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 March 28, 2023”.

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by

It also makes related and consequential amendments to the Excise Tax Act, the Tax Rebate Discounting Act, the Air Travellers Security Charge Act, the Excise Act, 2001, Part 1 of the Greenhouse Gas Pollution Pricing Act and the Electronic Filing and Provision of Information (GST/HST) Regulations.

Part 2 implements certain measures in respect of the Excise Tax Act and a related text by

Part 3 amends the Excise Act, the Excise Act, 2001 and the Air Travellers Security Charge Act in order to implement two measures.

Division 1 of Part 3 amends the Excise Act and the Excise Act, 2001 in order to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1, 2023.

Division 2 of Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement after April 2024 and for which any payment is made after April 2024.

Part 4 enacts and amends several Acts in order to implement various measures.

Division 1 of Part 4 amends the Bank Act to strengthen the regime for dealing with complaints against banks and authorized foreign banks by, among other things, providing for the designation of a not-for-profit body corporate to be the sole external complaints body. It also makes consequential amendments to the Financial Consumer Agency of Canada Act and related amendments to the Financial Consumer Protection Framework Regulations.

Division 2 of Part 4 amends the Pension Benefits Standards Act, 1985 to, among other things, provide for variable life benefits under a defined contribution provision of a pension plan and amends the Pooled Registered Pension Plans Act to, among other things, provide for variable life payments under pooled registered pension plans. It also makes a consequential amendment to the Canadian Human Rights Act.

Division 3 of Part 4 contains measures that are related to money laundering and to digital assets and other measures.

Subdivision A of Division 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,

Subdivision A also amends the Budget Implementation Act, 2021, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Subdivision B of Division 3 amends the Criminal Code to provide for a new warrant authorizing a peace officer or other person named in the warrant to search for and seize digital assets, including virtual currency, as well as to expand the list of offences on the basis of which an examination of information obtained by the Minister of National Revenue under various tax statutes may be authorized. The subdivision also makes related amendments to other Acts.

Division 4 of Part 4 amends the Customs Tariff to extend the expiry date of the General Preferential Tariff and Least Developed Country Tariff to December 31, 2034 and to create a new General Preferential Tariff Plus tariff treatment that will expire on the same date. The Division also aligns direct shipment requirements for tariff treatments under that Act with those that apply to free trade agreements.

Division 5 of Part 4 amends the Customs Tariff to remove Belarus and Russia from the List of Countries entitled to Most-Favoured-Nation tariff treatment.

Division 6 of Part 4 allows the Bank of Canada to apply, despite sections 27 and 27.‍1 of the Bank of Canada Act, any of its ascertained surplus to its retained earnings until its retained earnings are equal to zero or the ascertained surplus applied to its retained earnings is equal to the losses it incurred from the purchase of securities as part of the Government of Canada Bond Purchase Program.

Division 7 of Part 4 enacts the Canada Innovation Corporation Act. That Act continues the Canada Innovation Corporation, which was established under another Act, as a parent Crown corporation, sets out the Corporation’s purpose to maximize business investment in research and development across all sectors of the economy and in all regions of Canada to promote innovation-driven economic growth and includes transitional provisions. The Division also makes consequential and related amendments to other Acts.

Division 8 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.

Division 9 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to renew the authority to make Equalization and Territorial Formula Financing payments for another five-year period beginning on April 1, 2024 and makes a technical change to improve the accuracy of the programs. It also makes a technical change to the calculation of fiscal stabilization payments. Finally, it provides for the publication of the details of all amounts authorized to be paid under that Act.

Division 10 of Part 4 amends the Special Economic Measures Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to strengthen Canada’s ability to take economic measures against certain persons.

Division 11 of Part 4 amends the Privileges and Immunities (North Atlantic Treaty Organisation) Act to, among other things, enable the Paris Protocol to be implemented in Canada.

Division 12 of Part 4 amends the Service Fees Act to, among other things, clarify the definition “fee”, exempt certain fees from the application of that Act, make certain exceptions in that Act applicable only with the approval of the President of the Treasury Board, make certain changes to the annual adjustment provisions and provide authority for the President of the Treasury Board to amend the regulations made under section 22 of that Act by taking into account the factors established by regulations.

It also amends section 25.‍1 of the Canadian Food Inspection Agency Act to provide for the application of sections 16 to 18 of the Service Fees Act to low-materiality fees, within the meaning of the Service Fees Act, that are fixed under section 24 or 25 of the Canadian Food Inspection Agency Act.

Division 13 of Part 4 amends the Canada Pension Plan to allow the Minister of National Revenue to make available information to the Minister of Employment and Social Development that is necessary for the purpose of policy analysis, research or evaluation related to the administration of that Act.

Division 14 of Part 4 amends the Department of Employment and Social Development Act to grant the Minister of Employment and Social Development the authority to collect and use Social Insurance Numbers for the purposes of administering or enforcing any Act, program or activity in respect of which the administration or enforcement is the responsibility of the Minister.

Division 15 of Part 4 amends the Canada Labour Code in respect of leave related to the death or disappearance of a child to, among other things, increase the maximum length of that leave from 104 weeks to 156 weeks and to repeal paragraph 206.‍5(4)‍(b) of that Act.

Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide that a claim for refugee protection made by a person inside Canada must be made in person and, with regard to a claim made by the person other than at a port of entry, that the Minister of Citizenship and Immigration may specify the documents and information to be provided and the form and manner in which they are to be provided.

Division 17 of Part 4 amends the Immigration and Refugee Protection Act to clarify that the Minister of Citizenship and Immigration may give instructions in respect of an application to sponsor a person who applies for a visa as a Convention refugee, within the meaning of that Act, or as a person in similar circumstances.

Division 18 of Part 4 amends the College of Immigration and Citizenship Consultants Act to, among other things,

The Division also makes related amendments to the Citizenship Act and the Immigration and Refugee Protection Act to clarify that any person who is the subject of a notice of violation issued under either of those Acts has the right to request a review of the notice or the administrative monetary penalty set out in the notice.

Division 19 of Part 4 amends the Citizenship Act to, among other things,

Division 20 of Part 4 amends the Yukon Act to authorize the Minister of Northern Affairs to take any measures on certain public real property that the Minister considers necessary to prevent, counteract, mitigate or remedy any adverse effect on persons, property or the environment.

Subdivision A of Division 21 of Part 4 amends the Marine Liability Act to, among other things,

Subdivision B of Division 21 amends the Canada Shipping Act, 2001 to, among other things,

The Subdivision also makes a related amendment to the Oil Tanker Moratorium Act.

Subdivision C of Division 21 amends the Wrecked, Abandoned or Hazardous Vessels Act to, among other things, establish the Vessel Remediation Fund in the accounts of Canada and provide the Minister of Fisheries and Oceans with certain powers in relation to the detention of vessels.

Division 22 of Part 4 amends the Canada Transportation Act to, among other things,

Division 23 of Part 4 amends the Canada Transportation Act to, among other things,

Division 24 of Part 4 amends the Customs Act to, among other things,

The Division also makes a related amendment to the Quarantine Act.

Division 25 of Part 4 amends the National Research Council Act to, among other things, provide that the National Research Council of Canada may procure goods and services, including goods and services relating to construction and to research-related digital and information technology. It also establishes a new Procurement Oversight Board.

Division 26 of Part 4 amends the Patent Act to, among other things,

Division 27 of Part 4 amends the Food and Drugs Act to extend measures regarding therapeutic products to natural health products in order to, among other things,

Division 28 of Part 4 amends the Food and Drugs Act to, among other things, prohibit

(a) the sale of a cosmetic unless its safety can be established without relying on data derived from a test conducted on an animal that could cause pain, suffering or injury, whether physical or mental, to the animal, subject to certain exceptions;

Division 29 of Part 4 enacts the Dental Care Measures Act.

Division 30 of Part 4 amends subsection 41(1) of the Canada Post Corporation Act, in response to the decision in R. v. Gorman, to limit the Canada Post Corporation’s authority to open mail other than letters.

Division 31 of Part 4 expresses the assent of the Parliament of Canada to the issuing by His Majesty of a Royal Proclamation under the Great Seal of Canada establishing for Canada the applicable Royal Style and Titles.

Division 32 of Part 4 amends the Public Sector Pension Investment Board Act to provide that the Public Sector Pension Investment Board may incorporate a subsidiary for the purpose of providing investment management services to the Canada Growth Fund Inc. It also amends the Fall Economic Statement Implementation Act, 2022 to increase the amount that may be paid out of the Consolidated Revenue Fund on the requisition of the Minister of Finance for the acquisition of shares of the Canada Growth Fund Inc. and to provide that the Canada Growth Fund Inc. is not an agent of His Majesty in right of Canada.

Division 33 of Part 4 amends the Office of the Superintendent of Financial Institutions Act, the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to, among other things,

It also makes a consequential amendment to the Winding-up and Restructuring Act.

Division 34 of Part 4 amends the Criminal Code to, among other things, lower the criminal rate of interest calculated in respect of an agreement or arrangement and to express that rate as an annual percentage rate. It also authorizes the Governor in Council, by regulation, to fix a limit on the total cost of borrowing under a payday loan agreement. Finally, it provides for transitional provisions.

Division 35 of Part 4 amends the Employment Insurance Act to extend, until October 26, 2024, the increase in the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers.

Division 36 of Part 4 amends the Canadian Environmental Protection Act, 1999 to, among other things,

It also makes consequential amendments to the Canada Emission Reduction Incentives Agency Act.

Division 37 of Part 4 amends the Canada Deposit Insurance Corporation Act to clarify that the Canada Deposit Insurance Corporation may administer any contract related to deposit insurance entered into by the Minister of Finance and to allow the Minister to increase the deposit insurance coverage limit until April 30, 2024.

Division 38 of Part 4 amends the Department of Employment and Social Development Act to, among other things,

It also makes consequential amendments to other Acts.

Division 39 of Part 4 amends the Canada Elections Act to provide for a national, uniform, exclusive and complete regime applicable to registered parties and eligible parties respecting their collection, use, disclosure, retention and disposal of personal information.

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

• Standby charge for automobile

  (e) if at any time in the year an automobile is made available to the taxpayer, or to a particular person who does not deal at arm’s length with the taxpayer, by another person (referred to in this paragraph as “the employer”) because of or as a consequence of a previous, the current or an intended office or employment of the taxpayer, the amount, if any, by which

• (ii) the total of all amounts, each of which is an amount (other than an expense related to the operation of the automobile) paid in the year by the taxpayer, or the particular person who does not deal at arm’s length with the taxpayer, to the employer for the use of the automobile;

• (ii) amounts related to the operation (otherwise than in connection with or in the course of the taxpayer’s office or employment) of the automobile for the period or periods in the year during which the automobile was made available to the taxpayer, or a person who does not deal at arm’s length with the taxpayer, are paid or payable by the employer within the meaning of paragraph (e) that made the automobile available (in this paragraph referred to as the “payor”), and

Reasonable standby charge

(2) For the purposes of paragraph (1)‍(e), a reasonable standby charge for an automobile for the total number of days (in this subsection referred to as the “total available days”) in a taxation year during which the automobile is made available to a taxpayer, or to a person who does not deal at arm’s length with the taxpayer, by a person (referred to in this subsection as the “employer”) shall be deemed to be the amount determined by the formula

• Deduction – tradesperson’s tools

  (s) if the taxpayer is employed as a tradesperson at any time in the taxation year, the lesser of $1,000 and the amount determined by the formula

Certificate of employer

Interest income

(3) Subject to subsection (4.‍1), in computing the income for a taxation year of a corporation, partnership, unit trust or any trust of which a corporation or a partnership is a beneficiary, there shall be included any interest on a debt obligation (other than interest in respect of an income bond, an income debenture, a net income stabilization account or an indexed debt obligation) that accrues to it to the end of the year, or becomes receivable or is received by it before the end of the year, to the extent that the interest was not included in computing its income for a preceding taxation year.

Definition of flipped property

(13) For the purposes of subsections (12) and (14), a flipped property of a taxpayer means a property (other than a property, or a right to acquire property, that would be inventory of the taxpayer if the definition inventory in subsection 248(1) were read without reference to subsection (12)) that is

• (a) prior to its disposition by the taxpayer, either

  • (i) a housing unit located in Canada, or

  • (ii) a right to acquire a housing unit located in Canada; and

• (b) owned or, in the case of a right to acquire, held, by the taxpayer for less than 365 consecutive days prior to its disposition, other than a disposition that can reasonably be considered to occur due to, or in anticipation of, one or more of the following events:

  • (i) the death of the taxpayer or a person related to the taxpayer,

  • (ii) one or more persons related to the taxpayer becoming a member of the taxpayer’s household or the taxpayer becoming a member of the household of a related person,

  • (iii) the breakdown of the marriage or common-law partnership of the taxpayer if the taxpayer has been living separate and apart from their spouse or common-law partner for at least 90 days prior to the disposition,

  • (iv) a threat to the personal safety of the taxpayer or a related person,

  • (v) the taxpayer or a related person suffering from a serious illness or disability,

  • (vi) an eligible relocation of the taxpayer or the taxpayer’s spouse or common-law partner, if the definition eligible relocation were read without reference to the requirements for the new work location and the new residence to be in Canada,

  • (vii) an involuntary termination of the employment of the taxpayer or the taxpayer’s spouse or common-law partner,

  • (viii) the insolvency of the taxpayer, or

  • (ix) the destruction or expropriation of the property.

• (d) any amount that would, if this Act were read without reference to this subsection, be included in the cost of a property of the transferee included in Class 14.‍1 of Schedule II to the Income Tax Regulations (including a deemed acquisition under subsection (35)) or included in the proceeds of disposition of a property of the transferor included in that Class (including a deemed disposition under subsection (37)) in respect of the disposition or termination of the former property by the transferor is deemed to be

• a) pour l’application de la présente loi et de ses règlements (à l’exception du présent article, de l’article 20 et des dispositions réglementaires prises pour l’application de l’alinéa 20(1)a)), si la valeur de l’élément A de la formule figurant à la définition de montant cumulatif des immobilisations admissibles au paragraphe 14(5) avait augmenté immédiatement avant 2017 en raison de la disposition du bien immédiatement avant ce moment, le coût en capital du bien est réputé augmenter des 4/3 du montant de cette augmentation;

Transitional rule

(43) An amount is to be included in computing a taxpayer’s income from a business for a taxation year, and is deemed not to be a taxable capital gain (other than for the purposes of the definition capital dividend account in subsection 89(1)), to the extent

• (a) the amount is part of the proceeds of disposition of eligible capital property (as defined in section 54, as it read on December 31, 2016) that is in respect of the business;

• (b) the disposition is under an agreement between the taxpayer and a purchaser that deals at arm’s length with the taxpayer;

• (c) the disposition occurred before March 22, 2016;

• (d) the amount becomes receivable under the agreement after 2016 and before 2024 because of a condition of the agreement, if

  • (i) at the end of 2016, it was uncertain whether the condition would be met, and

  • (ii) the condition is met after 2016;

• (e) the amount would, in the absence of this subsection, be a taxable capital gain;

• (f) the amount would have been included in computing the taxpayer’s income from the business if the amount had become receivable on December 31, 2016; and

• (g) the taxpayer files an election with the Minister, no later than the filing-due date for the taxpayer’s first taxation year that ends after August 9, 2022 to have this subsection apply in respect of the amount.

When s. 15(2) not to apply – ordinary lending business

(2.‍3) Subsection (2) does not apply to a debt that arose in the ordinary course of the creditor’s business or a loan made in the ordinary course of the lender’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the lender) where, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the debt or loan within a reasonable time.

Interpretation – partnerships

(2.‍31) For the purposes of this subsection and subsection (2.‍3),

• (a) a person or partnership that is a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership; and

• (b) a borrower shall be considered to deal at arm’s length with a lender only if

  • (i) for greater certainty, the borrower and the lender deal with each other at arm’s length,

  • (ii) where either the borrower or the lender is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party, and

  • (iii) where both the borrower and the lender are partnerships, the borrower and each member of the borrower deal at arm’s length with the lender and each member of the lender.

Automobile benefit

(5) For the purposes of subsection (1), the value of the benefit to be included in computing a shareholder’s income for a taxation year with respect to an automobile made available to the shareholder, or a person related to the shareholder, by a corporation shall (except where an amount is determined under subparagraph 6(1)‍(e)‍(i) in respect of the automobile in computing the shareholder’s income for the year) be computed on the assumption that subsections 6(1), (1.‍1), (2) and (7) apply, with such modifications as the circumstances require, and as though references therein to “the employer” were read as “the corporation”.

• (vi) where a partnership has ceased to exist,

  • (A) no amount may be deducted by the partnership under this paragraph in computing its income for its last fiscal period, and

  • (B) there may be deducted for a taxation year ending after the time that is immediately before the end of the partnership’s last fiscal period (referred to in this clause as the “particular time”) by any person or partnership that was a member of the partnership at the particular time, that proportion of the amount that would, but for this subparagraph, have been deductible under this paragraph by the partnership in the fiscal period ending in the year had it continued to exist and had the partnership interest not been redeemed, acquired or cancelled, that the fair market value of the member’s interest in the partnership at the particular time is of the fair market value of all the interests in the partnership at the particular time;

• Mining taxes

  (v) such amount as is allowed by regulation in respect of taxes on income from mining operations;

Accrued bond interest

(14) Where, by virtue of an assignment or other transfer of a debt obligation, other than an income bond or an income debenture, the transferee has become entitled to an amount of interest that accrued on the debt obligation for a period commencing before the time of transfer and ending at that time that is not payable until after that time, that amount

Interest on debt obligation

(14.‍1) Where a person who has issued a debt obligation, other than an income bond or an income debenture, is obligated to pay an amount that is stipulated to be interest on that debt obligation in respect of a period before its issue (in this subsection referred to as the “unearned interest amount”) and it is reasonable to consider that the person to whom the debt obligation was issued paid to the issuer consideration for the debt obligation that included an amount in respect of the unearned interest amount,

• c) si l’ancien bien est visé à l’alinéa a), avant la fin de la deuxième année d’imposition suivant l’année initiale ou, si elle est postérieure, avant la fin de la période de 24 mois qui suit l’année initiale;

• d) sinon, avant la fin de la première année d’imposition suivant l’année initiale ou, si elle est postérieure, avant la fin de la période de 12 mois qui suit l’année initiale,

• (D) a trust

  • (I) a specified beneficiary of which for the year is a qualifying individual for the year in respect of the trust, and

  • (II) under which no person other than a beneficiary described in subclause (I) may receive or otherwise obtain the use of, during the beneficiary’s lifetime, any of the income or capital of the trust and the trustees are required to consider the needs of the beneficiary including, without limiting the generality of the foregoing, the comfort, care and maintenance of the beneficiary, and

• (g) a qualifying individual, for a taxation year in respect of a trust, means an individual who meets the following conditions:

  • (i) the individual is, in the year, any of

    • (A) the settlor of the trust,

    • (B) the child, grandchild, great grandchild, parent, grandparent, great grandparent, brother, sister, uncle, aunt, niece or nephew of the settlor or of the spouse or common-law partner or former spouse or common-law partner of the settlor, and

    • (C) the spouse or common-law partner or former spouse or common-law partner of any person described in clause (A) or (B),

  • (ii) the individual is resident in Canada during the year, and

  • (iii) an amount is deductible, or would be deductible if this Act were read without reference to paragraph 118.‍3(1)‍(c), under subsection 118.‍3(1) in computing the individual’s tax payable under this Part for the year; (résidence principale)

• Premium or payment under PRPP, RRSP or RRIF

  (i) any amount that is deductible under section 146 or 146.‍3 or subsection 147.‍3(13.‍1) or 147.‍5(19) in computing the income of the taxpayer for the year;

• Premium or payment – FHSA, PRPP, RRSP or RRIF

  (i) any amount that is deductible under section 146, 146.‍3 or 146.‍6 or subsection 147.‍3(13.‍1) or 147.‍5(19) in computing the income of the taxpayer for the year;

• (a) the pensioner is deemed not to have received the portion of the pensioner’s pension income, qualified pension income or an amount described in subparagraph (c)‍(i) of the definition eligible pension income in subsection (1), as the case may be, for the taxation year that is equal to the amount of the pensioner’s split-pension amount for that taxation year; and

• (iii) as an amount described in subparagraph (c)‍(i) of the definition eligible pension income in subsection (1) to the extent that the split-pension amount was received by the pensioner as an amount described in subparagraph (c)‍(i) of that definition, if the pension transferee has attained the age of 65 years before the end of the taxation year.

• (f) all Canadian development expenses described in subparagraph (a)‍(ii) of the definition Canadian development expense in subsection 66.‍2(5) incurred by the taxpayer in respect of the well in a taxation year preceding the year, other than

  • (i) expenses referred to in paragraph (d) or (e),

  • (ii) restricted expenses, and

  • (iii) expenses for a well referred to in paragraph (a) that are incurred

    • (A) after 2020 (including expenses that are deemed by subsection 66(12.‍66) to have been incurred on December 31, 2020), if the expenses are incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a licence or permit) by the taxpayer before March 22, 2017, and

    • (B) after 2018 (including expenses that are deemed by subsection 66(12.‍66) to have been incurred on December 31, 2018), in any other case,

an amount in respect of the interest was or would have been deductible in computing the debtor’s income, taxable income or taxable income earned in Canada, as the case may be, if this Act were read without reference to paragraph 18(1)‍(g), subsections 18(2), (3.‍1) and (4) and section 21; (créance commerciale)

• Canadian Forces members and veterans amounts

  (d.‍1) the total of all amounts received or enjoyed by the taxpayer or the taxpayer’s spouse or common-law partner or survivor (as defined in subsection 146.‍2(1)) in the year on account of

• (v) a benefit provided under the Veterans Health Care Regulations,

• (vi) a benefit provided in respect of Rehabilitation Services and Vocational Assistance under Part 2 of the Veterans Well-being Act, or

• (vii) a benefit provided to a member of the Canadian Forces under the Compensation and Benefit Instructions for the Canadian Forces that is

  • (A) a home modifications benefit,

  • (B) a home modifications move benefit,

  • (C) a vehicle modifications benefit,

  • (D) a home assistance benefit,

  • (E) an attendant care benefit,

  • (F) a caregiver benefit,

  • (G) a spousal education upgrade benefit,

  • (H) a funeral and burial expenses benefit, or

  • (I) a next of kin travel benefit;

• (viii) a benefit provided by the Department of National Defence as an education expense reimbursement for ill and injured members;

• (E) the Settlement Agreement entered into by His Majesty in right of Canada on January 18, 2023 in respect of the class action relating to the attendance of day scholars at residential schools, and

• Continuing corporation

  (j.‍6) for the purposes of paragraphs 12(1)‍(t) and (x), subsections 12(2.‍2) and 13(7.‍1), (7.‍4) and (24), paragraphs 13(27)‍(b) and (28)‍(c), subsections 13(29) and 18(9.‍1), paragraphs 20(1)‍(e), (e.‍1), (v) and (hh), sections 20.‍1 and 32, paragraph 37(1)‍(c), subsection 39(13), subparagraphs 53(2)‍(c)‍(vi) and (h)‍(ii), paragraph 53(2)‍(s), subsections 53(2.‍1), 66(11.‍4), 66.‍7(11) and 127(10.‍2), section 139.‍1, subsection 152(4.‍3), the determination of D in the definition undepreciated capital cost in subsection 13(21) and the determination of L in the definition cumulative Canadian exploration expense in subsection 66.‍1(6), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

• (b) indebtedness that arose in the ordinary course of the business of the creditor or a loan made in the ordinary course of the creditor’s ordinary business of lending money (other than a business of lending money if, at any time during which the loan is outstanding, less than 90% of the aggregate outstanding amount of the loans of the business is owing by borrowers that deal at arm’s length with the creditor) if, at the time the indebtedness arose or the loan was made, bona fide arrangements were made for repayment of the indebtedness or loan within a reasonable time;

Interpretation — partnerships

(8.‍01) For the purposes of paragraph (8)‍(b), a borrower shall be considered to deal at arm’s length with a creditor only if

• (a) for greater certainty, the borrower and the creditor deal with each other at arm’s length;

• (b) where either the borrower or the creditor is a partnership and the other party is not, each member of the partnership deals at arm’s length with the other party; and

• (c) where both the borrower and the creditor are partnerships, the borrower and each member of the borrower deal at arm’s length with the creditor and each member of the creditor.

Definition of specified trust

93.‍3 (1) In this section, specified trust, at any time, means a trust in respect of which the following apply at that time:

• (b) the trust is resident in Australia or India (in this section referred to as the “specified jurisdiction”);

• (c) the trust is at that time a specified trust;

• (e) unless the non-resident corporation first acquires a beneficial interest in the trust at that time or the non-resident corporation first becomes a foreign affiliate of the taxpayer at that time, immediately before that time (referred to in this paragraph as the “preceding time”) subsection (3) applied

Specified trusts

(3) If this subsection applies at any time to a taxpayer resident in Canada in respect of a trust, the following rules apply at that time for the specified purposes:

• (a) the trust is deemed to be a non-resident corporation that is resident in the specified jurisdiction and not to be a trust;

• (a) the determination, in respect of an interest in a specified trust, of the Canadian tax results (as defined in subsection 261(1)) of the taxpayer resident in Canada referred to in subsection (3) for a taxation year in respect of shares of the capital stock of a foreign affiliate of the taxpayer;

• b) la fourniture, par une société étrangère affiliée d’un contribuable, de services ou d’un engagement de fournir des services est réputée constituer une entreprise distincte, autre qu’une entreprise exploitée activement, que la société affiliée exploite, et le revenu qui est tiré de cette entreprise, qui s’y rapporte ou qui y est accessoire est réputé être un revenu tiré d’une entreprise autre qu’une entreprise exploitée activement, dans la mesure où, selon le cas :

eligible controlled foreign affiliate, of a taxpayer, at any time, means a foreign affiliate of the taxpayer at that time, if

• (a) the affiliate is a controlled foreign affiliate of the taxpayer at that time and at the end of the affiliate’s taxation year that includes that time, and

• (b) the following condition is met:

  A ≥ 90%

  where

  A

  is the total of all amounts each of which would be the participating percentage (determined at the end of the taxation year) of a share owned by the taxpayer of the capital stock of a corporation, in respect of the affiliate, if

  (i) the definition relevant cost base were read without reference to the words “if the affiliate is an eligible controlled foreign affiliate of the taxpayer at that time,” in its subparagraph (b)‍(i), and

  (ii) the definition participating percentage in subsection (1) were read without reference to its paragraph (a) and the portion of its paragraph (b) before subparagraph (i); (société étrangère affiliée contrôlée admissible)

Agreement or election of partnership members

(3) If a taxpayer who was a member of a partnership at any time in a fiscal period has, for any purpose relevant to the computation of the taxpayer’s income from the partnership for the fiscal period, made or executed an agreement, designation or election under or in respect of the application of any of subsections 10.‍1(1), 13(4), (4.‍2) and (16), 20(9) and 21(1) to (4), section 22, subsection 29(1), section 34, clause 37(8)‍(a)‍(ii)‍(B), subsections 44(1) and (6), 50(1) and 80(5) and (9) to (11), section 80.‍04, subsections 86.‍1(2), 88(3.‍1), (3.‍3) and (3.‍5) and 90(3), the definition relevant cost base in subsection 95(4) and subsections 97(2), 139.‍1(16) and (17) and 249.‍1(4) and (6) that, if this Act were read without reference to this subsection, would be a valid agreement, designation or election,

• (i.‍1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the person’s percentage of the fair market value of the property immediately after its distribution to the person is deemed to be determined by the formula

  A − B

  where

  A

  is the amount that is the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution,

  B

  is the portion of the amount by which the person’s percentage of the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution as may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time

  (A) in the case of depreciable property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such depreciable property exceeds its cost amount,

  (B) in the case of a Canadian resource property or a foreign resource property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of such Canadian or foreign resource property, or

  (C) in the case of other property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such other property exceeds its cost amount, and

• (i.‍1) if such property is a membership interest in a partnership (in this subparagraph referred to as the “other partnership”), the fair market value of the property immediately after the particular time is deemed to be determined by the formula

  A − B

  where

  A

  is the amount that is the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution to the proprietor,

  B

  is the portion of the amount by which the fair market value (determined without reference to this subparagraph) of the property immediately after its distribution to the proprietor exceeds the cost amount to the partnership of the property immediately before its distribution that may reasonably be regarded as being attributable to the total of all amounts each of which is immediately after the particular time

  (A) in the case of depreciable property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such depreciable property exceeds its cost amount,

  (B) in the case of a Canadian resource property or a foreign resource property held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the fair market value (determined without reference to liabilities) of such Canadian or foreign resource property, or

  (C) in the case of a property that is not a capital property, a Canadian resource property or a foreign resource property and that is held directly by the other partnership or held indirectly by the other partnership through one or more other partnerships, the amount by which the fair market value (determined without reference to liabilities) of such property exceeds its cost amount, and

Income of a trust in certain provisions

• b) à ce moment, la totalité ou la presque totalité de la juste valeur marchande des biens de la société est attribuable à des biens visés au sous-alinéa a)‍(iv). (share of the capital stock of a family farm or fishing corporation)

Not carrying on business in Canada

(2) For the purposes of subsections 115(1) and 150(1), Part XIV and section 805 of the Income Tax Regulations, a non-resident person is not considered to be carrying on business in Canada at any particular time solely because of the provision to the person, or to a partnership of which the person is a member, at the particular time of designated investment services by a Canadian service provider if

Adjustment to tax payable – advance payment

(2.‍1) The tax payable under this Part on the individual’s taxable income for a taxation year, as computed under subsection (2), is deemed to be the total of the amount otherwise computed under that subsection and, except for the purposes of sections 118 to 118.‍9, 120.‍2, 121 and Subdivision C, the lesser of

• (a) the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsections 122.‍7(2) and (3), and

• (b) the amount that

  • (i) if the individual is an eligible individual for the purposes of subsection 122.‍7(2), is the total of all amounts deemed to have been paid

    • (A) on account of the individual’s tax payable under this Part for the taxation year under subsection 122.‍72(1) or (3), and

    • (B) on account of tax payable under this Part for the taxation year under subsection 122.‍72(1) or (3), if subsection 122.‍72(1) were read without reference to subsection 122.‍7(3), of a person who is the individual’s cohabiting spouse or common-law partner (as defined in subsection 122.‍7(1)) at the end of the taxation year, and

  • (ii) in any other case, is the total of all amounts deemed to have been paid on account of the individual’s tax payable under this Part for the taxation year under subsection 122.‍72(1) or (3), if subsection 122.‍72(1) were read without reference to subsection 122.‍7(2).

• (iii.‍1) a payment (other than a payment described in subparagraph (i)) under a money purchase provision (as defined in subsection 147.‍1(1)) of a registered pension plan or under a specified pension plan,

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, if any, determined by the formula

Additional deemed payment – January 2023

(3.‍003) An eligible individual in relation to a month specified for a taxation year who files a return of income for the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount determined by the formula

January 2023 payment – shared-custody parent

(3.‍04) Notwithstanding subsection (3.‍003), if an eligible individual is a shared-custody parent (as defined in section 122.‍6, but with the term “qualified dependant” in that section having the meaning assigned by subsection (1)) in respect of one or more qualified dependants at the beginning of a month, the amount deemed by subsection (3.‍003) to have been paid during the specified month is equal to the amount determined by the formula

January 2023 – month specified

(4.‍3) Notwithstanding subsection (4) and for the purposes of this section, the month specified in subsection (3.‍003) is January 2023 and the taxation year is the 2021 taxation year.

Definitions

122.‍7 (1) The following definitions apply in this Subdivision.

Deemed payment on account of tax

(2) Subject to subsection (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula

Advance payment

122.‍72 (1) Subject to subsection (5), an individual in relation to a month specified for a taxation year who is an eligible individual for the preceding taxation year who files a return of income for the preceding taxation year on or before the first day of November of the taxation year is deemed to have paid during the specified month on account of their tax payable under this Part for the taxation year an amount equal to 1/6 of the total of the amounts, if any, determined for the individual for the preceding taxation year under subsections 122.‍7(2) and (3).

Conditions of application of subsection (3)

(2) Subsection (3) applies in respect of an individual in relation to a particular month specified for a taxation year, and each subsequent month specified for the taxation year, if absent subsection (3)

• (a) the amount deemed by subsection (1) to have been paid by the individual during the particular month specified for the taxation year would be less than $33; and

• (b) it is reasonable to conclude that the amount deemed by subsection (1) to have been paid by the individual during each subsequent month specified for the taxation year would be less than $33.

Single advance payment

(3) If this subsection applies

• (a) the total of all amounts that would otherwise be deemed by subsection (1) to have been paid on account of the individual’s tax payable under this Part for the taxation year during the particular month specified for the taxation year, and during each subsequent month specified for the taxation year, is deemed to have been paid by the individual on account of their tax payable under this Part for the taxation year during the particular specified month for the taxation year; and

• (b) the amount deemed by subsection (1) to have been paid by the eligible individual during those subsequent months specified for the taxation year is deemed, except for the purpose of this subsection, not to have been paid to the extent that it is included in an amount deemed to have been paid by this subsection.

Months specified

(4) For the purposes of this section, the months specified for a taxation year are July and October of the taxation year and January of the immediately following taxation year.

No advance payment

(5) For the purposes of subsection (1), an individual is not an eligible individual for the preceding taxation year in relation to a month specified for a taxation year if the individual

• (a) dies in the taxation year before the first day of July;

• (b) is confined to a prison or similar institution for a period in the taxation year of at least 90 days that begins on or before the first day of the specified month; or

• (c) ceases to be resident in Canada on a day in the taxation year that is on or before the first day of the specified month.

Notification to Minister

(6) If, in the absence of subsection (5), an individual or their cohabiting spouse or common-law partner at the end of the preceding taxation year would be deemed in a taxation year to have paid an amount on account of tax payable for the taxation year under this section, the individual (or, in the case of a deceased individual, their legal representative) shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs:

• (a) the individual dies in the taxation year;

• (b) the individual ceases to be resident in Canada in the taxation year; or

• (c) the individual is confined to a prison or similar institution for a period of at least 90 days in the taxation year.

Advance payment – no eligible spouse

(7) Subsection (1) is to be applied to a particular individual in relation to a month specified for a taxation year as if section 122.‍7 applied to the particular individual for the preceding taxation year on the basis that the particular individual had no eligible spouse for the preceding taxation year, if

• (a) another individual was, for the purposes of section 122.‍7, the eligible spouse of the particular individual for the preceding taxation year; and

• (b) the other individual is not, for the purposes of subsection (1), an eligible individual for the preceding taxation year in relation to the month specified for the taxation year because of subsection (5).

entreprise de placement déterminée Entreprise exploitée par une société, sauf une entreprise exploitée par une caisse de crédit ou une entreprise de location de biens autres que des biens immeubles ou réels, dont le but principal est de tirer un revenu de biens, notamment des intérêts, des dividendes, des loyers et des redevances. Toutefois, sauf dans le cas où la société est une société à capital de risque de travailleurs visée par règlement au cours de l’année, l’entreprise exploitée par une société au cours d’une année d’imposition n’est pas une entreprise de placement déterminée si, selon le cas :

Cooperative not private corporation

136 (1) Notwithstanding any other provision of this Act, a cooperative corporation that would, but for this section, be a private corporation is deemed not to be a private corporation except for the purposes of paragraphs 87(2)‍(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)‍(e.‍2)), the definitions excessive eligible dividend designation, general rate income pool and low rate income pool in subsection 89(1), subsections 89(4) to (6) and (8) to (10), sections 123.‍4, 125, 125.‍1, 127 and 127.‍1, the definition mark-to-market property in subsection 142.‍2(1), sections 152 and 157, subsection 185.‍2(3), the definition small business corporation in subsection 248(1) (as it applies for the purposes of paragraph 39(1)‍(c)) and subsection 249(3.‍1).

• (c) an income bond, an income debenture or a prescribed property, or

• (f) unless the condition in subparagraph (e)‍(ii) is satisfied, the rights under the trust of each key employee of a participating employer are not more advantageous than the rights of a class of beneficiaries described in subparagraph (e)‍(i);

• (b) except for the purposes of paragraphs (d) and (g) of the definition regular eligible amount and paragraphs (e) and (f) of the definition supplemental eligible amount in subsection (1), where an individual agrees to acquire a condominium unit, the individual shall be deemed to have acquired it on the day the individual is entitled to immediate vacant possession of it;

• (iv) an individual (other than a trust), who is a legal parent of a beneficiary, and the individual’s former spouse or common-law partner, who is also the legal parent of a beneficiary, and

• (II) the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 12-month period that ends at that time does not exceed $8,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual, or

• (B) the individual satisfies, at that time, the condition set out in clause (i)‍(B) and the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 13-week period that ends at that time does not exceed $4,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual;

Right of set-off

(4.‍1) A qualifying arrangement that is a deposit may provide that the issuer has the right to set off any indebtedness owed by the holder to the issuer, or a person related to the issuer, against the holder’s interest in the arrangement if

• (a) the terms and conditions of the indebtedness and the right of set-off are terms and conditions that persons dealing at arm’s length with each other would have entered into; and

• (b) it is reasonable to conclude that none of the main purposes for the right of set-off is to enable a person (other than the holder) or a partnership to benefit from the exemption from tax under this Part of any amount in respect of the TFSA.

TFSA

(5) If the issuer of an arrangement that is, at the time it is entered into, a qualifying arrangement files with the Minister, before March of the calendar year following the calendar year in which the arrangement was entered into (or such later date as is acceptable to the Minister), an election in prescribed form and manner to register the arrangement as a TFSA under the Social Insurance Number of the individual with whom the arrangement was entered into, the arrangement becomes a TFSA at the time the arrangement was entered into and ceases to be a TFSA at the earliest of the following times:

• (e.‍1) where the fund does not govern a trust or the fund governs a trust created before 1998 that does not hold an annuity contract as a qualified investment for the trust, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.‍1), the transferor shall retain an amount equal to the lesser of

• (e.‍2) where paragraph (e.‍1) does not apply, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.‍1), the transferor shall retain property in the fund sufficient to ensure that the total of

• (b) is transferred at the direction of the annuitant directly to a registered pension plan of which, at any time before the transfer, the annuitant was a member (as defined in subsection 147.‍1(1)) or to a specified pension plan and is allocated to the annuitant under a money purchase provision (as defined in subsection 147.‍1(1)) of the plan; or

• (B.‍1) if the arrangement is entered into before 2027, 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,

• (c) a brother or sister (determined without reference to subsection 252(2)) of the beneficiary. (membre de la famille admissible)

• (ii) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition, and

• (iii) the trust’s income shall be computed without reference to subsection 104(6).

• (a) an amount in respect of the individual’s employment with the employer, or an office in respect of which the individual is remunerated by the employer, that is required (or that would be required but for paragraph 81(1)‍(a) as it applies with respect to the Indian Act or the Foreign Missions and International Organizations Act) by section 5 or 6 to be included in computing the individual’s income for the year, except such portion of the amount that

  • (i) meets the following conditions:

    • (A) the portion may reasonably be considered to relate to a period throughout which the individual was not resident in Canada, and

    • (B) the portion is

      • (I) not attributable to the performance of the duties of the office or employment in Canada, or

      • (II) exempt from income tax in Canada by reason of a tax treaty, or

  • (ii) is deducted under paragraph 8(1)‍(o.‍2) in computing the taxpayer’s income for the year,

• (b) under which the only benefits in respect of a member are benefits

  • (i) determined solely with reference to, and provided by, the amount in the member’s account, or

  • (ii) provided under a VPLA fund described in subsection 8506(13) of the Income Tax Regulations; (disposition à cotisations déterminées)

designated money purchase provision, in a calendar year, means a money purchase provision of a registered pension plan under which accounts are maintained in respect of at least 10 members throughout the year or under which the total contributions made for the year on behalf of an individual described in paragraph 8515(4)‍(a) or (b) of the Income Tax Regulations do not exceed 50% of the total contributions made for the year; (disposition à cotisations déterminées désignée)

permitted corrective contribution to a registered pension plan means a contribution in a calendar year in respect of an individual that would otherwise have been made in one or more of the 10 immediately preceding years (each such year referred to in this definition as a “retroactive year”) in accordance with the money purchase provision of the plan as registered or a money purchase provision of a registered pension plan of a predecessor employer (for the purposes of this definition, as defined in subsection 8500(1) of the Regulations), but for an error that caused a failure to enroll the individual as a member of the plan or a failure to make a required contribution, to the extent that the amount of the contribution does not exceed the lesser of

• (a) the total of all amounts each of which is an amount, for a retroactive year, determined by the formula

  A + B − C

  where

  A

  is the total of all amounts each of which is an amount by which a contribution required to be made at a particular time in the retroactive year under the provision in respect of the individual exceeds the amount contributed at the particular time in respect of the individual,

  B

  is the amount of interest, if any, calculated in respect of each amount determined for A at a rate that

  (i) is required by the Pension Benefits Standards Act, 1985 or a similar law of a province, or

  (ii) if subparagraph (i) does not apply, does not exceed a reasonable rate, and

  C

  is the total amount previously contributed to the provision in respect of the individual under subsection (20) for the retroactive year, and

• (b) the amount determined by the formula

  E − F

  where

  E

  is 150% of the money purchase limit for the calendar year, and

  F

  is the total amount previously contributed in respect of the individual under subsection (20) to the provision, or to any other money purchase provision, if a participating employer under the provision or a predecessor employer has been a participating employer in respect of the individual under that other provision; (cotisation corrective permise)

Permitted corrective contribution

(20) An individual or an employer may make a contribution in a calendar year under a money purchase provision of a registered pension plan in respect of the individual if it is a permitted corrective contribution and the provision was a designated money purchase provision in each of the prior years in respect of which the contribution is made.

• (a) in the case of a contribution in respect of a money purchase provision of a plan, the contribution was made in respect of periods before the end of the taxation year

  • (i) in accordance with the plan as registered, or

  • (ii) under subsection 147.‍1(20);

• Service after 1989

  (a) the total of all amounts each of which is a contribution (other than a prescribed contribution) made by the individual in the year

  • (i) to a registered pension plan that is in respect of a period after 1989 or that is a prescribed eligible contribution, to the extent that the contribution was made in accordance with the plan as registered, or

  • (ii) under subsection 147.‍1(20);

• (iii) a surrender of benefits payable to a qualifying survivor of a member after the member’s death, to the extent permitted under the Pooled Registered Pension Plans Act or a similar law of a province;

Member’s account

(12) For the purposes of paragraph 18(1)‍(u), subparagraph (a)‍(i) of the definition excluded right or interest in subsection 128.‍1(10), paragraph 146(8.‍2)‍(b), subsection 146(8.‍21), paragraphs 146(16)‍(a) and (b), subparagraph 146(21)‍(a)‍(i), paragraph (b) of the definition excluded premium in subsection 146.‍01(1), paragraph (c) of the definition excluded premium in subsection 146.‍02(1), subsections 146.‍3(14) and 147(19) to (21), sections 147.‍3 and 160.‍2 and paragraphs 212(1)‍(j.‍1) and (m), and of regulations made under subsection 147.‍1(18), a member’s account under a PRPP is deemed to be a registered retirement savings plan under which the member is the annuitant.

• Pension Benefits Guarantee Fund

  (o.‍5) the Pension Benefits Guarantee Fund under the Pension Benefits Act, R.‍S.‍O. 1990, c. P.‍8, and any corporation established solely for investing the assets of the Pension Benefits Guarantee Fund;

• (a) under an agreement that meets the following conditions:

  • (i) the agreement is in writing between

    • (A) the corporation, commission or association, and

    • (B) a person who is His Majesty in right of Canada or of a province, a municipality, a municipal or public body or a corporation to which any of paragraphs (1)‍(d) to (d.‍6) applies and that is controlled by His Majesty in right of Canada or of a province, by a municipality in Canada or by a municipal or public body in Canada,

  • (ii) the agreement is applicable within the geographical boundaries of

    • (A) if the person is His Majesty in right of Canada or a corporation controlled by His Majesty in right of Canada, Canada,

    • (B) if the person is His Majesty in right of a province or a corporation controlled by His Majesty in right of a province, the province,

    • (C) if the person is a municipality in Canada or a corporation controlled by a municipality in Canada, the municipality, and

    • (D) if the person is a municipal or public body or a corporation controlled by such a body, the area described in subsection (11) in respect of the person,

  • (iii) the income earned from the activities carried on under the agreement is paid from the party described in clause (i)‍(B) to the party described in clause (i)‍(A), and

  • (iv) the activities under the agreement are activities normally carried out by a local government; or

• (a) the information contained in a public information return referred to in subsection (14) or (14.‍1), and the filing status of information returns required by that subsection, shall be communicated or otherwise made available to the public by the Minister in such manner as the Minister considers appropriate;

• (iii) the effective date of any suspension, revocation, annulment or termination of registration; and

Definition of tax preparer

(2.‍2) In this section and subsection 162(7.‍3), tax preparer, for a calendar year, means a person or partnership who, in the year, accepts consideration to prepare more than five returns of income of corporations, more than five returns of income of individuals (other than trusts) or more than five returns of income of estates or trusts, but does not include an employee who prepares returns of income in the course of performing their duties of employment.

Electronic filing — tax preparer

(2.‍3) A tax preparer shall file any return of income prepared by the tax preparer for consideration by way of electronic filing, except that five of the returns of corporations, five of the returns of individuals (other than trusts) and five of the returns of estates or trusts may be filed other than by way of electronic filing.

Declaration

(4) If a return of income of a taxpayer for a taxation year is filed by way of electronic filing by a particular person (in this subsection referred to as the “filer”) other than the person who is required to file the return, the person who is required to file the return shall make an information return in prescribed form containing prescribed information, retain a copy of it and provide the filer with the information return, and that return and the copy shall be deemed to be a record referred to in section 230 in respect of the filer and the other person.

Electronic notice of assessment

(4.‍1) Notwithstanding subsection 244(14.‍1), a notice of assessment in respect of a return of income for a taxation year of an individual is presumed to have been sent to the individual and received by the individual on the day that it is made available, using electronic means, to the individual, if

• (a) the return of income is filed by way of electronic filing; and

• (b) the individual has authorized that notices or other communications may be made available in that manner and has not before that date revoked that authorization in a manner specified by the Minister.

• (b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.‍2), 122.‍5(3) to (3.‍003), 122.‍51(2), 122.‍7(2) or (3), 122.‍72(1), 122.‍8(4), 122.‍9(2), 122.‍91(1), 125.‍4(3), 125.‍5(3), 125.‍6(2) or (2.‍1), 127.‍1(1), 127.‍41(3) or 210.‍2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year.

• (d) the Minister determines the amount deemed by any of subsections 122.‍5(3) to (3.‍003), 122.‍72(1) or 122.‍8(4) to have been paid by an individual for a taxation year to be nil, subsection (2) does not apply to the determination unless the individual requests a notice of determination from the Minister.

• (ii) est établie par suite de l’établissement, en application du présent alinéa ou du paragraphe (6), d’une cotisation ou d’une nouvelle cotisation concernant l’impôt payable par un autre contribuable,

• (b.‍1) an information return described in subsection 237.‍1(7) that is required to be filed in respect of a deduction or claim made by the taxpayer in relation to a tax shelter is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is three years after the day on which the information return is filed;

• (b.‍5) an information return that is required to be filed under subsection 237.‍3(2) in respect of a reportable transaction (as defined in subsection 237.‍3(1)) entered into by the taxpayer, or by a person for the benefit of the taxpayer, is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is

  • (i) in the case of a taxpayer described in paragraph (3.‍1)‍(a), four years after the day on which the information return is filed, or

  • (ii) in any other case, three years after the day on which the information return is filed;

• (b.‍6) an information return that is required to be filed under subsection 237.‍4(4) in respect of a notifiable transaction (as defined in subsection 237.‍4(1)) entered into by the taxpayer, or by a person for the benefit of the taxpayer, is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is

  • (i) in the case of a taxpayer described in paragraph (3.‍1)‍(a), four years after the day on which the information return is filed, or

  • (ii) in any other case, three years after the day on which the information return is filed;

• (b.‍7) an information return that is required to be filed under subsection 237.‍5(2) in respect of a reportable uncertain tax treatment (as defined in subsection 237.‍5(1)) of the taxpayer is not filed as and when required, and the assessment, reassessment or additional assessment is made before the day that is

  • (i) in the case of a taxpayer described in paragraph (3.‍1)‍(a), four years after the day on which the information return is filed, or

  • (ii) in any other case, three years after the day on which the information return is filed;

Extended period of assessment

(4.‍01) Notwithstanding subsections (4) and (5), an assessment, reassessment or additional assessment to which any of paragraphs (4)‍(a) to (b.‍1) or (b.‍3) to (c) applies in respect of a taxpayer for a taxation year may be made after the taxpayer’s normal reassessment period in respect of the year to the extent that, but only to the extent that, it can reasonably be regarded as relating to,

• (b) if any of paragraphs (4)‍(b), (b.‍1) or (b.‍5) to (c) applies to the assessment, reassessment or additional assessment,

• (vii) the deduction or claim referred to in paragraph (4)‍(b.‍1),

• (viii) the reportable transaction referred to in paragraph (4)‍(b.‍5),

• (ix) the notifiable transaction referred to in paragraph (4)‍(b.‍6), or

• (x) any transaction, or series of transactions, to which the reportable uncertain tax treatment referred to in paragraph (4)‍(b.‍7) relates;

• (b) redetermine the amount, if any, deemed by any of subsections 120(2) or (2.‍2), 122.‍5(3) to (3.‍003), 122.‍51(2), 122.‍7(2) or (3), 122.‍8(4), 122.‍9(2), 122.‍91(1), 127.‍1(1), 127.‍41(3) or 210.‍2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year or deemed by subsection 122.‍61(1) to be an overpayment on account of the taxpayer’s liability under this Part for the year.

must deduct or withhold from the payment the amount determined in accordance with prescribed rules and must, at the prescribed time, remit that amount to the Receiver General on account of the payee’s tax for the year under this Part or Part XI.‍3, as the case may be, and, where at that prescribed time the person is a prescribed person, the remittance must be made to the account of the Receiver General at or through a designated financial institution.

Exception — remittance to designated financial institution

(1.‍4) For the purpose of subsection (1), a prescribed person referred to in that subsection is deemed to have remitted an amount to the account of the Receiver General at or through a designated financial institution if the prescribed person has remitted the amount to the Receiver General at least one day before the day upon which the amount is due.

• (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion of the excess that can reasonably be considered to arise as a consequence of the operation of section 122.‍5, 122.‍61, 122.‍72 or 122.‍8) from the day it became payable to the date of payment.

• (b) the total of the amounts deemed by subsection 122.‍5(3), (3.‍002) or (3.‍003) to have been paid by the individual during those specified months.

Assessment

(3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of any of subsections (1) to (1.‍2) or for which the taxpayer is liable because of subsection (2.‍1) or (2.‍2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.‍5, 122.‍61, 122.‍72 or 122.‍8.

Electronic Payments

designated financial institution has the same meaning as in subsection 153(6).‍ (institution financière désignée)

electronic payment means any payment or remittance to the Receiver General that is made through electronic services offered by a designated financial institution or by any electronic means specified by the Minister.‍ (paiement électronique)

• (b.‍1) in the case of a penalty under subsection 237.‍1(7.‍4), 237.‍3(8), 237.‍4(12) or 237.‍5(5), from the day on which the taxpayer became liable to the penalty to the day of payment; and

• (a) where the number of those information returns is greater than 5 and less than 51, $125;

• (a.‍1) where the number of those information returns is greater than 50 and less than 251, $250;

Penalty — electronic payments

(7.‍4) Every person who fails to comply with subsection 160.‍5(2) is liable to a penalty equal to $100 for each such failure.

Rules — partnership liable to a penalty

Partnership liable to penalty

(2.‍9) If a partnership is liable to a penalty under paragraph (2)‍(i), subsection (2.‍4) or (2.‍901) or section 163.‍2, 237.‍1, 237.‍3 or 237.‍4, sections 152, 158 to 160.‍1, 161 and 164 to 167 and Division J apply, with any changes that the circumstances require, in respect of the penalty as if the partnership were a corporation.

Application respecting refunds under section 122.‍72

(2.‍22) Where an amount deemed under section 122.‍72 to be paid by an individual during a month specified for a taxation year is applied under subsection (2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to His Majesty in right of Canada.

Interest on refunds and repayments

(3) If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.‍5, 122.‍61, 122.‍72, 122.‍8 or 125.‍7) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied:

Revoked charity to file returns

(6.‍1) If the registration of a taxpayer as a registered charity has been revoked (and subsection 188(2.‍1) does not apply to the taxpayer), the taxpayer shall, on or before the day that is one year from the end of the taxation year referred to in paragraph 188(1)‍(a), and without notice or demand,

Provisions applicable to Part

(8) Subsections 150(2) and (3), sections 152 and 158, subsection 161(11), sections 162 to 167 and Division J of Part I apply in respect of an amount assessed under this Part and of a notice of suspension under subsection 188.‍2(1), (2) or (2.‍1) as if the notice were a notice of assessment made under section 152, with any modifications that the circumstances require including, for greater certainty, that a notice of suspension that is reconsidered or reassessed may be confirmed or vacated, but not varied, except that

Publication

204.‍5 Each year the Minister shall make available to the public, in such a manner as the Minister deems appropriate, the names of all registered investments as of December 31 of the preceding year.

• (ii) a loan or an indebtedness (including, in the case of a TFSA, a loan or an indebtedness in respect of which the conditions in subsection 146.‍2(4) or (4.‍1) are met) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into,

• (i) a transaction or event or a series of transactions or events (other than a payment, not exceeding a reasonable amount, by the controlling individual of the registered plan where the payment would be described by paragraph 20(1)‍(bb) if the reference to “the taxpayer” in subparagraph (i) of that paragraph were read as a reference to “a controlling individual of a registered plan” and if the references to “the taxpayer” in subparagraph (ii) of that paragraph were read as references to “the registered plan”) that

Interpretation

(2) For the purposes of this section, income includes dividends described in section 83.

Application of Part XIII tax — payer subject to Part I

(13.‍2) For the purposes of this Part, if a particular non-resident person pays or credits an amount (other than an amount to which subsection (13) applies) to another non-resident person or to a partnership (other than a Canadian partnership), the particular non-resident person is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing

• (a) the particular non-resident person’s taxable income earned in Canada from a source that is neither a treaty-protected business nor a treaty-protected property; or

• (b) the amount on which the particular non-resident person is liable to pay tax under Part I because of section 216.

Application of Part XIII to authorized foreign bank

(13.‍3) An authorized foreign bank is deemed to be a person resident in Canada for the purposes of

• (a) this Part, in respect of any amount paid or credited to or by the bank in respect of its Canadian banking business; and

• (b) the application in paragraph (13.‍1)‍(b) and subsection (13.‍2) of the definition Canadian partnership (as defined in subsection 248(1)), in respect of a membership interest in a partnership held by the bank in the course of its Canadian banking business.

• (b) subsection 237.‍1(7.‍4) or (7.‍5), 237.‍3(8), 237.‍4(12) or 237.‍5(5) by a person or partnership,

• (b) a partnership where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is a non-resident person or a taxpayer referred to in any of subparagraphs (a)‍(i) to (viii), is less than 90% of the income or loss of the partnership for the period, and, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of this paragraph.‍ (entité canadienne déterminée)

• (n) an interest in a trust that is described in paragraph (a) or (b) of the definition exempt trust in subsection 233.‍2(1), or that would be described in paragraph (b) of that definition if that paragraph were read as follows:

  • (b) a trust that

    • (i) is resident in Australia or New Zealand for income tax purposes under the laws of Australia or New Zealand, as the case may be,

    • (ii) qualifies for a reduced rate of income tax under the income tax laws of its country of residence referred to in subparagraph (i),

    • (iii) is established principally for the purpose of administering or providing benefits under a superannuation, pension or retirement fund or plan, and

    • (iv) is maintained primarily for the benefit of individuals that are resident in Australia or New Zealand, as the case may be; or

• (b) within 15 days after the individual is requested by the person to provide the individual’s Social Insurance Number,

avoidance transaction means a transaction if it may reasonably be considered that one of the main purposes of the transaction, or of a series of transactions of which the transaction is a part, is to obtain a tax benefit.‍ (opération d’évitement)

• (a) any form of insurance or other protection, including, without limiting the generality of the foregoing, an indemnity, compensation or a guarantee, that

  • (i) either immediately or in the future and either absolutely or contingently,

    • (A) protects a person against a failure of the transaction or series to achieve any tax benefit from the transaction or series, or

    • (B) pays for or reimburses any expense, fee, tax, interest, penalty or similar amount that may be incurred by a person in the course of a dispute in respect of a tax benefit from the transaction or series, and

  • (ii) is not

    • (A) standard professional liability insurance, or

    • (B) integral to an agreement between persons acting at arm’s length for the sale or transfer of all or part of a business (either directly or through the sale or transfer of one or more corporations, partnerships or trusts) where it is reasonable to consider that the insurance or protection

      • (I) is intended to ensure that the purchase price paid under the agreement takes into account any liabilities of the business immediately prior to the sale or transfer, and

      • (II) is obtained primarily for purposes other than to achieve any tax benefit from the transaction or series; and

reportable transaction, at any time, means an avoidance transaction that is entered into by or for the benefit of a person, and each transaction that is part of a series of transactions that includes the avoidance transaction, if at the time any of the following paragraphs applies in respect of the avoidance transaction or series:

• (a) an advisor or promoter, or any person who does not deal at arm’s length with the advisor or promoter, has or had an entitlement, either immediately or in the future and either absolutely or contingently, to a fee (other than a fee in relation to a prescribed form required to be filed under subsection 37(11)) that to any extent

• (b) an advisor or promoter in respect of the avoidance transaction or series, or any person who does not deal at arm’s length with the advisor or promoter, obtains or obtained confidential protection, and the prohibition on disclosure provided under the confidential protection provides confidentiality in respect of a tax treatment in relation to the avoidance transaction or series,

tax treatment, of a person, means a treatment in respect of a transaction, or series of transactions, that the person uses, or plans to use, in a return of income or an information return (or would use in a return of income or an information return if a return of income or an information return were filed) and includes the person’s decision not to include a particular amount in a return of income or an information return.‍ (traitement fiscal)

• (a) every person for whom a tax benefit results, or for whom a tax benefit is expected to result based on the person’s tax treatment of the reportable transaction, from

  • (i) the reportable transaction,

  • (ii) any other reportable transaction that is part of a series of transactions that includes the reportable transaction, or

  • (iii) a series of transactions that includes the reportable transaction;

Clerical or secretarial services

(4) For greater certainty, subsection (2) does not apply to a person solely because the person provided clerical services or secretarial services with respect to a reportable transaction.

Time for filing return

(5) An information return required under subsection (2) to be filed with the Minister for a reportable transaction must be filed by

• (a) a person described in paragraph (2)‍(a) or (b) on or before the particular day that is 90 days after the earliest of

  • (i) the day on which the person becomes contractually obligated to enter into the reportable transaction,

  • (ii) the day on which the person enters into the reportable transaction, and

  • (iii) if the person is described in paragraph (2)‍(a) and a person described in paragraph (2)‍(b) enters into the reportable transaction for the benefit of the person described in paragraph (2)‍(a), the day on which the reportable transaction is entered into; and

• (b) a person described in paragraph (2)‍(c) or (d) no later than the earliest particular day described in paragraph (a) for a person described in paragraph (2)‍(a) or (b) in respect of the reportable transaction.

Tax benefits disallowed

(6) At any time, section 245 is to be read without reference to its subsection (4) in respect of any reportable transaction in respect of a person described in paragraph (2)‍(a) in relation to the reportable transaction if, at that time,

Penalty

(8) Every person who fails to file an information return in respect of a reportable transaction as required under subsection (2) on or before the day required under subsection (5) is liable to a penalty equal to

• (a) if the person is described in paragraph (2)‍(a) or (b),

  • (i) if the person is a corporation and the carrying value of the corporation’s assets is greater than or equal to $50 million for its last taxation year that ends prior to the day on which the information return is required to be filed under subsection (5), $2,000 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of

    • (A) $100,000, and

    • (B) 25% of the amount of the tax benefit in respect of the reportable transaction, and

  • (ii) in any other case, $500 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of

    • (A) $25,000, and

    • (B) 25% of the amount of the tax benefit in respect of the reportable transaction; and

• (b) if the person is described in paragraph (2)‍(c) or (d), the total of

  • (i) the amount of the fees charged by that person in respect of the reportable transaction,

  • (ii) $10,000, and

  • (iii) $1,000 multiplied by the number of days during which the failure continues, up to a maximum of $100,000.

Penalty – deeming rule

(8.‍1) If a person described in both paragraphs (2)‍(b) and (d) is liable to a penalty under subsection (8) in respect of a reportable transaction, the amount of the penalty is deemed to be equal to the greater of the amounts determined under paragraphs (8)‍(a) and (b).

Carrying value

(8.‍2) For the purpose of subparagraph (8)‍(a)‍(i), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)‍(a) and (b).

Application of sections 231 to 231.‍3

(13) Without restricting the generality of sections 231 to 231.‍3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (2)‍(a) that results (or is expected to result) from the reportable transaction, sections 231 to 231.‍3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the reportable transaction.

Solicitor-client privilege

(17) For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege.

Definitions

237.‍4 (1) The following definitions apply in this section.

advisor, in respect of a notifiable transaction, means each person who provides, directly or indirectly in any manner whatever, any assistance or advice with respect to creating, developing, planning, organizing or implementing the notifiable transaction, to another person (including any person who enters into the notifiable transaction for the benefit of another person).‍ (conseiller)

fee, in respect of a notifiable transaction, has the same meaning as in subsection 237.‍3(1).‍ (honoraires)

notifiable transaction, at any time, means

• (a) a transaction that is the same as, or substantially similar to, a transaction that is designated at that time by the Minister under subsection (3); and

• (b) a transaction in a series of transactions that is the same as, or substantially similar to, a series of transactions that is designated at that time by the Minister under subsection (3).‍ (opération à signaler)

person includes a partnership.‍ (personne)

promoter, in respect of a notifiable transaction, has the same meaning as in subsection 237.‍3(1).‍ (promoteur)

tax benefit has the same meaning as in subsection 245(1).‍ (avantage fiscal)

tax treatment has the same meaning as in subsection 237.‍3(1).‍ (traitement fiscal)

transaction has the same meaning as in subsection 245(1).‍ (opération)

Interpretation – substantially similar

(2) For the purposes of the definition notifiable transaction in subsection (1), the term “substantially similar”

• (a) includes any transaction, or series of transactions, in respect of which a person is expected to obtain the same or similar types of tax consequences (as defined in subsection 245(1)) and that is either factually similar or based on the same or similar tax strategy; and

• (b) is to be interpreted broadly in favour of disclosure.

Designation of notifiable transactions

(3) The Minister may designate for the purposes of this section, with the concurrence of the Minister of Finance, in such manner as the Minister considers appropriate, transactions or series of transactions.

Requirement to file return

(4) An information return in prescribed form and containing prescribed information in respect of a notifiable transaction must be filed with the Minister by

• (a) every person for whom a tax benefit results, or for whom a tax benefit is expected to result based on the person’s tax treatment of the notifiable transaction, from

  • (i) the notifiable transaction,

  • (ii) any other notifiable transaction that is part of a series of transactions that includes the notifiable transaction, or

  • (iii) a series of transactions that includes the notifiable transaction;

• (b) every person who has entered into, for the benefit of a person described in paragraph (a), the notifiable transaction;

• (c) every advisor or promoter in respect of the notifiable transaction; and

• (d) every person who is not dealing at arm’s length with an advisor or promoter described in paragraph (c) and who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee in respect of the notifiable transaction.

Application

(5) For the purpose of subsection (4), if any particular person that is an employer or a partnership is required to file an information return in respect of a notifiable transaction under paragraph (4)‍(c) or (d), the filing of an information return required under those paragraphs by the particular person in respect of the notifiable transaction in prescribed form and manner is deemed to have been made by each employee or partner of the particular person in respect of the particular transaction.

Due diligence

(6) Paragraphs (4)‍(a) and (b) do not apply to a person in respect of a notifiable transaction if the person has exercised the degree of care, diligence and skill in determining whether the transaction is a notifiable transaction that a reasonably prudent person would have exercised in comparable circumstances.

Reasonable expectation to know

(7) Paragraphs (4)‍(c) and (d) do not apply to a person in respect of a notifiable transaction unless the person knows or should reasonably be expected to know that the transaction was a notifiable transaction.

Clerical or secretarial services

(8) For greater certainty, subsection (4) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the notifiable transaction.

Time for filing return

(9) An information return required under subsection (4) to be filed with the Minister for a notifiable transaction must be filed by

• (a) a person described in paragraph (4)‍(a) or (b) on or before the particular day that is 90 days after the earliest of

  • (i) the day on which the person becomes contractually obligated to enter into the notifiable transaction,

  • (ii) the day on which the person enters into the notifiable transaction, and

  • (iii) if the person is described in paragraph (4)‍(a) and a person described in paragraph (4)‍(b) enters into the notifiable transaction for the benefit of the person described in paragraph (4)‍(a), the day on which the notifiable transaction is entered into; and

• (b) a person described in paragraph (4)‍(c) or (d) no later than the earliest particular day described in paragraph (a) for a person described in paragraph (4)‍(a) or (b) in respect of the notifiable transaction.

Clarification of reporting transactions in series

(10) For greater certainty, if subsection (4) applies to a person in respect of each transaction that is part of a series of transactions that includes a notifiable transaction, the filing of the information return by the person that reports each transaction in the series is deemed to satisfy the obligation of the person under subsection (4) in respect of each transaction so reported.

Assessments

(11) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (12).

Penalty

(12) Every person who fails to file an information return in respect of a notifiable transaction as required under subsection (4) on or before the particular day required under subsection (9) is liable to a penalty equal to

• (a) if the person is described in paragraph (4)‍(a) or (b),

  • (i) if the person is a corporation and the carrying value of the corporation’s assets is greater than or equal to $50 million for its last taxation year that ends prior to the day on which the information return is required to be filed under subsection (4), $2,000 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of

    • (A) $100,000, and

    • (B) 25% of the amount of the tax benefit in respect of the notifiable transaction, and

  • (ii) in any other case, $500 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of

    • (A) $25,000, and

    • (B) 25% of the amount of the tax benefit in respect of the notifiable transaction; and

• (b) if the person is described in paragraph (4)‍(c) or (d), the total of

  • (i) the amount of the fees charged by that person in respect of the notifiable transaction,

  • (ii) $10,000, and

  • (iii) $1,000 multiplied by the number of days during which the failure continues, up to a maximum of $100,000.

Penalty – deeming rule

(13) If a person described in both paragraphs (4)‍(b) and (d) is liable to a penalty under subsection (12) in respect of a notifiable transaction, the amount of the penalty is deemed to be equal to the greater of the amounts determined under paragraphs (12)‍(a) and (b).

Penalty – non-application

(14) For greater certainty, if any person is deemed to have filed an information return in prescribed form and manner in respect of a particular notifiable transaction under subsection (5), that person is not liable to a penalty under subsection (12) in respect of the particular transaction.

Carrying value

(15) For the purpose of subparagraph (12)‍(a)‍(i), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)‍(a) and (b).

Return – not an admission

(16) The filing of an information return under this section by a person in respect of a notifiable transaction is not an admission by the person that any transaction is part of a series of transactions.

Application of sections 231 to 231.‍3

(17) Without restricting the generality of sections 231 to 231.‍3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (4)‍(a) that results (or is expected to result) from a notifiable transaction, sections 231 to 231.‍3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the notifiable transaction.

Solicitor-client privilege

(18) For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege.

Definitions

237.‍5 (1) The following definitions apply in this section.

consolidated financial statements has the same meaning as in subsection 233.‍8(1).‍ (états financiers consolidés)

person includes a partnership.‍ (personne)

relevant financial statements of a corporation for a taxation year, means audited financial statements that are prepared

• (a) in respect of

  • (i) the corporation, or

  • (ii) a group, of which the corporation is a member, of two or more persons required to prepare consolidated financial statements for financial reporting purposes under applicable accounting principles;

• (b) in accordance with

  • (i) International Financial Reporting Standards, or

  • (ii) other country-specific generally accepted accounting principles (such as U.‍S. generally accepted accounting principles) relevant for corporations that are listed on a stock exchange outside Canada; and

• (c) for a period of time that ends in the taxation year.‍ (états financiers de référence)

reportable uncertain tax treatment, of a corporation for a taxation year, means a tax treatment of the corporation in respect of which uncertainty is reflected in relevant financial statements of the corporation for the year.‍ (traitement fiscal incertain à déclarer)

reporting corporation, for a taxation year, means a corporation if

• (a) the corporation has relevant financial statements for the year;

• (b) the carrying value of the corporation’s assets is greater than or equal to $50 million at the end of the year; and

• (c) the corporation is required to file a return of income for the year under section 150.‍ (société déclarante)

tax treatment, of a corporation, means a treatment in respect of a transaction, or series of transactions, that the corporation uses, or plans to use, in a return of income or an information return (or would use in a return of income or an information return if a return of income or an information return were filed) and includes the corporation’s decision not to include a particular amount in a return of income or an information return.‍ (traitement fiscal)

transaction has the same meaning as in subsection 245(1).‍ (opération)

Filing requirement

(2) Every reporting corporation for a taxation year that has one or more reportable uncertain tax treatments for the year must file with the Minister an information return in prescribed form and containing prescribed information in respect of each reportable uncertain tax treatment of the corporation for the year.

Filing requirement – deadline

(3) An information return required under subsection (2) to be filed by a corporation for a taxation year must be filed with the Minister on or before the corporation’s filing-due date for the year.

Assessments

(4) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (5).

Penalty

(5) Every corporation that fails to report a reportable uncertain tax treatment on an information return as required under subsection (2) on or before the day required under subsection (3) is liable to a penalty, for each such failure to report, equal to $2,000 multiplied by the number of weeks during which the failure continues, up to a maximum of $100,000.

Due diligence

(6) A corporation required to file an information return in respect of a reportable uncertain tax treatment is not liable for a penalty under subsection (5) if the corporation has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances.

Return – not an admission

(7) The filing of an information return in respect of a reportable uncertain tax treatment as required under subsection (2) by a corporation is not an admission by the corporation that

• (a) the tax treatment is not in accordance with this Act or the regulations; or

• (b) any transaction is part of a series of transactions.

Application of sections 231 to 231.‍3

(8) Without restricting the generality of sections 231 to 231.‍3, if a corporation is required to file an information return under subsection (2) in respect of a reportable uncertain tax treatment of the corporation for a taxation year, even if a return of income has not been filed by the corporation under section 150 for the year, sections 231 to 231.‍3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the reportable uncertain tax treatment including, for greater certainty, any information relating to any transaction, or series of transactions, to which the reportable uncertain tax treatment relates.

Carrying value

(9) For the purposes of the definition reporting corporation in subsection (1), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)‍(a) and (b).

• (xx.‍1) to an official of

  • (A) the Department of Employment and Social Development or the Department of Health, solely for the purpose of the administration or enforcement of the Canadian Dental Care Plan established under the authority of the Department of Health Act in respect of dental service for individuals, or

  • (B) the Department of Health solely for the purpose of the formulation or evaluation of policy for that plan,

Date when electronic notice sent

(14.‍1) If a notice or other communication in respect of an individual, other than a notice or other communication that refers to the business number of a person or partnership, is made available in electronic format such that it can be read or perceived by an individual or a computer system or other similar device, the notice or other communication is presumed to be sent to the individual and received by the individual on the date that an electronic message is sent, to the electronic address most recently provided by the individual to the Minister for the purposes of this subsection, informing the individual that a notice or other communication requiring the individual’s immediate attention is available in the individual’s secure electronic account. A notice or other communication is considered to be made available if it is posted by the Minister in the individual’s secure electronic account and the individual has authorized that notices or other communications may be made available in this manner and has not before that date revoked that authorization in a manner specified by the Minister.

Date when electronic notice sent — My Business Account

(14.‍2) A notice or other communication that is made available in electronic format such that it can be read or perceived by an individual or a computer system or other similar device, and that refers to the business number of a person or partnership, is presumed to be sent to the person or partnership and received by the person or partnership on the date that it is posted by the Minister in the secure electronic account in respect of a business number of the person or partnership, unless the person or partnership has requested, 30 days prior to that date, in a manner specified by the Minister, that the notice or other communication be sent by mail.

• (b.‍1) any specified hedging transaction, in respect of a DRA share of the person,

• (c) any synthetic equity arrangement (other than a specified hedging transaction), in respect of a DRA share of the person, and

• (ii) it may reasonably be considered that the share was issued or acquired as part of a transaction or event or series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.‍1), 138(6) or 258(3),

• (ii) one of the main purposes for the issue of the particular share or for the modification of its terms or conditions was to avoid a limitation provided by subsection 112(2.‍1) or 138(6) in respect of a deduction or to avoid or limit the application of subsection 258(3),

specified hedging transaction, in respect of a DRA share of a person or partnership (referred to in this definition as the “particular person”), means a transaction (in this definition, as defined in subsection 245(1)) or series of transactions that satisfies the following conditions:

• (a) it is entered into by

  • (i) the particular person if the particular person is a registered securities dealer or a partnership each member of which is a registered securities dealer, or

  • (ii) a registered securities dealer or a partnership each member of which is a registered securities dealer (in either case, referred to in this definition as the “connected dealer”), if the connected dealer does not deal at arm’s length with, or is affiliated with, the particular person,

• (b) it has the effect, or would have the effect if the transaction or series were entered into by the particular person, of eliminating all or substantially all of the particular person’s risk of loss and opportunity for gain or profit in respect of the DRA share, determined without regard to any other transaction or series entered into in respect of the DRA share,

• (c) if paragraph 260(6)‍(a) were read without reference to subsection 260(6.‍2), an amount in respect of the transaction or series would be deductible by the particular person or the connected dealer under paragraph 260(6)‍(a), and

• (d) if the transaction or series is entered into by the connected dealer, it can reasonably be considered that the particular person or connected dealer knew or ought to have known that the effect described in paragraph (b) would result; (opération de couverture déterminée)

Définition de exercice

249.‍1 (1) Pour l’application de la présente loi, l’exercice d’une entreprise ou d’un bien d’une personne ou d’une société de personnes s’entend de la période pour laquelle les comptes correspondants de la personne ou de la société de personnes sont arrêtés pour l’établissement d’une cotisation en vertu de la présente loi. L’exercice ne peut toutefois se prolonger :

attribute trading restriction means a restriction on the use of a tax attribute arising on the application, either alone or in combination with other provisions, of any of this section, subsections 10(10) and 13(24), section 37, subsections 66(11.‍4) and (11.‍5), 66.‍7(10) and (11), 69(11) and 88(1.‍1) and (1.‍2), sections 111 and 127, subsections 181.‍1(7), 190.‍1(6) and 249(4), section 251.‍2 and subsection 256(7).‍ (restriction au commerce d’attributs)

specified provision means any of subsections 10(10) and 13(24), paragraph 37(1)‍(h), subsections 66(11.‍4) and (11.‍5), 66.‍7(10) and (11), 69(11) and 111(4) to (5.‍3), paragraphs (j) and (k) of the definition investment tax credit in subsection 127(9), subsections 181.‍1(7) and 190.‍1(6), section 251.‍2 and any provision of similar effect.‍ (dispositions déterminées)

Deemed acquisition of control

(6) If, at any time as part of a transaction or event or series of transactions or events, control of a particular corporation is acquired by a person or group of persons and it can reasonably be concluded that one of the main reasons for the transaction or event or any transaction or event in the series of transactions or events is so that a specified provision does not apply to one or more corporations, the attribute trading restrictions are deemed to apply to each of those corporations as if control of each of those corporations were acquired at that time.