (a) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(a) for the fifth qualifying period,
(4) The portion of paragraph (b) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(b) for the sixth qualifying period,
(5) The portion of paragraph (c) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(c) for the seventh qualifying period,
(6) The portion of paragraph (d) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(d) for the eighth qualifying period,
(7) The portion of paragraph (e) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(e) for the ninth qualifying period,
(8) Paragraph (f) of the definition base percentage in subsection 125.7(1) of the Act is amended by striking out “and” at the end of subparagraph (ii) and by replacing the portion of that paragraph before subparagraph (i) with the following:
(f) for the tenth qualifying period,
(9) Paragraph (g) of the definition base percentage in subsection 125.7(1) of the Act is replaced by the following:
(g) for the eleventh qualifying period to the seventeenth qualifying period,
(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and
(ii) in any other case, the percentage determined by the formula
0.8 × A
where
- A
- is the revenue reduction percentage;
(h) for the eighteenth qualifying period,
(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 35%, and
(ii) in any other case, the percentage determined by the formula
0.875 × (A − 10%)
where
- A
- is the revenue reduction percentage;
(i) for the nineteenth qualifying period,
(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 25%, and
(ii) in any other case, the percentage determined by the formula
0.625 × (A − 10%)
where
- A
- is the revenue reduction percentage;
(j) for the twentieth qualifying period,
(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 10%, and
(ii) in any other case, the percentage determined by the formula
0.25 × (A − 10%)
where
- A
- is the revenue reduction percentage; and
(k) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage de base)
(10) Paragraphs (a) to (c.7) of the definition current reference period in subsection 125.7(1) of the Act are replaced by the following:
(a) for the first qualifying period, March 2020;
(b) for the second qualifying period, April 2020;
(c) for the third qualifying period, May 2020;
(c.1) for the fourth qualifying period, June 2020;
(c.2) for the fifth qualifying period, July 2020;
(c.3) for the sixth qualifying period, August 2020;
(c.4) for the seventh qualifying period, September 2020;
(c.5) for the eighth qualifying period, October 2020;
(c.6) for the ninth qualifying period, November 2020;
(c.7) for the tenth qualifying period, December 2020;
(c.8) for the eleventh qualifying period, December 2020;
(c.9) for the twelfth qualifying period, January 2021;
(c.91) for the thirteenth qualifying period, February 2021;
(c.92) for the fourteenth qualifying period, March 2021;
(c.93) for the fifteenth qualifying period, April 2021;
(c.94) for the sixteenth qualifying period, May 2021;
(c.95) for the seventeenth qualifying period, June 2021;
(c.96) for the eighteenth qualifying period, July 2021;
(c.97) for the nineteenth qualifying period, August 2021;
(c.98) for the twentieth qualifying period, September 2021;
(c.99) for the twenty-first qualifying period, October 2021;
(c.991) for the twenty-second qualifying period, November 2021; and
(11) Subparagraphs (a)(i) to (x) of the definition prior reference period in subsection 125.7(1) of the Act are replaced by the following:
(i) for the first qualifying period, March 2019,
(ii) for the second qualifying period, April 2019,
(iii) for the third qualifying period, May 2019,
(iv) for the fourth qualifying period, June 2019,
(v) for the fifth qualifying period, July 2019,
(vi) for the sixth qualifying period, August 2019,
(vii) for the seventh qualifying period, September 2019,
(viii) for the eighth qualifying period, October 2019,
(ix) for the ninth qualifying period, November 2019,
(x) for the tenth qualifying period, December 2019,
(xi) for the eleventh qualifying period, December 2019,
(xii) for the twelfth qualifying period, January 2020,
(xiii) for the thirteenth qualifying period, February 2020,
(xiv) for the fourteenth qualifying period, March 2019,
(xv) for the fifteenth qualifying period, April 2019,
(xvi) for the sixteenth qualifying period, May 2019,
(xvii) for the seventeenth qualifying period, June 2019,
(xviii) for the eighteenth qualifying period, July 2019,
(xix) for the nineteenth qualifying period, August 2019,
(xx) for the twentieth qualifying period, September 2019,
(xxi) for the twenty-first qualifying period, October 2019, and
(xxii) for the twenty-second qualifying period, November 2019;
(12) Paragraphs (e) to (g) of the definition public health restriction in subsection 125.7(1) of the Act are replaced by the following:
(e) it does not result from a violation by the eligible entity – or a party with which the eligible entity does not deal at arm’s length that rents, directly or indirectly, the qualifying property from the eligible entity (referred to in this definition as the “specified tenant”) – of an order or decision that meets the conditions in paragraphs (a) to (d);
(f) as a result of the order or decision, some or all of the activities of the eligible entity – or the specified tenant – at, or in connection with, the qualifying property (that it is reasonable to expect the eligible entity – or the specified tenant – would, absent the order or decision, otherwise have engaged in) are required to cease (referred to in this definition as the “restricted activities”) based, for greater certainty, on the type of activity rather than the extent to which an activity may be performed or limits placed on the time during which an activity may be performed;
(g) it is reasonable to conclude that at least approximately 25% of the qualifying revenues of the eligible entity – or the specified tenant – for the prior reference period that were earned from, or in connection with, the qualifying property were derived from the restricted activities; and
(13) The portion of paragraph (c) of the definition qualifying entity in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(c) if the qualifying period is any of the first qualifying period to the fourth qualifying period, its qualifying revenues for the current reference period are equal to or less than the specified percentage, for the qualifying period, of
(14) Paragraphs (a) to (d) of the definition qualifying period in subsection 125.7(1) of the Act are replaced by the following:
(a) the period that begins on March 15, 2020 and ends on April 11, 2020 (referred to in this section as the “first qualifying period”);
(b) the period that begins on April 12, 2020 and ends on May 9, 2020 (referred to in this section as the “second qualifying period”);
(c) the period that begins on May 10, 2020 and ends on June 6, 2020 (referred to in this section as the “third qualifying period”);
(c.1) the period that begins on June 7, 2020 and ends on July 4, 2020 (referred to in this section as the “fourth qualifying period”);
(c.2) the period that begins on July 5, 2020 and ends on August 1, 2020 (referred to in this section as the “fifth qualifying period”);
(c.3) the period that begins on August 2, 2020 and ends on August 29, 2020 (referred to in this section as the “sixth qualifying period”);
(c.4) the period that begins on August 30, 2020 and ends on September 26, 2020 (referred to in this section as the “seventh qualifying period”);
(c.5) the period that begins on September 27, 2020 and ends on October 24, 2020 (referred to in this section as the “eighth qualifying period”);
(c.6) the period that begins on October 25, 2020 and ends on November 21, 2020 (referred to in this section as the “ninth qualifying period”);
(c.7) the period that begins on November 22, 2020 and ends on December 19, 2020 (referred to in this section as the “tenth qualifying period”);
(c.8) the period that begins on December 20, 2020 and ends on January 16, 2021 (referred to in this section as the “eleventh qualifying period”);
(c.9) the period that begins on January 17, 2021 and ends on February 13, 2021 (referred to in this section as the “twelfth qualifying period”);
(c.91) the period that begins on February 14, 2021 and ends on March 13, 2021 (referred to in this section as the “thirteenth qualifying period”);
(c.92) the period that begins on March 14, 2021 and ends on April 10, 2021 (referred to in this section as the “fourteenth qualifying period”);
(c.93) the period that begins on April 11, 2021 and ends on May 8, 2021 (referred to in this section as the “fifteenth qualifying period”);
(c.94) the period that begins on May 9, 2021 and ends on June 5, 2021 (referred to in this section as the “sixteenth qualifying period”);
(c.95) the period that begins on June 6, 2021 and ends on July 3, 2021 (referred to in this section as the “seventeenth qualifying period”);
(c.96) the period that begins on July 4, 2021 and ends on July 31, 2021 (referred to in this section as the “eighteenth qualifying period”);
(c.97) the period that begins on August 1, 2021 and ends on August 28, 2021 (referred to in this section as the “nineteenth qualifying period”);
(c.98) the period that begins on August 29, 2021 and ends on September 25, 2021 (referred to in this section as the “twentieth qualifying period”);
(c.99) the period that begins on September 26, 2021 and ends on October 23, 2021 (referred to in this section as the “twenty-first qualifying period”);
(c.991) the period that begins on October 24, 2021 and ends on November 20, 2021 (referred to in this section as the “twenty-second qualifying period”); and
(d) a prescribed period that ends no later than November 30, 2021. (période d’admissibilité)
(15) The portion of paragraph (a) of the definition rent subsidy percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(a) if the qualifying period is any of the eighth qualifying period to the seventeenth qualifying period,
(16) The definition rent subsidy percentage in subsection 125.7(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.1) if the qualifying period is any of the eighteenth qualifying period to the twentieth qualifying period, the percentage determined by the formula
A + B
where
- A
- is the eligible entity’s base percentage for the qualifying period, and
- B
- is the eligible entity’s top-up percentage for the qualifying period; and
(b) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage de subvention pour le loyer)
(17) The description of A in the definition rent top-up percentage in subsection 125.7(1) of the Act is replaced by the following:
- A
- is 25%, or a prescribed percentage, for any of the eighth qualifying period to the twentieth qualifying period and nil, or a prescribed percentage, for any subsequent qualifying period,
(18) Paragraphs (a) to (c) of the definition specified percentage in subsection 125.7(1) of the Act are replaced by the following:
(a) for the first qualifying period, 85%; and
(b) for any of the second qualifying period to the fourth qualifying period, 70%. (pourcentage déterminé)
(19) The portion of paragraph (a) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act before the formula is replaced by the following:
(a) for any of the fifth qualifying period to the seventh qualifying period, the result (expressed as a percentage) of the formula
(20) The portion of paragraph (b) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(b) for any of the eighth qualifying period to the tenth qualifying period, the greater of
(21) Paragraph (c) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act is replaced by the following:
(c) for the eleventh qualifying period and each subsequent qualifying period, the eligible entity’s revenue reduction percentage for the qualifying period. (pourcentage compensatoire de baisse de revenue)
(22) Subsection 125.7(1) of the Act is amended by adding the following in alphabetical order:
- executive compensation repayment amount
executive compensation repayment amount, of an eligible entity, means
(a) nil, unless
(i) shares of the capital stock of the eligible entity are listed or traded on a stock exchange or other public market, or
(ii) the eligible entity is controlled by a corporation described in subparagraph (i); and
(b) if the conditions in subparagraph (a)(i) or (ii) are met, the amount determined by the formula
A × B
where
- A
- is
(i) a percentage assigned to the eligible entity under an agreement if
(A) the agreement is entered into by
(I) the eligible entity,
(II) an eligible entity, shares of the capital stock of which are listed or traded on a stock exchange or other public market, that controls the eligible entity (referred to in this definition as the “public parent corporation”), if the public parent corporation received a deemed overpayment under subsection (2) in respect of the seventeenth qualifying period or any subsequent qualifying period, and
(III) each other eligible entity that received a deemed overpayment under subsection (2) in respect of the seventeenth qualifying period or any subsequent qualifying period and was controlled in that period by the eligible entity or the public parent corporation, if any,
(B) the agreement is filed in prescribed form and manner with the Minister,
(C) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A) of this description,
(D) the total of all the percentages assigned under the agreement equals 100%, and
(E) the percentage allocated to any eligible entity under the agreement would not result in an amount allocated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity under subsection (2) for the seventeenth qualifying period and any subsequent qualifying period, and
(ii) in any other case, 100%, and
- B
- is the lesser of
(i) the total of all amounts each of which is an amount of a deemed overpayment under subsection (2) for each of the eligible entities described in clause (i)(A) of the description of A for the seventeenth qualifying period and each subsequent qualifying period, other than amounts in respect of employees on leave with pay, and
(ii) the amount determined by the formula
C − D
where
- C
- is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2021 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year), and
- D
- is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2019 calendar year (prorated based upon the number of days of the eligible entity’s, or the public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the calendar year). (montant du remboursement de la rémunération de la haute direction)
- executive remuneration
executive remuneration, of an eligible entity, means
(a) the total amount of compensation that is reported in the eligible entity’s Statement of Executive Compensation for Named Executive Officers pursuant to National Instrument 51-102 Continuous Disclosure Obligations, as amended from time to time, of the Canadian Securities Administrators in respect of Named Executive Officers of the eligible entity;
(b) if paragraph (a) does not apply and the eligible entity is required to make a similar disclosure to shareholders under the laws of another jurisdiction, the amount of total compensation reported in that disclosure (if the compensation of more than five individuals is required to be reported under that disclosure, using the five most highly compensated of those individuals); and
(c) if paragraphs (a) and (b) do not apply, the amount that would be required to be reported by the eligible entity using the methodology for preparing the Statement of Executive Compensation referred to in paragraph (a). (rémunération de la haute direction)
- qualifying recovery entity
qualifying recovery entity, for a qualifying period, means an eligible entity that meets the following conditions:
(a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner no later than 180 days after the end of the qualifying period;
(b) it is a qualifying entity for the qualifying period;
(c) if it is a corporation (other than a corporation that is exempt from tax under this Part), it
(i) is a Canadian-controlled private corporation, or
(ii) would be a Canadian-controlled private corporation absent the application of subsection 136(1);
(d) if it is a partnership, throughout the qualifying period it is the case that
A ≤ 0.5B
where
- A
- is the total of all amounts, each of which is the fair market value of an interest in the partnership held — directly or indirectly, through one or more partnerships — by
(i) a person or partnership other than an eligible entity, or
(ii) a corporation, other than a corporation that
(A) is exempt from tax under this Part, or
(B) is described in subparagraph (c)(i) or (ii), and
- B
- is the total fair market value of all interests in the partnership; and
(e) it has a revenue reduction percentage
(i) greater than 0%, if it is the seventeenth qualifying period, or
(ii) greater than 10%, if it is any of the eighteenth qualifying period to the twenty-second qualifying period. (entité de relance admissible)
- recovery wage subsidy rate
recovery wage subsidy rate, for a qualifying period, means
(a) for any of the seventeenth qualifying period to the nineteenth qualifying period, 50%;
(b) for the twentieth qualifying period, 40%;
(c) for the twenty-first qualifying period, 30%; and
(d) for the twenty-second qualifying period, 20%. (taux de subvention salariale de relance)
- total base period remuneration
total base period remuneration, of an eligible entity, means the total of all amounts, each of which is for an eligible employee in respect of a week in the fourteenth qualifying period, equal to the least of
(a) $1,129,
(b) the eligible remuneration paid to the eligible employee in respect of the week,
(c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and
(d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période de base)
- total current period remuneration
total current period remuneration, of an eligible entity for a qualifying period, means the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, equal to the least of
(a) $1,129,
(b) the eligible remuneration paid to the eligible employee in respect of the week,
(c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and
(d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période actuelle)
(23) Subsection 125.7(3) of the Act is replaced by the following:
Marginal note:Canada recovery hiring program
(2.2) For a qualifying recovery entity for a qualifying period, an overpayment on account of the qualifying entity’s liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula
A × (B − C)
where
- A
- is the recovery wage subsidy rate for the qualifying period;
- B
- is the qualifying recovery entity’s total current period remuneration for the qualifying period; and
- C
- is the qualifying recovery entity’s total base period remuneration.
Marginal note:When assistance received
(3) For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is deemed under any of subsections (2) to (2.2) to have overpaid is assistance received by it from a government immediately before the end of the qualifying period to which it relates.
(24) Paragraph 125.7(4.2)(d) of the Act is replaced by the following:
(d) if the seller meets any of the following conditions, the eligible entity is deemed to meet that condition:
(i) either of the conditions in paragraph (d) of the definition qualifying entity in subsection (1), and
(ii) both of the conditions in subparagraph (c)(ii), or the condition in subparagraph (c)(iii), of the definition qualifying renter in subsection (1); and
(25) Paragraphs 125.7(5)(a) and (b) of the Act are replaced by the following:
(a) the amount of any deemed overpayment by an eligible entity under any of subsections (2) to (2.2) in respect of a qualifying period cannot exceed the amount claimed by the eligible entity in the application referred to in paragraph (a) of the definition qualifying entity in subsection (1) — or paragraph (a) of the definition qualifying renter in subsection (1) or paragraph (a) of the definition qualifying recovery entity in subsection (1) — in respect of that qualifying period; and
(b) if an eligible employee is employed in a week by two or more qualifying entities that do not deal with each other at arm’s length, the total amount of the deemed overpayment under subsection (2) or (2.2) in respect of the eligible employee for that week shall not exceed the amount that would arise if the eligible employee’s eligible remuneration for that week were paid by one qualifying entity.
(26) Subparagraph 125.7(6)(b)(ii) of the Act is replaced by the following:
(ii) in respect of the fifth qualifying period and subsequent qualifying periods, increase the amount of a deemed overpayment under subsection (2), or
(27) Section 125.7 of the Act is amended by adding the following after subsection (6):
Marginal note:Anti-avoidance — recovery wage subsidy
(6.1) Notwithstanding any other provision in this section, the total current period remuneration of an eligible entity for a qualifying period is deemed to be equal to the total base period remuneration of the eligible entity, if
(a) the eligible entity, or a person or partnership not dealing at arm’s length with the eligible entity, enters into a transaction or participates in an event (or a series of transactions or events) or takes an action (or fails to take an action) that has the effect of increasing the difference between the total current period remuneration and the total base period remuneration of the eligible entity for the qualifying period; and
(b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph (a) is to increase the amount of a deemed overpayment under subsection (2.2).
(28) Paragraphs 125.7(7)(a) and (b) of the Act are replaced by the following:
(a) for the purposes of subsections (2) to (2.2) and subsections 152(3.4) and 160.1(1), to be a taxpayer; and
(b) for the purposes of subsections (2) to (2.2), to have a liability under this Part for a taxation year in which a qualifying period ends.
(29) Subparagraphs 125.7(8)(a)(i) and (ii) of the Act are replaced by the following:
(i) the percentages in subparagraphs (a)(i), (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i), and
(ii) the factors in subparagraphs (a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii) and (j)(ii); and
(30) Paragraph 125.7(8)(b) of the Act is replaced by the following:
(b) the definition rent subsidy percentage in subsection (1), the factors and percentages in paragraphs (a) and (a.1) of that definition;
(b.1) the definition recovery wage subsidy rate in subsection (1), the percentages in that definition; and
(31) Section 125.7 of the Act is amended by adding the following after subsection (9):
Marginal note:Special case
(9.1) For the purposes of paragraph (9)(b), if the particular qualifying period is the eleventh qualifying period, then the immediately preceding qualifying period is deemed to be the ninth qualifying period.
Marginal note:Greater of wage and recovery subsidies
(9.2) For a qualifying period,
(a) if the amount of any deemed overpayment under subsection (2) is equal to or greater than the amount of any deemed overpayment under subsection (2.2), the amount of any deemed overpayment under subsection (2.2) is deemed to be nil; and
(b) if the amount of any deemed overpayment under subsection (2.2) is greater than the amount of any deemed overpayment under subsection (2), the amount of any deemed overpayment under subsection (2) is deemed to be nil.
(32) Section 125.7 of the Act is amended by adding the following in numerical order:
Marginal note:Executive compensation
(14) The amount of a refund made by the Minister to an eligible entity in respect of a deemed overpayment under subsection (2) on a particular date under subsection 164(1.6), in respect of any of the seventeenth qualifying period to the twenty-second qualifying period, is deemed to be an amount that has been refunded to the eligible entity on that particular date (for the taxation year in which the refund was made) in excess of the amount to which the eligible entity was entitled as a refund under this Act to the extent of the lesser of the amount of the refund and the amount determined by the formula
A − B
where
- A
- is the executive compensation repayment amount of the eligible entity; and
- B
- is the total of all amounts deemed to be an excess refund to the eligible entity under this subsection in respect of refunds made after the particular date.
Marginal note:Foreign currency — executive remuneration
(15) For the purposes of paragraphs 261(2)(b) and (5)(c), amounts referred to in the definition executive remuneration in subsection (1) are deemed to arise on the last day of the eligible entity’s fiscal period to which the amount relates and not at any other time.
(32.1) The Minister of Finance must prepare a report on proposed measures to
(a) prevent publicly traded companies and their subsidiaries from paying dividends or repurchasing their own shares while receiving the Canada Emergency Wage Subsidy, for the period that is after the tabling of the report under subsection (32.2); and
(b) recover wage subsidy amounts from publicly traded companies and their subsidiaries that paid dividends or repurchased their own shares while receiving the Canada Emergency Wage Subsidy, for the period that is before the tabling of the report under subsection (32.2).
(32.2) The Minister of Finance must cause the report to be tabled in each House of Parliament no later than 30 days after the day on which this Act receives royal assent or, if either House is not then sitting, on any of the first 15 days on which that House is sitting.
(33) Subsections (12) and (24) are deemed to have come into force on September 27, 2020.
- Date modified: