SUMMARY

These amendments to the Income Tax Act implement certain measures announced in the Budget of February 22, 1994. These measures are summarized below.

(1) Capital Gains Exemption: eliminates the $100,000 lifetime capital gains exemption; provides an election in respect of gains accrued before the date of the Budget.

(2) Employee Benefits: extends the taxation of employer-provided benefits to include the first $25,000 of life insurance.

(3) Age Tax Credit: provides a reduction in the amount of the credit based on an individual's income level.

(4) Home Buyers' Plan: modifies the provisions of the Home Buyers' Plan and extends it indefinitely for first-time home buyers.

(5) Charitable Donations Tax Credit: lowers the threshold at which the tax credit is calculated at the highest individual marginal tax rate.

(6) Business Meals and Entertainment Expenses: reduces the percentage of such expenses that may be recognized for tax purposes from 80 to 50 per cent.

(7) Tax Shelters - Partnership Interests: requires that limited and other passive partners report any negative adjusted cost base in their partnership interest as a capital gain.

(8) Divisive Corporate Reorganizations: curtails a tax avoidance technique that allowed capital gains on the disposition of corporate assets to be avoided in certain circumstances.

(9) Investment Tax Credits: reduces the rate at which the credit is calculated in respect of certain regions; eliminates the regional component of the credit in respect of scientific research and experimen tal development; discontinues the Special Investment Tax Credit.

(10) Expenditure Limit for Scientific Research and Experimental Development: prorates the expenditure limit for a Canadian-controlled private corporation based on the corporation's business limit for the year.

(11) Small Business Deduction: progressively reduces the small business deduction available to Canadian-controlled private corpora tions having taxable capital over $10 million employed in Canada so that the deduction is eliminated at the $15 million level.

(12) Mine Reclamation Funds: permits a tax deduction for contributions into these funds in the year in which the contributions are made.