904071st Session, 39th Parliament,55-56 Elizabeth II, 2006-2007house of commons of canadaBILL C-52An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:SHORT TITLEShort title
1. This Act may be cited as the Budget Implementation Act, 2007.PART 1AMENDMENTS RELATED TO INCOME TAXR.S., c. 1 (5th Supp.)
Income Tax Act2. (1) Subparagraph 53(2)(h)(i.1) of the Income Tax Act is amended by striking out the word “or” at the end of clause (A) and by adding the following after that clause:(A.1) that was deemed by subsection 104(16) to be a dividend received by the taxpayer, or(2) Subsection (1) is deemed to have come into force on October 31, 2006.3. (1) Subsection 56(1) of the Act is amended by adding the following after paragraph (a.1):Pension income reallocation
(a.2) where the taxpayer is a pension transferee (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pension transferee for the taxation year;(2) Subsection (1) applies to the 2007 and subsequent taxation years.4. (1) Section 60 of the Act is amended by adding the following after paragraph (b):Pension income reallocation
(c) where the taxpayer is a pensioner (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pensioner for the taxation year;(2) Subsection (1) applies to the 2007 and subsequent taxation years.5. (1) The Act is amended by adding the following after section 60.02:Definitions
60.03 (1) The following definitions apply in this section.“eligible pension income”
« revenu de pension déterminé »
“eligible pension income” has the same meaning as in subsection 118(7).“joint election”
« choix conjoint »
“joint election” in respect of a pensioner and a pension transferee for a taxation year means an election made jointly in prescribed form by the pensioner and the pension transferee and filed with the Minister with both the pensioner’s and the pension transferee’s returns of income for the taxation year in respect of which the election is made, on or before their respective filing-due dates for the taxation year. “pensioner”
« pensionné »
“pensioner” for a taxation year means an individual who(a) receives eligible pension income in the taxation year; and(b) is resident in Canada,(i) if the individual dies in the taxation year, at the time that is immediately before the individual’s death, or(ii) in any other case, at the end of the calendar year in which the taxation year ends.“pension income”
« revenu de pension »
“pension income” has the meaning assigned by section 118.“pension transferee”
« cessionnaire »
“pension transferee” for a taxation year means an individual who (a) is resident in Canada,(i) if the individual dies in the taxation year, at the time that is immediately before the individual’s death, or(ii) in any other case, at the end of the calendar year in which the taxation year ends; and(b) at any time in the taxation year is married to, or in a common-law partnership with, a pensioner and is not, by reason of the breakdown of their marriage or common-law partnership, living separate and apart from the pensioner at the end of the taxation year and for a period of at least 90 days commencing in the taxation year.“qualified pension income”
« revenu de pension admissible »
“qualified pension income” has the meaning assigned by section 118.“split-pension amount”
« montant de pension fractionné »
“split-pension amount” for a taxation year is the amount elected by a pensioner and a pension transferee in a joint election for the taxation year not exceeding the amount determined by the formula 0.5A × B/CwhereAis the eligible pension income of the pensioner for the taxation year;Bis the number of months in the pensioner’s taxation year at any time during which the pensioner was married to, or was in a common-law partnership with, the pension transferee; andCis the number of months in the pensioner’s taxation year.Effect of pension income split
(2) For the purpose of subsection 118(3), if a pensioner and a pension transferee have made a joint election in a taxation year,(a) the pensioner is deemed not to have received the portion of the pensioner’s pension income or qualified pension income, as the case may be, for the taxation year that is equal to the amount of the pensioner’s split-pension amount for that taxation year; and(b) the pension transferee is deemed to have received the split-pension amount(i) as pension income, to the extent that the split-pension amount was pension income to the pensioner, and(ii) as qualified pension income, to the extent that the split-pension amount was qualified pension income to the pensioner.Limitation
(3) A pensioner may file only one joint election for a particular taxation year.False declaration
(4) A joint election is invalid if the Minister establishes that a pensioner or a pension transferee has knowingly or under circumstances amounting to gross negligence made a false declaration in the joint election.(2) Subsection (1) applies to the 2007 and subsequent taxation years.6. (1) The definition “eligible dividend” in subsection 89(1) of the Act is replaced by the following:“eligible dividend”
« dividende déterminé »
“eligible dividend” means(a) a taxable dividend that is received by a person resident in Canada, paid after 2005 by a corporation resident in Canada and designated, as provided under subsection (14), to be an eligible dividend, and(b) in respect of a person resident in Canada, an amount that is deemed by subsection 96(1.11) or 104(16) to be a taxable dividend that is received by the person;(2) Subsection (1) is deemed to have come into force on October 31, 2006.7. (1) Section 96 of the Act is amended by adding the following after subsection (1.1):Deemed dividend of SIFT partnership
(1.11) If a SIFT partnership is liable to tax for a taxation year under Part IX.1,(a) paragraph (1)(f) is to be read as if the expression “the amount of the income of the partnership for a taxation year from any source or from sources in a particular place” were read as “the amount, if any, by which the income of the partnership for a taxation year from any source or from sources in a particular place exceeds, in respect of each such source, the portion of the partnership’s taxable non-portfolio earnings for the taxation year that is applicable to that source”; and(b) the partnership is deemed to have received a dividend in the taxation year from a taxable Canadian corporation equal to the amount by which the partnership’s taxable non-portfolio earnings for the taxation year exceeds the tax payable by the partnership for the taxation year under Part IX.1.(2) Subsection (1) is deemed to have come into force on October 31, 2006.8. (1) The portion of subparagraph 104(6)(b)(i) of the Act before clause (A) is replaced by the following:(i) such part (in this section referred to as the trust’s “adjusted distributions amount” for the taxation year) of the amount that, but for(2) Paragraph 104(6)(b) of the Act is amended by striking out the word “and” at the end of subparagraph (ii.1), by adding the word “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):(iv) where the trust is a SIFT trust for the taxation year, the amount, if any, by which(A) its adjusted distributions amount for the taxation yearexceeds(B) the amount, if any, by which(I) the amount that would, if this Act were read without reference to this subsection, be its income for the taxation yearexceeds(II) its non-portfolio earnings for the taxation year.(3) Section 104 of the Act is amended by adding the following after subsection (15):SIFT deemed dividend
(16) If an amount (in this subsection and section 122 referred to as the trust’s “non-deductible distributions amount” for the taxation year) is determined under subparagraph (6)(b)(iv) in respect of a SIFT trust for a taxation year(a) each beneficiary under the SIFT trust to whom at any time in the taxation year an amount became payable by the trust is deemed to have received at that time a taxable dividend that was paid at that time by a taxable Canadian corporation;(b) the amount of a dividend described in paragraph (a) as having been received by a beneficiary at any time in a taxation year is equal to the amount determined by the formulaA/B × CwhereAis the amount that became payable at that time by the SIFT trust to the beneficiary,Bis the total of all amounts, each of which became payable in the taxation year by the SIFT trust to a beneficiary under the SIFT trust, andCis the SIFT trust’s non-deductible distributions amount for the taxation year;(c) the amount of a dividend described in paragraph (a) in respect of a beneficiary under the SIFT trust is deemed for the purpose of subsection (13) not to be an amount payable to the beneficiary; and(d) for the purposes of applying Part XIII in respect of each dividend described in paragraph (a), the SIFT trust is deemed to be a corporation resident in Canada that paid the dividend.(4) Subsection 104(24) of the Act is replaced by the following:Amount payable
(24) For the purposes of subsections (6), (7), (13), (16) and (20) and subparagraph 53(2)(h)(i.1), an amount is deemed not to have become payable to a beneficiary in a taxation year unless it was paid in the year to the beneficiary or the beneficiary was entitled in the year to enforce payment of it.(5) Subsections (1) to (4) are deemed to have come into force on October 31, 2006.9. (1) Paragraph (a) of the description of B in subsection 118(1) of the Act is replaced by the following:Married or common-law partnership status
(a) in the case of an individual who at any time in the year is a married person or a person who is in a common-law partnership who supports the individual’s spouse or common-law partner and is not living separate and apart from the spouse or common-law partner by reason of a breakdown of their marriage or common-law partnership, an amount equal to the total of(i) $7,131, and(ii) the amount determined by the formula$6,055 - CwhereCis the income of the individual’s spouse or common-law partner for the year or, where the individual and the individ-ual’s spouse or com­mon-law partner are living separate and apart at the end of the year because of a breakdown of their marriage or common-law partnership, the spouse’s income for the year while married to, or in a common-law partnership with, the individual and not so separated,(2) The portion of paragraph 118(1)(b) of the French version of the Act before subparagraph (i) is replaced by the following:Crédit équivalent pour personne entièrement à charge
b) le total de 7 131 $ et de la somme obtenue par la formule suivante :6 055 $ - Doù :Dreprésente le revenu d’une personne à charge pour l’année,si le particulier ne demande pas de déduction pour l’année par l’effet de l’alinéa a) et si, à un moment de l’année :(3) Subparagraph (b)(iv) of the description of B in subsection 118(1) of the English version of the Act is replaced by the following:(iv) the amount determined by the formula$6,055 - DwhereDis the dependent person’s income for the year,(4) The description of B in subsection 118(1) of the Act is amended by adding the following after paragraph (b):Child amount
(b.1) where(i) a child of the individual ordinarily resides throughout the taxation year with the individual together with another parent of the child, $2,000 for each such child who is under the age of 18 years at the end of the taxation year, or(ii) except where subparagraph (i) applies, the individual may deduct an amount under paragraph (b) in respect of the individual’s child who is under the age of 18 years at the end of the taxation year, or could deduct such an amount in respect of that child if paragraph 118(4)(a) did not apply to the individual for the taxation year, $2,000 for each such child,(5) The formula in subsection 118(2) of the Act is replaced by the following:A × ($5,066 - B)(6) The description of B in subsection 118(3) of the Act is replaced by the following:Bis the lesser of $2,000 and the eligible pension income of the individual for the taxation year.(7) Paragraphs 118(3.2)(c) to (e) of the Act are replaced by the following:(c) for the 2007 taxation year, to be replaced by $8,929;(d) for the 2008 taxation year, to be replaced by the amount that is the total of $200 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (c);(e) for the 2009 taxation year, to be replaced by the amount that is the greater of(i) the total of $600 and the amount that would be determined for that description for that taxation year in respect of the particular amount by applying section 117.1 (without reference to subsection 117.1(3)) to the amount determined under paragraph (d), and(ii) $10,000; and(8) Subsection 118(3.3) of the Act is repealed.(9) Paragraph 118(4)(b) of the Act is replaced by the following:(b) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b) or (b.1) of the description of B in that subsection for a taxation year in respect of the same person or the same domestic establishment and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them;(10) The portion of subsection 118(7) of the Act before the definition “pension income” is replaced by the following:Definitions
(7) Subject to subsections (8) and (8.1), for the purposes of this subsection and subsection (3),(11) Subsection 118(7) of the Act is amended by adding the following in alphabetical order:“eligible pension income”
« revenu de pension déterminé »
“eligible pension income” of an individual for a taxation year means(a) if the individual has attained the age of 65 years before the end of the taxation year, the pension income received by the individ-ual in the taxation year, and(b) if the individual has not attained the age of 65 years before the end of the taxation year, the qualified pension income received by the individual in the taxation year;(12) The portion of subsection 118(8) of the Act before paragraph (a) is replaced by the following:Interpretation
(8) For the purposes of subsection (7), “pension income” and “qualified pension income” received by an individual in a taxation year do not include any amount that is(13) Paragraph 118(8)(d) of the Act is replaced by the following:(d) the amount, if any, by which(i) an amount required to be included in computing the individual’s income for the yearexceeds(ii) the amount, if any, by which the amount referred to in subparagraph (i) exceeds the total of all amounts deducted (other than under paragraph 60(c)) by the individual for the year in respect of that amount;(14) Subsection 118(8) of the Act is amended by adding the word “or” at the end of paragraph (e) and by adding the following after that paragraph:(f) a payment (other than a payment under the Judges Act or the Lieutenant Governors Superannuation Act) received out of or under an unfunded supplemental plan or arrangement, being a plan or arrangement where(i) the payment was in respect of services rendered to an employer by the individual or the individual’s spouse or common-law partner or former spouse or common-law partner as an employee, and(ii) the plan or arrangement would have been a retirement compensation arrangement or an employee benefit plan had the employer made a contribution in respect of the payment to a trust governed by the plan or arrangement.(15) Subsection 118(9) of the Act is replaced by the following:Bridging benefits
(8.1) For the purposes of subsection (7), a payment in respect of a life annuity under a superannuation or pension plan is deemed to include a payment in respect of bridging benefits, being benefits payable under a registered pension plan on a periodic basis and not less frequently than annually to an individual where(a) the individual or the individual’s spouse or common-law partner or former spouse or common-law partner was a member (as defined in subsection 147.1(1)) of the registered pension plan;(b) the benefits are payable for a period ending no later than the end of the month following the month in which the member attains 65 years of age or would have attained that age if the member had survived to that day; and(c) the amount (expressed on an annualized basis) of the benefits payable to the individual for a calendar year does not exceed the total of the maximum amount of benefits payable for that year under Part I of the Old Age Security Act and the maximum amount of benefits (other than disability, death or survivor benefits) payable for that year under either the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act.Rounding
(9) If an amount determined under any of paragraphs (3.1)(a) to (f) and (3.2)(a) to (f) is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, where it is equidistant from two such consecutive multiples, to the greater multiple.Child tax credit
(9.1) For greater certainty, in the case of a child who in a taxation year is born, adopted or dies, the reference to “throughout the taxation year” in subparagraph 118(1)(b.1)(i) is to be read as a reference to “throughout the portion of the taxation year that is after the child’s birth or adoption or before the child’s death”.(16) Subsections (1) to (4) and (6) to (15) apply to the 2007 and subsequent taxation years.(17) Subsection (5) applies to the 2006 and subsequent taxation years.10. (1) The description of B in section 118.8 of the Act is replaced by the following:Bis the total of all amounts each of which is deductible under subsection 118(1), because of paragraph (b.1) of the description of B in that subsection, or subsection 118(2) or (3) or 118.3(1) in computing the spouse’s or common-law partner’s tax payable under this Part for the year; and(2) Subsection (1) applies to the 2007 and subsequent taxation years.11. (1) Subsection 120(3) of the Act is amended by striking out the word “and” at the end of paragraph (b), by adding the word “and” at the end of paragraph (c) and by adding the following after paragraph (c):(d) in the case of a SIFT trust, the amount, if any, by which its income for the year determined without reference to this paragraph exceeds its taxable SIFT trust distributions (as defined in subsection 122(3)) for the year.(2) Subsection (1) is deemed to have come into force on October 31, 2006.12. (1) Subsection 122(1) of the Act is replaced by the following:Tax payable by inter vivos trust
122. (1) Notwithstanding section 117, the tax payable under this Part for a taxation year by an inter vivos trust is the total of(a) 29% of its amount taxable for the taxation year, and(b) if the trust is a SIFT trust for the taxation year, the positive or negative amount determined by the formulaA × BwhereAis the positive or negative decimal fraction determined by the formulaC + D - EwhereCis the net corporate income tax rate in respect of the SIFT trust for the taxation year,Dis the provincial SIFT tax factor for the taxation year, andEis the decimal fraction equivalent of the percentage rate of tax provided in paragraph (a) for the taxation year, andBis the SIFT trust’s taxable SIFT trust distributions for the taxation year.(2) Section 122 of the Act is amended by adding the following after subsection (2):Definitions
(3) The following definitions apply in this section.“non-deductible distributions amount”
« montant de distribution non déductible »
“non-deductible distributions amount” for a taxation year has the meaning assigned by subsection 104(16).“taxable SIFT trust distributions”
« montant de distribution imposable »
“taxable SIFT trust distributions”, of a SIFT trust for a taxation year, means the lesser of(a) its amount taxable for the taxation year, and(b) the amount determined by the formulaA/(1 - (B + C))whereAis its non-deductible distributions amount for the taxation year,Bis the net corporate income tax rate in respect of the SIFT trust for the taxation year, andCis the provincial SIFT tax factor for the taxation year.(3) Subsections (1) and (2) are deemed to have come into force on October 31, 2006.13. (1) The Act is amended by adding the following after section 122:Definitions
122.1 (1) The following definitions apply in this section and in sections 104 and 122.“entity”
« entité »
“entity” means a corporation, trust or partnership.“equity value”
« valeur des capitaux propres »
“equity value”, of an entity at any time, means the total fair market value at that time of(a) if the entity is a corporation, all of the issued and outstanding shares of the capital stock of the corporation;(b) if the entity is a trust, all of the income or capital interests in the trust; or(c) if the entity is a partnership, all of the interests in the partnership.“investment”
« placement »
“investment”, in a trust or partnership, means(a) a property that is a security of the trust or partnership; or(b) a right which may reasonably be considered to replicate a return on, or the value of, a security of the trust or partnership.“non-portfolio earnings”
« gains hors portefeuille »
“non-portfolio earnings”, of a SIFT trust for a taxation year, means the total of(a) the amount, if any, by which(i) the total of all amounts each of which is the SIFT trust’s income for the taxation year from a business carried on by it in Canada or from a non-portfolio property, other than income that is a taxable dividend received by the SIFT trust,exceeds(ii) the total of all amounts each of which is the SIFT trust’s loss for the taxation year from a business carried on by it in Canada or from a non-portfolio property, and(b) the amount, if any, by which(i) the total of(A) all taxable capital gains of the SIFT trust from dispositions of non-portfolio properties during the taxation year, and(B) one-half of the total of all amounts each of which is deemed under subsection 131(1) to be a capital gain of the SIFT trust for the taxation year in respect of a non-portfolio property of the SIFT trust for the taxation yearexceeds(ii) the total of the allowable capital losses of the SIFT trust for the taxation year from dispositions of non-portfolio properties during the taxation year.“non-portfolio property”
« bien hors portefeuille »
“non-portfolio property” of a trust or partnership for a taxation year means a property, held by the trust or partnership at any time in the taxation year, that is(a) a security of a subject entity, if at that time the trust or partnership holds(i) securities of the subject entity that have a total fair market value that is greater than 10% of the equity value of the subject entity, or(ii) securities of the subject entity that, together with all of the securities that the trust or partnership holds of entities affiliated with the subject entity, have a total fair market value that is greater than 50% of the equity value of the trust or partnership;(b) a Canadian real, immovable or resource property, if at any time in the taxation year the total fair market value of all properties held by the trust or partnership that are Canadian real, immovable or resource properties is greater than 50% of the equity value of the trust or partnership; or(c) a property that the trust or partnership, or a person or partnership with whom the trust or partnership does not deal at arm’s length, uses at that time in the course of carrying on a business in Canada.“public market”
« marché public »
“public market” includes any trading system or other organized facility on which securities that are qualified for public distribution are listed or traded, but does not include a facility that is operated solely to carry out the issuance of a security or its redemption, acquisition or cancellation by its issuer.“qualified REIT property”
« bien admissible de FPI »
“qualified REIT property” of a trust means a property, held by the trust, that is(a) a real or immovable property situated in Canada;(b) a security of a subject entity, if the entity derives all or substantially all of its revenues from maintaining, improving, leasing or managing real or immovable properties that are capital properties of the trust or of an entity of which the trust holds a share or an interest, including real or immovable properties that the trust, or an entity of which the trust holds a share or an interest, holds together with one or more other persons or partnerships;(c) a security of a subject entity, if the entity holds no property other than(i) legal title to real or immovable property of the trust (including real or immovable property that the trust holds together with one or more other persons or partnerships), and(ii) property described in paragraph (d); or(d) ancillary to the earning by the trust of the amounts described in subparagraphs (b)(i) and (iii) of the definition “real estate investment trust”.“real estate investment trust”
« fiducie de placement immobilier »
“real estate investment trust”, for a taxation year, means a trust that is resident in Canada throughout the taxation year, if(a) the trust at no time in the taxation year holds any non-portfolio property other than qualified REIT properties;(b) not less than 95% of the trust’s revenues for the taxation year are derived from one or more of the following:(i) rent from real or immovable properties,(ii) interest,(iii) capital gains from dispositions of real or immovable properties,(iv) dividends, and(v) royalties;(c) not less than 75% of the trust’s revenues for the taxation year are derived from one or more of the following:(i) rent from real or immovable properties, to the extent that it is derived from real or immovable properties situated in Canada,(ii) interest from mortgages, or hypothecs, on real or immovable properties situated in Canada, and(iii) capital gains from dispositions of real or immovable properties situated in Canada; and(d) at no time in the taxation year is the total fair market value of all properties held by the trust, each of which is a real or immovable property situated in Canada, cash, or a prop-erty described in clause 212(1)(b)(ii)(C), less than 75% of the equity value of the trust at that time.“real or immovable property”
« bien immeuble ou réel »
“real or immovable property”, of a taxpayer,(a) includes (i) a security held by the taxpayer, if the security is a security of a trust that satisfies (or of any other entity that would, if it were a trust, satisfy) the conditions set out in paragraphs (a) to (d) of the definition “real estate investment trust”, or(ii) an interest in real property or a real right in immovables (other than a right to a rental or royalty described in paragraph (d) or (e) of the definition “Canadian resource property” in subsection 66(15)); but(b) does not include any depreciable property, other than(i) a property included, otherwise than by an election permitted by regulation, in Class 1, 3 or 31 of Schedule II to the Income Tax Regulations,(ii) a property ancillary to the ownership or utilization of a property described in subparagraph (i), or(iii) a lease in, or a leasehold interest in respect of, land or property described in subparagraph (i).“rent from real or immovable properties”
« loyer de biens immeubles ou réels »
“rent from real or immovable properties”(a) includes(i) rent or similar payments for the use of, or right to use, real or immovable properties,(ii) payment for services ancillary to the rental of real or immovable properties and customarily supplied or rendered in connection with the rental of real or im­movable properties; but(b) does not include(i) payment for services supplied or rendered, other than those described in subparagraph (a)(ii), to the tenants of such properties,(ii) fees for managing or operating such properties,(iii) payment for the occupation of, use of, or right to use a room in a hotel or other similar lodging facility, or(iv) rent based on profits.“security”
« titre »
“security” of a particular entity means any right, whether absolute or contingent, conferred by the particular entity or by an entity that is affiliated with the particular entity, to receive, either immediately or in the future, an amount that can reasonably be regarded as all or any part of the capital, of the revenue or of the income of the particular entity, or as interest paid or payable by the particular entity, and for greater certainty includes(a) a liability of the particular entity;(b) if the particular entity is a corporation,(i) a share of the capital stock of the corporation, and(ii) a right to control in any manner whatever the voting rights of a share of the capital stock of the corporation;(c) if the particular entity is a trust, an income or a capital interest in the trust;(d) if the particular entity is a partnership, an interest as a member of the partnership; and(e) a right to, or to acquire, anything described in this paragraph and any of paragraphs (a) to (d).“SIFT trust”
« fiducie intermédiaire de placement déterminée »
“SIFT trust”, being a specified investment flow-through trust, for a taxation year means a trust (other than a trust that is a real estate investment trust for the taxation year) that meets the following conditions at any time during the taxation year:(a) the trust is resident in Canada;(b) investments in the trust are listed or traded on a stock exchange or other public market; and(c) the trust holds one or more non-portfolio properties.“subject entity”
« entité déterminée »
“subject entity” means a person or partnership that is(a) a corporation resident in Canada;(b) a trust resident in Canada;(c) a Canadian resident partnership; or(d) a non-resident person, or a partnership that is not described in paragraph (c), the principal source of income of which is one or any combination of sources in Canada.Application of definition “SIFT trust”
(2) The definition “SIFT trust” applies to a trust for a taxation year of the trust that ends after 2006, except that if the trust would have been a SIFT trust on October 31, 2006 had that definition been in force and applied to the trust as of that date, that definition does not apply to the trust for a taxation year of the trust that ends before the earlier of(a) 2011, and(b) the first day after December 15, 2006 on which the trust exceeds normal growth as determined by reference to the normal growth guidelines issued by the Department of Finance on December 15, 2006, as amended from time to time, unless that excess arose as a result of a prescribed transaction.(2) Subsection (1) is deemed to have come into force on October 31, 2006.14. The definition “general rate reduction percentage” in subsection 123.4(1) of the Act is amended by striking out the word “and” at the end of paragraph (c) and by replacing paragraph (d) with the following:(d) that proportion of 9% that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year, and(e) that proportion of 9.5% that the number of days in the taxation year that are after 2010 is of the number of days in the taxation year.15. (1) Section 126 of the Act is amended by adding the following after subsection (7):Deemed dividend — partnership
(8) If an amount is deemed by subsection 96(1.11) to be a taxable dividend received by a person in a taxation year of the person in respect of a partnership, and it is reasonable to consider that all or part of the amount (in this subsection referred to as the “foreign-source portion”) is attributable to income of the partnership from a source in a country other than Canada, the person is deemed for the purposes of this section to have an amount of income from that source for that taxation year equal to the amount determined by the formulaA × B/CwhereAis the total amount included under subsection 82(1) in computing the income of the person in respect of the taxable dividend for that taxation year;Bis the foreign-source portion; andCis the amount of the taxable dividend deemed to be received by the person.(2) Subsection (1) is deemed to have come into force on October 31, 2006.16. (1) Paragraph 132(7)(a) of the Act is replaced by the following:(a) at that time, all or substantially all of its property consisted of property other than property that would be taxable Canadian property if the definition “taxable Canadian property” in subsection 248(1) were read without reference to paragraph (b) of that definition; or (2) Subsection (1) is deemed to have come into force on January 1, 2004.17. (1) Paragraphs (a) and (b) of the definition “qualified investment” in subsection 146(1) of the Act are replaced by the following:(a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition “qualified investment” in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered retirement savings plan” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,(2) Subparagraph (c.2)(iv) of the definition “qualified investment” in subsection 146(1) of the Act is replaced by the following:(iv) the day on which the periodic payments began or are to begin (in this paragraph referred to as the “start date”) is not later than the end of the year in which the RRSP annuitant attains 72 years of age,(3) Paragraph 146(2)(b.4) of the Act is replaced by the following:(b.4) the plan does not provide for maturity after the end of the year in which the annuitant attains 71 years of age;(4) Subsections 146(13.2) and (13.3) of the Act are repealed.(5) Subsection (1) applies in determining whether a property is, at any time after March 18, 2007, a qualified investment.(6) Subsections (2) to (4) apply after 2006, except that subsection (4) does not apply to retirement savings plans under which the annuitant attained 69 years of age before 2007.18. (1) The definition “RESP annual limit” in subsection 146.1(1) of the Act is repealed.(2) Paragraphs (a) and (b) of the definition “qualified investment” in subsection 146.1(1) of the Act are replaced by the following:(a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition “qualified investment” in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered education savings plan” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,(3) Subsection 146.1(1) of the Act is amended by adding the following in alphabetical order:“specified educational program”
« programme de formation déterminé »
“specified educational program” means a program at a post-secondary school level of not less than three consecutive weeks duration that requires each student taking the program to spend not less than 12 hours per month on courses in the program;(4) Subparagraphs 146.1(2)(g.1)(i) and (ii) of the Act are replaced by the following:(i) either(A) the individual is, at that time, enrolled as a student in a qualifying educational program at a post-secondary educational institution, or(B) the individual has, before that time, attained the age of 16 years and is, at that time, enrolled as a student in a specified educational program at a post-secondary educational institution, and(ii) either(A) the individual satisfies, at that time, the condition set out in clause (i)(A), and(I) has satisfied that condition throughout at least 13 consecutive weeks in the 12-month period that ends at that time, or(II) the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 12-month period that ends at that time does not exceed $5,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual, or(B) the individual satisfies, at that time, the condition set out in clause (i)(B) and the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 13-week period that ends at that time does not exceed $2,500 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual;(5) Paragraph 146.1(2)(k) of the Act is repealed.(6) Subsections (1) and (5) apply to contributions made after 2006.(7) Subsection (2) applies in determining whether a property is, at any time after March 18, 2007, a qualified investment.(8) Subsections (3) and (4) apply to the 2007 and subsequent taxation years.19. (1) The definition “retirement income fund” in subsection 146.3(1) of the Act is replaced by the following:“retirement income fund”
« fonds de revenu de retraite »
“retirement income fund” means an arrangement between a carrier and an annuitant under which, in consideration for the transfer to the carrier of property, the carrier undertakes to pay amounts to the annuitant (and, where the annuitant so elects, to the annuitant’s spouse or common-law partner after the annuitant’s death), the total of which is, in each year in which the minimum amount under the arrangement for the year is greater than nil, not less than the minimum amount under the arrangement for that year, but the amount of any such payment does not exceed the value of the property held in connection with the arrangement immediately before the time of the payment.(2) The portion of the definition “minimum amount” in subsection 146.3(1) of the Act before the formula is replaced by the following:“minimum amount”
« minimum »
“minimum amount” under a retirement income fund for a year means, for the year in which the fund was entered into, a nil amount, and, for any other year, the amount determined by the formula(3) Paragraphs (a) and (b) of the definition “qualified investment” in subsection 146.3(1) of the Act are replaced by the following:(a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition “qualified investment” in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a registered retirement income fund” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”,(4) Subsections (1) and (2) apply after 2006, except that(a) in applying subsection (2) in 2007 (other than for the purposes of subsection 146.3(5.1) of the Act, regulations made under subsection 153(1) of the Act and the definition “periodic pension payment” in section 5 of the Income Tax Conventions Interpretation Act), the portion of the definition “minimum amount” in subsection 146.3(1) of the Act before the formula, as enacted by subsection (2), shall be read as follows:“minimum amount” under a retirement income fund for a year means, for the year in which the fund was entered into (and for 2007, if the individual who was the annuitant under the fund on January 1, 2007 attained 69 or 70 years of age in 2006), a nil amount, and, for any other year, the amount determined by the formula”(b) in applying subsection (2) in 2008 (other than for the purposes of subsection 146.3(5.1) of the Act, regulations made under subsection 153(1) of the Act and the definition “periodic pension payment” in section 5 of the Income Tax Conventions Interpretation Act), the portion of the definition “minimum amount” in subsection 146.3(1) of the Act before the formula, as enacted by subsection (2), shall be read as follows:“minimum amount” under a retirement income fund for a year means, for the year in which the fund was entered into (and for 2008, if the individual who was the annuitant under the fund on January 1, 2008 attained 70 years of age in 2007), a nil amount, and, for any other year, the amount determined by the formula”(5) Subsection (3) applies in determining whether a property is, at any time after March 18, 2007, a qualified investment.(6) For the purpose of applying clause 60(l)(v)(B.2) of the Act for the 2007 and 2008 taxation years, an eligible amount of a taxpayer for a taxation year in respect of a registered retirement income fund (within the meaning assigned by subsection 146.3(6.11) of the Act) is deemed to include(a) if the taxation year is 2007, the taxpayer was the annuitant under the fund on January 1, 2007 and the taxpayer attained 69 or 70 years of age in 2006, the lesser of(i) the total amounts included because of subsection 146.3(5) of the Act in computing the income of the taxpayer for the taxation year in respect of amounts received out of or under the fund (other than an amount paid by direct transfer from the fund to another fund or a registered retirement savings plan), and(ii) the amount that would, but for paragraph (4)(a), be the minimum amount under the fund for 2007; and(b) if the taxation year is 2008, the taxpayer was the annuitant under the fund on January 1, 2008 and the taxpayer attained 70 years of age in 2007, the lesser of(i) the total amounts included because of subsection 146.3(5) of the Act in computing the income of the taxpayer for the taxation year in respect of amounts received out of or under the fund (other than an amount paid by direct transfer from the fund to another fund or a registered retirement savings plan), and(ii) the amount that would, but for paragraph (4)(b), be the minimum amount under the fund for 2008.20. (1) Subparagraph 147(2)(k)(i) of the French version of the Act is replaced by the following:(i) la fin de l’année dans laquelle le bénéficiaire atteint 71 ans,(2) Subparagraph 147(2)(k)(iii) of the English version of the Act is replaced by the following:(iii) the end of the year in which the beneficiary attains 71 years of age, and(3) Clause 147(2)(k)(iv)(A) of the French version of the Act is replaced by the following:(A) dont le service doit commencer au plus tard à la fin de l’année dans laquelle le bénéficiaire atteint 71 ans,(4) Clause 147(2)(k)(vi)(A) of the English version of the Act is replaced by the following:(A) payment of the annuity is to begin not later than the end of the year in which the beneficiary attains 71 years of age, and(5) Section 147 of the Act is amended by adding the following after subsection (10.4):Amended contract
(10.5) Where an amendment is made to an annuity contract to which subparagraph (2)(k)(vi) applies, the sole effect of which is to defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, the annuity contract is deemed not to have been disposed of by the individual.(6) Subsection 147(10.6) of the Act is repealed.(7) Subsections (1) to (6) apply after 2006, except that subsection (6) does not apply to annuities under which the annuitant attained 69 years of age before 2007.21. (1) Subparagraph 147.4(2)(a)(i) of the Act is replaced by the following:(i) defer annuity commencement to no later than the end of the calendar year in which the individual in respect of whom the contract was purchased attains 71 years of age, or(2) Subsection 147.4(4) of the Act is repealed.(3) Subsections (1) and (2) apply after 2006, except that subsection (2) does not apply to annuities under which the annuitant attained 69 years of age before 2007.22. (1) Section 153 of the Act is amended by adding the following after subsection (1.2):Split-pension amount
(1.3) A joint election made or expected to be made under section 60.03 is not to be considered a basis on which the Minister may determine a lesser amount under subsection (1.1).Deemed withholding
(2) If a pensioner and a pension transferee (as those terms are defined in section 60.03) make a joint election under section 60.03 in respect of a split-pension amount (as defined in that section) for a taxation year, the portion of the amount deducted or withheld under subsection (1) that may be reasonably considered to be in respect of the split-pension amount is deemed to have been deducted or withheld on account of the pension transferee’s tax for the taxation year under this Part and not on account of the pensioner’s tax for the taxation year under this Part.(2) Subsection (1) applies to the 2007 and subsequent taxation years.23. (1) Section 160 of the Act is amended by adding the following after subsection (1.2):Joint liability — tax on split-pension income
(1.3) Where a pensioner and a pension transferee (as those terms are defined in section 60.03) make a joint election under section 60.03 in respect of a split-pension amount (as defined in that section) for a taxation year, they are jointly and severally, or solidarily, liable for the tax payable by the pension transferee under this Part for the taxation year to the extent that that tax payable is greater than it would have been if no amount were required to be added because of paragraph 56(1)(a.2) in computing the income of the pension transferee under this Part for the taxation year.(2) Subsection (1) applies to the 2007 and subsequent taxation years.24. (1) The Act is amended by adding the following after section 196:PART IX.1TAX ON SIFT PARTNERSHIPSDefinitions
197. (1) The following definitions apply in this Part and in section 96.“non-portfolio earnings”
« gains hors portefeuille »
“non-portfolio earnings”, of a SIFT partnership for a taxation year, means the total of(a) the amount, if any, by which(i) the total of all amounts each of which is the SIFT partnership’s income for the taxation year from a business carried on by it in Canada or from a non-portfolio property, other than income that is a taxable dividend received by the SIFT partnership,exceeds(ii) the total of all amounts each of which is the SIFT partnership’s loss for the taxation year from a business carried on by it in Canada or from a non-portfolio property, and(b) the amount, if any, by which all taxable capital gains of the SIFT partnership from dispositions of non-portfolio properties during the taxation year exceeds the total of the allowable capital losses of the SIFT partnership for the taxation year from dispositions of non-portfolio properties during the taxation year.“SIFT partnership”
« société de personnes intermédiaire de placement déterminée »
“SIFT partnership”, being a specified investment flow-through partnership, for any taxation year, means a partnership that meets the following conditions at any time during the taxation year:(a) the partnership is a Canadian resident partnership;(b) investments (as defined in subsection 122.1(1)) in the partnership are listed or traded on a stock exchange or other public market; and(c) the partnership holds one or more non-portfolio properties.“taxable non-portfolio earnings”
« gains hors portefeuille imposables »
“taxable non-portfolio earnings” of a SIFT partnership, for a taxation year, means the lesser of(a) the amount that would, if the SIFT partnership were a taxpayer for the purposes of Part I and if subsection 96(1) were read without reference to its paragraph (d), be its income for the taxation year as determined under section 3; and(b) its non-portfolio earnings for the taxation year.Tax on partnership income
(2) Every partnership that is a SIFT partnership for a taxation year is liable to a tax under this Part equal to the amount determined by the formulaA × (B + C)whereAis the taxable non-portfolio earnings of the SIFT partnership for the taxation year;Bis the net corporate income tax rate in respect of the SIFT partnership for the taxation year; andCis the provincial SIFT tax factor for the taxation year.Ordering
(3) This Part and section 122.1 are to be applied as if this Act were read without reference to subsection 96(1.11).Partnership to file return
(4) Every member of a partnership that is liable to pay tax under this Part for a taxation year shall — on or before the day on or before which the partnership return is required to be filed for the year under section 229 of the Income Tax Regulations — file with the Minister a return for the taxation year under this Part in prescribed form containing an estimate of the tax payable by the partnership under this Part for the taxation year.Authority to file return
(5) For the purposes of subsection (4), if, in respect of a taxation year of a partnership, a particular member of the partnership has authority to act for the partnership,(a) if the particular member has filed a return as required by this Part for a taxation year, each other person who was a member of the partnership during the taxation year is deemed to have filed the return; and(b) a return that has been filed by any other member of the partnership for the taxation year is not valid and is deemed not to have been filed by any member of the partnership.Provisions applicable to Part
(6) Subsection 150(2), sections 152, 156, 156.1, 158, 159 and 161 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require, and for greater certainty,(a) a notice of assessment referred to in subsection 152(2) in respect of tax payable under this Part is valid notwithstanding that a partnership is not a person; and(b) notwithstanding subsection 152(4), the Minister may at any time make an assessment or reassessment of tax payable under this Part or Part I to give effect to a determination made by the Minister under subsection 152(1.4), including the assessment or reassessment of Part I tax payable in respect of the disposition of an interest in a SIFT partnership by a member of the partnership.Payment
(7) Every SIFT partnership shall pay to the Receiver General, on or before its SIFT partnership balance-due day for each taxation year, its tax payable under this Part for the taxation year.Application of definition “SIFT partnership”
(8) The definition “SIFT partnership” applies to a partnership for a taxation year of the partnership that ends after 2006, except that if the partnership would have been a SIFT partnership on October 31, 2006 had that definition been in force and applied to the partnership as of that date, that definition does not apply to the partnership for a taxation year of the partnership that ends before the earlier of(a) 2011, and(b) the first day after December 15, 2006 on which the partnership exceeds normal growth as determined by reference to the normal growth guidelines issued by the Department of Finance on December 15, 2006, as amended from time to time, unless that excess arose as a result of a prescribed transaction.(2) Subsection (1) is deemed to have come into force on October 31, 2006.25. (1) Paragraph 198(6)(d) of the Act is replaced by the following:(d) the cash surrender value of the policy (exclusive of accumulated dividends) is or will be, at or before the end of the year in which the insured person attains 71 years of age, if all premiums under the policy are paid, not less than the maximum total amount (exclusive of accumulated dividends) payable by the insurer under the policy, and(2) Subsection (1) applies after 2006.26. (1) The portion of the definition “qualified investment” in section 204 of the Act before paragraph (a) is replaced by the following:“qualified investment”
« placement admissible »
“qualified investment” for a trust governed by a deferred profit sharing plan or revoked plan means, with the exception of excluded property in relation to the trust,(2) Paragraphs (b) to (d) of the definition “qualified investment” in section 204 of the Act are replaced by the following:(b) debt obligations described in clause 212(1)(b)(ii)(C),(c) debt obligations issued by(i) a corporation, mutual fund trust or limited partnership the shares or units of which are listed on a prescribed stock exchange in Canada,(ii) a corporation the shares of which are listed on a prescribed stock exchange outside Canada, or(iii) an authorized foreign bank and payable at a branch in Canada of the bank,(c.1) debt obligations that, at the time of acquisition by the trust, met the following criteria, namely,(i) the debt obligations had an investment grade rating with a prescribed credit rating agency, and(ii) either(A) the debt obligations were issued as part of a single issue of debt of at least $25 million, or(B) in the case of debt obligations that are issued on a continuous basis, the issuer of the debt obligations had issued and outstanding debt of that type of at least $25 million,(d) securities (other than futures contracts or other derivative instruments in respect of which the holder’s risk of loss may exceed the holder’s cost) that are listed on a prescribed stock exchange,(3) The definition “qualified investment” in section 204 of the Act is amended by adding the word “and” at the end of paragraph (g) and by replacing paragraphs (h) and (i) with the following:(h) prescribed investments;(4) Section 204 of the Act is amended by adding the following in alphabetical order:“debt obligation”
« titre de créance »
“debt obligation” means a bond, debenture, note or similar obligation;“excluded property”
« bien exclu »
“excluded property”, in relation to a trust governed by a deferred profit sharing plan or revoked plan, means a debt obligation or bankers’ acceptance issued by(a) an employer by whom payments are made in trust to a trustee under the plan for the benefit of beneficiaries under the plan, or(b) a corporation with whom that employer does not deal at arm’s length;(5) Subsections (1) to (4) apply in determining whether a property is, at any time after March 18, 2007, a qualified investment.27. (1) The definitions “excess amount” and “RESP lifetime limit” in subsection 204.9(1) of the Act are replaced by the following:“excess amount”
« excédent »
“excess amount” for a year at any time in respect of an individual means(a) for years before 2007, the amount, if any, by which the total of all contributions made after February 20, 1990 in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the lesser of(i) the RESP annual limit for the year, and(ii) the amount, if any, by which the RESP lifetime limit for the year exceeds the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years; and(b) for years after 2006, the amount, if any, by which the total of all contributions made in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the amount, if any, by which(i) the RESP lifetime limit for the yearexceeds(ii) the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years.“RESP lifetime limit”
« plafond cumulatif de REEE »
“RESP lifetime limit” for a year means(a) for 1990 to 1995, $31,500;(b) for 1996 to 2006, $42,000; and(c) for 2007 and subsequent years, $50,000.(2) Subsection (1) applies for the purpose of determining tax under Part X.4 of the Act for months that are after 2006.28. (1) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:“Canadian real, immovable or resource property”
« bien canadien immeuble, réel ou minier »
“Canadian real, immovable or resource property” means(a) a property that would, if this Act were read without reference to the definition “real or immovable property” in subsection 122.1(1), be a real or immovable property situated in Canada,(b) a Canadian resource property,(c) a timber resource property,(d) a share of the capital stock of a corporation, an income or a capital interest in a trust or an interest in a partnership, if more than 50% of the fair market value of the share or interest is derived directly or indirectly from one or any combination of properties described in paragraphs (a) to (c), or(e) any right to or interest in — or, for civil law, any right to or in — any property described in any of paragraphs (a) to (d);“Canadian resident partnership”
« société de personnes résidant au Canada »
“Canadian resident partnership” means a partnership that, at any time in respect of which the expression is relevant,(a) is a Canadian partnership,(b) would, if it were a corporation, be resident in Canada (including, for greater certainty, a partnership that has its central management and control in Canada), or(c) was formed under the laws of a province;“net corporate income tax rate”
« taux net d’imposition du revenu des sociétés »
“net corporate income tax rate” in respect of a SIFT trust or SIFT partnership for a taxation year means the amount, expressed as a decimal fraction, by which(a) the percentage rate of tax provided under paragraph 123(1)(a) for the taxation yearexceeds(b) the total of(i) the percentage that would, if the SIFT trust or SIFT partnership were a corporation, be its general rate reduction percent- age, within the meaning assigned by subsection 123.4(1), for the taxation year, and(ii) the percentage deduction from tax provided under subsection 124(1) for the taxation year;“non-portfolio property”
« bien hors portefeuille »
“non-portfolio property” has the same meaning as in subsection 122.1(1);“provincial SIFT tax factor”
« facteur fiscal provincial »
“provincial SIFT tax factor” for a taxation year means the decimal fraction 0.13;“public market”
« marché public »
“public market” has the same meaning as in subsection 122.1(1);“SIFT partnership”
« société de personnes intermédiaire de placement déterminée »
“SIFT partnership” has the meaning assigned by section 197;“SIFT partnership balance-due day”
« date d’échéance du solde »
“SIFT partnership balance-due day”, in respect of a taxation year of a SIFT partnership, means the day on or before which the partnership is required to file a return for the taxation year under section 229 of the Income Tax Regulations; “SIFT trust”
« fiducie intermédiaire de placement déterminée »
“SIFT trust” has the meaning assigned by section 122.1;(2) Subsection (1) is deemed to have come into force on October 31, 2006.29. (1) Paragraph 249(1)(a) of the Act is replaced by the following:(a) in the case of a corporation or Canadian resident partnership, a fiscal period, and(2) Subsection (1) is deemed to have come into force on October 31, 2006.C.R.C., c. 945
Income Tax Regulations30. (1) The portion of subsection 229(1) of the Income Tax Regulations before paragraph (a) is replaced by the following:229. (1) Every member of a partnership that carries on a business in Canada, or that is a Canadian partnership or a SIFT partnership, at any time in a fiscal period of the partnership shall make for that period an information return in prescribed form containing the following information:(2) Subsection (1) is deemed to have come into force on October 31, 2006.31. (1) Part XXVI of the Regulations is amended by adding the following after section 2607:Sift Trusts2608. For the purposes of this Part, if the individual is a SIFT trust, a reference to income earned in a taxation year shall be read as a reference to the amount that would, if this Part were read without reference to this section, be the amount, if any, by which its income for the taxation year exceeds its taxable SIFT trust distributions for the taxation year.(2) Subsection (1) is deemed to have come into force on October 31, 2006.32. (1) The portion of subsection 4900(1) of the Regulations before paragraph (a) is replaced by the following:4900. (1) For the purposes of paragraph (d) of the definition “qualified investment” in subsection 146(1) of the Act, paragraph (e) of the definition “qualified investment” in subsection 146.1(1) of the Act, paragraph (c) of the definition “qualified investment” in subsection 146.3(1) of the Act and paragraph (h) of the definition “qualified investment” in section 204 of the Act, each of the following investments is prescribed as a qualified investment for a plan trust at a particular time if at that time it is(2) Paragraph 4900(1)(d.1) of the Regulations is repealed.(3) Paragraph 4900(1)(e.01) of the Regulations is repealed.(4) Paragraphs 4900(1)(m) to (n.1) of the Regulations are repealed.(5) Paragraphs 4900(1)(p) and (p.1) of the Regulations are repealed.(6) Subsection 4900(2) of the Regulations is replaced by the following:(2) For the purposes of paragraph (c.1) of the definition “qualified investment” in section 204 of the Act, each of the following is a prescribed credit rating agency:(a) A.M. Best Company, Inc.;(b) Dominion Bond Rating Service Limited;(c) Fitch, Inc.;(d) Moody’s Investors Service, Inc.; and(e) the Standard and Poor’s Division of the McGraw-Hill Companies, Inc.(7) Subsection 4900(3) of the Regulations is replaced by the following:(3) For the purpose of paragraph (h) of the definition “qualified investment” in section 204 of the Act, a contract with a licensed annuities provider for an annuity payable to an employee who is a beneficiary under a deferred profit sharing plan beginning not later than the end of the year in which the employee attains 71 years of age, the guaranteed term of which, if any, does not exceed 15 years, is prescribed as a qualified investment for a trust governed by such a plan or revoked plan.(8) The portion of subsection 4900(7) of the Regulations before paragraph (a) is replaced by the following:(7) Subject to subsection (11), for the purposes of paragraph (h) of the definition “qualified investment” in section 204 of the Act, a property is prescribed as a qualified investment for a trust governed by a deferred profit sharing plan or revoked plan at any time if at that time the property is an interest(9) Subsections (1) to (6) and (8) apply in determining whether a property is, at any time after March 18, 2007, a qualified investment.(10) Subsection (7) applies after 2006 except that, for the period before March 19, 2007, the reference in subsection 4900(3) of the Regulations, as enacted by subsection (7), to “paragraph (h)” shall be read as a reference to “paragraph (i)”.33. (1) Paragraph 8308.3(1)(c) of the Regulations is replaced by the following:(c) a plan or arrangement that does not provide in any circumstances for payments to be made to or for the benefit of the individual after the later of the last day of the calendar year in which the individual attains 71 years of age and the day that is 5 years after the day of termination of the individual’s employment with the employer;(2) Subsection (1) applies after 2006.34. (1) Subparagraph 8502(e)(i) of the Regulations is replaced by the following:(i) requires that the retirement benefits of a member under each benefit provision of the plan begin to be paid not later than the end of the calendar year in which the member attains 71 years of age except that,(A) in the case of benefits provided under a defined benefit provision, the benefits may begin to be paid at any later time that is acceptable to the Minister, if the amount of benefits (expressed on an annualized basis) payable does not exceed the amount of benefits that would be payable if payment of the benefits began at the end of the calendar year in which the member attains 71 years of age, and(B) in the case of benefits provided under a money purchase provision in accordance with paragraph 8506(1)(e.1), the benefits may begin to be paid not later than the end of the calendar year in which the member attains 72 years of age, and(2) Subsection (1) applies after 2006.35. (1) Clause 8503(2)(f)(iii)(B) of the Regulations is replaced by the following:(B) the end of the calendar year in which the beneficiary attains 71 years of age,(2) Section 8503 of the Regulations is amended by adding the following after subsection (11):Special Rules for Member Aged 70 or 71 in 2007 (11.1) Where(a) a member of a registered pension plan attained 69 years of age in 2005 or 2006,(b) the member’s retirement benefits under a defined benefit provision of the plan commenced to be paid to the member in the year in which the member attained 69 years of age,(c) the member’s retirement benefits are suspended as of any particular time in 2007, and(d) the member was employed with a participating employer from the time the member’s retirement benefits commenced to be paid to the particular time,the following rules apply:(e) subsections (9) and (11) shall apply with respect to the member as though the member became an employee of the participating employer at the particular time, and(f) for the purpose of subsection (10), retirement benefits paid under the provision to the member before the particular time shall be disregarded.(3) Subsections (1) and (2) apply after 2006.36. (1) Subparagraph 8506(1)(e)(iii) of the Regulations is replaced by the following:(iii) the retirement benefits are payable to the beneficiary beginning no later than on the later of one year after the day of death of the member and the end of the calendar year in which the beneficiary attains 71 years of age;(2) The portion of paragraph 8506(2)(c.1) of the Regulations before subparagraph (i) is replaced by the following:(c.1) no contribution is made under the provision with respect to a member, and no amount is transferred for the benefit of a member to the provision from another benefit provision of the plan, at any time after the calendar year in which the member attains 71 years of age, other than an amount that is transferred for the benefit of the member to the provision(3) Paragraph 8506(7)(b) of the Regulations is replaced by the following:(b) that individual had not attained 71 years of age at the end of the preceding calendar year.(4) Subsections (1) to (3) apply after 2006.2004, c. 26
Canada Education Savings Act37. (1) Subparagraph 5(2)(b)(i) of the Canada Education Savings Act is replaced by the following:(i) $1,000, unless the particular year is any of 1998 to 2006, in which case, $800, and(2) Paragraph 5(3)(b) of the Act is replaced by the following:(b) in any other case, determined by the formula$400A + $500B - CwhereAis the number of years after 1997 and before 2007 in which the beneficiary was alive, other than a year throughout which the beneficiary was(i) an ineligible beneficiary in accordance with the regulations, or(ii) not resident in Canada,Bis the number of years after 2006 in which the beneficiary was alive, up to and including the particular year, other than a year throughout which the beneficiary was(i) an ineligible beneficiary in accordance with the regulations, or(ii) not resident in Canada, andCis the total of all CES grants paid before that time — other than those amounts paid under subsection (4) — in respect of contributions made in a preceding year in respect of the beneficiary.SOR/2005-151
Canada Education Savings Regulations38. Paragraph 4(1)(d) of the Canada Education Savings Regulations is replaced by the following:(d) the total of the contribution and all other contributions to RESPs made, or deemed to have been made for the purpose of Part X.4 of the Income Tax Act, in respect of the beneficiary does not exceed the RESP lifetime limit (as defined in subsection 204.9(1) of the Income Tax Act) for the year in which the contribution is made;Coordinating AmendmentsBill C-33
39. Sections 40 to 42 apply if Bill C-33 (in those sections referred to as the “other Act”), introduced in the 1st session of the 39th Parliament and entitled Income Tax Amendments Act, 2006, receives royal assent.40. (1) Subsection 104(24) of the Act, having been amended by subsection 8(4) of this Act and 23(8) of the other Act, is replaced by the following:Amount payable
(24) For the purposes of subparagraph 53(2)(h)(i.1), paragraph (c) of the definition “specified charity” in subsection 94(1), subsection 94(8) and subsections (6), (7), (7.01), (13), (16) and (20), an amount is deemed not to have become payable to a beneficiary in a taxation year unless it was paid in the year to the beneficiary or the beneficiary was entitled in the year to enforce payment of it.(2) Subsection (1) applies in respect of taxation years of a trust that begin after 2006.41. If the other Act is assented to on the same day as or after the day on which this Act is assented to, subsections 106(1) and (3) of the other Act are deemed to have come into force before subsections 9(1) and (16) of this Act.42. (1) Subsection 249(1) of the Act, having been amended by subsection 188(1) of the other Act and subsection 29(1) of this Act, is replaced by the following:Definition of “taxation year”
249. (1) Except as expressly otherwise provided in this Act, a “taxation year” is(a) in the case of a corporation, a fiscal period;(b) in the case of an individual (other than a testamentary trust), a calendar year;(c) in the case of a testamentary trust, the period for which the accounts of the trust are made up for purposes of assessment under this Act; and(d) in the case of a Canadian resident partnership, a fiscal period.(2) Subsection (1) is deemed to have come into force on October 31, 2006.PART 2R.S., c. E-15
AMENDMENTS TO THE EXCISE TAX ACT (OTHER THAN WITH RESPECT TO THE GOODS AND SERVICES TAX/HARMONIZED SALES TAX)R.S., c. 7 (2nd Supp.), s. 34(1)
43. (1) Section 68 of the Excise Tax Act is replaced by the following:Payment where error
68. (1) If a person, otherwise than pursuant to an assessment, has paid any moneys in error in respect of any goods, whether by reason of mistake of fact or law or otherwise, and the moneys have been taken into account as taxes, penalties, interest or other sums under this Act, an amount equal to the amount of the moneys shall, subject to this Part, be paid to the person if the person applies for the payment of the amount within two years after the payment of the moneys.Exception
(2) Subsection (1) does not apply if an application for a payment in respect of the goods can be made by any person under section 68.01.Payment for end-users — diesel fuel
68.01 (1) If tax under this Act has been paid in respect of diesel fuel, the Minister may pay an amount equal to the amount of that tax(a) in the case where a vendor delivers the diesel fuel to a purchaser(i) to the vendor, if the vendor applies for the payment, the purchaser certifies that the diesel fuel is for use exclusively as heating oil and the vendor reasonably believes that the purchaser will use it exclusively as heating oil,(ii) to the purchaser, if the purchaser applies for the payment, the purchaser uses the diesel fuel as heating oil and no application in respect of the diesel fuel can be made by the vendor under subparagraph (i); or(b) to a purchaser who applies for the payment and who uses the diesel fuel to generate electricity, except if the electricity so generated is used primarily in the operation of a vehicle.Payment for end-users — fuel used as ships’ stores
(2) If tax under this Act has been paid in respect of fuel and no application is made in respect of the fuel by any person under section 68.17 or 70, the Minister may pay an amount equal to the amount of that tax to a purchaser who applies for the payment and who uses the fuel as ships’ stores.Timing of application
(3) No payment shall be made under this section unless(a) the vendor described in subparagraph (1)(a)(i) applies for it within two years after the vendor sells the diesel fuel to the purchaser described in paragraph (1)(a); or(b) the purchaser described in subparagraph (1)(a)(ii), paragraph (1)(b) or subsection (2) applies for it within two years after the purchase.Conditions
(4) The Minister is not required to make a payment under this section unless the Minister is satisfied that all the conditions for the payment have been met.Deemed tax payable
(5) If, under this section, the Minister pays an amount to a person to which that person is not entitled, or pays an amount to a person in excess of the amount to which that person is entitled, the amount of the payment or the excess is deemed to be a tax payable by that person under this Act on the day on which the Minister made the payment.Payment to end-users — specially equipped van
68.02 (1) If tax under this Act has been paid in respect of a van to which section 6 of Schedule I applies, the Minister may pay an amount equal to the amount of the tax paid at the rate set out in that section(a) if the van was manufactured or produced in Canada, to a person who is the first final consumer of the van if, at the time of the acquisition of the van by the person or within six months after that time, the van has been equipped with a device designed exclusively to assist in placing a wheelchair in the van without having to collapse the wheelchair; or(b) if the van was imported, to a person who is the first final consumer of the van after the importation if, at the time of importation, the van was equipped with a device designed exclusively to assist in placing a wheelchair in the van without having to collapse the wheelchair.Timing of application
(2) No payment in respect of a van shall be made under this section unless the person to whom the payment can be made applies for it within two years after the person acquires the van.Deemed tax payable
(3) If, under this section, the Minister pays an amount to a person to which that person is not entitled, or pays an amount to a person in excess of the amount to which that person is entitled, the amount of the payment or the excess is deemed to be a tax payable by that person under this Act on the day on which the Minister made the payment.(2) Sections 68 and 68.01 of the Act, as enacted by subsection (1), are deemed to have come into force on September 3, 1985 except that, before March 20, 2007,(a) subsection 68(2) of the Act, as enacted by subsection (1), shall be read as follows:(2) Subsection (1) does not apply if an application for a payment in respect of the goods is made by any person under section 68.01.(b) subparagraph 68.01(1)(a)(ii) of the Act, as enacted by subsection (1), shall be read as follows:(ii) to the purchaser, if the purchaser applies for the payment, the purchaser uses the diesel fuel as heating oil and no application in respect of the diesel fuel is made by the vendor under subparagraph (i); or(3) Section 68.02 of the Act, as enacted by subsection (1), applies in respect of each van to which section 6 of Schedule I to the Act, as enacted by section 44 of this Act, applies.(4) If, before this Act is assented to, an application under section 68 of the Act has been made by a person who could have made an application under section 68.01 of the Act had that section been in force at that time, the application made under section 68 of the Act is deemed to have been made under subsection 68.01(1) or (2) of the Act, as the case may be.44. (1) Section 6 of Schedule I to the Act is replaced by the following:6. (1) Automobiles (including station wag- ons, vans and sport utility vehicles) designed primarily for use as passenger vehicles but not including pickup trucks, vans equipped to accommodate 10 or more passengers, ambulances and hearses, at the following rates:(a) $1,000, in the case of an automobile that has a weighted fuel consumption rating of 13 litres or more per 100 kilometres but less than 14 litres per 100 kilometres;(b) $2,000, in the case of an automobile that has a weighted fuel consumption rating of 14 litres or more per 100 kilometres but less than 15 litres per 100 kilometres;(c) $3,000, in the case of an automobile that has a weighted fuel consumption rating of 15 litres or more per 100 kilometres but less than 16 litres per 100 kilometres; and(d) $4,000, in the case of an automobile that has a weighted fuel consumption rating of 16 litres or more per 100 kilometres.(2) For the purposes of subsection (1), the weighted fuel consumption rating of an automobile shall be the amount determined by the formula0.55A + 0.45BwhereAis the city fuel consumption rating (based on the number of litres of fuel, other than E85, per 100 kilometres) for automobiles of the same model with the same attributes as the automobile, as determined by reference to data published by the Government of Canada under the EnerGuide mark, or, if no rating can be so determined that would apply to the automobile, by reference to the best available data, which may include the city fuel consumption rating for the most similar model and attributes; andBis the highway fuel consumption rating (based on the number of litres of fuel, other than E85, per 100 kilometres) for automobiles of the same model with the same attributes as the automobile, as determined by reference to data published by the Government of Canada under the EnerGuide mark, or, if no rating can be so determined that would apply to the automobile, by reference to the best available data, which may include the highway fuel consumption rating for the most similar model and attributes.(2) Subsection (1) applies to each automobile delivered by a manufacturer or producer to a purchaser after March 19, 2007, and each automobile imported into Canada after that day unless the automobile had been put into service before March 20, 2007, but does not apply to an automobile for which an agreement in writing has been entered into before March 20, 2007 between a person in the business of selling vehicles to consumers and a final consumer, and for which possession is taken by the final consumer before October 2007.PART 3