Fall Economic Statement Implementation Act, 2022 (S.C. 2022, c. 19)

• (b.4) a FHSA,

• Marginal note:FHSA trust

  (u.4) a trust governed by a FHSA to the extent provided by section 146.6;

disbursement quota

disbursement quota, for a taxation year of a registered charity, means the amount determined by the formula

A ÷ 365 × B

where

A

is the number of days in the taxation year, and

B

is

• (a) 3.5% of the prescribed amount for the year, in respect of all or a portion of a property owned by the charity at any time in the 24 months immediately preceding the taxation year that was not used directly in charitable activities or administration, if the prescribed amount is equal to or less than $1 million but greater than

  • (i) if the registered charity is a charitable organization, $100,000, and

  • (ii) in any other case, $25,000,

• (b) if the prescribed amount for the year in respect of all or a portion of a property owned by the charity at any time in the 24 months immediately preceding the taxation year that was not used directly in charitable activities or administration is greater than $1 million, $35,000 plus 5% of the amount by which the prescribed amount exceeds $1 million, and

• (c) in any other case, nil; (contingent des versements)

• (d) expenditures on administration and management of the charity.

• (d) of a registered charity, if it has in a taxation year received a gift of property (other than a designated gift) from another registered charity with which it does not deal at arm’s length and it has expended, before the end of the next taxation year, in addition to its disbursement quota for each of those taxation years, an amount that is less than the fair market value of the property, on charitable activities carried on by it or by way of gifts that are qualifying disbursements to qualified donees or grantee organizations, with which it deals at arm’s length;

• Marginal note:Reduction

  (5) The Minister may, on application made to the Minister in prescribed form by a registered charity, specify an amount in respect of the charity for a taxation year and the registered charity’s disbursement quota shall be deemed to be reduced by that amount.

• Marginal note:Exception

  (1.1) Subject to subsection (1.2), subsection (1) does not apply to a taxation year of a taxpayer if

• Marginal note:Exception — trusts

  (1.2) Subsection (1.1) does not apply to a taxation year of a trust if the trust is resident in Canada and is an express trust, or for civil law purposes a trust other than a trust that is established by law or by judgement, unless the trust

  • (a) had been in existence for less than three months at the end of the year;

  • (b) holds assets with a total fair market value that does not exceed $50,000 throughout the year, if the only assets held by the trust throughout the year are one or more of

    • (i) money,

    • (ii) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3),

    • (iii) a share, debt obligation or right listed on a designated stock exchange,

    • (iv) a share of the capital stock of a mutual fund corporation,

    • (v) a unit of a mutual fund trust,

    • (vi) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), and

    • (vii) an interest as a beneficiary under a trust, all the units of which are listed on a designated stock exchange;

  • (c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided the trust is not maintained as a separate trust for a particular client or clients;

  • (d) is a registered charity;

  • (e) is a club, society or association described in paragraph 149(1)(l);

  • (f) is a mutual fund trust;

  • (g) is, for greater certainty, a related segregated fund trust, within the meaning assigned by paragraph 138.1(1)(a);

  • (h) is a trust, all the units of which are listed on a designated stock exchange;

  • (i) is prescribed to be a master trust;

  • (j) is, for greater certainty, a graduated rate estate;

  • (k) is a qualified disability trust, as defined in subsection 122(3);

  • (l) is an employee life and health trust;

  • (m) is a trust described under paragraph 81(1)(g.3);

  • (n) is a trust under or governed by

    • (i) a deferred profit sharing plan,

    • (ii) a pooled registered pension plan,

    • (iii) a registered disability savings plan,

    • (iv) a registered education savings plan,

    • (v) a registered pension plan,

    • (vi) a registered retirement income fund,

    • (vii) a registered retirement savings plan,

    • (viii) a tax-free savings account,

    • (ix) an employee profit sharing plan,

    • (x) a registered supplementary unemployment benefit plan, or

    • (xi) a first home savings account; or

  • (o) is a cemetery care trust or a trust governed by an eligible funeral arrangement.

• Marginal note:Bare trusts and arrangements — inclusion

  (1.3) For the purposes of this section, a trust includes an arrangement under which a trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property.

• Marginal note:Solicitor-client privilege

  (1.4) For greater certainty, subsections (1.1) to (1.3) do not require the disclosure of information that is subject to solicitor-client privilege.

• Marginal note:Determination under subsection 245(2)

  (1.11) If at any time the Minister ascertains the tax consequences to a taxpayer because of subsection 245(2) with respect to a transaction, the Minister

  • (a) shall, in the case of a determination under subsection 245(8), determine any amount that is, or could at a subsequent time be, relevant for the purposes of computing the income, taxable income or taxable income earned in Canada of, tax or other amount payable by, or amount refundable to, the taxpayer under this Act;

  • (b) may, in any case not described in paragraph (a), determine any amount referred to in paragraph (a); and

  • (c) shall, if a determination is made under this subsection, send to the taxpayer, with all due dispatch, a notice of determination stating the amount so determined.

• (v.1) is made in respect of an amount deducted under subsection 127(5) in respect of a flow-through critical mineral mining expenditure as defined in subsection 127(9),

• (v) a payment out of or under

  • (i) a FHSA, if the amount is required by section 146.6 to be included in computing a taxpayer’s income, or

  • (ii) an arrangement that ceased to be a FHSA by application of subsection 146.6(16)

• Marginal note:Interpretation

  (0.1) In this section and section 160.01, a transaction includes an arrangement or event.

• d) le bénéficiaire du transfert et l’auteur du transfert sont solidairement responsables du paiement d’une partie de l’impôt de l’auteur du transfert en vertu de la présente partie pour chaque année d’imposition égale à l’excédent de l’impôt pour l’année sur ce que cet impôt aurait été sans l’application des articles 74.1 à 75.1 de la présente loi et de l’article 74 de la Loi de l’impôt sur le revenu, chapitre 148 des Statuts revisés du Canada de 1952, à l’égard de tout revenu tiré des biens ainsi transférés ou des biens y substitués ou à l’égard de tout gain tiré de la disposition de tels biens;

• e) le bénéficiaire du transfert et l’auteur du transfert sont solidairement responsables du paiement en vertu de la présente loi d’un montant égal au moins élevé des montants suivants :

• Marginal note:Anti-avoidance rules

  (5) For the purposes of subsections (1) to (4), if a person (referred to in this section as the “transferor”) has transferred property either directly or indirectly, by means of a trust or by any other means whatever to another person (referred to in this section as the “transferee”) in a transaction or as part of a series of transactions

  • (a) the transferor is deemed to not be dealing at arm’s length with the transferee at all times in the transaction or series of transactions if

    • (i) at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, the transferor and transferee do not deal at arm’s length, and

    • (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and transferor for an amount payable under this Act;

  • (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (2) for that amount) is deemed to have become payable in the taxation year in which the property was transferred if it is reasonable to conclude that one of the purposes for the transfer of property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and

  • (c) the amount determined under subparagraph (1)(e)(i) is deemed to be the greater of

    • (i) the amount otherwise determined under that subparagraph without reference to this paragraph, and

    • (ii) the amount determined by the formula

      A − B

      where

      A

      is the fair market value of the property at the time of the transfer, and

      B

      is

      • (A) the lowest fair market value of the consideration (that is held by the transferor) given for the property at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, or

      • (B) if the consideration is in a form that is cancelled or extinguished during the period referred to in clause (A),

        • (I) the amount that is the lowest of the amount determined in clause (A) and the fair market value during the period of any property, other than property that is cancelled or extinguished during the period, that is substituted for the consideration referred to in clause (A), or

        • (II) if there is no property that is substituted for the consideration referred to in clause (A), other than property cancelled or extinguished during the period, nil.

Marginal note:Definitions

• 160.01 (1) The following definitions apply in this section.

  gross entitlements

  gross entitlements of a person at any time, in respect of a planning activity of the person, means all amounts to which the person, or another person not dealing at arm’s length with the person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the activity. (droits à paiement)

  person

  person includes a partnership. (personne)

  planning activity

  planning activity has the same meaning as in subsection 163.2(1). (activité de planification)

  section 160 avoidance planning

  section 160 avoidance planning by a person, means planning activity in respect of a transaction or series of transactions that

  • (a) is, or is part of, a section 160 avoidance transaction; and

  • (b) one of the purposes of the transaction or series of transactions is to

    • (i) reduce a transferee’s joint and several, or solidary, liability for tax owing under this Act by the transferor (or that would be owing by the transferor if not for a tax attribute transaction), or

    • (ii) reduce the person’s or another person’s ability to pay any amount owing, or that may become owing, under this Act. (planification d’évitement en vertu de l’article 160)

  section 160 avoidance transaction

  section 160 avoidance transaction means a transaction or series of transactions in respect of which

  • (a) the conditions set out in paragraph 160(5)(a) or (b) are met; or

  • (b) if subsection 160(5) applied to the transaction or series of transactions, the amount determined under subparagraph 160(5)(c)(ii) would exceed the amount determined under subparagraph 160(5)(c)(i). (opération d’évitement en vertu de l’article 160)

  tax attribute

  tax attribute means a balance, pool or other amount determined under this Act that is or may be relevant in computing income or in determining a taxpayer’s liability for tax under this Act in any taxation year and includes

  • (a) a capital loss, non-capital loss, restricted farm loss, farm loss and limited partnership loss;

  • (b) an amount that is deductible in computing a person’s income;

  • (c) any balance of undeducted outlays, expenses or other amounts;

  • (d) paid-up capital in respect of a share of any class of the capital stock of a corporation;

  • (e) cost or capital cost of a property; 

  • (f) an amount deductible from an amount otherwise payable under this Act; and

  • (g) an amount that is deemed to have been remitted as an amount payable under this Act. (attribut fiscal)

  tax attribute transaction

  tax attribute transaction means a transaction or series of transactions in which a tax attribute – of a person that dealt at arm’s length with a transferor or transferee immediately before the transaction or series of transactions – is used, directly or indirectly, to provide a tax benefit for the transferor or transferee (or, if either the transferor or transferee is amalgamated with another corporation, the new corporation within the meaning assigned by subsection 87(1)). (opération d’attribut fiscal)

  tax benefit

  tax benefit has the same meaning as in subsection 163.2(1). (avantage fiscal)

  transferee

  transferee has the meaning assigned by subsections 160(1) and (5). (bénéficiaire du transfert)

  transferor

  transferor has the meaning assigned by subsections 160(1) and (5). (auteur du transfert)

• Marginal note:Penalty

  (2) Every person that engages in, participates in, assents to or acquiesces in planning activity that they know is section 160 avoidance planning, or would reasonably be expected to know is section 160 avoidance planning, but for circumstances amounting to gross negligence is liable to a penalty that is the lesser of

  • (a) 50% of the amount payable under this Act (determined without reference to this subsection), the joint and several, or solidary, liability for which was sought to be avoided through the planning, and

  • (b) the total of $100,000 and the person’s gross entitlements at the time at which the notice of assessment of the penalty is sent to the person in respect of the planning.

• Marginal note:Clerical or secretarial services

  (3) Subsection (2) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the planning.