Fall Economic Statement Implementation Act, 2023 (S.C. 2024, c. 15)

• 68 (1) Subsection 256(7) of the Act is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i), and by adding the following after paragraph (i):

  • (j) if an employee ownership trust controls a qualifying business, control of the qualifying business is deemed not to be acquired solely because of a change in the trustee having ownership or control of the trust’s property if the trust remains an employee ownership trust immediately after the change of trustee.

• (2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2024.

• 69 (1) The definition specified provision in subsection 256.1(1) of the Act is replaced by the following:

  specified provision

  specified provision means any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4), (5), (5.01), (5.1) and (5.3), paragraphs (j) and (k) of the definition investment tax credit in subsection 127(9), subsections 181.1(7) and 190.1(6) and any provision of similar effect. (dispositions déterminées)

• (2) Subsection (1) applies in respect of taxation years of a taxpayer that begin on or after October 1, 2023. However, subsection (1) also applies in respect of a taxation year that begins before, and ends after, October 1, 2023 if

  • (a) any of the taxpayer’s three immediately preceding taxation years was, because of a transaction or event or a series of transactions or events, shorter than it would have been in the absence of that transaction, event or series; and

  • (b) it can reasonably be considered that one of the purposes of the transaction, event or series was to defer the application of paragraph 12(1)(l.2) of the Act, as enacted by subsection 2(1), or the application of section 18.2 or 18.21 of the Act, as enacted by subsection 7(1), to the taxpayer.

• 70 (1) Section 260 of the Act is amended by adding the following after subsection (6.2):

  • Marginal note:Subsections 112(2.01) and (2.3) — ordering

    (6.3) For the purposes of paragraphs (6.1)(b) and (6.2)(b), the amount of any dividends received by a corporation in respect of which no amount was deductible because of subsection 112(2.3) includes an amount that was not deductible under both subsections 112(2.01) and (2.3).

• (2) Subsection (1) applies in respect of dividends received after 2023.

R.S., c. E-15Excise Tax Act

71 Clause 295(5)(d)(xi.1)(A) of the Excise Tax Act is replaced by the following:

2002, c. 22Excise Act, 2001

72 Clause 211(6)(e)(xii.1)(A) of the Excise Act, 2001 is replaced by the following:

C.R.C., c. 945Income Tax Regulations

• 73 (1) Paragraph 103(7)(a) of the Income Tax Regulations is amended by striking out “or” at the end of subparagraph (ii) and by adding the following after subparagraph (iii):

  • (iv) a contribution that is an excluded contribution (as defined in subsection 207.5(1) of the Act); or

• (2) Subsection (1) is deemed to have come into force on March 28, 2023.

• 74 (1) Subsection 204(3) of the Regulations is amended by striking out “or” at the end of paragraph (f), by adding “or” at the end of paragraph (g) and by adding the following after paragraph (g):

  • (h) governed by a FHSA.

• (2) Subsection (1) is deemed to have come into force on April 1, 2023.

• 75 (1) Subsection 205(3) of the Regulations is amended by deleting the following:

  First Home Savings Account (FHSA) Annual Information Return

• (2) Subsection 205(3) of the Regulations is amended by adding the following in alphabetical order:

  First Home Savings Account Statement

  T4FHSA

• (3) Subsections (1) and (2) are deemed to have come into force on April 1, 2023.

• 76 (1) Subsection 205.1(1) of the Regulations is amended by deleting the following:

  First Home Savings Account (FHSA) Annual Information Return

• (2) Subsection 205.‍1(1) of the Regulations is amended by adding the following in alphabetical order:

  First Home Savings Account Statement

  T4FHSA

• (3) Subsections (1) and (2) are deemed to have come into force on April 1, 2023.

• 77 (1) The portion of subsection 209(5) of the Regulations before paragraph (a) is replaced by the following:

  • (5) A person may provide a Statement of Remuneration Paid (T4) information return, a Tuition and Enrolment Certificate, a First Home Savings Account Statement (T4FHSA) information return, a Statement of Pension, Retirement, Annuity, and Other Income (T4A) information return or a Statement of Investment Income (T5) information return, as required under subsection (1), as a single document in an electronic format (instead of the two copies required under subsection (1)) to the taxpayer to whom the return relates, on or before the date on which the return is to be filed with the Minister, unless

• (2) Subsection (1) is deemed to have come into force on April 1, 2023.

• 78 (1) Paragraph 304(1)(a) of the Regulations is replaced by the following:

  • (a) an annuity contract that is, or is issued pursuant to, an arrangement described in any of paragraphs 148(1)(a) to (b.4) and (d) of the Act;

• (2) Subsection (1) is deemed to have come into force on April 1, 2023.

• 79 (1) Paragraph 1100(1)(a) of the Regulations is amended by striking out “and” at the end of subparagraph (xli) and by adding the following after subparagraph (xlii):

  • (xliii) of Class 57, 8 per cent,

  • (xliv) of Class 58, 20 per cent,

  • (xlv) of Class 59, 100 per cent, and

  • (xlvi) of Class 60, 30 per cent,

• (2) Paragraph (a) of the description of A in subsection 1100(2) of the Regulations is replaced by the following:

  • (a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 43.2, 53, 54, 55, 56, 59 or in Class 43 in the circumstances described in paragraph (d),

• (3) Subsections (1) and (2) apply to property acquired after 2021.

• 80 (1) The definition governing plan in subsection 4901(2) of the Regulations is replaced by the following:

  governing plan

  governing plan means a deferred profit sharing plan or a revoked plan, a FHSA, a registered disability savings plan, a registered education savings plan, a registered retirement income fund, a registered retirement savings plan or a TFSA; (régime d’encadrement)

• (2) Subsection (1) is deemed to have come into force on April 1, 2023.

• 81 (1) Clause (a)(i)(I) of the definition qualified zero-emission technology manufacturing activities in section 5202 of the Regulations is replaced by the following:

  • (I) equipment that is a component of property included in clauses (A) to (H) or (L) to (O), if such equipment is purpose-built or designed exclusively to form an integral part of that property,

• (2) Subparagraph (a)(i) of the definition qualified zero-emission technology manufacturing activities in section 5202 of the Regulations is amended by striking out “and” at the end of clause (J), by striking out “and” at the end of clause (K) and by adding the following after clause (K):

  • (L) nuclear energy equipment,

  • (M) heavy water used for nuclear energy generation,

  • (N) nuclear fuels used for nuclear energy generation, and

  • (O) nuclear fuel rods, and

• (3) Subsections (1) and (2) apply to taxation years that begin after 2023.

• 82 (1) The portion of subsection 5903(5) of the Regulations before paragraph (a) is replaced by the following:

  • (5) For the purposes of this section, section 5903.1 and section 18.2 of the Act,

• (2) Subsection (1) applies in respect of a taxation year of a foreign affiliate of a taxpayer that ends in a taxation year of the taxpayer beginning on or after October 1, 2023. However, subsection (1) also applies in respect of a taxation year of a foreign affiliate of a taxpayer that ends in a taxation year of the taxpayer that begins before, and ends after, October 1, 2023 if

  • (a) any of the taxpayer’s three immediately preceding taxation years was, because of a transaction or event or a series of transactions or events, shorter than it would have been in the absence of that transaction, event or series; and

  • (b) it can reasonably be considered that one of the purposes of the transaction, event or series was to defer the application of paragraph 12(1)(l.2) of the Act, as enacted by subsection 2(1), or the application of section 18.2 or 18.21 of the Act, as enacted by subsection 7(1), to the taxpayer.

• 83 (1) Subparagraph (a)(iii) of the definition earnings in subsection 5907(1) of the Regulations is replaced by the following:

  • (iii) in any other case, the amount that would be the income from the active business for the year under Part I of the Act if the business were carried on in Canada, the affiliate were resident in Canada and the Act were read without reference to subsections 12.7(3), 18(4), 18.4(4), 80(3) to (12), (15) and (17) and 80.01(5) to (11) and sections 80.02 to 80.04,

• (2) Subparagraph (a)(iii) of the definition earnings in subsection 5907(1) of the Regulations, as enacted by subsection (1), is replaced by the following:

  • (iii) in any other case, the amount that would be the income from the active business for the year under Part I of the Act if the business were carried on in Canada, the affiliate were resident in Canada and the Act were read without reference to subsections 12.7(3), 18(4), 18.2(2), 18.4(4), 80(3) to (12), (15) and (17) and 80.01(5) to (11) and sections 80.02 to 80.04,

• (3) Subparagraph (iii) of the description of A in the definition exempt surplus in subsection 5907(1) of the Regulations is replaced by the following:

  • (iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed by subsection 5905(7) to have been received by the subject affiliate) that

    • (A) was prescribed by paragraph 5900(1)(a) to have been paid out of the payer affiliate’s exempt surplus in respect of the corporation,

    • (B) does not give rise to the application of subsection 12.7(3) in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and

    • (C) would not be deemed under subsection 113(5) of the Act not to be a dividend received by the subject affiliate on a share of the capital stock of the payer affiliate for the purposes of section 113 of the Act, if the subject affiliate were a corporation resident in Canada,

• (4) Subparagraph (iv) of the description of A in the definition hybrid surplus in subsection 5907(1) of the Regulations is replaced by the following:

  • (iv) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that

    • (A) was prescribed under paragraph 5900(1)(a.1) to have been paid out of the payer affiliate’s hybrid surplus in respect of the corporation,

    • (B) does not give rise to the application of subsection 12.7(3) in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and

    • (C) would not be deemed under subsection 113(5) of the Act not to be a dividend received by the subject affiliate on a share of the capital stock of the payer affiliate for the purposes of section 113 of the Act, if the subject affiliate were a corporation resident in Canada, or

• (5) Paragraph (b) of the definition net earnings in subsection 5907(1) of the Regulations is replaced by the following:

  • (b) in respect of foreign accrual property income is the amount that would be its foreign accrual property income for the year, if the formula in the definition foreign accrual property income in subsection 95(1) of the Act were read without reference to F and F.1 in that formula and the amount determined for E in that formula were the amount determined under paragraph (a) of the description of E in that formula and the Act were read without regard to its clause 95(2)(f.11)(ii)(D), minus the portion of any income or profits tax paid to the government of a country for the year by the affiliate that can reasonably be regarded as tax in respect of that income,

• (6) Subclause (b)(i)(A)(I) of the definition net loss in subsection 5907(1) of the Regulations is replaced by the following:

  • (I) the amount that would be determined for D in the formula in the definition foreign accrual property income in subsection 95(1) of the Act for the year, if the Act were read without regard to its clauses 95(2)(f.11)(ii)(D) and (E),

• (7) Subparagraph (iii) of the description of A in the definition taxable surplus in subsection 5907(1) of the Regulations is replaced by the following:

  • (iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed by subsection 5905(7) to have been received by the subject affiliate) that

    • (A) was prescribed by paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation,

    • (B) does not give rise to the application of subsection 12.7(3) in computing the foreign accrual property income of a foreign affiliate of a taxpayer, and

    • (C) would not be deemed under subsection 113(5) of the Act not to be a dividend received by the subject affiliate on a share of the capital stock of the payer affiliate for the purposes of section 113 of the Act, if the subject affiliate were a corporation resident in Canada,

• (8) Subsection (1) applies in respect of payments arising on or after July 1, 2022.

• (9) Subsections (2), (5) and (6) apply in respect of a taxation year of a foreign affiliate of a taxpayer that ends in a taxation year of the taxpayer beginning on or after October 1, 2023. However, subsections (2), (5) and (6) also apply in respect of a taxation year of a foreign affiliate of a taxpayer that ends in a taxation year of the taxpayer that begins before, and ends after, October 1, 2023 if

  • (a) any of the taxpayer’s three immediately preceding taxation years was, because of a transaction or event or a series of transactions or events, shorter than it would have been in the absence of that transaction, event or series; and

  • (b) it can reasonably be considered that one of the purposes of the transaction, event or series was to defer the application of paragraph 12(1)(l.2) of the Act, as enacted by subsection 2(1), or the application of section 18.2 or 18.21 of the Act, as enacted by subsection 7(1), to the taxpayer.

• (10) Subsections (3), (4) and (7) apply in respect of any dividend received on or after July 1, 2024.