Budget Implementation Act, 2022, No. 1 (S.C. 2022, c. 10)
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Assented to 2022-06-23
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
13 Section 125.4 of the Act is amended by adding the following after subsection (1):
Marginal note:COVID-19 — production commencement time
(1.1) The reference to “two years” in subparagraph (b)(iii) of the definition production commencement time in subsection (1) is to be read as a reference to “three years” in respect of film or video productions for which the labour expenditure of the corporation in respect of the production for the taxation year ending in 2020 or 2021 was greater than nil.
14 (1) Section 125.7 of the Act is amended by adding the following after subsection (15):
Marginal note:Extension of time by Minister
(16) For the purposes of determining whether an eligible entity is a qualifying entity, a qualifying recovery entity or a qualifying renter, the Minister may, at any time, extend the time for filing an application under this section.
(2) Subsection (1) is deemed to have come into force on April 11, 2020.
15 (1) The definition earned income in subsection 146(1) of the Act is amended by adding the following after paragraph (b):
(b.01) an amount included under paragraph 56(1)(n) in computing the taxpayer’s income for a period in the year throughout which the taxpayer was resident in Canada in connection with a program that consists primarily of research and does not lead to a diploma from a college or a collège d’enseignement général et professionnel, or a bachelor, masters, doctoral or equivalent degree,
(2) Subject to subsection (3), subsection (1) applies in respect of income received in the 2021 and subsequent taxation years.
(3) Before 2026, the taxpayer may file an election with the Minister of National Revenue to include income that is described in paragraph (b.01) of the definition earned income in subsection 146(1) of the Act, and received by the taxpayer after 2010 and before 2021, for the purposes of computing the taxpayer’s RRSP deduction limit (as defined in that subsection) on or after the date the election is filed.
16 (1) The definition charitable purposes in subsection 149.1(1) of the Act is replaced by the following:
- charitable purposes
charitable purposes includes making qualifying disbursements; (fins de bienfaisance)
(2) Paragraph (a.1) of the definition charitable organization in subsection 149.1(1) of the Act is replaced by the following:
(a.1) all the resources of which are devoted to charitable activities carried on by the organization itself or to making qualifying disbursements,
(3) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:
- grantee organization
grantee organization includes a person, club, society, association or organization or prescribed entity, but does not include a qualified donee; (organisation donataire)
- qualifying disbursement
qualifying disbursement means a disbursement by a charity, by way of a gift or by otherwise making resources available,
(a) subject to subsection (6.001), to a qualified donee, or
(b) to a grantee organization, if
(i) the disbursement is in furtherance of a charitable purpose (determined without reference to the definition charitable purposes in this subsection) of the charity,
(ii) the charity ensures that the disbursement is exclusively applied to charitable activities in furtherance of a charitable purpose of the charity, and
(iii) the charity maintains documentation sufficient to demonstrate
(A) the purpose for which the disbursement is made, and
(B) that the disbursement is exclusively applied by the grantee organization to charitable activities in furtherance of a charitable purpose of the charity; (versement admissible)
(4) Paragraphs 149.1(2)(b) and (c) of the Act are replaced by the following:
(b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the organization’s disbursement quota for that year; or
(c) makes a disbursement, other than
(i) a disbursement made in the course of charitable activities carried on by it, or
(ii) a qualifying disbursement.
(5) Paragraphs 149.1(3)(b) and (b.1) of the Act are replaced by the following:
(b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the foundation’s disbursement quota for that year;
(b.1) makes a disbursement, other than
(i) a disbursement made in the course of charitable activities carried on by it, or
(ii) a qualifying disbursement;
(6) Paragraphs 149.1(4)(b) and (b.1) of the Act are replaced by the following:
(b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, amounts the total of which is at least equal to the foundation’s disbursement quota for that year;
(b.1) makes a disbursement, other than
(i) a disbursement made in the course of charitable activities carried on by it, or
(ii) a qualifying disbursement;
(7) Paragraph 149.1(4.1)(d) of the Act is replaced by the following:
(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 qualified disbursements to qualified donees or grantee organizations, with which it deals at arm’s length;
(8) Subsection 149.1(6) of the Act is replaced by the following:
Marginal note:Devotion of resources — charitable activity
(6) A charitable organization shall be considered to be devoting its resources to charitable activities carried on by it to the extent that it uses those resources in carrying on a related business.
Marginal note:Qualifying disbursement limit — charitable organizations
(6.001) In any taxation year, disbursements of income of a charitable organization by way of gifts to a qualified donee (other than disbursements of income to a registered charity that the Minister has designated in writing as a charity associated with the charitable organization) in excess of 50% of the charitable organization’s income for that year are not qualifying disbursements.
(9) Subsection 149.1(10) of the Act is repealed.
(10) Subsections 149.1(20) and (21) of the Act are replaced by the following:
Marginal note:Rule regarding disbursement excess
(20) Where a registered charity has expended a disbursement excess for a taxation year, the charity may, for the purpose of determining whether it complies with the requirements of paragraph (2)(b), (3)(b) or (4)(b), as the case may be, for the immediately preceding taxation year of the charity and five or less of its immediately subsequent taxation years, include in the computation of the amounts expended on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements, such portion of that disbursement excess as was not so included under this subsection for any preceding taxation year.
Marginal note:Definition of disbursement excess
(21) For the purpose of subsection (20), disbursement excess, for a taxation year of a charity, means the amount, if any, by which the total of amounts expended in the year by the charity on charitable activities carried on by it and by way of gifts made by it that are qualifying disbursements exceeds its disbursement quota for the year.
17 (1) Paragraph 152(1.2)(d) of the Act is replaced by the following:
(d) if the Minister determines the amount deemed by subsection 122.5(3), (3.001) or 122.8(4) to have been paid by an individual for a taxation year to be nil, subsection (2) does not apply to the determination unless the individual requests a notice of determination from the Minister.
(2) Subsection (1) applies to payments made after June 2022 in respect of the 2021 and subsequent taxation years.
18 (1) Paragraph 160.1(1)(b) of the Act is replaced by the following:
(b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion thereof that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61 or 122.8) from the day it became payable to the date of payment.
(2) Section 160.1 of the Act is amended by adding the following after subsection (1.1):
Marginal note:Liability for refund — Climate Action Incentive
(1.2) If a person is a qualified relation of an individual (within the meaning assigned by subsection 122.8(1)), in relation to one or more months specified for a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay the lesser of
(a) any excess described in subsection (1) that was refunded in respect of the taxation year to, or applied to a liability of, the individual as a consequence of the operation of section 122.8; and
(b) the total of the amounts deemed by subsection 122.8(4) to have been paid by the individual during those specified months.
(3) Subsection 160.1(2) of the Act is replaced by the following:
Marginal note:Liability under other provisions
(2) Subsections (1.1) and (1.2) do not limit a person’s liability under any other provision of this Act.
(4) Subsection 160.1(3) of the Act is replaced by the following:
Marginal note:Assessment
(3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of any of subsections (1) to (1.2) or for which the taxpayer is liable because of subsection (2.1) or (2.2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61 or 122.8.
(5) Subsections (1) to (4) apply to payments made after June 2022 in respect of the 2021 and subsequent taxation years.
19 (1) Paragraph 163(2)(c.4) of the Act is replaced by the following:
(c.4) the amount, if any, by which
(i) the total of all amounts each of which is an amount that would be deemed by section 122.8 to be paid by that person during a month specified for the year or, where that person is the qualified relation of an individual in relation to that specified month (within the meaning assigned by subsection 122.8(1)), by that individual, if that total were calculated by reference to the information provided in the person’s return of income (within the meaning assigned by subsection 122.8(1)) for the year
exceeds
(ii) the total of all amounts each of which is an amount that is deemed by section 122.8 to be paid by that person or by an individual of whom the person is the qualified relation in relation to a month specified for the year (within the meaning assigned by subsection 122.8(1)),
(2) Subsection (1) applies to payments made after June 2022 in respect of the 2021 and subsequent taxation years.
20 (1) Section 164 of the Act is amended by adding the following after subsection (2.2):
Marginal note:Application respecting refunds — Climate Action Incentive
(2.21) Where an amount deemed under section 122.8 to be paid by an individual during a month specified for a taxation year is applied under subsection (2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to Her Majesty in right of Canada.
(2) The portion of subsection 164(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Interest on refunds and repayments
(3) If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.5, 122.61, 122.8 or 125.7) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied:
(3) Subsections (1) and (2) apply to payments made after June 2022 in respect of the 2021 and subsequent taxation years.
21 Paragraph 168(1)(f) of the Act is replaced by the following:
(f) in the case of a registered charity, registered Canadian amateur athletic association or registered journalism organization, accepts a gift the granting of which was expressly or implicitly conditional on the charity, association or organization making a gift to another person, club, society, association or organization other than a qualified donee.
22 (1) Subsection 188(1.2) of the Act is replaced by the following:
Marginal note:Winding-up period
(1.2) In this Part, the winding-up period of a charity is the period
(a) that begins immediately after the earliest of the days on which
(i) the Minister issues a notice of intention to revoke the registration of the charity under any of subsections 149.1(2) to (4.1) and 168(1),
(ii) the charity becomes a listed terrorist entity, and
(iii) it is determined, under subsection 7(1) of the Charities Registration (Security Information) Act, that a certificate served in respect of the charity under subsection 5(1) of that Act is reasonable on the basis of information and evidence available, and
(b) that ends on the day that is the latest of
(i) the day, if any, on which the charity files a return under subsection 189(6.1) for the taxation year deemed by subsection (1) to have ended, but not later than the day on which the charity is required to file that return,
(ii) the day on which the Minister last issues a notice of assessment of tax payable under subsection (1.1) for that taxation year by the charity, and
(iii) if the charity has filed a notice of objection or appeal in respect of that assessment, the day on which the Minister may take a collection action under section 225.1 in respect of that tax payable.
(2) Subsection (1) is deemed to have come into force on June 29, 2021.
- Date modified: