Jobs and Growth Act, 2012 (S.C. 2012, c. 31)
Full Document:
Assented to 2012-12-14
15. (1) Paragraph 75(3)(a) of the Act is replaced by the following:
(a) by a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan, a retirement compensation arrangement or a TFSA;
(2) Subsection (1) comes into force or is deemed to have come into force on the day on which the Pooled Registered Pension Plans Act comes into force.
16. (1) Paragraphs 84(1)(c.1) and (c.2) of the Act are replaced by the following:
(c.1) if the corporation is an insurance corporation, any action by which it converts contributed surplus related to its insurance business (other than any portion of that contributed surplus that arose in connection with an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of the shares of its capital stock,
(c.2) if the corporation is a bank, any action by which it converts any of its contributed surplus that arose on the issuance of shares of its capital stock (other than any portion of that contributed surplus that arose in connection with an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies) into paid-up capital in respect of shares of its capital stock, or
(2) The portion of paragraph 84(1)(c.3) of the Act before subparagraph (i) is replaced by the following:
(c.3) if the corporation is neither an insurance corporation nor a bank, any action by which it converts into paid-up capital in respect of a class of shares of its capital stock any of its contributed surplus that arose after March 31, 1977 (other than any portion of that contributed surplus that arose in connection with an investment, as defined in subsection 212.3(10), to which subsection 212.3(2) applies)
(3) Subsections (1) and (2) are deemed to have come into force on March 29, 2012.
17. (1) Paragraph 87(2)(g.1) of the Act is replaced by the following:
Marginal note:Continuation
(g.1) for the purposes of sections 12.4 and 26 and subsection 97(3), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;
(2) Subsection (1) applies in respect of amalgamations that occur, and windings-up that begin, after March 28, 2012.
18. (1) Paragraph 88(1)(d) of the Act is amended by striking out “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(ii.1) for the purpose of calculating the amount in subparagraph (ii) in respect of an interest of the subsidiary in a partnership, the fair market value of the interest at the time the parent last acquired control of the subsidiary is deemed to be the amount determined by the formula
A – B
where
- A
- is the fair market value (determined without reference to this subparagraph) of the interest at that time, and
- B
- is the portion of the amount by which the fair market value (determined without reference to this subparagraph) of the interest at that time exceeds its cost amount at that time as may reasonably be regarded as being attributable at that time to the total of all amounts each of which is
(A) in the case of a depreciable property held directly by the partnership or held indirectly by the partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of the property exceeds its cost amount,
(B) in the case of a Canadian resource property or a foreign resource property held directly by the partnership or held indirectly by the partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of the property, or
(C) in the case of a property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the partnership or held indirectly through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of the property exceeds its cost amount, and
(2) Subsection 88(1) of the Act is amended by adding the following after paragraph (d.3):
(e) for the purposes of the description of A in subparagraph (d)(ii.1), the fair market value of an interest in a particular partnership held by the subsidiary at the time the parent last acquired control of the subsidiary is deemed not to include the amount that is the total of each amount that is the fair market value of a property that would otherwise be included in the fair market value of the interest, if
(i) as part of the transaction or event or series of transactions or events in which control of the subsidiary is last acquired by the parent and on or before the acquisition of control,
(A) the subsidiary disposes of the property to the particular partnership or any other partnership and subsection 97(2) applies to the disposition, or
(B) where the property is an interest in a partnership, the subsidiary acquires the interest in the particular partnership or any other partnership from a person or partnership with whom the subsidiary does not deal at arm’s length (otherwise than because of a right referred to in paragraph 251(5)(b)) and section 85 applies in respect of the acquisition of the interest, and
(ii) at the time of the acquisition of control, the particular partnership holds directly, or indirectly through one or more other partnerships, property described in clauses (A) to (C) of the description of B in subparagraph (d)(ii.1);
(3) Subsection (1) applies to amalgamations that occur and windings-up that begin after March 28, 2012, other than — if a taxable Canadian corporation (in this subsection referred to as the “parent corporation”) has acquired control of another taxable Canadian corporation (in this subsection referred to as the “subsidiary corporation”) — an amalgamation of the parent corporation and the subsidiary corporation that occurs before 2013, or a winding-up of the subsidiary corporation into the parent corporation that begins before 2013, if
(a) the parent corporation acquired control of the subsidiary corporation before March 29, 2012 or was obligated as evidenced in writing before March 29, 2012 to acquire control of the subsidiary (except that the parent corporation shall not be considered to be obligated if, as a result of amendments to the Act, it may be excused from the obligation to acquire control); and
(b) the parent corporation had the intention as evidenced in writing before March 29, 2012 to amalgamate with, or wind up, the subsidiary corporation.
(4) Subsection (2) applies to dispositions made after August 13, 2012 other than a disposition made before 2013 pursuant to an obligation under a written agreement entered into before August 14, 2012 by parties that deal with each other at arm’s length. The parties shall not be considered to be obligated if any party may be excused from the obligation as a result of amendments to the Act.
19. (1) Subparagraph (b)(iii) of the definition “paid-up capital” in subsection 89(1) of the Act is replaced by the following:
(iii) where the particular time is after March 31, 1977, an amount equal to the paid-up capital in respect of that class of shares at the particular time, computed without reference to the provisions of this Act except subsections 51(3) and 66.3(2) and (4), sections 84.1 and 84.2, subsections 85(2.1), 85.1(2.1) and (8), 86(2.1), 87(3) and (9), paragraph 128.1(1)(c.3), subsections 128.1(2) and (3), 138(11.7), 139.1(6) and (7), 192(4.1) and 194(4.1) and sections 212.1 and 212.3,
(2) Subsection (1) is deemed to have come into force on March 29, 2012.
20. (1) The portion of subsection 93.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Shares held by partnership
93.1 (1) For the purposes of determining whether a non-resident corporation is a foreign affiliate of a corporation resident in Canada for the purposes of subsections (2) and 20(12), sections 93 and 113, paragraphs 128.1(1)(c.3) and (d), section 212.3 and subsection 219.1(2), (and any regulations made for the purposes of those provisions), section 95 (to the extent that it is applied for the purposes of those provisions) and section 126, if, based on the assumptions contained in paragraph 96(1)(c), at any time shares of a class of the capital stock of a corporation are owned by a partnership or are deemed under this subsection to be owned by a partnership, then each member of the partnership is deemed to own at that time the number of those shares that is equal to the proportion of all those shares that
(2) Subsection (1) is deemed to have come into force on March 29, 2012.
21. (1) The portion of subsection 97(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Rules if election by partners
(2) Notwithstanding any other provision of this Act other than subsections (3) and 13(21.2), where a taxpayer at any time disposes of any property that is a capital property, Canadian resource property, foreign resource property, eligible capital property or inventory of the taxpayer to a partnership that immediately after that time is a Canadian partnership of which the taxpayer is a member, if the taxpayer and all the other members of the partnership jointly so elect in prescribed form within the time referred to in subsection 96(4),
(2) Section 97 of the Act is amended by adding the following after subsection (2):
Marginal note:Election not available — section 88
(3) Subsection (2) does not apply to a disposition of a property by a taxpayer to a particular partnership if
(a) as part of a transaction or event or series of transactions or events that includes the disposition
(i) control of a taxable Canadian corporation (in this subsection referred to as the “subsidiary”) is acquired by another taxable Canadian corporation (in this paragraph referred to as the “parent”),
(ii) the subsidiary is wound up under subsection 88(1) or amalgamated with one or more other corporations under subsection 87(11), and
(iii) the parent makes a designation under paragraph 88(1)(d) in respect of an interest in a partnership;
(b) the disposition occurs after the acquisition of control of the subsidiary;
(c) the property
(i) is referred to in clauses (A) to (C) of the description of B in subparagraph 88(1)(d)(ii.1), or
(ii) is an interest in a partnership that holds, directly or indirectly through one or more partnerships, property referred to in clauses (A) to (C) of the description of B in subparagraph 88(1)(d)(ii.1); and
(d) the subsidiary is the taxpayer or has, before the disposition of the property, directly or indirectly in any manner whatever, an interest in the taxpayer.
(3) Subsections (1) and (2) apply in respect of dispositions made after March 28, 2012.
- Date modified: