Fall Economic Statement Implementation Act, 2022 (S.C. 2022, c. 19)
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Assented to 2022-12-15
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
C.R.C., c. 945Income Tax Regulations (continued)
76 (1) The Regulations are amended by adding the following after section 218:
First Home Savings Account
219 (1) An issuer of a FHSA shall make an information return for each calendar year in prescribed form and manner in respect of the FHSA.
(2) An issuer of a FHSA shall make an information return in prescribed form and manner in respect of any calendar year in which one or more of the following occurs:
(a) the holder makes a contribution to the FHSA;
(b) an amount has been transferred to the FHSA from an RRSP under which the holder is an annuitant;
(c) an amount is required to be included in the income of a taxpayer under section 146.6 of the Act;
(d) the holder makes a qualifying withdrawal from the FHSA; or
(e) the holder designates an amount under the definition designated amount in subsection 207.01(1) of the Act.
(3) An issuer of a FHSA that governs a trust shall notify the holder of the FHSA in prescribed form and manner before March of a calendar year if, at any time during the preceding calendar year,
(a) the trust acquires or disposes of property that is a non-qualified investment (as defined in subsection 207.01(1) of the Act) for the trust; or
(b) property held by the trust becomes or ceases to be a non-qualified investment (as defined in subsection 207.01(1) of the Act) for the trust.
(2) Subsection (1) applies to the 2023 and subsequent taxation years.
77 (1) Paragraphs 309.1(b) and (c) of the Regulations are replaced by the following:
(b) there shall be included the insurer’s maximum tax actuarial reserve (in this section as defined in subsection 138(12) of the Act) for the immediately preceding taxation year in respect of participating life insurance policies in Canada;
(c) there shall not be included any amount in respect of the insurer’s participating life insurance policies in Canada that was deducted under subparagraph 138(3)(a)(i) of the Act in computing its income for the immediately preceding taxation year;
(2) Paragraph 309.1(e) of the Regulations is replaced by the following:
(e) there shall be deducted the insurer’s maximum tax actuarial reserve for the year in respect of participating life insurance policies in Canada;
(3) Paragraph 309.1(g) of the Regulations is replaced by the following:
(g) except as otherwise provided in paragraph (e), no deduction shall be made in respect of a reserve deductible under subparagraph 138(3)(a)(i) of the Act in computing the insurer’s income for the year; and
(4) Subsection (1) applies to taxation years that begin after 2023.
(5) Subsections (2) and (3) apply to taxation years that begin after 2022.
78 (1) Subsections 1400(3) and (4) of the Regulations are replaced by the following:
(3) For the purposes of paragraphs (1)(a) and (2)(a), the amount determined under this subsection in respect of an insurer for a taxation year is the positive or negative amount determined by the formula
A + B + (0.95 × C) − (0.9 × D) + E + F + G − (H − (0.9 × I))
where
- A
- is the total of all amounts each of which is the liability for remaining coverage for a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts;
- B
- is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is
(a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies other than insurance policies in respect of which
(i) a claim that was incurred before the end of the year has been reported to the insurer before the end of the year,
(ii) the claim is in respect of damages for personal injury or death, and
(iii) the insurer has agreed to a structured settlement of the claim, and
(b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies other than insurance policies that meet the conditions in subparagraphs (a)(i) to (iii);
- C
- is the total of all amounts each of which is an amount, in respect of a group of insurance contracts of the insurer at the end of the year other than a group of life insurance contracts, that is
(a) the liability for incurred claims for the group, if no portion of the liability for incurred claims is in respect of insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B, and
(b) in any other case, the amount that would be the liability for incurred claims for the group if the liability for incurred claims were determined excluding insurance policies that meet the conditions in subparagraphs (a)(i) to (iii) of the description of B,
- D
- is the total of all amounts each of which is the contractual service margin for a group of insurance policies of the insurer at the end of the year that is in respect of
(a) non-cancellable or guaranteed renewable accident and sickness policies that are in respect of accident and sickness insurance,
(b) mortgage insurance, or
(c) title insurance;
- E
- is an amount in respect of policies that insure a fidelity risk, a surety risk, a nuclear risk or a risk related to a financial loss of a lender on a loan made on the security of real property, equal to the lesser of
(a) the total of the reported reserves of the insurer at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F), and
(b) a reasonable amount as a reserve determined as at the end of the year in respect of such risks (other than an amount included under the description of A, B, C, D or F);
- F
- is the amount of a guarantee fund at the end of the year provided for under an agreement in writing between the insurer and His Majesty in right of Canada under which His Majesty has agreed to guarantee the obligations of the insurer under a policy that insures a risk related to a financial loss of a lender on a loan made on the security of real property;
- G
- is an amount in respect of policies that insure earthquake risks in Canada equal to the lesser of
(a) the portion of the reported reserve of the insurer at the end of the year in respect of those risks that is attributable to accumulations from premiums in respect of those risks (other than an amount included under the description of A, B, C, D, E or F), and
(b) a reasonable amount as a reserve determined at the end of the year in respect of those risks (other than an amount included under the description of A, B, C, D, E or F);
- H
- is the total of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
(a) if no portion of the reinsurance contract held amount for the group is in respect of the reinsurance of a risk under life insurance policies, the reinsurance contract held amount for the group, and
(b) in any other case, the amount that would be the reinsurance contract held amount for the group if the amount were determined excluding any portion of that amount that is in respect of the reinsurance of a risk under life insurance policies; and
- I
- is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
(a) if no portion of the contractual service margin for the group is in respect of the reinsurance of a risk under a policy other than a policy described in paragraph (a) of the description of D, or a policy in respect of insurance described in paragraph (b) or (c) of the description of D, the contractual service margin for the group, and
(b) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion of the contractual service margin other than that portion that is in respect of the reinsurance of a risk under a policy described in paragraph (a) of the description of D, and a policy in respect of insurance described in paragraph (b) or (c) of the description of D.
(2) Subsection (1) applies to taxation years that begin after 2022.
79 (1) Section 1402 of the Regulations is replaced by the following:
1402 Any amount determined under
(a) section 1401 shall be determined net of relevant reinsurance recoverable amounts; and
(b) section 1400 or 1401 shall be determined without reference to any amount in respect of a deposit accounting insurance policy.
(2) Subsection (1) applies to taxation years that begin after 2022.
80 (1) The portion of subsection 1404(1) of the Regulations before paragraph (a) is replaced by the following:
1404 (1) For the purpose of subparagraph 138(3)(a)(i) of the Act, there may be deducted, in computing a life insurer’s income from carrying on its life insurance business in Canada for a taxation year in respect of its groups of life insurance contracts in Canada at the end of the year, the amount the insurer claims, not exceeding
(2) The portion of subsection 1404(2) of the Regulations before paragraph (a) is replaced by the following:
(2) For the purpose of paragraph 138(4)(b) of the Act, the amount prescribed in respect of an insurer for a taxation year, in respect of its groups of life insurance contracts in Canada at the end of the year, is
(3) Subsection 1404(3) of the Regulations is replaced by the following:
(3) For the purposes of paragraphs (1)(a) and (2)(a), the amount determined under this subsection in respect of an insurer for a taxation year, for groups of life insurance contracts in Canada of the insurer at the end of the year, is the positive or negative amount determined by the formula
A + B − (0.9 × C) − (D − (0.9 × E))
where
- A
- is the total of all amounts each of which is the liability for remaining coverage for a group of life insurance contracts in Canada of the insurer at the end of the year;
- B
- is the total of all amounts each of which is the liability for incurred claims for a group of life insurance contracts in Canada of the insurer at the end of the year;
- C
- is the total of all amounts each of which is the contractual service margin for a group of life insurance contracts in Canada (other than a group of segregated fund policies) of the insurer at the end of the year;
- D
- is the total of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
(a) if no portion of the reinsurance contract held amount for the group is in respect of the reinsurance of a risk under an insurance policy other than a life insurance policy in Canada, the reinsurance contract held amount for the group, and
(b) in any other case, the amount that would be the reinsurance contract held amount for the group if the amount were determined excluding any portion that is in respect of the reinsurance of a risk under an insurance policy other than a life insurance policy in Canada; and
- E
- is the total of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
(a) if no portion of the contractual service margin for the group is in respect of the reinsurance of a risk under an insurance policy other than a life insurance policy in Canada that is not a segregated fund policy, the contractual service margin for the group, and
(b) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion that is in respect of the reinsurance of a risk under insurance policies other than a life insurance policy in Canada that is not a segregated fund policy.
(4) Subsections (1) to (3) apply to taxation years that begin after 2022.
81 (1) Section 1405 of the Regulations is repealed.
(2) Subsection (1) applies to taxation years that begin after 2022.
82 (1) The portion of section 1406 of the Regulations before paragraph (b) is replaced by the following:
1406 Any amount determined under section 1404 shall be determined
(2) Subsection (1) applies to taxation years that begin after 2022.
83 (1) Section 1407 of the Regulations is replaced by the following:
1407 For greater certainty, any amount referred to in or determined under section 1404 may be equal to, or less than, nil.
(2) Subsection (1) applies to taxation years that begin after 2022.
84 (1) The definitions claim liability, extended motor vehicle warranty, general amending provision, policy liability, post-1995 life insurance policy, post-1995 non-cancellable or guaranteed renewable accident and sickness policy, pre-1996 life insurance policy, pre-1996 non-cancellable or guaranteed renewable accident and sickness policy and reinsurance commission in subsection 1408(1) of the Regulations are repealed.
(2) The definitions relevant authority and reported reserve in subsection 1408(1) of the Regulations are replaced by the following:
- relevant authority
relevant authority of an insurer has the same meaning as in subsection 138(12) of the Act. (autorité compétente)
- reported reserve
reported reserve of an insurer at the end of a taxation year in respect of a policy that insures an earthquake risk in Canada, or a fidelity risk, a nuclear risk or a risk related to a financial loss of a lender on a loan made on the security of real property, means the amount equal to the positive or negative amount of the reserve reported as at the end of the year. (provision déclarée)
(3) Subsection 1408(1) of the Regulations is amended by adding the following in alphabetical order:
- accident and sickness insurance
accident and sickness insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance accidents et maladie)
- contractual service margin
contractual service margin for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by the insurer, at the end of a taxation year, has the same meaning as in subsection 138(12) of the Act. (marge sur services contractuels)
- group of insurance contracts
group of insurance contracts of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance)
- group of life insurance contracts
group of life insurance contracts of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance-vie)
- group of life insurance contracts in Canada
group of life insurance contracts in Canada of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats d’assurance-vie au Canada)
- group of reinsurance contracts
group of reinsurance contracts held by an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de contrats de réassurance)
- group of segregated fund policies
group of segregated fund policies of an insurer has the same meaning as in subsection 138(12) of the Act. (groupe de polices à fonds réservé)
- liability for incurred claims
liability for incurred claims for a group of insurance contracts of an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (passif au titre des sinistres survenus)
- liability for remaining coverage
liability for remaining coverage for a group of insurance contracts of an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (passif au titre de la couverture restante)
- mortgage insurance
mortgage insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance hypothécaire)
- reinsurance contract held amount
reinsurance contract held amount for a group of reinsurance contracts held by an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act. (montant au titre des contrats de réassurance détenus)
- title insurance
title insurance has the same meaning as in the schedule to the Insurance Companies Act. (assurance de titres)
(4) Subsections 1408(2), (4), (7) and (8) of the Regulations are repealed.
(5) Subsections (1) to (4) apply to taxation years that begin after 2022.
- Date modified: