Economic Action Plan 2014 Act, No. 1 (S.C. 2014, c. 20)

Assented to 2014-06-19

Economic Action Plan 2014 Act, No. 1

S.C. 2014, c. 20

Assented to 2014-06-19

An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures

SUMMARY

Part 1 implements income tax measures and related measures proposed in the February 11, 2014 budget. Most notably, it

  • (a) increases the maximum amount of eligible expenses for the adoption expense tax credit;

  • (b) expands the list of expenses eligible for the medical expense tax credit to include the cost of the design of individualized therapy plans and costs associated with service animals for people with severe diabetes;

  • (c) introduces the search and rescue volunteers tax credit;

  • (d) extends, for one year, the mineral exploration tax credit for flow-through share investors;

  • (e) expands the circumstances in which members of underfunded pension plans can benefit from unreduced pension-to-RRSP transfer limits;

  • (f) eliminates the need for individuals to apply for the GST/HST credit and allows the Minister of National Revenue to automatically determine if an individual is eligible to receive the credit;

  • (g) extends to 10 years the carry-forward period with respect to certain donations of ecologically sensitive land;

  • (h) removes, for certified cultural property acquired as part of a gifting arrangement that is a tax shelter, the exemption from the rule that deems the value of a gift to be no greater than its cost to the donor;

  • (i) allows the Minister of National Revenue to refuse to register, or revoke the registration of, a charity or Canadian amateur athletic association that accepts a donation from a state supporter of terrorism;

  • (j) reduces, for certain small and medium-sized employers, the frequency of remittances for source deductions;

  • (k) improves the Canada Revenue Agency’s ability to provide feedback to the Financial Transactions and Reports Analysis Centre of Canada; and

  • (l) requires a listing of outstanding tax measures to be tabled in Parliament.

Part 1 also implements other selected income tax measures. Most notably, it

  • (a) introduces transitional rules relating to the labour-sponsored venture capital corporations tax credit;

  • (b) requires certain financial intermediaries to report to the Canada Revenue Agency international electronic funds transfers of $10,000 or more;

  • (c) makes amendments relating to the introduction of the Offshore Tax Informant Program of the Canada Revenue Agency;

  • (d) permits the disclosure of taxpayer information to an appropriate police organization in certain circumstances if the information relates to a serious offence; and

  • (e) provides that the Business Development Bank of Canada and BDC Capital Inc. are not financial institutions for the purposes of the Income Tax Act’s mark-to-market rules.

Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures proposed in the February 11, 2014 budget by

  • (a) expanding the GST/HST exemption for training that is specially designed to assist individuals with a disorder or disability to include the service of designing such training;

  • (b) expanding the GST/HST exemption for services rendered to individuals by certain health care practitioners to include professional services rendered by acupuncturists and naturopathic doctors;

  • (c) adding eyewear specially designed to treat or correct a defect of vision by electronic means to the list of GST/HST zero-rated medical and assistive devices;

  • (d) extending to newly created members of a group the election that allows members of a closely-related group to not account for GST/HST on certain supplies between them, introducing joint and several (or solidary) liability for the parties to that election for any GST/HST liability on those supplies and adding a requirement to file that election with the Canada Revenue Agency;

  • (e) giving the Minister of National Revenue the discretionary authority to register a person for GST/HST purposes if the person fails to comply with the requirement to apply for registration, even after having been notified by the Canada Revenue Agency of that requirement; and

  • (f) improving the Canada Revenue Agency’s ability to provide feedback to the Financial Transactions and Reports Analysis Centre of Canada.

Part 2 also implements other GST/HST measures by

  • (a) providing a GST/HST exemption for supplies of hospital parking for patients and visitors, clarifying that the GST/HST exemption for supplies of a property, when all or substantially all of the supplies of the property by a charity are made for free, does not apply to paid parking and clarifying that paid parking provided by charities that are set up or used by municipalities, universities, public colleges, schools and hospitals to operate their parking facilities does not qualify for the special GST/HST exemption for parking supplied by charities;

  • (b) clarifying that reports of international electronic funds transfers made to the Canada Revenue Agency may be used for the purposes of the administration of the GST/HST;

  • (c) making amendments relating to the introduction of the Offshore Tax Informant Program of the Canada Revenue Agency;

  • (d) permitting the disclosure of confidential GST/HST information to an appropriate police organization in certain circumstances if the information relates to a serious offence; and

  • (e) clarifying that a person cannot claim input tax credits in respect of an amount of GST/HST that has already been recovered by the person from a supplier.

Part 3 implements excise measures proposed in the February 11, 2014 budget by

  • (a) adjusting the domestic rate of excise duty on tobacco products to account for inflation and eliminating the preferential excise duty treatment of tobacco products available through duty free markets;

  • (b) ensuring that excise tax returns are filed accurately through the addition of a new administrative monetary penalty and an amended criminal offence for the making of false statements or omissions, consistent with similar provisions in the GST/HST portion of the Excise Tax Act; and

  • (c) improving the Canada Revenue Agency’s ability to provide feedback to the Financial Transactions and Reports Analysis Centre of Canada.

Part 3 also implements other excise measures by

  • (a) permitting the disclosure of confidential information to an appropriate police organization in certain circumstances if the information relates to a serious offence; and

  • (b) making amendments relating to the introduction of the Offshore Tax Informant Program of the Canada Revenue Agency.

In addition, Part 3 amends the Air Travellers Security Charge Act, the Excise Act, 2001 and the Excise Tax Act to clarify that reports of international electronic funds transfers made to the Canada Revenue Agency may be used for the purposes of the administration of those Acts.

Part 4 amends the Customs Tariff. In particular, it

  • (a) reduces the Most-Favoured-Nation rates of duty and, if applicable, rates of duty under the other tariff treatments on tariff items related to mobile offshore drilling units used in oil and gas exploration and development that are imported on or after May 5, 2014;

  • (b) removes the exemption provided by tariff item 9809.00.00 and makes consequential amendments to tariff item 9833.00.00 to apply the same tariff rules to the Governor General that are applied to other public office holders; and

  • (c) clarifies the tariff classification of certain imported food products, effective November 29, 2013.

Part 5 enacts the Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act and amends the Income Tax Act to introduce consequential information reporting requirements.

Part 6 enacts and amends several Acts in order to implement various measures.

Division 1 of Part 6 provides for payments to compensate for deductions in certain benefits and allowances that are payable under the Canadian Forces Members and Veterans Re-establishment and Compensation Act, the War Veterans Allowance Act and the Civilian War-related Benefits Act.

Division 2 of Part 6 amends the Bank of Canada Act and the Canada Deposit Insurance Corporation Act to authorize the Bank of Canada to provide banking and custodial services to the Canada Deposit Insurance Corporation.

Division 3 of Part 6 amends the Hazardous Products Act to better regulate the sale and importation of hazardous products intended for use, handling or storage in a work place in Canada in accordance with the Regulatory Cooperation Council Joint Action Plan initiative for work place chemicals. In particular, the amendments implement the Globally Harmonized System of Classification and Labelling of Chemicals with respect to, among other things, labelling and safety data sheet requirements. It also provides for enhanced powers related to administration and enforcement. Finally, it makes amendments to the Canada Labour Code and the Hazardous Materials Information Review Act.

Division 4 of Part 6 amends the Importation of Intoxicating Liquors Act to authorize individuals to transport beer and spirits from one province to another for their personal consumption.

Division 5 of Part 6 amends the Judges Act to increase the number of judges of the Superior Court of Quebec and the Court of Queen’s Bench of Alberta.

Division 6 of Part 6 amends the Members of Parliament Retiring Allowances Act to prohibit parliamentarians from contributing to their pension and accruing pensionable service as a result of a suspension.

Division 7 of Part 6 amends the National Defence Act to recognize the historic names of the Royal Canadian Navy, the Canadian Army and the Royal Canadian Air Force while preserving the integration and the unification achieved under the Canadian Forces Reorganization Act and to provide that the designations of rank and the circumstances of their use are prescribed in regulations made by the Governor in Council.

Division 8 of Part 6 amends the Customs Act to extend to 90 days the time for making a request for a review of a seizure, ascertained forfeiture or penalty assessment and to provide that requests for a review and third-party claims can be made directly to the Minister of Public Safety and Emergency Preparedness.

Division 9 of Part 6 amends the Atlantic Canada Opportunities Agency Act to provide for the dissolution of the Atlantic Canada Opportunities Board and to repeal the requirement for the President of the Atlantic Canada Opportunities Agency to submit a comprehensive report every five years on the Agency’s activities and on the impact those activities have had on regional disparity.

Division 10 of Part 6 dissolves the Enterprise Cape Breton Corporation and authorizes, among other things, the transfer of its assets and obligations, as well as those of its subsidiaries, to either the Atlantic Canada Opportunities Agency or Her Majesty in right of Canada as represented by the Minister of Public Works and Government Services. It also provides that the employees of the Corporation and its subsidiaries are deemed to have been appointed under the Public Service Employment Act and includes provisions related to their terms and conditions of employment. Furthermore, it amends the Atlantic Canada Opportunities Agency Act to, among other things, confer on the Atlantic Canada Opportunities Agency the authority that is necessary for the administration, management, control and disposal of the assets and obligations transferred to the Agency. It also makes consequential amendments to other Acts and repeals the Enterprise Cape Breton Corporation Act.

Division 11 of Part 6 provides for the transfer of responsibility for the administration of the programs known as the “Online Works of Reference” and the “Virtual Museum of Canada” from the Minister of Canadian Heritage to the Canadian Museum of History.

Division 12 of Part 6 amends the Nordion and Theratronics Divestiture Authorization Act to remove certain restrictions on the acquisition of voting shares of Nordion.

Division 13 of Part 6 amends the Bank Act to add regulation-making powers respecting a bank’s activities in relation to derivatives and benchmarks.

Division 14 of Part 6 amends the Insurance Companies Act to broaden the Governor in Council’s authority to make regulations respecting the conversion of a mutual company into a company with common shares.

Division 15 of Part 6 amends the Motor Vehicle Safety Act to support the objectives of the Regulatory Cooperation Council to enhance the alignment of Canadian and U.S. regulations while protecting Canadians. It introduces measures to accelerate and streamline the regulatory process, reduce the administrative burden for manufacturers and importers and improve safety for Canadians through revised oversight procedures and enhanced availability of vehicle safety information.

The amendments to the Railway Safety Act and the Transportation of Dangerous Goods Act, 1992 modernize the legislation by aligning it with the Cabinet Directive on Regulatory Management.

This Division also amends the Safe Food for Canadians Act to authorize the Governor in Council to make regulations respecting activities related to specified fresh fruits and vegetables, including requiring a person who engages in certain activities to be a member of a specified entity or organization. It also repeals the Board of Arbitration.

Division 16 of Part 6 amends the Telecommunications Act to set a maximum amount that a Canadian carrier can charge to another Canadian carrier for certain roaming services.

Division 17 of Part 6 amends the Canada Labour Code to allow employees to interrupt their compassionate care leave or leave related to their child’s critical illness, death or disappearance in order to take leave because of sickness or a work-related illness or injury. It also amends the Employment Insurance Act to facilitate access to sickness benefits for claimants who are in receipt of compassionate care benefits or benefits for parents of critically ill children.

Division 18 of Part 6 amends the Canadian Food Inspection Agency Act to provide that fees fixed under that Act for the use of a facility provided by the Canadian Food Inspection Agency under the Safe Food for Canadians Act as well as fees fixed for services, products and rights and privileges provided by the Agency under that Act are exempt from the application of the User Fees Act.

Division 19 of Part 6 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things, enhance the client identification, record keeping and registration requirements for financial institutions and intermediaries, refer to online casinos, and extend the application of the Act to persons and entities that deal in virtual currencies and foreign money services businesses. Furthermore, it makes modifications in regards to the information that the Financial Transactions and Reports Analysis Centre of Canada may receive, collect or disclose, and expands the circumstances in which the Centre or the Canada Border Services Agency can disclose information received or collected under the Act. It also updates the review and appeal provisions related to cross-border currency reporting and brings Part 1.1 of the Act into force.

Division 20 of Part 6 amends the Immigration and Refugee Protection Act and the Economic Action Plan 2013 Act, No. 2 to, among other things,

  • (a) require certain applications to be made electronically;

  • (b) provide for the making of regulations regarding the establishment of a system of administrative monetary penalties for the contravention of conditions applicable to employers hiring foreign workers;

  • (c) provide for the termination of certain applications for permanent residence in respect of which a decision as to whether the selection criteria are met is not made before February 11, 2014; and

  • (d) clarify and strengthen requirements related to the expression of interest regime.

Division 21 of Part 6 amends the Public Service Labour Relations Act to clarify that an adjudicator may grant systemic remedies when it has been determined that the employer has engaged in a discriminatory practice.

It also clarifies the transitional provisions in respect of essential services that were enacted by the Economic Action Plan 2013 Act, No. 2.

Division 22 of Part 6 amends the Softwood Lumber Products Export Charge Act, 2006 to clarify how payments to provinces under section 99 of that Act are to be determined.

Division 23 of Part 6 amends the Budget Implementation Act, 2009 so that the aggregate amount of payments to provinces and territories for matters relating to the establishment of a Canadian securities regulation regime may be fixed through an appropriation Act.

Division 24 of Part 6 amends the Protection of Residential Mortgage or Hypothecary Insurance Act and the National Housing Act to provide that certain criteria established in a regulation may apply to an existing insured mortgage or hypothecary loan.

Division 25 of Part 6 amends the Trade-marks Act to, among other things, make that Act consistent with the Singapore Treaty on the Law of Trademarks and add the authority to make regulations for carrying into effect the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks. The amendments include the simplification of the requirements for obtaining a filing date in relation to an application for the registration of a trade-mark, the elimination of the requirement to declare use of a trade-mark before registration, the reduction of the term of registration of a trade-mark from 15 to 10 years, and the adoption of the classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.

Division 26 of Part 6 amends the Trade-marks Act to repeal the power to appoint the Registrar of Trade-marks and to provide that the Registrar is the person appointed as Commissioner of Patents under subsection 4(1) of the Patent Act.

Division 27 of Part 6 amends the Old Age Security Act to prevent the payment of Old Age Security income-tested benefits for the entire period of a sponsorship undertaking by removing the current 10-year cap.

Division 28 of Part 6 enacts the New Bridge for the St. Lawrence Act, respecting the construction and operation of a new bridge in Montreal to replace the Champlain Bridge and the Nuns’ Island Bridge.

Division 29 of Part 6 enacts the Administrative Tribunals Support Service of Canada Act, which establishes the Administrative Tribunals Support Service of Canada (ATSSC) as a portion of the federal public administration. The ATSSC becomes the sole provider of resources and staff for 11 administrative tribunals and provides facilities and support services to those tribunals, including registry, administrative, research and analysis services. The Division also makes consequential amendments to the Acts establishing those tribunals and to other Acts related to those tribunals.

Division 30 of Part 6 enacts the Apprentice Loans Act, which provides for financial assistance for apprentices to help with the cost of their training. Under that Act, apprentices registered in eligible trades will be eligible for loans that will be interest-free until their training ends.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Marginal note:Short title

 This Act may be cited as the Economic Action Plan 2014 Act, No. 1.

PART 1AMENDMENTS TO THE INCOME TAX ACT AND TO RELATED LEGISLATION

R.S., c. 1 (5th Supp.)Income Tax Act

 Subsection 56(1) of the Income Tax Act is amended by striking out “and” at the end of paragraph (z.2), by adding “and” at the end of paragraph (z.3) and by adding the following after paragraph (z.3):

  • Marginal note:Tax informant program

    (z.4) any amount received in the year by the taxpayer under a contract, to provide information to the Canada Revenue Agency, entered into by the taxpayer under a program administered by the Canada Revenue Agency to obtain information relating to tax non-compliance.

 Section 60 of the Act is amended by striking out “and” at the end of paragraph (y), by adding “and” at the end of paragraph (z) and by adding the following after paragraph (z):

  • Marginal note:Tax informant program

    (z.1) the total of all amounts each of which is an amount paid in the year as a repayment of an amount that was included, because of paragraph 56(1)(z.4), in computing the taxpayer’s income for the year or a preceding taxation year.

  •  (1) The portion of subsection 81(4) of the Act after subparagraph (b)(ii) is replaced by the following:

    there shall not be included in computing the individual’s income derived from the performance of those duties the lesser of $1,000 and the total of those amounts, unless the individual makes a claim under section 118.06 or 118.07 for the year.

  • (2) Subsection (1) applies to the 2014 and subsequent taxation years.

  •  (1) The portion of subparagraph 110.1(1)(d)(iii) of the Act before clause (A) is replaced by the following:

    • (iii) the gift was made by the corporation in the year or in any of the 10 preceding taxation years to

  • (2) Subsection (1) applies to gifts made after February 10, 2014.

  •  (1) Paragraph (a) of the description of B in subsection 118.01(2) of the Act is replaced by the following:

    • (a) $15,000, and

  • (2) Subsection (1) applies to the 2014 and subsequent taxation years.

  • (3) Subsection 117.1(1) of the Act does not apply in respect of subsection 118.01(2) of the Act for the 2014 taxation year.

  •  (1) Subsections 118.06(1) and (2) of the Act are replaced by the following:

    Definition of “eligible volunteer firefighting services”

    • 118.06 (1) In this section and section 118.07, “eligible volunteer firefighting services” means services provided by an individual in the individual’s capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.

    • Marginal note:Volunteer firefighter tax credit

      (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual

      • (a) performs in the year not less than 200 hours of service each of which is an hour of

        • (i) eligible volunteer firefighting service for a fire department, or

        • (ii) eligible search and rescue volunteer service for an eligible search and rescue organization; and

      • (b) provides the certificates referred to in subsections (3) and 118.07(3) as and when requested by the Minister.

  • (2) Subsection (1) applies to the 2014 and subsequent taxation years.

  •  (1) The Act is amended by adding the following after section 118.06:

    Marginal note:Definitions
    • 118.07 (1) The following definitions apply in this section and section 118.06.

      “eligible search and rescue organization”

      « organisme admissible de recherche et sauvetage »

      “eligible search and rescue organization” means a search and rescue organization

      • (a) that is a member of the Search and Rescue Volunteer Association of Canada, the Civil Air Search and Rescue Association or the Canadian Coast Guard Auxiliary; or

      • (b) whose status as a search and rescue organization is recognized by a provincial, municipal or public authority.

      “eligible search and rescue volunteer services”

      « services admissibles de volontaire en recherche et sauvetage »

      “eligible search and rescue volunteer services” means services, other than eligible volunteer firefighting services, provided by an individual in the individual’s capacity as a volunteer to an eligible search and rescue organization that consist primarily of responding to and being on call for search and rescue and related emergency calls, attending meetings held by the organization and participating in required training related to search and rescue services, but does not include services provided to an organization if the individual provides search and rescue services to the organization otherwise than as a volunteer.

    • Marginal note:Search and rescue volunteer tax credit

      (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible search and rescue volunteer services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual

      • (a) performs in the year not less than 200 hours of service each of which is an hour of

        • (i) eligible search and rescue volunteer service for an eligible search and rescue organization, or

        • (ii) eligible volunteer firefighting services for a fire department;

      • (b) provides the certificates referred to in subsections (3) and 118.06(3) as and when requested by the Minister; and

      • (c) has not deducted an amount under section 118.06 for the year.

    • Marginal note:Certificate

      (3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the team president, or other individual who fulfils a similar role, of each eligible search and rescue organization to which the individual provided eligible search and rescue volunteer services for the year, attesting to the number of hours of eligible search and rescue volunteer services performed in the year by the individual for the particular organization.

  • (2) Subsection (1) applies to the 2014 and subsequent taxation years.

  •  (1) The portion of paragraph (c) of the definition “total ecological gifts” in subsection 118.1(1) of the Act before subparagraph (i) is replaced by the following:

    • (c) the gift was made by the individual in the year or in any of the 10 preceding taxation years to

  • (2) Subsection (1) applies to gifts made after February 10, 2014.

  •  (1) The portion of paragraph 118.2(2)(l) of the Act before subparagraph (i) is replaced by the following:

    • (l) on behalf of the patient who is blind or profoundly deaf or has severe autism, severe diabetes, severe epilepsy or a severe and prolonged impairment that markedly restricts the use of the patient’s arms or legs,

  • (2) Subsection 118.2(2) of the Act is amended by adding the following after paragraph (l.91):

    • (l.92) as remuneration for the design of an individualized therapy plan for the patient because of the patient’s severe and prolonged impairment, if

      • (i) because of the patient’s impairment, an amount would be, if this Act were read without reference to paragraph 118.3(1)(c), deductible under section 118.3 in computing a taxpayer’s tax payable under this Part for the taxation year in which the remuneration is paid,

      • (ii) the plan is required to access public funding for specialized therapy or is prescribed by

        • (A) a medical doctor or a psychologist, in the case of mental impairment, or

        • (B) a medical doctor or an occupational therapist, in the case of a physical impairment,

      • (iii) the therapy set out in the plan is prescribed by and, if undertaken, administered under the general supervision of

        • (A) a medical doctor or a psychologist, in the case of mental impairment, or

        • (B) a medical doctor or an occupational therapist, in the case of a physical impairment, and

      • (iv) the payment is made to a person ordinarily engaged in a business that includes the design of such plans for individuals who are not related to the payee;

  • (3) Subsections (1) and (2) apply in respect of expenses incurred after 2013.

  •  (1) Paragraph 118.3(2)(d) of the Act is replaced by the following:

    • (d) the amount of that person’s tax payable under this Part for the year computed before any deductions under this Division (other than under sections 118 to 118.07 and 118.7).

  • (2) Subsection (1) applies to the 2014 and subsequent taxation years.

  •  (1) The description of C in subsection 118.61(1) of the Act is replaced by the following:

    C 
    is the lesser of the value of B and the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.07, 118.3 and 118.7);
  • (2) Paragraph 118.61(2)(b) of the Act is replaced by the following:

    • (b) the amount that would be the individual’s tax payable under this Part for the year if no amount were deductible under this Division (other than an amount deductible under this section and any of sections 118 to 118.07, 118.3 and 118.7).

  • (3) Subsections (1) and (2) apply to the 2014 and subsequent taxation years.

 
Date modified: