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Bill C-74

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First Session, Forty-second Parliament,
64-65-66-67 Elizabeth II, 2015-2016-2017-2018
STATUTES OF CANADA 2018
CHAPTER 12
An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures
ASSENTED TO
June 21, 2018
BILL C-74


RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures”.

SUMMARY

Part 1 implements certain income tax measures proposed or referenced in the February 27, 2018 budget by
(a)ensuring appropriate tax treatment of amounts received under the Veterans Well-being Act;
(b)exempting from income amounts received under the Memorial Grant for First Responders;
(c)lowering the small business tax rate and making consequential adjustments to the dividend gross-up factor and dividend tax credit;
(d)reducing the business limit for the small business deduction based on passive income and restricting access to dividend refunds on the payment of eligible dividends;
(e)preventing the avoidance of tax through income sprinkling arrangements;
(f)removing the risk score requirement and increasing the level of income that can be deducted for Canadian armed forces personnel and police officers serving on designated international missions;
(g)introducing the Canada Workers Benefit;
(h)expanding the medical expense tax credit to recognize expenses incurred in respect of an animal specially trained to perform tasks for a patient with a severe mental impairment;
(i)indexing the Canada Child Benefit as of July 2018;
(j)extending, for one year, the mineral exploration tax credit for flow-through share investors;
(k)extending, by five years, the ability of a qualifying family member to be the plan holder of an individual’s Registered Disability Savings Plan;
(l)allowing transfers of property from charities to municipalities to be considered as qualifying expenditures for the purposes of reducing revocation tax;
(m)ensuring that appropriate taxpayers are eligible for the Canada Child Benefit and that information related to the Canada Child Benefit can be shared with provinces and territories for certain purposes; and
(n)extending, by five years, eligibility for Class 43.‍2.
Part 2 implements certain excise measures proposed in the February 27, 2018 budget by
(a)advancing the existing inflationary adjustments for excise duty rates on tobacco products to occur on an annual basis rather than every five years; and
(b)increasing excise duty rates on tobacco products to account for inflation since the last inflationary adjustment in 2014 and by an additional $1 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates on other tobacco products.
Part 3 implements a new federal excise duty framework for cannabis products proposed in the February 27, 2018 budget by
(a)requiring that cannabis cultivators and manufacturers obtain a cannabis licence from the Canada Revenue Agency;
(b)requiring that all cannabis products that are removed from the premises of a cannabis licensee to be entered into the Canadian market for retail sale be affixed with an excise stamp;
(c)imposing excise duties on cannabis products to be paid by cannabis licensees;
(d)providing for administration and enforcement rules related to the excise duty framework;
(e)providing the Governor in Council with authority to provide for an additional excise duty in respect of provinces and territories that enter into a coordinated cannabis taxation agreement with Canada; and
(f)making related amendments to other legislative texts, including ensuring that any sales of cannabis products that would otherwise be considered as basic groceries are subject to the GST/HST in the same way as sales of other types of cannabis products.
Part 4 amends the Pension Act to authorize the Minister of Veterans Affairs to waive, in certain cases, the requirement for an application for an award under that Act.
It also amends the Veterans Well-being Act to, among other things,
(a)replace the earnings loss benefit, career impact allowance, supplementary retirement benefit and retirement income security benefit with the income replacement benefit;
(b)replace the disability award with pain and suffering compensation; and
(c)create additional pain and suffering compensation.
Finally, it makes consequential amendments to other Acts.
Part 5 enacts the Greenhouse Gas Pollution Pricing Act and makes the Fuel Charge Regulations.
Part 1 of that Act sets out the regime for a charge on fossil fuels. The fuel charge regime provides that a charge applies, at rates set out in Schedule 2 to that Act, to fuels that are produced, delivered or used in a listed province, brought into a listed province from another place in Canada, or imported into Canada at a location in a listed province. The fuel charge regime also provides relief from the fuel charge, through rebate and exemption certificate mechanisms, in certain circumstances. The fuel charge regime also sets out the registration requirements for persons that carry out certain activities relating to fuels subject to the charge. Part 1 of that Act also contains administrative provisions and enforcement provisions, including penalties, offences and collection provisions. Part 1 of that Act also sets out a mechanism for distributing revenues from the fuel charge. Part 1 of that Act also provides the Governor in Council with authority to make regulations for purposes of that Part, including the authority to determine which province, territory or area is a listed province for purpose of that Part.
Part 2 of that Act sets out the regime for pricing industrial greenhouse gas emissions. The industrial emissions pricing regime requires the registration of any facility that is located in a province or area that is set out in Part 2 of Schedule 1 to that Act and that either meets criteria specified by regulation or voluntarily joins the regime. The industrial emissions pricing regime requires compliance reporting with respect to any facility that is covered by the regime and the provision of compensation for any amount of a greenhouse gas that the facility emits above the applicable emissions limit during a compliance period. Part 2 of that Act also sets out an information gathering regime, administrative powers, duties and functions, enforcement tools, offences and related penalties, and a mechanism for distributing revenues from the industrial emissions pricing regime. Part 2 of that Act also provides the Governor in Council with the authority to make regulations for the purposes of that Part and the authority to make orders that amend Part 2 of Schedule 1 by adding, deleting or amending the name of a province or the description of an area.
Part 3 of that Act authorizes the Governor in Council to make regulations that provide for the application of provincial laws concerning greenhouse gas emissions to works, undertakings, lands and waters under federal jurisdiction.
Part 4 of that Act requires the Minister of the Environment to prepare an annual report on the administration of the Act and to cause it to be tabled in each House of Parliament.
Part 6 amends several Acts in order to implement various measures.
Division 1 of Part 6 amends the Financial Administration Act to establish the office of the Chief Information Officer of Canada and to provide that the President of the Treasury Board is responsible for the coordination of that Officer’s activities with those of the other deputy heads of the Treasury Board Secretariat. It also amends the Act to ensure Crown corporations with no borrowing authority are able to continue to enter into leases and to specify that leases are not considered to be transactions to borrow money for the purposes of Crown corporations’ statutory borrowing limits.
Division 2 of Part 6 amends the Canada Deposit Insurance Corporation Act in order to modernize and enhance the Canadian deposit insurance framework to ensure it continues to meet its objectives, including financial stability.
Division 3 of Part 6 amends the Federal-Provincial Fiscal Arrangements Act to renew Fiscal Equalization Payments to the provinces and Territorial Formula Financing Payments to the territories for a five-year period beginning on April 1, 2019 and ending on March 31, 2024, and to authorize annual transition payments of $1,270,000 to Yukon and $1,744,000 to the Northwest Territories for that period. It also amends the Act to allow Canada Health Transfer deductions to be reimbursed when provinces and territories have taken the steps necessary to eliminate extra-billing and user fees in the delivery of public health care.
Division 4 of Part 6 amends the Bank of Canada Act to ensure that the Bank of Canada may continue to buy and sell securities issued or guaranteed by the government of the United Kingdom if that country ceases to be a member state of the European Union.
Division 5 of Part 6 amends the Currency Act to expand the objectives of the Exchange Fund Account to include providing a source of liquidity for the government of Canada. It also amends that Act to authorize the payment of funds from the Exchange Fund Account into the Consolidated Revenue Fund.
Division 6 of Part 6 amends the Bank of Canada Act to require the Bank of Canada to make adequate arrangements for the removal from circulation in Canada of its bank notes that are worn or mutilated or that are the subject of an order made under paragraph 9(1)‍(b) of the Currency Act. It also amends the Currency Act to provide, among other things, that
(a)bank notes are current if they are issued under the authority of the Bank of Canada Act;
(b)the Governor in Council may, by order, call in certain bank notes; and
(c)bank notes that are called in by order are not current.
Division 7 of Part 6 amends the Payment Clearing and Settlement Act in order to implement a framework for resolution of clearing and settlement systems and clearing houses, and to protect information related to oversight, by the Bank of Canada, of clearing and settlement systems.
Division 8 of Part 6 amends the Canadian International Trade Tribunal Act to, among other things,
(a)create the position of Vice-chairperson of the Canadian International Trade Tribunal;
(b)provide that former permanent members of the Tribunal may be re-appointed to one further term as a permanent member; and
(c)clarify the rules concerning the interim replacement of the Chairperson of the Tribunal and provide for the interim replacement of the Vice-chairperson of the Tribunal.
Division 9 of Part 6 amends the Canadian High Arctic Research Station Act to, among other things, provide that the Canadian High Arctic Research Station is to be considered an agent corporation for the purpose of the transfer of the administration of federal real property and federal immovables under the Federal Real Property and Federal Immovables Act. It also provides that the Order entitled Game Declared in Danger of Becoming Extinct is deemed to have continued in force and to have continued to apply in Nunavut, as of April 1, 2014.
Division 10 of Part 6 amends the Canadian Institutes of Health Research Act in order to separate the roles of President of the Canadian Institutes of Health Research and Chairperson of the Governing Council, to merge the responsibility to establish policies and to limit delegation of certain Governing Council powers, duties and functions to its members or committees or to the President.
Division 11 of Part 6 amends the Red Tape Reduction Act to permit an administrative burden imposed by regulations to be offset by the reduction of another administrative burden imposed by another jurisdiction if the reduction is the result of regulatory cooperation agreements.
Division 12 of Part 6 provides for the transfer of certain employees and disclosure of information to the Communications Security Establishment to improve cyber security.
Division 13 of Part 6 amends the Department of Employment and Social Development Act to provide the Minister of Employment and Social Development with legislative authority respecting service delivery to the public and to make related amendments to Parts 4 and 6 of that Act.
Division 14 of Part 6 amends the Employment Insurance Act to modify the treatment of earnings received by claimants while they are in receipt of benefits.
Division 15 of Part 6 amends the Judges Act to authorize the salaries for the following new judges, namely, six judges for the Ontario Superior Court of Justice, one judge for the Saskatchewan Court of Appeal, 39 judges for the unified family courts (as of April 1, 2019), one judge for the Federal Court and a new Associate Chief Justice for the Federal Court. This division also makes consequential amendments to the Federal Courts Act.
Division 16 of Part 6 amends certain Acts governing federal financial institutions and related Acts to, among other things,
(a)extend the scope of activities related to financial services in which federal financial institutions may engage, including activities related to financial technology, as well as modernize certain provisions applicable to information processing and information technology activities;
(b)permit life companies, fraternal benefit societies and insurance holding companies to make long-term investments in permitted infrastructure entities to obtain predictable returns under the Insurance Companies Act;
(c)provide prudentially regulated deposit-taking institutions, such as credit unions, with the ability to use generic bank terms under the Bank Act, subject to disclosure requirements, as well as provide the Superintendent of Financial Institutions with additional enforcement tools under the Bank Act and the Office of the Superintendent of Financial Institutions Act, and clarify existing provisions of the Bank Act; and
(d)modify sunset provisions in certain Acts governing federal financial institutions to extend by five years, after the day on which this Act receives royal assent, the period during which those institutions may carry on business.
Division 17 of Part 6 amends the Western Economic Diversification Act to remove the requirement of the Governor in Council’s approval for the Minister of Western Economic Diversification to enter into an agreement with the government of a province, or with a provincial agency, respecting the exercise of the Minister’s powers and the carrying out of the Minister’s duties and functions.
Division 18 of Part 6 amends the Parliament of Canada Act to give each House of Parliament the power to make regulations related to maternity and parental arrangements for its own members.
Division 19 of Part 6 amends the Canada Pension Plan to, among other things,
(a)eliminate age-based restrictions on the survivor’s pension;
(b)fix the amount of the death benefit at $2,500;
(c)provide a benefit to disabled retirement pension beneficiaries under the age of 65;
(d)protect retirement and survivor’s pension amounts under the additional Canada Pension Plan for individuals who are disabled;
(e)protect benefit amounts under the additional Canada Pension Plan for parents with lower earnings during child-rearing years;
(f)maintain portability between the Canada Pension Plan and the Act respecting the Québec Pension Plan; and
(g)authorize the making of regulations to support the sustainability of the additional Canada Pension Plan.
Division 20 of Part 6 amends the Criminal Code to establish a remediation agreement regime. Under this regime, the prosecutor may negotiate a remediation agreement with an organization that is alleged to have committed an offence of an economic character referred to in the schedule to Part XXII.‍1 of that Act and the proceedings related to that offence are stayed if the organization complies with the terms of the agreement.
Available on the House of Commons website at the following address:
www.ourcommons.ca


TABLE OF PROVISIONS

An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures
Short Title
1
Budget Implementation Act, 2018, No. 1
PART 1
Amendments to the Income Tax Act and to Related Legislation
2
PART 2
Amendments to the Excise Act, 2001 (Tobacco Taxation) and to Related Legislation
47
PART 3
Amendments to the Excise Act, 2001 (Cannabis Taxation), the Excise Tax Act and Other Related Texts
68
PART 4
Canadian Forces Members and Veterans
120
PART 5
Greenhouse Gas Pollution Pricing Act
186
Enactment of Act
An Act to mitigate climate change through the pan-Canadian application of pricing mechanisms to a broad set of greenhouse gas emission sources and to make consequential amendments to other Acts
Short Title
1
Greenhouse Gas Pollution Pricing Act
Her Majesty
2
Her Majesty
PART 1
Fuel Charge
Division 1
Interpretation and General Rules of Application
Interpretation
3
Definitions
4
Meaning of administration or enforcement of this Part
5
Covered facility of a person
6
Arm’s length
7
Exclusive economic zone and continental shelf
General Rules of Application
8
Determining quantities — litres
9
Determining quantities
10
Fuel brought into a listed province
11
Fuel in transit through a listed province
12
Fuel imported in a listed province
13
Importer
14
Delivery of marketable natural gas — distribution system
15
Substance marketed as fuel
16
Mixtures
Division 2
Application of Charge
SUBDIVISION a 
General Application of Charge to Fuel and Combustible Waste
17
Charge — delivery by registered distributor
18
Charge — use by registered distributor
19
Charge — bringing into a listed province
20
Application
21
Charge — production
22
Charge — diversion from covered facility
23
Charge — diversion by registered user
24
Charge — diversion by a farmer
24.1
Charge — delivery in a listed province
25
Charge — combustible waste
26
Charge — regulations
27
Charge not payable — regulations
SUBDIVISION B 
Application of Charge to Air, Marine, Rail and Road Carriers
28
Net fuel quantity — registered specified air or marine carrier
29
Net fuel quantity — registered specified rail carrier
30
Net fuel quantity — registered air or marine carrier
31
Net fuel quantity — registered rail carrier
32
Net fuel quantity — registered road carrier
33
Annual net fuel adjustment — rail carrier
34
Charge — net fuel quantity
35
Charge — annual net fuel adjustment
SUBDIVISION C 
Exemption Certificate
36
Exemption certificate
37
Charge — false declaration
SUBDIVISION D 
Application of Charge in Special Circumstances
38
Charge — fuel held on adjustment day
39
Charge — ceasing to be registered
SUBDIVISION E 
Amount of Charge
40
Charge amount — fuel
41
Charge amount — combustible waste
Division 3
Rebates
42
Statutory recovery rights
43
Rebate — fuel removed from listed province
44
Rebate — fuel brought to covered facility
45
Rebate — fuel used in non-covered activity
46
Rebate — net fuel quantity
47
Rebate — annual net fuel adjustment
48
Rebate — regulations
49
Rebate — payment in error
50
Restriction on rebate
51
Restriction on rebate
52
Application for rebate
53
Single application
54
Restriction — bankruptcy
Division 4
Registration, Reporting Periods, Returns and Payments
SUBDIVISION A 
Registration
55
Distributor — registration required
56
Importer — registration required
57
Emitter — registration permitted
58
User of fuel — registration permitted
59
User of combustible waste — registration required
60
Air carrier — registration required
61
Marine carrier — registration required
62
Rail carrier — registration required
63
Road carrier — registration required
64
Application for registration
65
Cancellation of registration
66
Security
67
Registrations not statutory instruments
SUBDIVISION B 
Reporting Periods, Returns and Requirement to Pay
68
Definition of calendar quarter
69
Filing required
70
Form and content
71
Net charge — obligation
72
Overpayment of rebate or interest
73
Reportable amount
Division 5
Miscellaneous
SUBDIVISION A 
Trustees, Receivers and Personal Representatives
74
Definitions
75
Estate or succession of a deceased individual
76
Definitions
77
Distribution by trust
SUBDIVISION B 
Amalgamation and Winding-up
78
Amalgamations
79
Winding-up
SUBDIVISION C 
Partnerships and Joint Ventures
80
Partnerships
81
Joint ventures
SUBDIVISION D 
Anti-avoidance
82
Definitions
83
Definitions
Division 6
Administration and Enforcement
SUBDIVISION A 
Payments
84
Person resident in Canada
85
Set-off of rebates
86
Large payments
87
Small amounts owing
88
Authority for separate returns
89
Definition of electronic filing
90
Execution of returns, etc.
91
Extension of time
92
Demand for return
SUBDIVISION B 
Administration and Officers
93
Minister’s duty
94
Staff
95
Administration of oaths
96
Inquiry
SUBDIVISION C 
Interest
97
Compound interest on amounts not paid when required
98
Compound interest on amounts owed by Her Majesty
99
Application of interest provisions if Part amended
100
Waiving or reducing interest
101
Cancellation of penalties and interest
SUBDIVISION D 
Financial Administration Act and Service Fees Act
102
Dishonoured instruments
103
Service Fees Act
SUBDIVISION E 
Records and Information
104
Keeping records
105
Electronic funds transfer
106
Requirement to provide information or record
107
Definitions
SUBDIVISION F 
Assessments
108
Assessment
109
Assessment of rebate
110
Notice of assessment
111
Limitation period for assessments
112
Payment of rebates and other amounts
SUBDIVISION G 
Objections to Assessment
113
Objection to assessment
114
Extension of time by Minister
SUBDIVISION H 
Appeal
115
Extension of time by Tax Court of Canada
116
Appeal to Tax Court of Canada
117
Extension of time to appeal
118
Limitation on appeals to the Tax Court of Canada
119
Institution of appeals
120
Disposition of appeal
121
References to Tax Court of Canada
122
Reference of common questions to Tax Court of Canada
SUBDIVISION I 
Penalties
123
Failure to file a return when required
124
Failure to file by electronic transmission
125
Waiving or cancelling penalties
126
Failure to register
127
General penalty
128
Failure to answer demand
129
Failure to provide information
130
Failure to provide information
131
False statements or omissions
SUBDIVISION J 
Offences and Punishment
132
Offence for failure to file return or to comply with demand or order
133
Offences for false or deceptive statement
134
Offence — confidential information
135
Failure to pay charge
136
General offence
137
Compliance orders
138
Officers of corporations, etc.
139
Power to decrease punishment
140
Information or complaint
SUBDIVISION K 
Inspections
141
By whom
142
Compliance order
143
Search warrant
144
Definition of foreign-based information or record
145
Copies
146
Compliance
147
Information respecting non-resident persons
SUBDIVISION L 
Collection
148
Definitions
149
Security
150
Collection restrictions
151
Over $10,000,000 — security
152
Certificates
153
Garnishment
154
Recovery by deduction or set-off
155
Acquisition of debtor’s property
156
Money seized from debtor
157
Seizure
158
Person leaving Canada or defaulting
159
Definitions
160
Compliance by unincorporated bodies
161
Charge liability — transfers not at arm’s length
SUBDIVISION M 
Evidence and Procedure
162
Service
163
Timing of receipt
164
Proof of service
Division 7
Distribution of Fuel Charge
165
Definition of net amount
Division 8
Regulations
166
Regulations
167
Incorporation by reference — limitation removed
168
Definition of fuel charge system
PART 2
Industrial Greenhouse Gas Emissions
Interpretation
169
Definitions
170
Conversion into CO2e tonnes
DIVISION 1
Pricing Mechanism for Greenhouse Gas Emissions
Registration of Covered Facilities
171
Application for registration
172
Designation of facility as covered facility
Reporting, Compensation and Compliance Units
173
Reporting requirement
174
Compensation for excess emissions
175
Issuance of surplus credits
176
Errors and omissions
177
Errors and omissions
178
Change in obligations
179
Retirement of compliance units
180
Suspension or revocation of compliance units
181
Issuance error or invalidity
Recovery of Compensation
182
Ministerial power
183
Debts to Her Majesty
184
Certificate
Tracking System
185
Establishment and maintenance
186
Accounts
Records
187
Keeping records
Revenues
188
Distribution — charge payments
Orders and Regulations
189
Amendments to Part 2 of Schedule 1
190
Amendments to Schedule 3
191
Amendments to Schedule 4
192
Regulations
193
Transitional measures
194
Effect
195
Regulations — offset credit system
Delegation
196
Delegation
DIVISION 2
Information and Samples
197
Purposes
198
Regulations — information
199
Errors and omissions
DIVISION 3
Administration and Enforcement
Interpretation
200
Definitions
Designation of Enforcement Officers and Analysts
201
Designation
202
Immunity
Powers
203
Authority to enter
204
Warrant to enter dwelling-house
205
Production of documents and samples
Assistance to Enforcement Officers and Analysts
206
Entry on private property
207
Assistance
208
False or misleading statements
209
Obstruction
Disposition of Things Seized
210
Custody of things seized
211
Disposition by Minister
212
Liability for costs
Jurisdiction of Justices and Judges — Exclusive Economic Zone of Canada and Waters Above the Continental Shelf of Canada
213
Jurisdiction of justices and judges
Compliance Orders
214
Definitions
215
Order
216
Notice of intent
217
Compliance with the order
218
Intervention by enforcement officer
219
Recovery of reasonable costs and expenses by Her Majesty
220
Variation or cancellation of order
221
Regulations
222
Request for review
223
Review of order
224
Immunity
Voluntary Reports
225
Voluntary reports
Application for Investigation of Offences
226
Application for investigation by Minister
227
Investigation by Minister
228
Progress reports
229
Sending evidence to Attorney General of Canada
230
Discontinuation of investigation
Injunctions
231
Injunctions
DIVISION 4
Offences and Punishment
Offences
232
Offences
233
Offences
234
Determination of small revenue organization status
235
Relief from minimum fine
236
Deeming — second and subsequent offence
237
Additional fine
238
Notice to shareholders
239
Limitation period
240
Offence for each tonne
241
Regulations
242
Liability of senior officers
243
Proof of offence
244
Defence
245
Certificate of analyst
246
Regulations
Sentencing
247
Fundamental purpose
248
Principles
249
Orders of court
250
Suspended sentence
251
Application of fines
Registry
252
Publication of information about contraventions
DIVISION 5
Miscellaneous
Agreements Respecting Administration and Enforcement
253
Negotiation of agreement
Confidentiality
254
Request for confidentiality
255
Additional justification
256
Regulations
Regulations
257
Variation
258
Incorporation by reference — limitation removed
259
Regulations not mandatory
Service Fees Act
260
Service Fees Act
Review
261
Review
PART 3
Application of Provincial Schemes
262
Definitions
263
Regulations
264
Statutory Instruments Act
265
Service Fees Act
266
Federal Courts Act
267
Exclusive economic zone and continental shelf
268
Amounts collected
269
Liability for acts and omissions
PART 4
Report to Parliament
270
Annual report
Making of Regulations
187
Making
Fuel Charge Regulations
Interpretation
1
Definition of Act
PART 1
Interest Rate
2
Definitions
3
Prescribed rates of interest
PART 2
Registered Specified Rail Carriers
4
Prescribed persons — rail carriers
Consequential Amendments
188
Access to Information Act
189
Tax Court of Canada Act
193
Canada Revenue Agency Act
194
Environmental Violations Administrative Monetary Penalties Act
Coordinating Amendment
198
2014, c. 7
PART 6
Various Measures
DIVISION 1
Financial Administration Act
199
DIVISION 2
Canada Deposit Insurance Corporation Act
202
DIVISION 3
Federal-Provincial Fiscal Arrangements Act
214
Division 4
Securities Issued or Guaranteed by Foreign Governments
220
Division 5
Exchange Fund Account
222
Division 6
Bank Notes
225
DIVISION 7
Payment Clearing and Settlement
231
Division 8
Canadian International Trade Tribunal Act
245
DIVISION 9
Canadian High Arctic Research Station and Application of an Order in Nunavut
247
DIVISION 10
Canadian Institutes of Health Research Act
250
DIVISION 11
Red Tape Reduction Act
257
DIVISION 12
Communications Security Establishment
265
DIVISION 13
Department of Employment and Social Development Act
268
DIVISION 14
Employment Insurance Act
284
DIVISION 15
Judges Act
297
DIVISION 16
Financial Sector Legislative Renewal
310
DIVISION 17
Western Economic Diversification Act
359
DIVISION 18
Parliament of Canada Act
360
DIVISION 19
Canada Pension Plan
361
DIVISION 20
Criminal Code
403
Schedule 1
SCHEDULE 2
SCHEDULE 3
SCHEDULE 4
SCHEDULE 5
SCHEDULE 6


64-65-66-67 Elizabeth II
CHAPTER 12
An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures
[Assented to 21st June, 2018]
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

Short title
1This Act may be cited as the Budget Implementation Act, 2018, No. 1.

PART 1

Amendments to the Income Tax Act and to Related Legislation
R.‍S.‍, c. 1 (5th Supp.‍)

Income Tax Act

2(1)Paragraph 6(1)‍(f.‍1) of the Income Tax Act is replaced by the following:
Canadian Forces members and veterans amounts
(f.‍1)the total of all amounts received by the taxpayer in the year on account of
(i)an earnings loss benefit, an income replacement benefit (other than an amount determined under subsection 19.1(1), paragraph 23(1)‍(b) or subsection 26.1(1) of the Veterans Well-being Act, as modified, where applicable, under Part 5 of that Act), a supplementary retirement benefit or a career impact allowance payable to the taxpayer under Part 2 of the Veterans Well-being Act, or
(ii)an amount payable under any of subsections 99(6), 109(1) and 115(5) and sections 124 to 126 of the Veterans Well-being Act;
(2)Subsection (1) comes into force on April 1, 2019.
3(1)Paragraph 56(1)‍(a) of the Act is amended by striking out “or” at the end of subparagraph (vi), by adding “or” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):
(viii)an income replacement benefit payable to the taxpayer under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)‍(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act);
(2)Subsection (1) comes into force on April 1, 2019.
4(1)Subparagraph (c)‍(i) of the definition eligible pension income in subsection 60.03(1) of the Act is replaced by the following:
(i)the total of all amounts received by the individual in the year on account of
(A)a retirement income security benefit payable to the individual under Part 2 of the Veterans Well-being Act, or
(B)an income replacement benefit payable to the individual under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)‍(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act), and
(2)Subsection (1) comes into force on April 1, 2019.
5(1)Paragraph 81(1)‍(d.‍1) of the Act is replaced by the following:
Canadian Forces members and veterans amounts
(d.‍1)the total of all amounts received by the taxpayer in the year on account of
(i)a Canadian Forces income support benefit payable to the taxpayer under Part 2 of the Veterans Well-being Act,
(ii)pain and suffering compensation, additional pain and suffering compensation or a critical injury benefit, disability award, death benefit, clothing allowance or detention benefit payable to the taxpayer under Part 3 of the Veterans Well-being Act,
(iii)a family caregiver relief benefit or caregiver recognition benefit payable to the taxpayer under Part 3.1 of the Veterans Well-being Act, or
(iv)an amount payable to the taxpayer under subsection 132(1) of the Veterans Well-being Act;
(2)Subparagraph 81(1)‍(d.‍1)‍(iii) of the Act, as enacted by subsection (1), is replaced by the following:
(iii)a caregiver recognition benefit payable to the taxpayer under Part 3.1 of the Veterans Well-being Act, or
(3)Subsection 81(1) of the Act is amended by adding the following after paragraph (i):
Memorial grant
(j)an amount received under the Memorial Grant Program for First Responders established under the authority of the Department of Public Safety and Emergency Preparedness Act in respect of individuals who die in the course of, or as a result of, their duties or as a result of an occupational illness or psychological impairment;
(4)Subsection (1) comes into force on April 1, 2019.
(5)Subsection (2) applies to the 2020 and subsequent taxation years.
(6)Subsection (3) applies in respect of amounts received after March 2018.
6(1)Subparagraph 82(1)‍(b)‍(i) of the Act is replaced by the following:
(i)the product of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year multiplied by
(A)for the 2018 taxation year, 16%, and
(B)for taxation years after 2018, 15%, and
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
7(1)Paragraph 87(2)‍(aa) of the Act is replaced by the following:
Refundable dividend tax on hand
(aa)if the new corporation was a private corporation immediately after the amalgamation, the following rules apply:
(i)for the purpose of computing the eligible refundable dividend tax on hand and non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) of the new corporation at the end of its first taxation year there shall be added to the total determined under those definitions in respect of the new corporation for the year
(A)in respect of the new corporation’s eligible refundable dividend tax on hand, the total of all amounts each of which is the amount, if any, by which the eligible refundable dividend tax on hand of a predecessor corporation at the end of its last taxation year exceeds the total of all amounts each of which is the portion, if any, of its dividend refund for its last taxation year from its eligible refundable dividend tax on hand determined under subparagraph 129(1)‍(a)‍(i) or clause 129(1)‍(a)‍(ii)‍(B), and
(B)in respect of the new corporation’s non-eligible refundable dividend tax on hand, the total of all amounts each of which is the amount, if any, by which the non-eligible refundable dividend tax on hand of a predecessor corporation at the end of its last taxation year exceeds the portion, if any, of its dividend refund for its last taxation year from its non-eligible refundable dividend tax on hand determined under clause 129(1)‍(a)‍(ii)‍(A), and
(ii)no amount shall be added under this paragraph in respect of a predecessor corporation
(A)that was not a private corporation at the end of its last taxation year, or
(B)where subsection 129(1.2) would have applied to deem a dividend paid by the predecessor corporation immediately before the amalgamation not to be a taxable dividend for the purpose of subsection 129(1);
(2)Subject to subsection 20(5), subsection (1) applies to taxation years that begin after 2018.
8(1)The portion of paragraph 104(21.2)‍(b) of the Act before subparagraph (i) is replaced by the following:
(b)the beneficiary is, for the purposes of section 120.4 and for the purposes of sections 3, 74.3 and 111 as they apply for the purposes of section 110.6,
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
9(1)Clauses 110(1)‍(f)‍(v)‍(A) and (B) of the Act are replaced by the following:
(A)the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed international operational mission (as determined by the Minister of National Defence or by a person designated by that Minister), and
(B)the employment income that would have been so earned by the taxpayer if the taxpayer had been paid at the maximum rate of pay that applied, from time to time during the mission, to a Lieutenant-Colonel (General Service Officers) of the Canadian Forces,
(2)Subsection 110(1.3) of the Act is repealed.
(3)Subsections (1) and (2) apply to the 2017 and subsequent taxation years.
10(1)The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:
Annual adjustment
117.1(1)The amount of $1,000 referred to in the formula in paragraph 8(1)‍(s), each of the amounts expressed in dollars in subparagraph 6(1)‍(b)‍(v.‍1), subsection 117(2), the description of B in subsection 118(1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1) and subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amount of $400,000 referred to in the formula in paragraph 110.6(2)‍(a), the amounts of $1,355 and $2,335 referred to in the description of A, and the amounts of $12,820 and $17,025 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $700 referred to in the description of C, and the amounts of $24,111 and $36,483 referred to in the description of D, in the formula in subsection 122.7(3), and each of the amounts expressed in dollars in Part I.‍2 in relation to tax payable under this Part or Part I.‍2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of
(2)Subsection (1) applies to the 2019 and subsequent taxation years, except that the adjustment provided for in subsection 117.1(1) of the Act, as amended by subsection (1), does not apply for the 2019 taxation year in respect of the amounts of $1,355, $2,335, $12,820, $17,025, $700, $24,111 and $36,483.
11(1)The description of B in subsection 118(2) of the Act is replaced by the following:
B
is 15% of the amount, if any, by which the individual’s income for the year would exceed $25,921 if, in computing that income, no amount were included in respect of a gain from a disposition of property to which section 79 applies and no amount were deductible under paragraph 20(1)‍(ww).
(2)Paragraph (b) of the description of B in subsection 118(3) of the Act is amended by striking out “and” at the end of subparagraph (i) and by replacing subparagraph (ii) with the following:
(ii)the total of all amounts received by the individual in the year on account of a retirement income security benefit under Part 2 of the Veterans Well-being Act, and
(iii)the total of all amounts received by the individual in the year on account of an income replacement benefit payable to the individual under Part 2 of the Veterans Well-being Act, if the amount is determined under subsection 19.1(1), paragraph 23(1)‍(b) or subsection 26.1(1) of that Act (as modified, where applicable, under Part 5 of that Act).
(3)Subsection 118(4) of the Act is amended by adding the following after paragraph (a.‍1):
(a.‍2)a reference to income for a year is to be read as a reference to that income determined as if, in computing that income, no amount were deductible under paragraph 20(1)‍(ww);
(4)Subsections (1) and (3) apply to the 2018 and subsequent taxation years.
(5)Subsection (2) comes into force on April 1, 2019.
12(1)The portion of paragraph 118.2(2)‍(l) of the Act before subparagraph (ii) is replaced by the following:
(l)on behalf of the patient who is blind or profoundly deaf or has severe autism, severe diabetes, severe epilepsy, severe mental impairment or a severe and prolonged impairment that markedly restricts the use of the patient’s arms or legs,
(i)for an animal that is
(A)specially trained to
(I)in the case of severe mental impairment, perform specific tasks (excluding, for greater certainty, the provision of emotional support) that assist the patient in coping with the impairment, and
(II)in all other cases, assist the patient in coping with the impairment, and
(B)provided by a person or organization one of whose main purposes is such training of animals,
(2)Subsection (1) applies in respect of expenses incurred after 2017.
13(1)The definitions excluded amount and specified individual in subsection 120.4(1) of the Act are replaced by the following:
excluded amount, in respect of an individual for a taxation year, means an amount that is the individual’s income for the year from, or the individual’s taxable capital gain or profit for the year from the disposition of, a property to the extent that the amount
(a)if the individual has not attained the age of 24 years before the year, is from a property that was acquired by, or for the benefit of, the individual as a consequence of the death of a person who is
(i)a parent of the individual, or
(ii)any person, if the individual is
(A)enrolled as a full-time student during the year at a post-secondary educational institution (as defined in subsection 146.1(1)), or
(B)an individual in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year;
(b)is from a property acquired by the individual under a transfer described in subsection 160(4);
(c)is a taxable capital gain that arises because of subsection 70(5);
(d)is a taxable capital gain for the year from the disposition by the individual of property that is, at the time of the disposition, qualified farm or fishing property or qualified small business corporation shares (as those terms are defined in subsection 110.6(1)), unless the amount would be deemed to be a dividend under subsection 120.4(4) or (5) if this definition were read without reference to this paragraph;
(e)if the individual has attained the age of 17 years before the year, is
(i)not derived directly or indirectly from a related business in respect of the individual for the year, or
(ii)derived directly or indirectly from an excluded business of the individual for the year;
(f)if the individual has attained the age of 17 years but not the age of 24 years before the year, is
(i)a safe harbour capital return of the individual, or
(ii)a reasonable return in respect of the individual, having regard only to the contributions of arm’s length capital by the individual; or
(g)if the individual has attained the age of 24 years before the year, is
(i)income from, or a taxable capital gain from the disposition of, excluded shares of the individual, or
(ii)a reasonable return in respect of the individual. (montant exclu)
specified individual, for a taxation year, means an individual (other than a trust) who
(a)is resident in Canada
(i)in the case where the individual dies in the year, immediately before the death, and
(ii)in any other case, at the end of the year; and
(b)if the individual has not attained the age of 17 years before the year, has a parent resident in Canada at any time in the year. (particulier déterminé)
(2)Subparagraph (b)‍(ii) of the definition split income in subsection 120.4(1) of the Act is replaced by the following:
(ii)can reasonably be considered to be income derived directly or indirectly from
(A)one or more related businesses in respect of the individual for the year, or
(B)the rental of property by a particular partnership or trust, if a person who is related to the individual at any time in the year
(I)is actively engaged on a regular basis in the activities of the particular partnership or trust related to the rental of property, or
(II)in the case of a particular partnership, has an interest in the particular partnership directly or indirectly through one or more other partnerships,
(3)Clauses (c)‍(ii)‍(C) and (D) of the definition split income in subsection 120.4(1) of the Act are replaced by the following:
(C)to be income derived directly or indirectly from one or more related businesses in respect of the individual for the year, or
(D)to be income derived from the rental of property by a particular partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the particular partnership or trust related to the rental of property,
(4)The definition split income in subsection 120.4(1) of the Act is amended by adding the following after paragraph (c):
(d)an amount included in computing the individual’s income for the year to the extent that the amount is in respect of a debt obligation that
(i)is of a corporation (other than a mutual fund corporation or a corporation shares of a class of the capital stock of which are listed on a designated stock exchange), partnership or trust (other than a mutual fund trust), and
(ii)is not
(A)described in paragraph (a) of the definition fully exempt interest in subsection 212(3),
(B)listed or traded on a public market, or
(C)a deposit, standing to the credit of the individual,
(I)within the meaning assigned by the Canada Deposit Insurance Corporation Act, or
(II)with a credit union or a branch in Canada of a bank, and
(e)an amount in respect of a property, to the extent that
(i)the amount
(A)is a taxable capital gain, or a profit, of the individual for the year from the disposition after 2017 of the property, or
(B)is included under subsection 104(13) or 105(2) in computing the individual’s income for the year and can reasonably be considered to be attributable to a taxable capital gain, or a profit, of any person or partnership for the year from the disposition after 2017 of the property, and
(ii)the property is
(A)a share of the capital stock of a corporation (other than a share of a class listed on a designated stock exchange or a share of the capital stock of a mutual fund corporation), or
(B)a property in respect of which the following conditions are met:
(I)the property is
1an interest in a partnership,
2an interest as a beneficiary under a trust (other than a mutual fund trust or a trust that is deemed to be in existence by subsection 143(1)), or
3a debt obligation (other than a debt obligation described in any of clauses (d)‍(ii)‍(A) to (C)), and
(II)either
1in respect of the property an amount is included in the individual’s split income for the year or an earlier taxation year, or
2all or any part of the fair market value of the property, immediately before the disposition referred to in clause (i)‍(A) or (B), as the case may be, is derived, directly or indirectly, from a share described in clause (A). (revenu fractionné)
(5)Subsection 120.4(1) of the Act is amended by adding the following in alphabetical order:
arm’s length capital, of a specified individual, means property of the individual if the property, or property for which it is a substitute, was not
(a)acquired as income from, or a taxable capital gain or profit from the disposition of, another property that was derived directly or indirectly from a related business in respect of the specified individual;
(b)borrowed by the specified individual under a loan or other indebtedness; or
(c)transferred, directly or indirectly by any means whatever, to the specified individual from a person who was related to the specified individual (other than as a consequence of the death of a person). (capital indépendant)
excluded business, of a specified individual for a taxation year, means a business if the specified individual is actively engaged on a regular, continuous and substantial basis in the activities of the business in either
(a)the taxation year, except in respect of an amount described in paragraph (e) of the definition split income; or
(b)any five prior taxation years of the specified individual. (entreprise exclue)
excluded shares, of a specified individual at any time, means shares of the capital stock of a corporation owned by the specified individual if
(a)the following conditions are met:
(i)less than 90% of the business income of the corporation for the last taxation year of the corporation that ends at or before that time (or, if no such taxation year exists, for the taxation year of the corporation that includes that time) was from the provision of services, and
(ii)the corporation is not a professional corporation;
(b)immediately before that time, the specified individual owns shares of the capital stock of the corporation that
(i)give the holders thereof 10% or more of the votes that could be cast at an annual meeting of the shareholders of the corporation, and
(ii)have a fair market value of 10% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and
(c)all or substantially all of the income of the corporation for the relevant taxation year in subparagraph (a)‍(i) is income that is not derived, directly or indirectly, from one or more related businesses in respect of the specified individual other than a business of the corporation. (actions exclues)
reasonable return, in respect of a specified individual for a taxation year, means a particular amount derived directly or indirectly from a related business in respect of the specified individual that
(a)would, if this subsection were read without reference to subparagraph (f)‍(ii) or (g)‍(ii) of the definition excluded amount, be an amount described in the definition split income in respect of the specified individual for the year; and
(b)is reasonable having regard to the following factors relating to the relative contributions of the specified individual, and each source individual in respect of the specified individual, in respect of the related business:
(i)the work they performed in support of the related business,
(ii)the property they contributed, directly or indirectly, in support of the related business,
(iii)the risks they assumed in respect of the related business,
(iv)the total of all amounts that were paid or that became payable, directly or indirectly, by any person or partnership to, or for the benefit of, them in respect of the related business, and
(v)such other factors as may be relevant. (rendement raisonnable)
related business, in respect of a specified individual for a taxation year, means
(a)a business carried on by
(i)a source individual in respect of the specified individual at any time in the year, or
(ii)a partnership, corporation or trust if a source individual in respect of the specified individual at any time in the year is actively engaged on a regular basis in the activities of the partnership, corporation or trust related to earning income from the business;
(b)a business of a particular partnership, if a source individual in respect of the specified individual at any time in the year has an interest — including directly or indirectly — in the particular partnership; and
(c)a business of a corporation, if the following conditions are met at any time in the year:
(i)a source individual in respect of the specified individual owns
(A)shares of the capital stock of the corporation, or
(B)property that derives, directly or indirectly, all or part of its fair market value from shares of the capital stock of the corporation, and
(ii)it is the case that
0.‍1A ≤ B + C
where
A
is the total fair market value of all of the issued and outstanding shares of the capital stock of the corporation,
B
is the total fair market value of property described in clause (i)‍(A), and
C
is the portion of the total fair market value of property described in clause (i)‍(B) that is derived from shares of the capital stock of the corporation. (entreprise liée)
safe harbour capital return, of a specified individual for a taxation year, means an amount that does not exceed the amount determined by the formula
A × B
where
A
is the rate equal to the highest rate of interest prescribed under paragraph 4301(c) of the Income Tax Regulations in effect for a quarter in the year; and
B
is the total of all amounts each of which is determined by the formula
C × D/E
where
C
is the fair market value of property contributed by the specified individual in support of a related business at the time it was contributed,
D
is the number of days in the year that the property (or property substituted for it) is used in support of the related business and has not directly or indirectly, in any manner whatever, been returned to the specified individual, and
E
is the number of days in the year. (rendement exonéré)
source individual, in respect of a specified individual for a taxation year, means an individual (other than a trust) who, at any time in the year, is
(a)resident in Canada; and
(b)related to the specified individual. (particulier source)
(6)Section 120.4 of the Act is amended by adding the following after subsection (1):
Additional rules — specified individual
(1.1)For the purpose of applying this section in respect of a specified individual in respect of a taxation year,
(a)an individual is deemed to be actively engaged on a regular, continuous and substantial basis in the activities of a business in a taxation year of the individual if the individual works in the business at least an average of 20 hours per week during the portion of the year in which the business operates;
(b)if an amount would — if this section were read without reference to this paragraph — be split income of a specified individual who has attained the age of 17 years before the year in respect of a property, and that property was acquired by, or for the benefit of, the specified individual as a consequence of the death of another person, then
(i)for the purpose of applying paragraph (b) of the definition reasonable return in subsection (1), to the extent that the particular amount referred to in that paragraph is in respect of the property, then the factors referred to in that paragraph in respect of the other person are to be included for the purpose of determining a reasonable return in respect of the individual,
(ii)for the purposes of this subparagraph and the definition excluded business in subsection (1), if the other person was actively engaged on a regular, substantial and continuous basis in the activities of a business throughout five previous taxation years, then the individual is deemed to have been actively engaged on a regular, substantial and continuous basis in the business throughout those five years, and
(iii)for the purpose of applying paragraph (g) of the definition excluded amount in subsection (1) in respect of that property, the individual is deemed to have attained the age of 24 years before the year if the other person had attained the age of 24 years before the year;
(c)an amount that is a specified individual’s income for a taxation year from, or the specified individual’s taxable capital gain or profit for the year from the disposition of, a property is deemed to be an excluded amount in respect of the specified individual for the taxation year if
(i)the following conditions are met:
(A)the amount would be an excluded amount in respect of the specified individual’s spouse or common-law partner for the year, if the amount were included in computing the spouse or common-law partner’s income for the year, and
(B)the spouse or common law partner has attained the age of 64 years before the year, or
(ii)the amount would have been an excluded amount in respect of an individual who was, immediately before their death, the specified individual’s spouse or common-law partner, if the amount were included in computing the spouse or common-law partner’s income for their last taxation year (determined as if this section applies in respect of that year);
(d)for greater certainty, an amount derived directly or indirectly from a business includes
(i)an amount that
(A)is derived from the provision of property or services to, or in support of, the business, or
(B)arises in connection with the ownership or disposition of an interest in the person or partnership carrying on the business, and
(ii)an amount derived from an amount described in this paragraph; and
(e)for the purposes of this section, an individual is deemed not to be related to their spouse or common-law partner at any time in a year if, at the end of the year, the individual is living separate and apart from their spouse or common-law partner because of a breakdown of their marriage or common-law partnership.
(7)Subsections 120.4(3) to (5) of the Act are replaced by the following:
Tax payable by a specified individual
(3)Notwithstanding any other provision of this Act, if an individual is a specified individual for a taxation year, the individual’s tax payable under this Part for the year shall not be less than the amount by which the amount added under subsection (2) to the individual’s tax payable under this Part for the year exceeds the amount determined by the formula
A + B
where
A
is the amount deducted under section 118.3 in computing the individual’s tax payable under this Part for the year; and
B
is the total of all amounts each of which is the amount that
(a)may be deducted under section 121 or 126 in computing the individual’s tax payable under this Part for the year, and
(b)can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the year.
Taxable capital gain
(4)If a specified individual who has not attained the age of 17 years before a taxation year would have for the taxation year, if this Act were read without reference to this section, a taxable capital gain (other than an excluded amount) from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, then the amount of that taxable capital gain is deemed not to be a taxable capital gain and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.
Taxable capital gain of trust
(5)If a specified individual who has not attained the age of 17 years before a the taxation year would be, if this Act were read without reference to this section, required under subsection 104(13) or 105(2) to include an amount in computing the specified individual’s income for the taxation year, then to the extent that the amount can reasonably be considered to be attributable to a taxable capital gain (other than an excluded amount) of a trust from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, subsections 104(13) and 105(2) do not apply in respect of the amount and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.
(8)Subsections (1) to (7) apply to the 2018 and subsequent taxation years. For the 2018 taxation year, the portion of paragraph (b) of the definition excluded shares in subsection 120.4(1) of the Act before subparagraph (i), as enacted by subsection (5), is to be read as follows:
(b)immediately before that time or the end of 2018, the shares
14(1)Paragraph 121(a) of the Act is replaced by the following:
(a)the product of the amount, if any, that is required by subparagraph 82(1)‍(b)‍(i) to be included in computing the individual’s income for the year multiplied by
(i)for the 2018 taxation year, 8/11, and
(ii)for taxation years after 2018, 9/13, and
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
15(1)Paragraph (b) of the definition adjusted income in subsection 122.5(1) of the Act is replaced by the following:
(b)deductible under paragraph 20(1)‍(ww) or 60(y) or (z). (revenu rajusté)
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
16(1)Paragraph (b) of the definition adjusted income in section 122.6 of the Act is replaced by the following:
(b)deductible under paragraph 20(1)‍(ww) or 60(y) or (z); (revenu modifié)
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
17The portion of subsection 122.61(5) of the Act before paragraph (a) is replaced by the following:
Annual adjustment
(5)Each amount expressed in dollars in subsection (1) shall be adjusted so that, where the base taxation year in relation to a particular month is after 2016, the amount to be used under that subsection for the month is the total of
18(1)The heading of Subdivision A.‍2 of Division E of Part I of the Act is replaced by the following:
Canada Workers Benefit
(2)Subsection (1) comes into force on January 1, 2019.
19(1)Paragraph (c) of the definition adjusted net income in subsection 122.7(1) of the Act is replaced by the following:
(c)in computing that income, no amount were deductible under paragraph 20(1)‍(ww) or 60(y) or (z). (revenu net rajusté)
(2)The descriptions of A and B in subsection 122.7(2) of the Act are replaced by the following:
A
is
(a)if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser of $1,355 and 26% of the amount, if any, by which the individual’s working income for the taxation year exceeds $3,000, or
(b)if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,335 and 26% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $3,000; and
B
is
(a)if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 12% of the amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $12,820, or
(b)if the individual had an eligible spouse or an eligible dependant, for the taxation year, 12% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $17,025.
(3)The descriptions of C and D in subsection 122.7(3) of the Act are replaced by the following:
C
is the lesser of $700 and 26% of the amount, if any, by which the individual’s working income for the taxation year exceeds $1,150; and
D
is
(a)if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 12% of the amount, if any, by which the individual’s adjusted net income for the taxation year exceeds $24,111,
(b)if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount under subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 12% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $36,483, or
(c)if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under subsection 118.3(1) for the taxation year, 6% of the amount, if any, by which the total of the adjusted net incomes of the individual and of the eligible spouse, for the taxation year, exceeds $36,483.
(4)Subsection (1) applies to the 2018 and subsequent taxation years.
(5)Subsections (2) and (3) come into force on January 1, 2019.
20(1)Paragraphs 125(1.1)‍(a) and (b) of the Act are replaced by the following:
(a)that proportion of 17.5% that the number of days in the taxation year that are before 2018 is of the number of days in the taxation year,
(b)that proportion of 18% that the number of days in the taxation year that are in 2018 is of the number of days in the taxation year, and
(c)that proportion of 19% that the number of days in the taxation year that are after 2018 is of the number of days in the taxation year.
(2)Subsection 125(5.1) of the Act is replaced by the following:
Business limit reduction
(5.1)Notwithstanding subsections (2), (3), (4) and (5), a Canadian-controlled private corporation’s business limit for a particular taxation year ending in a calendar year is the amount, if any, by which its business limit otherwise determined for the particular taxation year exceeds the greater of
(a)the amount determined by the formula
A × B/$11,250
where
A
is the amount that would, but for this subsection, be the corporation’s business limit for the particular taxation year, and
B
is the amount determined by the formula
0.‍225% × (C – $10 million)
where
C
is
(i)if, in both the particular taxation year and the preceding taxation year, the corporation is not associated with any corporation, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the preceding taxation year,
(ii)if, in the particular taxation year, the corporation is not associated with any corporation but was associated with one or more corporations in the preceding taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year, or
(iii)if, in the particular taxation year, the corporation is associated with one or more particular corporations, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation or of any of the particular corporations for its last taxation year that ended in the preceding calendar year, and
(b)the amount determined by the formula
D/$500,000 × 5(E − $50,000)
where
D
is the amount determined for A in paragraph (a), and
E
is the total of all amounts each of which is the adjusted aggregate investment income of the corporation, or of any corporation with which it is associated at any time in the particular taxation year, for each taxation year of the corporation, or associated corporation, as the case may be, that ended in the preceding calendar year.
Anti-avoidance
(5.2)A particular corporation and another corporation are deemed to be associated with each other at a particular time for the purposes of paragraph (5.1)‍(b) if
(a)the particular corporation lends or transfers property at any time, either directly or indirectly, by means of a trust or by any other means whatever, to the other corporation;
(b)the other corporation is, at the particular time, related to the particular corporation but is not associated with it; and
(c)it may reasonably be considered that one of the reasons the loan or transfer was made was to reduce the amount determined for E in paragraph (5.1)‍(b) in respect of the particular corporation, or of any corporation with which it is associated, for a taxation year.
(3)Subsection 125(7) of the Act is amended by adding the following in alphabetical order:
active asset, of a particular corporation at any time, means property that is
(a)used at that time principally in an active business carried on primarily in Canada by the particular corporation or by a Canadian-controlled private corporation that is related to the particular corporation,
(b)a share of the capital stock of another corporation if, at that time,
(i)the other corporation is connected with the particular corporation (within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and
(ii)the share would be a qualified small business corporation share (as defined in subsection 110.6(1)) if
(A)the references in that definition to an “individual” were references to the particular corporation, and
(B)that definition were read without reference to “the individual’s spouse or common law partner”, or
(c)an interest in a partnership, if
(i)at that time, the fair market value of the particular corporation’s interest in the partnership is equal to or greater than 10% of the total fair market value of all interests in the partnership,
(ii)throughout the 24–month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to property described in this paragraph or in paragraph (a) or (b), and
(iii)at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in this paragraph or in paragraph (a) or (b); (bien actif)
adjusted aggregate investment income, of a corporation (other than a corporation that is deemed not to be a private corporation by subsection 136(1) or 137(7) or section 141.1) for a taxation year, means the amount that would be the aggregate investment income (as defined in subsection 129(4)) of the corporation for the year, if
(a)paragraph (a) of that definition read as follows:
(a)the amount, if any, by which
(i)the eligible portion of the corporation’s taxable capital gains (other than taxable capital gains from the disposition of property that is, at the time of disposition, an active asset of the corporation) for the year
exceeds
(ii)the eligible portion of its allowable capital losses (other than allowable capital losses from the disposition of property that is, at the time of disposition, an active asset of the corporation) for the year, or
(b)subparagraph (b)‍(iii) of that definition read as follows:
(iii)a dividend from a corporation connected with it (within the meaning assigned by subsection 186(4) on the assumption that the corporation is at that time a payer corporation within the meaning of that subsection), and
(c)paragraph (a) of the definition income or loss in subsection 129(4) read as follows:
(a)includes
(i)the income or loss from a specified investment business carried on by it, and
(ii)amounts in respect of a life insurance policy that are included in computing the corporation’s income for the year, to the extent that the amounts would not otherwise be included in the computation of the corporation’s aggregate investment income, but
and
(d)no amount were deducted under subsection 91(4) by the corporation in computing its income for the year; (revenu de placement total ajusté)
(4)Subsection (1) applies to the 2018 and subsequent taxation years.
(5)Subsections (2) and (3) apply to taxation years that begin after 2018. However, subsections (2) and (3), 7(1), 22(1) to (5), 23(1) and (2) and 29(1) also apply to a taxation year of a corporation that begins before 2019 and ends after 2018 if
(a)the corporation’s preceding taxation year was, because of a transaction or event or a series of transactions or events, shorter than it would have been in the absence of that transaction, event or series; and
(b)one of the reasons for the transaction, event or series was to defer the application of subsections (2) and (3) or 22(1) to (5) to the corporation.
21(1)Paragraph (a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following:
(a)that is a Canadian exploration expense incurred by a corporation after March 2018 and before 2020 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2020) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1),
(2)Paragraphs (c) and (d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are replaced by the following:
(c)an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2018 and before April 2019, and
(d)that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2018 and before April 2019; (dépense minière déterminée)
(3)Subsections (1) and (2) apply in respect of expenses renounced under a flow-through share agreement entered into after March 2018.
22(1)Paragraph 129(1)‍(a) of the Act is replaced by the following:
(a)may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) in respect of taxable dividends paid by the corporation on shares of its capital stock in the year, and at a time when it was a private corporation, equal to the total of
(i)in respect of eligible dividends, an amount equal to the lesser of
(A)381/3% of the total of all eligible dividends paid by it in the year, and
(B)its eligible refundable dividend tax on hand at the end of the year, and
(ii)in respect of taxable dividends (other than eligible dividends), an amount equal to the total of
(A)the lesser of
(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and
(II)its non-eligible refundable dividend tax on hand at the end of the year, and
(B)either
(I)if the amount determined under subclause (A)‍(I) exceeds the amount determined under subclause (A)‍(II), the lesser of
1the amount of the excess, and
2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and
(II)in any other case, nil; and
(2)The portion of subsection 129(1.1) of the Act before paragraph (a) is replaced by the following:
Dividends paid to bankrupt controlling corporation
(1.1)In determining the dividend refund for a taxation year ending after 1977 of a particular corporation, no amount may be included under clause (1)‍(a)‍(i)‍(A), subclause (1)‍(a)‍(ii)‍(A)‍(I) or sub-subclause (1)‍(a)‍(ii)‍(B)‍(I)1 in respect of a taxable dividend paid to a shareholder that
(3)Subsection 129(3) of the Act is repealed.
(4)Subsection 129(4) of the Act is amended by adding the following in alphabetical order:
eligible refundable dividend tax on hand, of a particular corporation at the end of a taxation year, means the amount, if any, by which the total of
(a)the total of the taxes payable under Part IV by the particular corporation for the year in respect of
(i)eligible dividends received by the particular corporation in the year from corporations other than corporations with which the particular corporation is connected (in this paragraph, within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and
(ii)taxable dividends received by the particular corporation in the year from corporations that are connected with the particular corporation to the extent that such dividends caused a dividend refund to those corporations from their eligible refundable dividend tax on hand, and
(b)where the particular corporation was a private corporation at the end of its preceding taxation year, the particular corporation’s eligible refundable dividend tax on hand at the end of that preceding year
exceeds
(c)the total of all amounts each of which is the portion, if any, of the particular corporation’s dividend refund from its eligible refundable dividend tax on hand determined, for its preceding taxation year, under
(i)subparagraph (1)‍(a)‍(i), and
(ii)clause (1)‍(a)‍(ii)‍(B). (impôt en main remboursable au titre de dividendes déterminés)
non-eligible refundable dividend tax on hand, of a corporation at the end of a taxation year, means the amount, if any, by which the total of
(a)if the corporation was a Canadian-controlled private corporation throughout the year, the least of
(i)the amount determined by the formula
A − B
where
A
is 30 2/3% of the corporation’s aggregate investment income for the year, and
B
is the amount, if any, by which
(A)the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Part
exceeds
(B)8% of its foreign investment income for the year,
(ii)30 2/3% of the amount, if any, by which the corporation’s taxable income for the year exceeds the total of
(A)the least of the amounts determined under paragraphs 125(1)‍(a) to (c) in respect of the corporation for the year,
(B)100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and
(C)the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and
(iii)the corporation’s tax for the year payable under this Part,
(b)the total of the taxes payable under Part IV by the corporation for the year less the amount determined under paragraph (a) of the definition eligible refundable dividend tax on hand in respect of the corporation for the year, and
(c)if the corporation was a private corporation at the end of its preceding taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of that preceding year
exceeds
(d)the portion, if any, of the corporation’s dividend refund from its non-eligible refundable dividend tax on hand determined, for its preceding taxation year, under clause (1)‍(a)‍(ii)‍(A). (impôt en main remboursable au titre de dividendes non déterminés)
(5)Section 129 of the Act is amended by adding the following after subsection (4):
2019 transitional RDTOH
(5)The following rules apply to a corporation’s first taxation year in respect of which the definition eligible refundable dividend tax on hand in subsection (4) applies:
(a)if the corporation is a Canadian-controlled private corporation throughout the taxation year and its preceding taxation year and is not a corporation in respect of which an election under subsection 89(11) applies to the taxation year or the preceding taxation year,
(i)for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of
(A)the amount determined by the formula
A − B
where
A
is the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, and
B
is the corporation’s dividend refund for its preceding taxation year, and
(B)the amount determined by the formula
(C − D) × E
where
C
is the corporation’s general rate income pool at the end of its preceding taxation year,
D
is the amount, if any, by which
(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation year
exceeds
(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, and
E
is 38 1/3%, and
(ii)for the purpose of applying paragraph (c) of the definition non-eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formula
A − B
where
A
is the amount determined under clause (a)‍(i)‍(A) in respect of the corporation at the end of the preceding taxation year, and
B
is the amount determined under clause (a)‍(i)‍(B) in respect of the corporation at the end of the preceding taxation year; and
(b)in any other case, for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount that would be determined for clause (a)‍(i)‍(A) if paragraph (a) applied to the corporation in respect of the taxation year.
2019 transitional RDTOH — amalgamations
(5.1)Subsection (5) applies with such modifications as are necessary for the purpose of applying paragraph 87(2)‍(aa) in respect of a corporation if
(a)the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1));
(b)the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)‍(a); and
(c)the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definition eligible refundable dividend tax on hand in subsection (4) applies.
(6)Subject to subsection 20(5), subsections (1) to (5) apply to taxation years that begin after 2018.
23(1)Paragraph 131(5)‍(a) of the Act is replaced by the following:
(a)is deemed for the purposes of paragraph 87(2)‍(aa) and section 129 to have been a private corporation throughout the year, except that its non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) at the end of the year shall be determined without reference to paragraph (a) of that definition; and
(2)Paragraph 131(11)‍(a) of the Act is replaced by the following:
(a)for the purposes of subparagraphs (a)‍(i) and (ii) of the definition non-eligible refundable dividend tax on hand in subsection 129(4), the amount deducted under paragraph 111(1)‍(b) from the corporation’s income for each taxation year ending after that time shall be deemed to be nil;
(3)Subject to subsection 20(5), subsections (1) and (2) apply to taxation years that begin after 2018.
24Clause (a)‍(ii)‍(B.‍1) of the definition disability savings plan in subsection 146.4(1) of the Act is replaced by the following:
(B.‍1)if the arrangement is entered into before 2024, a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is a qualifying person in relation to the beneficiary,
25(1)Subparagraph (a)‍(iv) of the definition qualified donee in subsection 149.1(1) of the Act is replaced by the following:
(iv)a university outside Canada, the student body of which ordinarily includes students from Canada, that has applied for registration, or
(2)Subsection (1) is deemed to have come into force on February 27, 2018, except that
(a)if a university has applied for registration prior to February 27, 2018 and is registered by the Minister on or after that day, subsection (1) applies in respect of the university as of the day it applied for registration; and
(b)any university named in Schedule VIII to the Income Tax Regulations at the end of February 26, 2018 is deemed to have applied for registration.
26(1)Subsection 160(1.2) of the Act is replaced by the following:
Joint and several, or solidary, liability — tax on split income
(1.2)If an amount is required to be added because of subsection 120.4(2) in computing a specified individual’s tax payable under this Part for a taxation year and the specified individual has not attained the age of 24 years before the start of the year, the following rules apply:
(a)subject to paragraph (b), a particular individual is jointly and severally, or solidarily, liable with the specified individual for the amount if
(i)where the specified individual has not attained the age of 17 years before the year, the particular individual is a parent of the specified individual, and
(ii)where the specified individual has attained the age of 17 years before the year,
(A)the particular individual is a source individual in respect of the specified individual,
(B)the amount was derived directly or indirectly from a related business (within the meaning of paragraph 120.4(1.1)‍(d)) in respect of the specified individual, and
(C)the particular individual meets the conditions in any of paragraphs (a) to (c) in the definition related business in subsection 120.4(1) in respect of the related business;
(b)the particular individual’s liability under paragraph (a) in respect of the specified individual for the year is to be determined as though the only amounts included in the specified individual’s split income for the year are amounts derived from the related business referred to in subparagraph (a)‍(ii); and
(c)nothing in this subsection limits the liability of
(i)the specified individual under any other provision of this Act, or
(ii)the particular individual for the interest that the particular individual is liable to pay under this Act on an assessment in respect of the amount that the particular individual is liable to pay because of this subsection.
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
27(1)The portion of subsection 162(6) of the Act before paragraph (a) is replaced by the following:
Failure to provide identification number
(6)Every person or partnership who fails to provide on request their business number, their Social Insurance Number, their trust account number or their U.‍S. federal taxpayer identifying number to a person required under this Act or the Regulations to make an information return requiring the number is liable to a penalty of $100 for each such failure, unless
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
28(1)Paragraph (b) of the definition adjusted income in subsection 180.2(1) of the Act is replaced by the following:
(b)deductible under paragraph 20(1)‍(ww) or 60(w), (y) or (z); (revenu modifié)
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
29(1)Subsection 186(5) of the Act is replaced by the following:
Deemed private corporation
(5)A corporation that is at any time in a taxation year a subject corporation shall, for the purposes of paragraph 87(2)‍(aa) and section 129, be deemed to be a private corporation at that time, except that its non-eligible refundable dividend tax on hand (as defined in subsection 129(4)) at the end of the year shall be determined without reference to paragraph (a) of that definition.
(2)Subject to subsection 20(5), subsection (1) applies to taxation years that begin after 2018.
30(1)Subsection 188(1.3) of the Act is replaced by the following:
Eligible donee
(1.3)In this Part, an eligible donee in respect of a particular charity is
(a)a registered charity
(i)of which more than 50% of the members of the board of directors or trustees of the registered charity deal at arm’s length with each member of the board of directors or trustees of the particular charity,
(ii)that is not the subject of a suspension under subsection 188.2(1),
(iii)that has no unpaid liabilities under this Act or under the Excise Tax Act,
(iv)that has filed all information returns required by subsection 149.1(14), and
(v)that is not the subject of a certificate under subsection 5(1) of the Charities Registration (Security Information) Act or, if it is the subject of such a certificate, the certificate has been determined under subsection 7(1) of that Act not to be reasonable; or
(b)a municipality in Canada that is approved by the Minister in respect of a transfer of property from the particular charity.
(2)Subsection (1) applies in respect of transfers of property made after February 26, 2018.
31(1)The portion of subsection 189(6.3) of the Act before paragraph (a) is replaced by the following:
Reduction of liability for penalties
(6.3)If the Minister has assessed a particular person in respect of the particular person’s liability for penalties under section 188.1 for a taxation year, and that liability exceeds $1,000, that liability is, at any particular time, reduced by the total of all amounts, each of which is an amount, in respect of a property transferred by the particular person after the day on which the Minister first assessed that liability and before the particular time to another person that was at the time of the transfer an eligible donee described in paragraph 188(1.3)‍(a) in respect of the particular person, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the total of
(2)Subsection (1) applies in respect of transfers of property made on or after February 27, 2018.
32(1)Paragraph 221(1)‍(d.‍1) of the Act is replaced by the following:
(d.‍1)requiring any person or partnership to provide any information — including their name, address, business number, Social Insurance Number or trust account number — to any class of persons required to make an information return containing that information;
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
33(1)Subsections 237(1.1) to (3) of the Act are replaced by the following:
Production of number
(1.1)Every person and partnership shall provide their designated number
(a)in any return filed under this Act; and
(b)to another person or partnership at the request of the other person or partnership, if the other person or partnership is required to make an information return pursuant to this Act or the Regulations requiring the designated number.
Designated number
(1.2)For the purpose of subsection (1.1), designated number, of a person or partnership, means
(a)in the case of an individual (other than a trust), their Social Insurance Number;
(b)in the case of a trust, its trust account number; and
(c)in any other case, the person’s or partnership’s business number.
Number required in information returns
(2)For the purposes of this Act and the Regulations, a person or partnership required to make an information return requiring a business number, Social Insurance Number or trust account number of another person or partnership
(a)shall make a reasonable effort to obtain the number from the other person or partnership; and
(b)shall not knowingly use, communicate or allow to be communicated, otherwise than as required or authorized under this Act or a regulation, the number without the written consent of the other person or partnership.
Authority to communicate number
(3)A particular person may communicate, or allow to be communicated, a business number, Social Insurance Number or trust account number to another person related to the particular person where the other person is required, by this Act or the Regulations, to make an information return that requires the number.
(2)The portion of subsection 237(4) of the Act before paragraph (a) is replaced by the following:
Authority to communicate number
(4)An insurance corporation may communicate, or allow to be communicated, to another person the business number, Social Insurance Number or trust account number of a particular person or partnership if
(3)Paragraph 237(4)‍(c) of the Act is replaced by the following:
(c)the other person is required, by this Act or the Regulations, to make an information return, in respect of the disposition of the share or income from the share, that requires the number.
(4)Subsections (1) to (3) apply to the 2018 and subsequent taxation years.
34(1)Paragraph 237.1(7)‍(a) of the Act is replaced by the following:
(a)the name, address and the business number, Social Insurance Number or trust account number of each person who so acquires or otherwise invests in the tax shelter in the year,
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
35(1)Subsection 239(2.3) of the Act is replaced by the following:
Offence with respect to an identification number
(2.3)Every person to whom the business number of a taxpayer or partnership, to whom the Social Insurance Number of an individual or to whom the trust account number of a trust has been provided under this Act or the Regulations, and every officer, employee and agent of such a person, who without written consent of the individual, taxpayer, partnership or trust, as the case may be, knowingly uses, communicates or allows to be communicated the number (otherwise than as required or authorized by law, in the course of duties in connection with the administration or enforcement of this Act or for a purpose for which it was provided by the individual, taxpayer, partnership or trust, as the case may be) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months, or to both.
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
36(1)Paragraph 241(4)‍(j.‍1) of the Act is replaced by the following:
(j.‍1)provide taxpayer information to an official or a designated person solely for the purpose of permitting the making of an adjustment to a social assistance payment made on the basis of a means, needs or income test if the purpose of the adjustment is to take into account
(i)the amount determined in respect of a person for C in subsection 122.61(1), as it read before July 2018, in respect of a base taxation year (as defined in section 122.6) before 2017, or
(ii)an amount determined in respect of a person under subsection 122.61(1) or (1.1) in respect of a base taxation year (as defined in section 122.6) after 2014;
(2)Subsection (1) comes into force or is deemed to have come into force on July 1, 2018.
37(1)The portion of the definition business number in subsection 248(1) of the Act before paragraph (a) is replaced by the following:
business number means the number (other than a Social Insurance Number or trust account number) used by the Minister to identify
(2)Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
trust account number means the number (other than a business number)
(a)used by the Minister to identify a trust, and
(b)of which the Minister has notified the trust; (numéro de compte en fiducie)
(3)Subsections (1) and (2) apply to the 2018 and subsequent taxation years.

Deemed Coming into Force

Definition of eligible individual
38Subparagraph (e)‍(v) of the definition eligible individual in section 122.6 of the Act, as enacted by subsection 28(1) of the Budget Implementation Act, 2016, No. 1, is deemed to have come into force on January 1, 2005.
2016, c. 14

An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act

39Section 67 of An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board Act and the Income Tax Act is repealed.
40Section 69 of the Act is repealed.
2017, c. 20

Budget Implementation Act, 2017, No. 1

41(1)Subsection 6(2) of the Budget Implementation Act, 2017, No. 1 is repealed.
(2)Subsection 6(5) of the Act is repealed.
C.‍R.‍C.‍, c. 945

Income Tax Regulations

42(1)Subparagraph 201(1)‍(b)‍(ii) of the Income Tax Regulations is replaced by the following:
(ii)in respect of
(A)money on loan to an association, corporation, institution, organization, partnership or trust,
(B)money on deposit with an association, corporation, institution, organization, partnership or trust, or
(C)property deposited or placed with an association, corporation, institution, organization, partnership or trust,
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
43(1)Paragraph 229(1)‍(b) of the Regulations is replaced by the following:
(b)in respect of each member of the partnership who is entitled to a share referred to in paragraph (c) or (d) for the fiscal period, the member’s
(i)name,
(ii)address, and
(iii)business number, Social Insurance Number or trust account number, as the case may be;
(2)Subsection (1) applies to the 2018 and subsequent taxation years.
44(1)Section 3503 of the Regulations and the heading before it are repealed.
(2)Subsection (1) is deemed to have come into force on February 27, 2018.
45The portion of Class 43.2 in Schedule II to the Regulations before paragraph (a) is replaced by the following:
Property that is acquired after February 22, 2005 and before 2025 (other than property that was included, before it was acquired, in another class in this Schedule by any taxpayer) and that is property that would otherwise be included in Class 43.1
46(1)Schedule VIII to the Regulations is repealed.
(2)Subsection (1) is deemed to have come into force on February 27, 2018.

PART 2

Amendments to the Excise Act, 2001 (Tobacco Taxation) and to Related Legislation
2002, c. 22

Excise Act, 2001

47(1)Subsections 43.1(1) and (2) of the Excise Act, 2001 are replaced by the following:
Definition of inflationary adjusted year
43.1(1)In this section, inflationary adjusted year means 2019 and every year after that year.
Annual adjustments
(2)Each rate of duty set out in sections 1 to 4 of Schedule 1 and paragraph (a) of Schedule 2 in respect of a tobacco product is to be adjusted on April 1 of an inflationary adjusted year so that the rate is equal to the greater of
(a)the rate determined by the formula
A × B
where
A
is the rate of duty applicable to the tobacco product on March 31 of the inflationary adjusted year, and
B
is the amount, rounded to the nearest one-thousandth, or, if the amount is equidistant from two consecutive one-thousandths, rounded to the higher one-thousandth, determined by the formula
C/D
where
C
is the Consumer Price Index for the 12-month period ending on September 30 of the particular year preceding the inflationary adjusted year, and
D
is the Consumer Price Index for the 12-month period ending on September 30 of the year preceding the particular year; and
(b)the rate of duty referred to in the description of A in paragraph (a).
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
48(1)The definition adjustment day in section 58.1 of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.‍1)February 28, 2018; or
(b)in the case of an inflationary adjusted year, April 1 of that year. (date d’ajustement)
(2)The portion of the definition taxed cigarettes in section 58.1 of the Act before paragraph (a) is replaced by the following:
taxed cigarettes of a person means cigarettes in respect of which duty has been imposed under section 42 or 53 at the rate applicable on the day before an adjustment day, and that, at the beginning of the adjustment day,
(3)Subsections (1) and (2) are deemed to have come into force on February 28, 2018.
49(1)Subsection 58.2(2) of the Act is replaced by the following:
Imposition of tax — 2018 increase
(1.1)Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of February 28, 2018 at the rate of $0.011468 per cigarette.
Imposition of tax  — inflationary adjusted years
(2)Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of April 1 of an inflationary adjusted year at a rate per cigarette equal to
(a)in the case of cigarettes in respect of which duty has been imposed under section 42, the amount determined by the formula
(A – B)/5
where
A
is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on April 1 of the inflationary adjusted year, and
B
is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on March 31 of the inflationary adjusted year; and
(b)in the case of cigarettes in respect of which duty has been imposed under section 53, the amount determined by the formula
C – D
where
C
is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on April 1 of the inflationary adjusted year, and
D
is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on March 31 of the inflationary adjusted year.
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
50(1)Subsection 58.5(1) of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.‍1)in the case of the tax imposed under subsection 58.2(1.1), April 30, 2018; or
(b)in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
51(1)Subsection 58.6(1) of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.‍1)in the case of the tax imposed under subsection 58.2(1.1), April 30, 2018; or
(b)in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
52(1)Subparagraphs 216(2)‍(a)‍(i) to (iv) of the Act are replaced by the following:
(i)$0.24 multiplied by the number of cigarettes to which the offence relates,
(ii)$0.24 multiplied by the number of tobacco sticks to which the offence relates,
(iii)$0.30 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and
(iv)$0.47 multiplied by the number of cigars to which the offence relates, and
(2)Subparagraphs 216(3)‍(a)‍(i) to (iv) of the Act are replaced by the following:
(i)$0.36 multiplied by the number of cigarettes to which the offence relates,
(ii)$0.36 multiplied by the number of tobacco sticks to which the offence relates,
(iii)$0.45 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and
(iv)$0.93 multiplied by the number of cigars to which the offence relates, and
53Paragraphs 240(a) to (c) of the Act are replaced by the following:
(a)$0.43 per cigarette that was removed in contravention of that subsection,
(b)$0.43 per tobacco stick that was removed in contravention of that subsection, and
(c)$537.48 per kilogram of manufactured tobacco, other than cigarettes and tobacco sticks, that was removed in contravention of that subsection.
54(1)Paragraph 1(a) of Schedule 1 to the Act is replaced by the following:
(a)$0.59634; or
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
55(1)Paragraph 2(a) of Schedule 1 to the Act is replaced by the following:
(a)$0.11927; or
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
56(1)Paragraph 3(a) of Schedule 1 to the Act is replaced by the following:
(a)$7.45425; or
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
57(1)Paragraph 4(a) of Schedule 1 to the Act is replaced by the following:
(a)$25.95832; or
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
58(1)Subparagraph (a)‍(i) of Schedule 2 to the Act is replaced by the following:
(i)$0.09331, or
(2)Paragraph (b) of Schedule 2 to the Act is replaced by the following:
(b)the amount obtained by multiplying the sale price, in the case of cigars manufactured in Canada, or the duty-paid value, in the case of imported cigars, by 88%.
(3)Subsections (1) and (2) are deemed to have come into force on February 28, 2018.
2014, c. 20

Economic Action Plan 2014 Act, No. 1

59Subsection 76(5) of the Economic Action Plan 2014 Act, No. 1 is replaced by the following:
(5)Subsections (2) and (4) come into force on April 1, 2019.
60Subsection 78(3) of the Act is replaced by the following:
(3)Subsection (2) comes into force on April 1, 2019.
61Subsection 79(4) of the Act is replaced by the following:
(4)Subsection (2) comes into force on April 1, 2019.
62Subsection 80(4) of the Act is replaced by the following:
(4)Subsection (2) comes into force on April 1, 2019.
63Subsection 81(4) of the Act is replaced by the following:
(4)Subsection (2) comes into force on April 1, 2019.
2014, c. 39

Economic Action Plan 2014 Act, No. 2

64Subsection 100(4) of the Economic Action Plan 2014 Act, No. 2 is replaced by the following:
(4)Subsection (2) is deemed to have come into force on February 28, 2018.
65Subsection 101(2) of the Act is replaced by the following:
(2)Subsection (1) is deemed to have come into force on February 28, 2018.
2017, c. 20

Budget Implementation Act, 2017, No. 1

66(1)Subsection 45(3) of the Budget Implementation Act, 2017, No. 1 is repealed.
(2)Subsection 45(5) of the Act is repealed.

Application

67For the purposes of applying the provisions of the Customs Act that provide for the payment of, or the liability to pay, interest in respect of any amount, the amount is to be determined and interest is to be computed on it as though paragraphs 1(a), 2(a), 3(a) and 4(a) of Schedule 1 to the Excise Act, 2001, as enacted by sections 54 to 57, and subparagraph (a)‍(i) and paragraph (b) of Schedule 2 to the Excise Act, 2001, as enacted by section 58, had been assented to on February 28, 2018.

PART 3

Amendments to the Excise Act, 2001 (Cannabis Taxation), the Excise Tax Act and Other Related Texts

Coordination with the Cannabis Act

68(1)If Bill C-45, introduced in the 1st session of the 42nd Parliament and entitled the Cannabis Act (referred to in this section and section 118 as the “other Act”), receives royal assent, then for the purposes of this section and sections 117 and 118, commencement day means the day on which subsection 204(1) of the other Act comes into force.
(2)If the other Act receives royal assent, then sections 69 to 78, subsection 79(1), section 84, subsection 85(2), sections 87, 89 to 106 and 108 to 113 and subsection 115(1) come into force on the first day on which both this Act and the other Act have received royal assent.
(3)Despite subsection (2), if the other Act receives royal assent, then sections 158.02, 158.09 to 158.12, 158.15 and 158.16 of the Excise Act, 2001, as enacted by section 73, come into force on commencement day.
(4)If the other Act receives royal assent, then subsection 79(2), sections 80 to 83, subsections 85(1) and (3), sections 86, 88, 107 and 114, subsection 115(2) and section 116 come into force on commencement day.
2002, c. 22

Excise Act, 2001

69(1)The definitions container, excise stamp, non-duty-paid, stamped and take for use in section 2 of the Excise Act, 2001 are replaced by the following:
container, in respect of a tobacco product or a cannabis product, means a wrapper, package, carton, box, crate, bottle, vial or other container that contains the tobacco product or cannabis product.‍ (contenant)
excise stamp means a tobacco excise stamp or a cannabis excise stamp. (timbre d’accise)
non-duty-paid, in respect of packaged alcohol or a cannabis product, means that duty (other than special duty in the case of alcohol) has not been paid on the alcohol or cannabis product.‍ (non acquitté)
stamped means
(a)in respect of a tobacco product, that a tobacco excise stamp, and all prescribed information in a prescribed format in respect of the tobacco product, are stamped, impressed, printed or marked on, indented into or affixed to the tobacco product or its container in the prescribed manner to indicate that duty, other than special duty, has been paid on the tobacco product; and
(b)in respect of a cannabis product, that a cannabis excise stamp, and all prescribed information in a prescribed format in respect of the cannabis product, are stamped, impressed, printed or marked on, indented into or affixed to the cannabis product or its container in the prescribed manner to indicate that duty has been paid on the cannabis product. (estampillé)
take for use means
(a)in respect of alcohol, to consume, analyze or destroy alcohol or to use alcohol for any purpose that results in a product other than alcohol; and
(b)in respect of a cannabis product, to consume, analyze or destroy the cannabis product. (utilisation pour soi)
(2)Paragraph (a) of the definition packaged in section 2 of the Act is replaced by the following:
(a)in respect of raw leaf tobacco, a tobacco product or a cannabis product, packaged in a prescribed package; or
(3)The definition produce in section 2 of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):
(c)in respect of a cannabis product, has the same meaning as in subsection 2(1) of the Cannabis Act but also includes packaging the cannabis product. (production)
(4)Section 2 of the Act is amended by adding the following in alphabetical order:
additional cannabis duty means a duty imposed under section 158.2 or 158.22.‍ (droit additionnel sur le cannabis)
cannabis has the same meaning as in subsection 2(1) of the Cannabis Act.‍ (cannabis)
cannabis duty means a duty imposed under section 158.19 or 158.21.‍ (droit sur le cannabis)
cannabis excise stamp means a stamp that is issued by the Minister under subsection 158.03(1) and that has not been cancelled under section 158.07.‍ (timbre d’accise de cannabis)
cannabis licensee means a person that holds a cannabis licence issued under section 14. (titulaire de licence de cannabis)
cannabis plant has the same meaning as in subsection 2(1) of the Cannabis Act. (plante de cannabis)
cannabis product means
(a)a product that is cannabis but that is not industrial hemp produced or imported in accordance with the Cannabis Act or the Industrial Hemp Regulations,
(b)a product that is an industrial hemp by-product,
(c)anything that is made with or contains a product described in paragraph (a) or (b), or
(d)a prescribed substance, material or thing,
but does not include a prescribed substance, material or thing. (produit du cannabis)
dutiable amount, in respect of a cannabis product, means
(a)if paragraph (b) does not apply, the amount determined by the formula
A × [100%/(100% + B + C)]
where
A
is the total of the following amounts that the purchaser is liable to pay to the vendor by reason of, or in respect of, the sale of the cannabis product:
(i)the consideration, as determined for the purposes of Part IX of the Excise Tax Act, for the cannabis product,
(ii)any additional consideration, as determined for the purposes of that Part, for the container in which the cannabis product is contained, and
(iii)any amount of consideration, as determined for the purposes of that Part, that is in addition to the amounts referred to in subparagraphs (i) and (ii), whether payable at the same or any other time, including, but not limited to, any amount charged for or to make provision for advertising, financing, commissions or any other matter,
B
is the percentage set out in section 2 of Schedule 7, and
C
is
(i)if additional cannabis duty in respect of a specified province is imposed on the cannabis product, the prescribed percentage in respect of the specified province, or
(ii)in any other case, 0%; and
(b)in prescribed circumstances, the amount determined in prescribed manner. (somme passible de droits)
flowering material means the whole or any part (other than viable seeds) of an inflorescence of a cannabis plant at any stage of development, including the infructescence stage of development.‍ (matière florifère)
industrial hemp means cannabis that is industrial hemp for the purposes of the Cannabis Act or the Industrial Hemp Regulations.‍ (chanvre industriel)
industrial hemp by-product means flowering material (other than viable achenes) or non-flowering material that has been removed or separated from an industrial hemp plant and that has not
(a)been disposed of by retting or by otherwise rendering it into a condition such that it cannot be used for any purpose not permitted under the Controlled Drugs and Substances Act; or
(b)been disposed of in a similar manner under the Cannabis Act.‍ (sous-produit de chanvre industriel)
industrial hemp grower means a person that holds a licence or permit under the Controlled Drugs and Substances Act or the Cannabis Act authorizing the person to produce industrial hemp plants. (producteur de chanvre industriel)
industrial hemp plant means a cannabis plant, including a seedling, that is industrial hemp. (plante de chanvre industriel)
low-THC cannabis product means a cannabis product
(a)consisting entirely of cannabis of a class referred to in any of items 1 to 3 of Schedule 4 to the Cannabis Act; and
(b)any part of which does not have a maximum yield of more than 0.3% THC w/w, taking into account the potential to convert delta-9-tetrahydrocannabinolic acid into THC, as determined in accordance with the Cannabis Act. (produit du cannabis à faible teneur en THC)
non-flowering material means any part of a cannabis plant other than flowering material, viable seeds and a part of the plant referred to in Schedule 2 to the Cannabis Act.‍ (matière non florifère)
prescription cannabis drug means a cannabis product that is a drug that has been assigned a drug identification number under the Food and Drug Regulations, other than
(a)a drug or mixture of drugs that may, under the Food and Drugs Act or the Controlled Drugs and Substances Act, be sold to a consumer, as defined in subsection 123(1) of the Excise Tax Act, without a prescription, as defined in section 1 of Part I of Schedule VI to the Excise Tax Act; or
(b)a prescribed cannabis product or a cannabis product of a prescribed class. (drogue de cannabis sur ordonnance)
specified province means a prescribed province.‍ (province déterminée)
THC means Δ9-tetrahydrocannabinol ((6aR, 10aR)-6a, 7,8,10a-tetrahydro-6,6,9-trimethyl-3-pentyl-6H-dibenzo [b,d] pyran-1-ol).‍ (THC)
tobacco excise stamp means a stamp that is issued by the Minister under subsection 25.1(1) and that has not been cancelled under section 25.5.‍ (timbre d’accise de tabac)
vegetative cannabis plant means a cannabis plant, including a seedling, that has not yet produced reproductive structures, including flowers, fruits or seeds. (plante de cannabis à l’état végétatif)
viable seed means a viable seed of a cannabis plant that is not an industrial hemp plant.‍ (graine viable)
70(1)Subsection 5(1) of the Act is replaced by the following:
Constructive possession
5(1)For the purposes of section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61, subsections 70(1) and 88(1), section 158.04, subsections 158.05(1) and 158.11(1) and (2), sections 230 and 231 and subsection 238.1(1), if one of two or more persons, with the knowledge and consent of the rest of them, has anything in the person’s possession, it is deemed to be in the custody and possession of each and all of them.
(2)The portion of subsection 5(2) of the Act before paragraph (a) is replaced by the following:
Definition of possession
(2)In this section and in section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61, subsections 70(1) and 88(1), section 158.04 and subsections 158.05(1), 158.11(1) and (2) and 238.1(1), possession means not only having in one’s own personal possession but also knowingly
71Section 14 of the Act is amended by adding the following after subsection (1):
Cannabis licence
(1.1)Subject to the regulations, on application, the Minister may issue to a person a cannabis licence for the purposes of this Act.
Cannabis licence — effect
(1.2)A cannabis licence issued to a person shall not have effect before a licence or permit issued to the person under subsection 62(1) of the Cannabis Act comes into effect.
72(1)Subsection 23(2.1) of the Act is amended by striking out “or” at the end of paragraph (a) and by adding the following after that paragraph:
(a.‍1)in the case of a cannabis licence, a licence or permit issued to the person under subsection 62(1) of the Cannabis Act is amended, suspended or revoked; or
(2)Paragraph 23(3)‍(b) of the Act is replaced by the following:
(b)shall, in the case of a spirits licence, a tobacco licence or a cannabis licence, require security in a form satisfactory to the Minister and in an amount determined in accordance with the regulations; and
73The Act is amended by adding the following after section 158:
PART 4.1
Cannabis
Exclusions
Non-application
158.01This Part does not apply to
(a)cannabis products that are produced in Canada by an individual for the personal use of the individual and in accordance with the Cannabis Act, but only to the extent that those cannabis products are used in activities that are not prohibited for those cannabis products under that Act;
(b)cannabis products that are produced in Canada by an individual for the medical purposes of the individual and in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, as applicable, but only to the extent that those cannabis products are used by the individual in activities that are not prohibited for those cannabis products under whichever of those Acts is applicable; or
(c)cannabis products that are produced in Canada by a designated person — being an individual who is authorized under the Controlled Drugs and Substances Act or the Cannabis Act to produce cannabis for the medical purposes of another individual — for the medical purposes of the other individual and in accordance with whichever of those Acts is applicable, but only to the extent that those cannabis products are used by the designated person or the other individual in activities that are not prohibited for those cannabis products under whichever of those Acts is applicable.
Cannabis Production and Stamping
Production without licence prohibited
158.02(1)No person shall, other than in accordance with a cannabis licence issued to the person, produce cannabis products.
Deemed producer
(2)A person that, whether for consideration or otherwise, provides or offers to provide in their place of business equipment for use in that place by another person in the production of a cannabis product is deemed to be producing the cannabis product and the other person is deemed not to be producing the cannabis product.
Exception
(3)Subsection (1) does not apply in respect of
(a)the production of industrial hemp by-products by an industrial hemp grower; and
(b)a prescribed person that produces prescribed cannabis products, or cannabis products of a prescribed class, in prescribed circumstances or for a prescribed purpose.
Issuance of cannabis excise stamps
158.03(1)On application in the prescribed form and manner, the Minister may issue, to a cannabis licensee, stamps the purpose of which is to indicate that cannabis duty and, if applicable, additional cannabis duty have been paid on a cannabis product.
Quantity of cannabis excise stamps
(2)The Minister may limit the quantity of cannabis excise stamps that may be issued to a person under subsection (1).
Security
(3)No person shall be issued a cannabis excise stamp unless the person has provided any security required by regulation in a form satisfactory to the Minister.
Supply of cannabis excise stamps
(4)The Minister may authorize a producer of cannabis excise stamps to supply, on the direction of the Minister, cannabis excise stamps to a person to which those stamps are issued under subsection (1).
Design and construction
(5)The design and construction of cannabis excise stamps shall be subject to the approval of the Minister.
Counterfeit cannabis excise stamps
158.04No person shall produce, possess, sell or otherwise supply, or offer to supply, without lawful justification or excuse the proof of which lies on the person, anything that is intended to resemble or pass for a cannabis excise stamp.
Unlawful possession of cannabis excise stamps
158.05(1)No person shall possess a cannabis excise stamp that has not been affixed to a packaged cannabis product in the manner prescribed for the purposes of the definition stamped in section 2 to indicate that duty has been paid on the cannabis product.
Exceptions — possession
(2)Subsection (1) does not apply to the possession of a cannabis excise stamp by
(a)the person that lawfully produced the cannabis excise stamp;
(b)the person to which the cannabis excise stamp is issued; or
(c)a prescribed person.
Unlawful supply of cannabis excise stamps
158.06No person shall dispose of, sell or otherwise supply, or offer to supply, a cannabis excise stamp otherwise than in accordance with this Act.
Cancellation of cannabis excise stamps
158.07The Minister may
(a)cancel a cannabis excise stamp that has been issued; and
(b)direct that it be returned or destroyed in a manner specified by the Minister.
Unlawful packaging or stamping
158.08No person shall package or stamp a cannabis product unless the person is a cannabis licensee or a prescribed person.
Unlawful removal
158.09(1)Except as permitted under section 158.15, no person shall remove a cannabis product from the premises of a cannabis licensee unless it is packaged and
(a)if the cannabis product is intended for the duty-paid market,
(i)it is stamped to indicate that cannabis duty has been paid, and
(ii)if additional cannabis duty in respect of a specified province is imposed on the cannabis product, it is stamped to indicate that the additional cannabis duty has been paid; or
(b)if the cannabis product is not intended for the duty-paid market, all prescribed information is printed on or affixed to its container in a prescribed manner.
Exception
(2)Subsection (1) does not apply to a cannabis licensee that removes from their premises a cannabis product
(a)if the cannabis product is being removed
(i)for delivery to another cannabis licensee,
(ii)for export as permitted under the Cannabis Act,
(iii)for delivery to a person for sterilization in accordance with subparagraph 158.11(3)‍(a)‍(ii), or
(iv)for delivery to a person for analysis or destruction in accordance with subparagraph 158.3(a)‍(v);
(b)if the cannabis product is
(i)a low-THC cannabis product,
(ii)a prescription cannabis drug, or
(iii)a prescribed cannabis product or a cannabis product of a prescribed class; or
(c)in prescribed circumstances or for a prescribed purpose.
Removal by Minister
(3)Subsection (1) does not apply to the removal of a cannabis product for analysis or destruction
(a)by the Minister; or
(b)by the Minister, as defined in subsection 2(1) of the Cannabis Act.
Prohibition — cannabis for sale
158.1No person shall purchase or receive for sale
(a)a cannabis product from a producer that the person knows, or ought to know, is not
(i)a cannabis licensee, or
(ii)in the case of an industrial hemp by-product, an industrial hemp grower;
(b)a cannabis product that is required under this Act to be packaged and stamped unless it is packaged and stamped in accordance with this Act; or
(c)a cannabis product that the person knows, or ought to know, is fraudulently stamped.
Selling, etc.‍, unstamped cannabis
158.11(1)No person, other than a cannabis licensee, shall dispose of, sell, offer for sale, purchase or have in their possession a cannabis product unless
(a)it is packaged; and
(b)it is stamped to indicate that cannabis duty has been paid.
Selling, etc.‍, unstamped cannabis — specified province
(2)No person, other than a cannabis licensee, shall dispose of, sell, offer for sale, purchase or have in their possession a cannabis product in a specified province unless it is stamped to indicate that additional cannabis duty in respect of the specified province has been paid.
Exception — possession of cannabis
(3)Subsections (1) and (2) do not apply to the possession of a cannabis product
(a)by a person that
(i)is a prescribed person that is transporting the cannabis product under prescribed circumstances and conditions,
(ii)is a prescribed person that is sterilizing the cannabis product under prescribed circumstances and conditions,
(iii)is an individual if the cannabis product was imported for their medical purposes in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, as applicable, or
(iv)possesses the cannabis product for analysis or destruction in accordance with subparagraph 158.3(a)‍(v);
(b)if the cannabis product is
(i)a low-THC cannabis product,
(ii)a prescription cannabis drug, or
(iii)a prescribed cannabis product or a cannabis product of a prescribed class; or
(c)in prescribed circumstances or for a prescribed purpose.
Exception — disposal, sale, etc.
(4)Subsections (1) and (2) do not apply to the disposal, sale, offering for sale or purchase of a cannabis product
(a)if the cannabis product is
(i)a low-THC cannabis product,
(ii)a prescription cannabis drug, or
(iii)a prescribed cannabis product or a cannabis product of a prescribed class; or
(b)in prescribed circumstances or for a prescribed purpose.
Exception — industrial hemp
(5)Subsections (1) and (2) do not apply to
(a)the possession of an industrial hemp by-product by the industrial hemp grower that produced it, if the industrial hemp by-product
(i)is on the industrial hemp grower’s property, or
(ii)is being transported by the industrial hemp grower for delivery to or return from a cannabis licensee; and
(b)the disposal, sale or offering for sale of an industrial hemp by-product to a cannabis licensee by the industrial hemp grower that produced it.
Exception — specified province
(6)Subsection (2) does not apply to
(a)the possession of a cannabis product in prescribed circumstances or for a prescribed purpose; or
(b)the disposal, sale, offering for sale or purchase of a cannabis product in prescribed circumstances or for a prescribed purpose.
Sale or distribution by licensee
158.12(1)No cannabis licensee shall distribute a cannabis product or sell or offer for sale a cannabis product to a person unless
(a)it is packaged;
(b)it is stamped to indicate that cannabis duty has been paid; and
(c)if additional cannabis duty in respect of a specified province is imposed on the cannabis product, it is stamped to indicate that the additional cannabis duty has been paid.
Exception
(2)Subsection (1) does not apply to the distribution, sale or offering for sale of a cannabis product
(a)to a cannabis licensee;
(b)if the cannabis product is exported by the cannabis licensee in accordance with the Cannabis Act;
(c)if the cannabis product is
(i)a low-THC cannabis product,
(ii)a prescription cannabis drug, or
(iii)a prescribed cannabis product or a cannabis product of a prescribed class; or
(d)in prescribed circumstances or for a prescribed purpose.
Packaging and stamping of cannabis
158.13A cannabis licensee that produces a cannabis product shall not enter the cannabis product into the duty-paid market unless
(a)the cannabis product has been packaged by the licensee;
(b)the package has printed on it prescribed information;
(c)the cannabis product is stamped by the licensee to indicate that cannabis duty has been paid; and
(d)if the cannabis product is to be entered in the duty-paid market of a specified province, the cannabis product is stamped by the licensee to indicate that additional cannabis duty in respect of the specified province has been paid.
Notice — absence of stamping
158.14(1)The absence on a cannabis product of stamping that indicates that cannabis duty has been paid is notice to all persons that cannabis duty has not been paid on the cannabis product.
Notice — absence of stamping
(2)The absence on a cannabis product of stamping that indicates that additional cannabis duty in respect of a specified province has been paid is notice to all persons that additional cannabis duty in respect of the specified province has not been paid on the cannabis product.
Cannabis — waste removal
158.15(1)No person shall remove a cannabis product that is waste from the premises of a cannabis licensee other than the cannabis licensee or a person authorized by the Minister.
Removal requirements
(2)If a cannabis product that is waste is removed from the premises of a cannabis licensee, it shall be dealt with in the manner authorized by the Minister.
Re-working or destruction of cannabis
158.16A cannabis licensee may re-work or destroy a cannabis product in the manner authorized by the Minister.
Responsibility for Cannabis
Responsibility
158.17Subject to section 158.18, a person is responsible for a cannabis product at any time if
(a)the person is
(i)the cannabis licensee that owns the cannabis product at that time, or
(ii)if the cannabis product is not owned at that time by a cannabis licensee, the cannabis licensee that last owned it; or
(b)the person is a prescribed person or a person that meets prescribed conditions.
Person not responsible
158.18A person that is responsible for a cannabis product ceases to be responsible for it
(a)if it is packaged and stamped and the duty on it is paid;
(b)if it is consumed or used in the production of a cannabis product that is
(i)a low-THC cannabis product,
(ii)a prescription cannabis drug, or
(iii)a prescribed cannabis product or a cannabis product of a prescribed class;
(c)if it is taken for use and the duty on it is paid;
(d)if it is taken for use in accordance with any of subparagraphs 158.3(a)‍(i) to (v);
(e)if it is exported in accordance with the Cannabis Act;
(f)if it is lost in prescribed circumstances and the person fulfils any prescribed conditions; or
(g)in prescribed circumstances or if prescribed conditions are met.
Imposition and Payment of Duty on Cannabis
Imposition — flat-rate duty
158.19(1)Duty is imposed on cannabis products produced in Canada at the time they are packaged in the amount determined under section 1 of Schedule 7.
Imposition — ad valorem duty
(2)Duty is imposed on packaged cannabis products produced in Canada at the time of their delivery to a purchaser in the amount determined under section 2 of Schedule 7.
Duty payable
(3)The greater of the duty imposed under subsection (1) and the duty imposed under subsection (2) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser and the cannabis products are relieved of the lesser of those duties.
Equal duties
(4)If the amount of duty imposed under subsection (1) is equal to the amount of duty imposed under subsection (2), the duty imposed under subsection (1) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser and the cannabis products are relieved of the duty imposed under subsection (2).
Imposition — additional cannabis duty
158.2(1)In addition to the duty imposed under section 158.19, a duty in respect of a specified province is imposed on cannabis products produced in Canada in prescribed circumstances in the amount determined in a prescribed manner.
Duty payable
(2)The duty imposed under subsection (1) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser.
Duty on imported cannabis
158.21(1)Duty is imposed on imported cannabis products in the amount that is equal to the greater of
(a)the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(b)the amount determined in respect of the cannabis products under section 3 of Schedule 7.
Duty payable
(2)The duty imposed under subsection (1) is payable by the importer, owner or other person that is liable under the Customs Act to pay duty levied under section 20 of the Customs Tariff or that would be liable to pay that duty on the cannabis products if they were subject to that duty.
Additional cannabis duty on imported cannabis
158.22(1)In addition to the duty imposed under section 158.21, a duty in respect of a specified province is imposed on imported cannabis products in prescribed circumstances in the amount determined in a prescribed manner.
Duty payable
(2)The duty imposed under subsection (1) is payable by the importer, owner or other person that is liable under the Customs Act to pay duty levied under section 20 of the Customs Tariff or that would be liable to pay that duty on the cannabis products if they were subject to that duty.
Application of Customs Act
158.23The duties imposed under sections 158.21 and 158.22 on imported cannabis products shall be paid and collected under the Customs Act, and interest and penalties shall be imposed, calculated, paid and collected under that Act, as if the duties were a duty levied under section 20 of the Customs Tariff, and, for those purposes, the Customs Act applies with any modifications that the circumstances require.
Value for duty
158.24For the purposes of section 3 of Schedule 7 and of any regulations made for the purposes of section 158.22 in respect of imported cannabis products,
(a)the value of a cannabis product is equal to the value of the cannabis product, as it would be determined under the Customs Act for the purpose of calculating duties imposed under the Customs Tariff on the cannabis product at a percentage rate, whether the cannabis product is in fact subject to duty under the Customs Tariff; or
(b)despite paragraph (a), the value of a cannabis product imported in prescribed circumstances shall be determined in prescribed manner.
Duty on cannabis taken for use
158.25(1)If a particular person is responsible for cannabis products at a particular time when the cannabis products are taken for use, the following rules apply:
(a)if the cannabis products are packaged, they are relieved of the duty imposed under subsection 158.19(1); and
(b)duty is imposed on the cannabis products in the amount that is equal to the greater of
(i)the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(ii)the amount determined in respect of the cannabis products under section 4 of Schedule 7.
Specified province — duty on cannabis taken for use
(2)If a particular person is responsible for cannabis products at a particular time when the cannabis products are taken for use, a duty in respect of a specified province is imposed on the cannabis products in prescribed circumstances in the amount determined in prescribed manner. This duty is in addition to the duty imposed under subsection (1).
Duty payable
(3)The duty imposed under subsection (1) or (2) is payable at the particular time, and by the particular person, referred to in that subsection.
Duty on unaccounted cannabis
158.26(1)If a particular person that is responsible at a particular time for cannabis products cannot account for the cannabis products as being, at the particular time, in the possession of a cannabis licensee or in the possession of another person in accordance with subsection 158.11(3) or paragraph 158.11(5)‍(a), the following rules apply:
(a)if the cannabis products are packaged, they are relieved of the duty imposed under subsection 158.19(1); and
(b)duty is imposed on the cannabis products in the amount that is equal to the greater of
(i)the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(ii)the amount determined in respect of the cannabis products under section 4 of Schedule 7.
Specified province — duty on unaccounted cannabis
(2)If a particular person that is responsible at a particular time for cannabis products cannot account for the cannabis products as being, at the particular time, in the possession of a cannabis licensee or in the possession of another person in accordance with subsection 158.11(3) or paragraph 158.11(5)‍(a), a duty in respect of a specified province is imposed on the cannabis products in prescribed circumstances in the amount determined in prescribed manner. This duty is in addition to the duty imposed under subsection (1).
Duty payable
(3)The duty imposed under subsection (1) or (2) is payable at the particular time, and by the particular person, referred to in that subsection.
Exception
(4)Subsection (1) does not apply in circumstances in which the particular person referred to in that subsection is convicted of an offence under section 218.1.
Definition of commencement day
158.27(1)For the purposes of this section, commencement day has the same meaning as in section 152 of the Cannabis Act.
Duty on cannabis — production before commencement day
(2)Duty is imposed on cannabis products that are produced in Canada and delivered to a purchaser before commencement day for sale or distribution on or after that day in the amount that is equal to the greater of
(a)the amount determined in respect of the cannabis product under section 1 of Schedule 7, and
(b)the amount determined in respect of the cannabis product under section 2 of Schedule 7.
Additional cannabis duty — production before commencement day
(3)In addition to the duty imposed under subsection (2), a duty in respect of a specified province is imposed on cannabis products that are produced in Canada and delivered to a purchaser before commencement day for sale or distribution on or after that day in prescribed circumstances in the amount determined in a prescribed manner.
Duty payable
(4)The duty imposed under subsection (2) or (3) is payable on commencement day by the cannabis licensee that packaged the cannabis product.
Exception
(5)Subsection (2) does not apply to a prescribed cannabis product, or a cannabis product of a prescribed class, that is delivered to a prescribed person in prescribed circumstances or for a prescribed purpose.
Duty relieved — cannabis imported by licensee
158.28The duties imposed under sections 158.21 and 158.22 are relieved on
(a)a cannabis product that is not packaged and that is imported by a cannabis licensee; or
(b)a prescribed cannabis product, or a cannabis product of a prescribed class, that is imported by a prescribed person in prescribed circumstances or for a prescribed purpose.
Duty relieved — prescribed circumstances
158.29The duties imposed under any of sections 158.19 to 158.22 and 158.27 are relieved on a prescribed cannabis product, or a cannabis product of a prescribed class, in prescribed circumstances or if prescribed conditions are met.
Duty not payable
158.3Duty is not payable on
(a)a cannabis product that
(i)is taken for analysis or destroyed by the Minister,
(ii)is taken for analysis or destroyed by the Minister, as defined in subsection 2(1) of the Cannabis Act,
(iii)is taken for analysis by a cannabis licensee in a manner approved by the Minister,
(iv)is destroyed by a cannabis licensee in a manner approved by the Minister,
(v)is delivered by a cannabis licensee to another person for analysis or destruction by that person in a manner approved by the Minister,
(vi)is a low-THC cannabis product,
(vii)is a prescription cannabis drug, or
(viii)is a prescribed cannabis product or a cannabis product of a prescribed class;
(b)a non-duty-paid cannabis product that is removed from the premises of a cannabis licensee for export in accordance with the Cannabis Act; or
(c)a prescribed cannabis product, or a cannabis product of a prescribed class, that is delivered by a cannabis licensee to a prescribed person in prescribed circumstances or for a prescribed purpose.
Quantity of cannabis
158.31For the purposes of determining an amount of duty in respect of a cannabis product under section 1 of Schedule 7, the following rules apply:
(a)the quantity of flowering material and non-flowering material included in the cannabis product or used in the production of the cannabis product is to be determined in a prescribed manner in prescribed circumstances; and
(b)if paragraph (a) does not apply in respect of the cannabis product,
(i)the quantity of flowering material and non-flowering material included in the cannabis product or used in the production of the cannabis product is to be determined at the time the flowering material and non-flowering material are so included or used and in a manner satisfactory to the Minister, and
(ii)if the quantity of flowering material included in the cannabis product or used in the production of the cannabis product is determined in accordance with subparagraph (i), the particular quantity of that flowering material that is industrial hemp by-product is deemed to be non-flowering material if that particular quantity is determined in a manner satisfactory to the Minister.
Delivery to purchaser
158.32For the purposes of sections 158.19, 158.2 and 158.27 and for greater certainty, delivery to a purchaser includes
(a)delivering cannabis products, or making them available, to a person other than the purchaser on behalf of or under the direction of the purchaser;
(b)delivering cannabis products, or making them available, to a person that obtains them otherwise than by means of a purchase; and
(c)delivering cannabis products or making them available in prescribed circumstances.
Time of delivery
158.33For the purposes of sections 158.19, 158.2 and 158.27, a cannabis product is deemed to be delivered to a purchaser by a cannabis licensee at the earliest of
(a)the time at which the cannabis licensee delivers the cannabis product or makes it available to the purchaser,
(b)the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to the purchaser, and
(c)the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to a carrier — being a person that provides a service of transporting goods including, for greater certainty, a service of delivering mail — for delivery to the purchaser.
Dutiable amount
158.34For the purpose of section 2 of Schedule 7, the dutiable amount of a cannabis product is deemed to be equal to the fair market value of the cannabis product
(a)if the cannabis product is delivered or made available to a person that obtains it otherwise than by means of a purchase; or
(b)in prescribed circumstances.
74(1)The portion of subsection 159(1) of the Act before paragraph (a) is replaced by the following:
Determination of fiscal months
159(1)The fiscal months of a person other than a cannabis licensee shall be determined in accordance with the following rules: