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)
54 (1) Paragraph 219.1(2)(b) of the Act is replaced by the following:
(b) the other corporation is controlled, at that time, by a non-resident person or a group of non-resident persons not dealing with each other at arm’s length; and
(2) Subsection (1) applies in respect of transactions or events that occur after March 18, 2019.
55 (1) The portion of subsection 231.2(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Requirement to provide documents or information
231.2 (1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice sent or served in accordance with subsection (1.1), require that any person provide, within such reasonable time as is stipulated in the notice,
(2) Section 231.2 of the Act is amended by adding the following after subsection (1):
Marginal note:Notice
(1.1) A notice referred to in subsection (1) may be
(a) served personally;
(b) sent by registered or certified mail; or
(c) sent electronically to a bank or credit union that has provided written consent to receive notices under subsection (1) electronically.
56 (1) Subsection 231.6(2) of the Act is replaced by the following:
Marginal note:Requirement to provide foreign-based information
(2) Notwithstanding any other provision of this Act, the Minister may, by notice sent or served in accordance with subsection (3.1), require that a person resident in Canada or a non-resident person carrying on business in Canada provide any foreign-based information or document.
(2) Section 231.6 of the Act is amended by adding the following after subsection (3):
Marginal note:Notice
(3.1) A notice referred to in subsection (2) may be
(a) served personally;
(b) sent by registered or certified mail; or
(c) sent electronically to a bank or credit union that has provided written consent to receive notices under subsection (2) electronically.
(3) Subsection 231.6(4) of the English version of the Act is replaced by the following:
Marginal note:Review of foreign information requirement
(4) The person who is sent or served with a notice of a requirement under subsection (2) may, within 90 days after the notice is sent or served, apply to a judge for a review of the requirement.
(4) Subsection 231.6(6) of the English version of the Act is replaced by the following:
Marginal note:Unreasonableness
(6) For the purposes of paragraph (5)(c), the requirement to provide the information or document shall not be considered to be unreasonable because the information or document is under the control of or available to a non-resident person that is not controlled by the person who is sent or served with the notice of the requirement under subsection (2) if that person is related to the non-resident person.
(5) Subsection 231.6(8) of the Act is replaced by the following:
Marginal note:Consequence of failure
(8) If a person fails to comply substantially with a notice sent or served under subsection (2) and if the notice is not set aside by a judge pursuant to subsection (5), any court having jurisdiction in a civil proceeding relating to the administration or enforcement of this Act shall, on motion of the Minister, prohibit the introduction by that person of any foreign-based information or document covered by that notice.
57 Paragraph 231.8(a) of the Act is replaced by the following:
(a) where the taxpayer is sent or served with a notice of a requirement under subsection 231.2(1), the period of time between the day on which an application for judicial review in respect of the requirement is made and the day on which the application is finally disposed of; and
58 (1) Paragraphs 241(3.4)(a) and (b) of the Act are replaced by the following:
(a) the names of each organization in respect of which an individual can be entitled to a deduction under subsection 118.02(2);
(b) information relating to the eligibility, for the deduction under subsection 118.02(2), of subscriptions offered by organizations referred to in paragraph (a); and
(c) the start and, if applicable, end of the period in which paragraph (a) or (b) applies in respect of any particular organization or subscription.
(2) Subsection (1) is deemed to have come into force on January 1, 2020.
59 Section 244 of the Act is amended by adding the following after subsection (6):
Marginal note:Proof of electronic delivery
(6.1) If, by this Act or a regulation, provision is made for sending a notice to a person electronically, an affidavit of an officer of the Canada Revenue Agency sworn before a commissioner or other person authorized to take affidavits, shall, in the absence of proof to the contrary, be received as evidence of the sending and of the notice if the affidavit sets out that
(a) the officer has knowledge of the facts in the particular case;
(b) the notice was sent electronically to the person on a named day; and
(c) the officer identifies as exhibits attached to the affidavit copies of
(i) an electronic message confirming the notice has been sent to the person, and
(ii) the notice.
60 (1) The portion of subsection 247(2) of the Act after paragraph (b) and before paragraph (c) is replaced by the following:
any amounts (in subsection (2.1) referred to as the “initial amounts”) that would be determined for the purposes of applying the provisions of this Act (if this Act were read without reference to this section and section 245) in respect of the taxpayer or the partnership for a taxation year or fiscal period shall be adjusted (in this section referred to as an “adjustment”) to the quantum or nature of the amounts (in subsection (2.1) referred to as the “adjusted amounts”) that would have been determined if,
(2) Section 247 of the Act is amended by adding the following after subsection (2):
Marginal note:Ordering
(2.1) For the purpose of applying subsection (2) in the context of the other provisions of this Act, the following order is to be applied:
(a) first determine each of the initial amounts;
(b) then make the adjustments, if any, to each of the initial amounts; and
(c) then apply each of the provisions of this Act (other than subsection (2) and, for greater certainty, including section 245) using the adjusted amounts.
(3) Subsection 247(8) of the Act is repealed.
(4) Subsections (1) to (3) apply to taxation years that begin after March 18, 2019.
61 (1) Subparagraph (b)(i) of the definition derivative forward agreement in subsection 248(1) of the Act is replaced by the following:
(i) revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property unless
(A) the property is
(I) a Canadian security (as defined in subsection 39(6)), or
(II) an interest in a partnership the fair market value of which is derived, in whole or in part, from a Canadian security,
(B) the agreement is an agreement to acquire property from
(I) a tax-indifferent investor, or
(II) a financial institution (as defined in subsection 142.2(1)), and
(C) it can reasonably be considered that one of the main purposes of the series of transactions or events, or any transaction or event in the series, of which the agreement is part is for all or any portion of the capital gain on a disposition (other than a disposition by the seller to the taxpayer under the agreement) of a Canadian security referred to in clause (A) — as part of the same series of transactions or events — to be attributable to amounts paid or payable on the Canadian security by the issuer of the Canadian security during the term of the agreement as
(I) interest,
(II) dividends, or
(III) income of a trust other than income paid out of the taxable capital gains of the trust,
(2) The portion of subparagraph (a)(v) of the definition qualified Canadian journalism organization in subsection 248(1) of the Act before clause (A) is replaced by the following:
(v) it is engaged in the production of original news content, which
(3) Subparagraph (a)(vii) of the definition qualified Canadian journalism organization in subsection 248(1) of the Act is amended by adding “or” at the end of clause (A), by replacing “or” at the end of clause (B) with “and” and by repealing clause (C).
(4) Paragraph (b) of the definition tax-indifferent investor in subsection 248(1) of the Act is replaced by the following:
(b) a non-resident person, other than a person to which all amounts paid or credited under a derivative forward agreement, a synthetic equity arrangement or a specified synthetic equity arrangement, as the case may be, may reasonably be attributed to the business carried on by the person in Canada through a permanent establishment (as defined in section 8201 of the Income Tax Regulations) in Canada,
(5) The definition zero-emission vehicle in subsection 248(1) of the Act is amended by striking out “and” at the end of paragraph (b) and by replacing paragraph (c) with the following:
(c) does not meet any of the following conditions:
(i) it is a vehicle in respect of which the taxpayer has, at any time, made an election under subsection 1103(2j) of the Income Tax Regulations,
(ii) it is a vehicle in respect of which assistance has been paid by the Government of Canada under a prescribed program, and
(iii) if the vehicle was acquired before March 2, 2020, either
(A) it has been used, or acquired for use, for any purpose before it was acquired by the taxpayer, or
(B) it is a vehicle in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) by another person or partnership, and
(d) would be an accelerated investment incentive property of the taxpayer if subsection 1104(4) of the Income Tax Regulations were read without its exclusions for property included in Class 54 or Class 55 of Schedule II to those Regulations. (véhicule zéro émission)
(6) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
- advanced life deferred annuity
advanced life deferred annuity has the meaning assigned by subsection 146.5(1); (rente viagère différée à un âge avancé)
(7) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
- fully collateralized arrangement
fully collateralized arrangement means a securities lending arrangement or a specified securities lending arrangement if, throughout the term of the arrangement, the borrower
(a) has provided the lender under the arrangement with money in an amount of, or securities described in paragraph (c) of the definition qualified security in subsection 260(1) that have a fair market value of, not less than 95% of the fair market value of the security that is transferred or lent under the arrangement, and
(b) is entitled to enjoy, directly or indirectly, the benefits of all or substantially all income derived from, and opportunity for gain in respect of, the money or securities provided; (mécanisme entièrement garanti)
- specified securities lending arrangement
specified securities lending arrangement has the same meaning as in subsection 260(1); (mécanisme de prêt de valeurs mobilières déterminé)
(8) Subsection (1) is deemed to have come into force on March 19, 2019. However, it does not apply before 2020 in respect of
(a) an agreement that is entered into after the final settlement of another derivative forward agreement (in this paragraph referred to as the “prior agreement”) if
(i) having regard to the source of the funds used to purchase the property to be sold under the agreement, it is reasonable to conclude that the agreement is a continuation of the prior agreement,
(ii) the terms of the agreement and the prior agreement are substantially similar,
(iii) the final settlement date under the agreement is before 2020,
(iv) subsection (1) does not apply to the prior agreement, and
(v) the notional amount of the agreement is at all times less than or equal to the amount determined by the formula
(A + B + C + D + E) – (F + G)
where
- A
- is the notional amount of the agreement when it is entered into,
- B
- is the total of all amounts each of which is an increase in the notional amount of the agreement, at or before that time, that is attributable to the underlying interest,
- C
- is the amount of the taxpayer’s cash on hand immediately before March 19, 2019 that was committed, before March 19, 2019, to be invested under the agreement,
- D
- is the total of all amounts each of which is an increase, at or before that time, in the notional amount of the agreement that is attributable to the final settlement of another derivative forward agreement if subsection (1) does not apply to the other agreement,
- E
- is the lesser of
(A) either
(I) if the prior agreement was entered into before March 19, 2019, the amount, if any, by which the amount determined under subparagraph (i) of the description of F in paragraph (b) for the prior agreement immediately before it was finally settled exceeds the total determined under subparagraph (ii) of the description of F in paragraph (b) for the prior agreement immediately before it was finally settled, or
(II) in any other case, the amount, if any, by which the amount determined under this clause for the prior agreement immediately before it was finally settled exceeds the total determined under clause (B) for the prior agreement immediately before it was finally settled, and
(B) the total of all amounts each of which is an increase in the notional amount of the agreement before 2020 that is not otherwise described in this formula,
- F
- is the total of all amounts each of which is a decrease in the notional amount of the agreement, at or before that time, that is attributable to the underlying interest, and
- G
- is the total of all amounts each of which is the amount of a partial settlement of the agreement, at or before that time, to the extent that it is not reinvested in the agreement; or
(b) an agreement that is entered into before March 19, 2019, unless at any time on or after March 19, 2019, the notional amount of the agreement exceeds the amount determined by the formula
(A + B + C + D + E + F) – (G + H)
where
- A
- is the notional amount of the agreement immediately before March 19, 2019,
- B
- is the total of all amounts each of which is an increase in the notional amount of the agreement, on or after March 19, 2019 and at or before that time, that is attributable to the underlying interest,
- C
- is the amount of the taxpayer’s cash on hand immediately before March 19, 2019 that was committed, before March 19, 2019, to be invested under the agreement,
- D
- is the amount, if any, of an increase, on or after March 19, 2019 and at or before that time, in the notional amount of the agreement as a consequence of the exercise of an over-allotment option granted before March 19, 2019,
- E
- is the total of all amounts each of which is an increase, on or after March 19, 2019 and at or before that time, in the notional amount of the agreement that is attributable to the final settlement of another derivative forward agreement if subsection (1) does not apply to the other agreement,
- F
- is the lesser of
(i) 5% of the notional amount of the agreement immediately before March 19, 2019, and
(ii) the total of all amounts each of which is an increase in the notional amount of the agreement on or after March 19, 2019 and before 2020 that is not otherwise described in this formula,
- G
- is the total of all amounts each of which is a decrease in the notional amount of the agreement, on or after March 19, 2019 and at or before that time, that is attributable to the underlying interest, and
- H
- is the total of all amounts each of which is the amount of a partial settlement of the agreement, on or after March 19, 2019 and at or before that time, to the extent that it is not reinvested in the agreement.
(9) For the purposes of subsection (8), the notional amount of a derivative forward agreement at any time is the fair market value at that time of the property that would be acquired under the agreement if the agreement were finally settled at that time.
(10) Subsections (2) and (3) are deemed to have come into force on January 1, 2019.
(11) Subsections (4) and (7) are deemed to have come into force on March 19, 2019.
(12) Subsection (5) is deemed to have come into force on March 2, 2020.
(13) Subsection (6) is deemed to have come into force on January 1, 2020.
- Date modified: