Budget Implementation Act, 2023, No. 1 (S.C. 2023, c. 26)

• 23 (1) The portion of subsection 108(3) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Income of a trust in certain provisions

    (3) For the purposes of the definition income interest in subsection (1), subclause (c.1)(iii.1)(D)(II) of the definition principal residence in section 54 and the definitions lifetime benefit trust in subsection 60.011(1) and exempt foreign trust in subsection 94(1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definition pre-1972 spousal trust in subsection (1) and paragraphs 70(6)(b) and (6.1)(b), 73(1.01)(c) and 104(4)(a), the income of a trust is its income computed without reference to the provisions of this Act, minus any dividends included in that income

• (2) Subsection (1) applies to taxation years that begin after 2016.

24 Paragraph (b) of the definition action du capital-actions d’une société agricole ou de pêche familiale in subsection 110.6(1) of the French version of the Act is replaced by the following:

• 25 (1) The portion of subsection 115.2(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Not carrying on business in Canada

    (2) For the purposes of subsections 115(1) and 150(1), Part XIV and section 805 of the Income Tax Regulations, a non-resident person is not considered to be carrying on business in Canada at any particular time solely because of the provision to the person, or to a partnership of which the person is a member, at the particular time of designated investment services by a Canadian service provider if

• (2) Subsection (1) is deemed to have come into force on August 9, 2022.

• 26 (1) Subsection 117(2.1) of the Act is replaced by the following:

  • Marginal note:Adjustment to tax payable – advance payment

    (2.1) The tax payable under this Part on the individual’s taxable income for a taxation year, as computed under subsection (2), is deemed to be the total of the amount otherwise computed under that subsection and, except for the purposes of sections 118 to 118.9, 120.2, 121 and Subdivision C, the lesser of

    • (a) the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsections 122.7(2) and (3), and

    • (b) the amount that

      • (i) if the individual is an eligible individual for the purposes of subsection 122.7(2), is the total of all amounts deemed to have been paid

        • (A) on account of the individual’s tax payable under this Part for the taxation year under subsection 122.72(1) or (3), and

        • (B) on account of tax payable under this Part for the taxation year under subsection 122.72(1) or (3), if subsection 122.72(1) were read without reference to subsection 122.7(3), of a person who is the individual’s cohabiting spouse or common-law partner (as defined in subsection 122.7(1)) at the end of the taxation year, and

      • (ii) in any other case, is the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsection 122.72(1) or (3), if subsection 122.72(1) were read without reference to subsection 122.7(2).

• (2) Subsection (1) applies to taxation years that begin after 2022.

• 27 (1) Subparagraph (a)(iii.1) of the definition pension income in subsection 118(7) of the Act is replaced by the following:

  • (iii.1) a payment (other than a payment described in subparagraph (i)) under a money purchase provision (as defined in subsection 147.1(1)) of a registered pension plan or under a specified pension plan,

• (2) Subsection (1) applies to the 2019 and subsequent taxation years.

• 28 (1) The portion of subsection 120.4(3) of the Act before paragraph (a) of the description of B is replaced by the following:

  • Marginal note:Tax payable by a specified individual

    (3) Notwithstanding any other provision of this Act, if an individual is a specified individual for a taxation year, the individual’s tax payable under this Part for the year shall not be less than the amount, if any, determined by the formula

    (A + B) − (C + D)

    where

    A

    is the amount added under subsection (2) to the individual’s tax payable under this Part for the year;

    B

    is the amount that is the lesser of the amounts determined under paragraphs 117(2.1)(a) and (b) for the individual for the year;

    C

    is the amount deducted under section 118.3 in computing the individual’s tax payable under this Part for the year; and

    D

    is the total of all amounts each of which is the amount that

• (2) Subsection (1) applies to taxation years that begin after 2022.

• 29 (1) Section 122.5 of the Act is amended by adding the following after subsection (3.002):

  • Marginal note:Additional deemed payment – January 2023

    (3.003) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula

    0.25 × (A − B) − C

    where

    A

    is the total of

    • (a) $918,

    • (b) $918 for the qualified relation, if any, of the individual in relation to the specified month,

    • (c) if the individual has no qualified relation in relation to the specified month and is entitled to deduct an amount for the taxation year under subsection 118(1) because of paragraph (b) of the description of B in that subsection in respect of a qualified dependant of the individual in relation to the specified month, $918,

    • (d) $483 times the number of qualified dependants of the individual in relation to the specified month, other than a qualified dependant in respect of whom an amount is included under paragraph (c) in computing the total for the specified month,

    • (e) if the individual has no qualified relation and has one or more qualified dependants, in relation to the specified month, $483, and

    • (f) if the individual has no qualified relation and no qualified dependant, in relation to the specified month, the lesser of $483 and 6% of the amount, if any, by which the individual’s income for the taxation year exceeds $9,919;

    B

    is 15% of the amount, if any, by which the individual’s adjusted income for the taxation year exceeds $39,826; and

    C

    is the amount that the eligible individual is deemed to have paid under subsection (3) during the specified month on account of their tax payable for the taxation year.

• (2) Section 122.5 of the Act is amended by adding the following after subsection (3.03):

  • Marginal note:January 2023 payment – shared-custody parent

    (3.04) Notwithstanding subsection (3.003), if an eligible individual is a shared-custody parent (as defined in section 122.6, but with the term “qualified dependant” in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.003) to have been paid during the specified month is equal to the amount determined by the formula

    0.5 × (A + B)

    where

    A

    is the amount determined by the formula in subsection (3.003), calculated without reference to this subsection; and

    B

    is the amount determined by the formula in subsection (3.003), calculated without reference to this subsection and subparagraph (b)(ii) of the definition eligible individual in section 122.6.

• (3) Section 122.5 of the Act is amended by adding the following after subsection (4.2):

  • Marginal note:January 2023 – month specified

    (4.3) Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.003) is January 2023 and the taxation year is the 2021 taxation year.

• 30 (1) The portion of subsection 122.7(1) of the Act before the first definition is replaced by the following:

  Marginal note:Definitions

  • 122.7 (1) The following definitions apply in this Subdivision.

• (2) The portion of subsection 122.7(2) of the Act before the formula is replaced by the following:

  • Marginal note:Deemed payment on account of tax

    (2) Subject to subsection (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula

• (3) Subsections 122.7(4) and (6) to (9) of the Act are repealed.

• (4) Subsections (1) to (3) apply to taxation years that begin after 2022.

• 31 (1) The Act is amended by adding the following after section 122.71:

  Marginal note:Advance payment

  • 122.72 (1) Subject to subsection (5), an individual in relation to a month specified for a taxation year who is an eligible individual for the preceding taxation year who files a return of income for the preceding taxation year on or before the first day of November of the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount equal to 1/6 of the total of the amounts, if any, determined for the individual for the preceding taxation year under subsections 122.7(2) and (3).

  • Marginal note:Conditions of application of subsection (3)

    (2) Subsection (3) applies in respect of an individual in relation to a particular month specified for a taxation year, and each subsequent month specified for the taxation year, if absent subsection (3)

    • (a) the amount deemed by subsection (1) to have been paid by the individual during the particular month specified for the taxation year would be less than $33; and

    • (b) it is reasonable to conclude that the amount deemed by subsection (1) to have been paid by the individual during each subsequent month specified for the taxation year would be less than $33.

  • Marginal note:Single advance payment

    (3) If this subsection applies

    • (a) the total of all amounts that would otherwise be deemed by subsection (1) to have been paid on account of the individual’s tax payable under this Part for the taxation year during the particular month specified for the taxation year, and during each subsequent month specified for the taxation year, is deemed to have been paid by the individual on account of their tax payable under this Part for the taxation year during the particular specified month for the taxation year; and

    • (b) the amount deemed by subsection (1) to have been paid by the eligible individual during those subsequent months specified for the taxation year is deemed, except for the purpose of this subsection, not to have been paid to the extent that it is included in an amount deemed to have been paid by this subsection.

  • Marginal note:Months specified

    (4) For the purposes of this section, the months specified for a taxation year are July and October of the taxation year and January of the immediately following taxation year.

  • Marginal note:No advance payment

    (5) For the purposes of subsection (1), an individual is not an eligible individual for the preceding taxation year in relation to a month specified for a taxation year if the individual

    • (a) dies in the taxation year before the first day of July;

    • (b) is confined to a prison or similar institution for a period in the taxation year of at least 90 days that begins on or before the first day of the specified month; or

    • (c) ceases to be resident in Canada on a day in the taxation year that is on or before the first day of the specified month.

  • Marginal note:Notification to Minister

    (6) If, in the absence of subsection (5), an individual or their cohabiting spouse or common-law partner at the end of the preceding taxation year would be deemed in a taxation year to have paid an amount on account of tax payable for the taxation year under this section, the individual (or, in the case of a deceased individual, their legal representative) shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs:

    • (a) the individual dies in the taxation year;

    • (b) the individual ceases to be resident in Canada in the taxation year; or

    • (c) the individual is confined to a prison or similar institution for a period of at least 90 days in the taxation year.

  • Marginal note:Advance payment – no eligible spouse

    (7) Subsection (1) is to be applied to a particular individual in relation to a month specified for a taxation year as if section 122.7 applied to the particular individual for the preceding taxation year on the basis that the particular individual had no eligible spouse for the preceding taxation year, if

    • (a) another individual was, for the purposes of section 122.7, the eligible spouse of the particular individual for the preceding taxation year; and

    • (b) the other individual is not, for the purposes of subsection (1), an eligible individual for the preceding taxation year in relation to the month specified for the taxation year because of subsection (5).

• (2) Subsection (1) applies to taxation years that begin after 2022.