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)
50 (1) The Act is amended by adding the following after Part XI.4:
PART XI.5Tax in Respect of Employee Life and Health Trust
Marginal note:Definitions
207.9 (1) The following definitions apply in this Part.
- participating employer
participating employer of an employee life and health trust means an employer that provides designated employee benefits for its employees through a trust that meets the conditions described in subsection 144.1(2). (employeur participant)
- prohibited investment
prohibited investment, at any time for an employee life and health trust, means property that is at that time
(a) a share of the capital stock of, an interest in or a debt of
(i) a participating employer of the employee life and health trust, or
(ii) a person or partnership that does not deal at arm’s length with a participating employer of the employee life and health trust; or
(b) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a). (placement interdit)
Marginal note:Tax payable on prohibited investment
(2) A trust shall pay a tax under this Part for a calendar year if, at any time in the year while the trust is an employee life and health trust,
(a) the trust acquires property that is a prohibited investment for the trust; or
(b) income is received or becomes receivable by the trust from, or the trust has a taxable capital gain from the disposition of, a prohibited investment for the trust.
Marginal note:Amount of tax payable
(3) The amount of tax payable under subsection (2) is
(a) if paragraph (2)(a) applies, 50% of the fair market value of the property at the time it is acquired; and
(b) if paragraph (2)(b) applies, 50% of the income or the taxable capital gain.
Marginal note:Refund
(4) If in a calendar year a trust disposes of a property in respect of which a tax is imposed on the trust under subsection (2), the trust is entitled to a refund for the year of an amount equal to
(a) the amount of the tax so imposed, unless paragraph (b) applies; or
(b) nil, if
(i) it is reasonable to consider that the trustees knew, or ought to have known, at the time the property was acquired that it was, or would become, a property described in subsection (2), or
(ii) the property is not disposed of by the trust before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances.
Marginal note:Deemed disposition and reacquisition
(5) If, at any time, a property held by an employee life and health trust ceases to be, or becomes, a prohibited investment for the employee life and health trust, the employee life and health trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value.
(2) Subsection (1) applies to the 2014 and subsequent taxation years.
51 Section 211.91 of the Act is amended by adding the following after subsection (2):
Marginal note:COVID-19 – expenses deemed incurred earlier
(2.1) If an agreement referred to in subsection 66(12.66) was made in 2019 or 2020,
(a) the reference in subsection (2) to “the following calendar year” is to be read as a reference to “the second following calendar year”; and
(b) for the purposes of this section and, where subparagraph (iii) applies, paragraph 66(12.66)(a), Canadian exploration expenses incurred by a corporation in respect of the agreement in a particular month in a calendar year are deemed to have been incurred
(i) in January 2020, if the expenses were incurred in 2020 and the agreement was entered into in 2019,
(ii) in January 2021, if the expenses were incurred in 2021 and the agreement was entered into in 2020, and
(iii) 12 months earlier, in any other case.
52 (1) Subsection 212(1) of the Act is amended by adding the following after paragraph (l):
Marginal note:Advanced life deferred annuity payment
(l.1) a payment of an amount described in paragraph 56(1)(z.5);
(2) The portion of subsection 212(2.1) of the Act before paragraph (c) is replaced by the following:
Marginal note:Exempt dividends
(2.1) Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement or a specified securities lending arrangement if
(a) the amount is deemed by subparagraph 260(8)(a)(ii) to be a dividend;
(b) either
(i) the arrangement is a fully collateralized arrangement, or
(ii) the borrower and the lender are dealing at arm’s length; and
(3) Paragraph (d) of the definition fully exempt interest in subsection 212(3) of the Act is replaced by the following:
(d) an amount paid or payable or credited under a securities lending arrangement, or a specified securities lending arrangement, that is deemed by subparagraph 260(8)(a)(i) to be a payment made by a borrower to a lender of interest, if the arrangement is a fully collateralized arrangement, and
(i) the following conditions are met:
(A) the arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and
(B) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (b) of the definition qualified security in subsection 260(1) and issued by a non-resident issuer,
(ii) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (c) of the definition qualified security in subsection 260(1), or
(iii) the security that is transferred or lent to the borrower under the arrangement is described in paragraph (a) or (b). (intérêts entièrement exonérés)
(4) Subsection (1) is deemed to have come into force on January 1, 2020.
(5) Subsections (2) and (3) apply in respect of amounts paid or payable or credited after March 18, 2019.
53 (1) The portion of paragraph 212.3(1)(b) of the Act before clause (i)(A) is replaced by the following:
(b) the CRIC or an other Canadian corporation is immediately after the investment time, or becomes after the investment time and as part of a transaction or event or series of transactions or events that includes the making of the investment, controlled by one non-resident person or, if no single non-resident person controls the CRIC, by a group of non-resident persons not dealing with each other at arm’s length (in this section, that one non-resident person, or each member of the group of non-resident persons, as the case may be, is referred to as a “parent”, and the group of non-resident persons, if any, is referred to as the “group of parents”), and any of the following conditions is satisfied:
(i) if, at the investment time, a parent owned all shares of the capital stock of the CRIC and the other Canadian corporation, if applicable, that are owned — determined without reference to paragraph (25)(b) in the case of partnerships referred to in this subparagraph and as if all rights referred to in paragraph 251(5)(b), of the parent, each person that does not deal at arm’s length with the parent and all of those partnerships, were immediate and absolute and the parent and each of the other persons and partnerships had exercised those rights at the investment time — by the parent, persons that are not dealing at arm’s length with the parent and partnerships of which the parent or a person that is not dealing at arm’s length with the parent is a member (other than a limited partner within the meaning assigned by subsection 96(2.4)), the parent would own shares of the capital stock of the CRIC or the other Canadian corporation that
(2) Paragraph 212.3(2)(a) of the Act is replaced by the following:
(a) for the purposes of this Part and subject to subsections (3) and (7), the CRIC is deemed to have paid to each parent, and each parent is deemed to have received from the CRIC, at the dividend time, a dividend in an amount determined by the formula
A × B/C
where
- A
- is the total of all amounts each of which is the portion of the fair market value at the investment time of any property (not including shares of the capital stock of the CRIC) transferred, any obligation assumed or incurred, or any benefit otherwise conferred, by the CRIC, or of any property transferred to the CRIC which transfer results in the reduction of an amount owing to the CRIC, that can reasonably be considered to relate to the investment,
- B
- is
(i) if there is one parent, one, and
(ii) if there is a group of parents, the fair market value at the dividend time of the shares of the capital stock of the CRIC that are held, directly or indirectly, by the parent, and
- C
- is
(i) if there is one parent, one, and
(ii) if there is a group of parents, the total of all amounts each of which is the fair market value at the dividend time of the shares of the capital stock of the CRIC that are held, directly or indirectly, by a parent; and
(3) The portion of subsection 212.3(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Dividend substitution election
(3) If a CRIC (or a CRIC and a corporation that is a qualifying substitute corporation in respect of the CRIC at the dividend time) and a parent (or a parent and another non-resident person that at the dividend time is related to the parent) jointly elect in writing under this subsection in respect of an investment, and the election is filed with the Minister on or before the filing-due date of the CRIC for its taxation year that includes the dividend time, then the dividend that would, in the absence of this subsection, be deemed under paragraph (2)(a) to have been paid by the CRIC to the parent and received by the parent from the CRIC is deemed to have instead been
(4) Paragraph 212.3(3)(b) of the Act is replaced by the following:
(b) paid to, and received by, the parent or the other non-resident person, as agreed on in the election.
(5) Paragraphs (a) and (b) of the definition cross-border class in subsection 212.3(4) of the Act are replaced by the following:
(a) a parent, or a non-resident person that does not deal at arm’s length with a parent, owns at least one share of the class; and
(b) no more than 30% of the issued and outstanding shares of the class are owned by one or more persons resident in Canada that do not deal at arm’s length with a parent. (catégorie transfrontalière)
(6) The portion of the definition dividend time before subparagraph (b)(ii) in subsection 212.3(4) of the Act is replaced by the following:
- dividend time
dividend time, in respect of an investment, means
(a) if the CRIC is controlled by a parent or group of parents at the investment time, the investment time; and
(b) in any other case, the earlier of
(i) the first time, after the investment time, at which the CRIC is controlled by a parent or group of parents, as the case may be, and
(7) Paragraphs (a) to (c) of the definition qualifying substitute corporation in subsection 212.3(4) of the Act are replaced by the following:
(a) that is, at that time, controlled by
(i) a parent,
(ii) a group of parents, or
(iii) a non-resident person that does not deal at arm’s length with a parent;
(b) that has, at that time, an equity percentage (as defined in subsection 95(4)) in the CRIC; and
(c) shares of the capital stock of which are, at that time, owned by a parent or another non-resident person with which the parent does not, at that time, deal at arm’s length. (société de substitution admissible)
(8) The portion of subsection 212.3(5.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Sequential investments — paragraph (10)(f)
(5.1) In the case of an investment (in this subsection referred to as the “second investment”) in a subject corporation by a CRIC described in paragraph (10)(f), the amount determined for A in paragraph (2)(a) in respect of the second investment is to be reduced by the amount determined for A in paragraph (2)(a) in respect of a prior investment (in this subsection referred to as the “first investment”) in the subject corporation by another corporation resident in Canada if
(9) Paragraphs 212.3(5.1)(b) and (c) of the Act are replaced by the following:
(b) immediately after the investment time in respect of the first investment, the other corporation is not controlled by
(i) if there is one parent in respect of the CRIC, the parent, and
(ii) if there is a group of parents in respect of the CRIC, the group of parents; and
(c) the other corporation becomes, after the time that is immediately after the investment time in respect of the first investment and as part of a transaction or event or series of transactions or events that includes the making of the first investment, controlled by the parent or group of parents, as the case may be, because of the second investment.
(10) The portion of paragraph 212.3(6)(a) of the Act before subparagraph (i) is replaced by the following:
(a) a particular corporation resident in Canada that does not deal at arm’s length with a parent
(11) The portion of clause 212.3(6)(a)(ii)(B) of the Act before subclause (I) is replaced by the following:
(B) the increase in paid-up capital in respect of the particular class can reasonably be considered to be connected to funding provided to the particular corporation or another corporation resident in Canada (other than the corporation that issued the particular class) by a parent or a non-resident person that does not deal at arm’s length with a parent, unless
(12) The portion of subparagraph 212.3(7)(a)(i) of the Act before clause (A) is replaced by the following:
(i) the amount determined, without reference to this subsection, for A in paragraph (2)(a), is reduced by the lesser of
(13) The portion of paragraph 212.3(7)(b) of the Act before subparagraph (ii) is replaced by the following:
(b) where the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is equal to or greater than the total of all amounts each of which is an amount of paid-up capital immediately after the dividend time, determined without reference to this paragraph, of a cross-border class in respect of the investment, then
(i) the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is reduced by the total referred to in this paragraph, and
(14) Paragraphs 212.3(7)(c) and (d) of the Act are replaced by the following:
(c) where paragraph (b) does not apply and there is at least one cross-border class in respect of the investment,
(i) the amount determined, without reference to this paragraph, for A in paragraph (2)(a) is reduced to nil,
(ii) in computing, at any time after the dividend time, the paid-up capital in respect of a particular cross-border class in respect of the investment, there is to be deducted the amount, if any, that when added to the total of all amounts that are deducted under this paragraph in computing the paid-up capital of other cross-border classes, results in the greatest total reduction because of this paragraph, immediately after the dividend time, of the paid-up capital in respect of shares of cross-border classes that are owned by a parent or another non-resident person with which a parent does not, at the dividend time, deal at arm’s length,
(iii) if the proportion of the shares of a particular class owned, in aggregate, by parents and non-resident persons that do not deal at arm’s length with parents is equal to the proportion so owned of one or more other cross-border classes (in this subparagraph all those classes, together with the particular class, referred to as the “relevant classes”), then the proportion that the reduction under subparagraph (ii) to the paid-up capital in respect of the particular class is of the paid-up capital, determined immediately after the dividend time and without reference to this paragraph, in respect of that class is to be equal to the proportion that the total reduction under subparagraph (ii) to the paid-up capital in respect of all the relevant classes is of the total paid-up capital, determined immediately after the dividend time and without reference to this paragraph, of all the relevant classes, and
(iv) the total of all amounts each of which is an amount to be deducted under subparagraph (ii) in computing the paid-up capital of a cross-border class is to be equal to the amount by which the amount determined for A in paragraph (2)(a) is reduced under subparagraph (i); and
(d) if the amount determined for A in paragraph (2)(a) is reduced because of any of subparagraphs (a)(i), (b)(i) and (c)(i),
(i) the CRIC shall file with the Minister in prescribed manner a form containing prescribed information and the amounts of the paid-up capital, determined immediately after the dividend time and without reference to this subsection, of each class of shares that is described in paragraph (a) or that is a cross-border class in respect of the investment, the paid-up capital of the shares of each of those classes that are owned by a parent or another non-resident person that does not, at the dividend time, deal at arm’s length with a parent, and the reduction under any of subparagraphs (a)(ii), (b)(ii) and (c)(ii) in respect of each of those classes, and
(ii) if the form is not filed on or before the CRIC’s filing-due date for its taxation year that includes the dividend time, the CRIC is deemed to have paid to each parent, and each parent is deemed to have received from the CRIC, on the filing-due date, a dividend equal to the total of all amounts each of which is the amount of a reduction because of any of subparagraphs (a)(i), (b)(i) and (c)(i) in the amount the CRIC is deemed under paragraph (2)(a) to have paid to the parent.
(15) The portion of paragraph 212.3(11)(c) of the Act before subparagraph (i) is replaced by the following:
(c) the CRIC and each parent jointly elect in writing under this paragraph in respect of the amount owing and file the election with the Minister on or before the filing-due date of the CRIC
(16) Paragraphs 212.3(15)(a) and (b) of the Act are replaced by the following:
(a) a CRIC or a taxpayer to which paragraph 128.1(1)(c.3) applies (in this subsection referred to as the “specific corporation”), that would, in the absence of this subsection, be controlled at any time
(i) by more than one non-resident person, is deemed not to be controlled at that time by any such person that controls at that time another non-resident person that controls at that time the specific corporation, unless the application of this paragraph would otherwise result in no non-resident person controlling the specific corporation, and
(ii) by a particular non-resident corporation is deemed not to be controlled at that time by the particular non-resident corporation if the particular non-resident corporation is controlled at that time by another corporation that is at that time
(A) resident in Canada, and
(B) not controlled by any non-resident person or group of non-resident persons not dealing with each other at arm’s length; and
(b) a non-resident person is deemed not to be a member of a particular group of non-resident persons not dealing with each other at arm’s length that controls the specific corporation if
(i) the non-resident person would, absent the application of this paragraph, be a member of the particular group, and
(ii) the non-resident person is a member of the particular group solely because it controls, or is a member of a group that controls, another member of the particular group.
(17) The portion of paragraph 212.3(16)(a) of the Act before subparagraph (i) is replaced by the following:
(a) the business activities carried on by the subject corporation and all other corporations (those other corporations in this subsection and subsection (17) referred to as the “subject subsidiary corporations”) in which the subject corporation has, at the investment time, an equity percentage (as defined in subsection 95(4)) are at the investment time, and are expected to remain, on a collective basis, more closely connected to the business activities carried on in Canada by the CRIC, or by any corporation resident in Canada with which the CRIC does not, at the investment time, deal at arm’s length, than to the business activities carried on by any non-resident person with which the CRIC, at the investment time, does not deal at arm’s length, other than
(18) Clauses 212.3(18)(a)(i)(A) and (B) of the Act are replaced by the following:
(A) each shareholder of the disposing corporation immediately before the investment time is
(I) if there is only one parent in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and
2 at no time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and
2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(B) the disposing corporation is
(I) if there is only one parent in respect of the CRIC, at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(19) Subparagraph 212.3(18)(a)(ii) of the Act is replaced by the following:
(ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and
(A) either
(I) if there is only one parent in respect of the CRIC, none of the predecessor corporations are, at any time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, or
(II) if there is a group of parents in respect of the CRIC, all of the predecessor corporations are, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is
(I) if there is only one parent in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and
2 at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and
2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents;
(20) Subparagraphs 212.3(18)(c)(i) and (ii) of the Act are replaced by the following:
(i) from a corporation (in this paragraph referred to as the “disposing corporation”) to which the CRIC is, immediately before the investment time, related (determined without reference to paragraph 251(5)(b)) and
(A) each shareholder of the disposing corporation immediately before the investment time is
(I) if there is only one parent in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that, immediately before the investment time, is related to the parent, and
2 at no time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and
2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(B) the disposing corporation is
(I) if there is only one parent in respect of the CRIC, at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC, or a corporation of which the CRIC is a shareholder, if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and
(A) either
(I) if there is only one parent in respect of the CRIC, none of the predecessor corporations are, at any time that is in the period during which the series of transactions or events that includes the making of the investment occurs and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, or
(II) if there is a group of parents in respect of the CRIC, all of the predecessor corporations are, at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents, or
(B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is
(I) if there is only one parent in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, related to the parent, and
2 at no time that is in the period and that is before the investment time, dealing at arm’s length (determined without reference to paragraph 251(5)(b)) with the parent or a non-resident person that participates in the series and is, at any time that is in the period and that is before the investment time, related to the parent, and
(II) if there is a group of parents in respect of the CRIC,
1 either the CRIC or a corporation resident in Canada that is, immediately before the investment time, controlled by the group of parents, and
2 at all times that are in the period during which the series of transactions or events that includes the making of the investment occurs and that are before the investment time, controlled by the group of parents;
(21) Subsection 212.3(21) of the Act is replaced by the following:
Marginal note:Persons deemed not to be related
(21) If it can reasonably be considered that one of the main purposes of one or more transactions or events is to cause two or more persons to be related to each other, or a person or group of persons to control another person, so that, in the absence of this subsection, subsection (2) would not apply because of subsection (18) to an investment in a subject corporation made by a CRIC, those persons are deemed not to be related to each other, or that person or group of persons is deemed not to control that other person, as the case may be, for the purposes of subsection (18).
(22) Section 212.3 of the Act is amended by adding the following after subsection (25):
Marginal note:Trusts
(26) For the purposes of this section, subsection 17.1(1) (as it applies in respect of a pertinent loan or indebtedness as defined in subsection (11)), paragraph 128.1(1)(c.3) and subsection 219.1(2), and for the purpose of paragraph 251(1)(a) as it applies for the purposes of those provisions,
(a) in determining, at any time, whether two persons are related to each other or whether any person is controlled by any other person or group of persons, it shall be assumed that
(i) each trust is a corporation having a capital stock of a single class of voting shares divided into 100 issued shares, and
(ii) each beneficiary under a trust owned at that time the number of issued shares of that class determined by the formula
A/B × 100
where
- A
- is the fair market value at that time of the beneficiary’s interest in the trust, and
- B
- is the total fair market value at that time of all beneficiaries’ interests in the trust;
(b) in determining, at any time, the extent to which any person owns shares of the capital stock of a corporation, if at that time a trust resident in Canada owns (determined without reference to this paragraph) shares of the capital stock of the corporation, each beneficiary of the trust is deemed to own, and the trust is deemed not to own, at that time, the shares of each class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust, the number of which is determined by the formula
A × B/C
where
- A
- is the total number of shares of the class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust at that time,
- B
- is the fair market value, at that time, of the beneficiary’s interest in the trust, and
- C
- is the total fair market value, at that time, of all beneficiaries’ interests in the trust; and
(c) if a beneficiary’s share of the income or capital of a trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, then the amounts determined for A and B in paragraph (a), and for B and C in paragraph (b), in respect of the beneficiary are deemed to be equal to one, unless
(i) the trust is resident in Canada, and
(ii) it cannot reasonably be considered that one of the main reasons for the discretionary power is to avoid or limit the application of paragraph 128.1(1)(c.3) or subsection 212.3(2) or 219.1(2).
(23) Subsections (1) to (22) apply in respect of transactions or events that occur after March 18, 2019.
- Date modified: