Bill C-43

1st Session, 38th Parliament,

53-54 Elizabeth II, 2004-2005

house of commons of canada

BILL C-43

An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005

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

SHORT TITLE

1. This Act may be cited as the Budget Implementation Act, 2005.

PART 1

AMENDMENTS IN RESPECT OF INCOME TAX

Income Tax Act

2. (1) Section 37 of the Income Tax Act is amended by adding the following after subsection (1.2):

(1.3) For the purposes of this section and section 127 of this Act and Part XXIX of the Income Tax Regulations, an expenditure is deemed to have been made by a taxpayer in Canada if the expenditure is

(a) made by the taxpayer in the course of a business carried on by the taxpayer in Canada; and

(b) made for the prosecution of scientific research and experimental development in the exclusive economic zone of Canada, within the meaning of the Oceans Act, or in the airspace above that zone or the seabed or subsoil below that zone.

(2) Subsection (1) applies to expenditures made after February 22, 2005.

3. (1) The portion of subsection 86.1(2) of the Act before paragraph (a) is replaced by the following:

(2) For the purpose of this section, a distribution by a particular corporation that is received by a taxpayer is an eligible distribution if

(2) The portion of paragraph 86.1(2)(f) of the Act before subparagraph (i) is replaced by the following:

(f) the taxpayer elects in writing filed with the taxpayer’s return of income for the taxation year in which the distribution occurs that this section apply to the distribution and provides information satisfactory to the Minister

(3) Subsections (1) and (2) apply to distributions received after 2004.

4. (1) The portion of paragraph 107.4(3)(b) of the Act before subparagraph (i) is replaced by the following:

(b) the transferee trust’s cost of the property is deemed to be the amount, if any, by which

(2) Paragraph 107.4(3)(c) of the Act is repealed.

(3) Subsections (1) and (2) apply to dispositions that occur after 2004.

5. Subsection 118(3.1) of the Act is replaced by the following:

(3.1) The amount of $7,131 referred to in paragraphs (a) to (c) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $100 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a);

(c) for the 2008 taxation year, to be replaced by the amount that is the total of $400 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (b);

(d) for the 2009 taxation year, to be replaced by the amount that is the greater of

(i) the amount that is the total of $600 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (c), and

(ii) $10,000; and

(e) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (d).

(3.2) The amount of $6,055 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $85 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a);

(c) for the 2008 taxation year, to be replaced by the amount that is the total of $340 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (b);

(d) for the 2009 taxation year, to be replaced by the amount that is the greater of

(i) the amount that is the total of $510 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (c), and

(ii) $8,500; and

(e) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (d).

(3.3) The amount of $606 referred to in subparagraphs (a)(ii) and (b)(iv) of the description of B in subsection (1) (in this subsection referred to as the “particular amount”) that is to be used for the purpose of determining the amount of that description is

(a) for the 2006 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that year in respect of the particular amount if this section were read without reference to this subsection;

(b) for the 2007 taxation year, to be replaced by the amount that is the total of $8.50 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (a);

(c) for the 2008 taxation year, to be replaced by the amount that is the total of $34 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (b);

(d) for the 2009 taxation year, to be replaced by the amount that is the greater of

(i) the amount that is the total of $51 and the amount that would be determined for that description for that year in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (c), and

(ii) $850; and

(e) for the 2010 and subsequent taxation years, to be replaced by the amount that is the amount that would be determined for that description for those years in respect of the particular amount by applying subsection 117.1(1) to the amount determined under paragraph (d).

6. For the purpose of applying section 118.1 of the Act, a gift made by an individual after 2004 and before January 12, 2005 is deemed to have been made by the individual in the individual’s 2004 taxation year and not in the individual’s 2005 taxation year if

(a) the individual claims an amount under subsection 118.1(3) of the Act in respect of the gift for the individual’s 2004 taxation year;

(b) the gift was made to a registered charity listed under the International Humanitarian Assistance program of the Canadian International Development Agency;

(c) the individual directed the charity to apply the gift to the tsunami relief effort; and

(d) the gift was in the form of cash or was transferred by way of cheque, credit card or money order.

7. (1) Paragraph (a) of the description of A in subsection 122.51(2) of the Act is replaced by the following:

(a) $750, and

(2) Subsection (1) applies to the 2005 and subsequent taxation years.

8. (1) The portion of the description of N in the description of M in subsection 122.61(1) of the Act before paragraph (a) is replaced by the following:

N      is the product obtained by multiplying $2,000 by the number of qualified dependants in respect of whom both

(2) Subsection (1) applies in respect of overpayments deemed to arise during months that are after June 2005.

9. Section 123.2 of the Act is replaced by the following:

123.2 (1) There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation an amount equal to the corporation’s specified percentage for the taxation year multiplied by the amount, if any, by which

(a) the tax payable under this Part by the corporation for the year determined without reference to this section, sections 123.3, 123.4 and 125 to 126 and subsections 127(3), (5), (27) to (31), (34) and (35) and 137(3) and as if subsection 124(1) did not contain the words “in a province”

exceeds

(b) in the case of a corporation that was throughout the year an investment corporation or a mutual fund corporation, the amount determined for A in the definition “refundable capital gains tax on hand” in subsection 131(6) in respect of the corporation for the year, and

(c) in any other case, nil.

(2) The specified percentage of a corporation for a taxation year is

(a) if the taxable capital employed in Canada of the corporation for the taxation year is equal to or less than $50,000,000, that pro- portion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year; and

(b) if paragraph (a) does not apply, the percentage determined by the formula

A + B[(C - $50,000,000)/$25,000,000]

where

A      is that proportion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year,

B      is that proportion of 4% that the number of days in the taxation year that are after 2007 is of the number of days in the taxation year; and

C      is the lesser of $75,000,000 and the taxable capital employed in Canada of the corporation for the taxation year.

(3) For the purpose of subsection (2), the taxable capital employed in Canada of a corporation for a particular taxation year is

(a) if the corporation is associated with one or more other corporations in the particular taxation year, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation, or of such an associated corporation, for its last taxation year that ended in the calendar year preceding the calendar year in which the particular taxation year ends; and

(b) if the corporation is not associated with one or more other corporations in the particular taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year.

10. (1) Subsection 146.1(1) of the Act is amended by adding the following in alphabetical order:

“specified plan” means an education savings plan

(a) that does not allow more than one beneficiary under the plan at any one time,

(b) under which the beneficiary is an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the beneficiary’s taxation year that ends in the 21st year following the year in which the plan was entered into, and

(c) that provides that, at all times after the end of the 25th year following the year in which the plan was entered into, no other individual may be designated as a beneficiary under the plan;

(2) Clause 146.1(2)(d.1)(iii)(B) of the Act is replaced by the following:

(B) the payment is made in the year in which the plan is required to be terminated in accordance with paragraph (i), or

(3) Paragraphs 146.1(2)(h) and (i) of the Act are replaced by the following:

(h) the plan provides that no contribution (other than a contribution made by way of a transfer from another registered education savings plan) may be made into the plan after

(i) in the case of a specified plan, the 25th year following the year in which the plan was entered into, and

(ii) in any other case, the 21st year following the year in which the plan was entered into;

(i) the plan provides that it must be terminated on or before the last day of

(i) in the case of a specified plan, the 30th year following the year in which the plan was entered into, and

(ii) in any other case, the 25th year following the year in which the plan was entered into;

(4) The portion of paragraph 146.1(6.1)(b) of the Act before subparagraph (i) is replaced by the following:

(b) for the purposes of this paragraph, the definition “specified plan” in subsection (1) and paragraphs (2)(d.1), (h) and (i), the transferee plan is deemed to have been entered into on the day that is the earlier of

(5) Subsections (1) to (4) apply to the 2005 and subsequent taxation years.

11. (1) Paragraph (k) of the definition “money purchase limit” in subsection 147.1(1) of the Act is replaced by the following:

(k) for 2006, the greater of $19,000 and the former limit for the year,

(l) for 2007, the greater of $20,000 and the former limit for the year,

(m) for 2008, the greater of $21,000 and the former limit for the year,

(n) for 2009, the greater of $22,000 and the former limit for the year, and

(o) for each year after 2009, the greater of

(i) the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of

(A) the money purchase limit for 2009, and

(B) the quotient obtained when the average wage for the year is divided by the average wage for 2009, and

(ii) the money purchase limit for the preceding year;

(2) Subsection 147.1(1) of the Act is amended by adding the following in alphabetical order:

“former limit” for each calendar year after 2005 and before 2010 means the greater of

(a) the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of

(i) $18,000, and

(ii) the quotient obtained when the average wage for the year is divided by the average wage for 2005, and

(b ) for 2006, $18,000, and for any other of those calendar years, the former limit for the preceding calendar year;

(3) Subsections (1) and (2) apply after 2004.

12. (1) Clauses 204.4(2)(a)(i)(A) and (B) of the Act are replaced by the following:

(A) not fewer than 20 beneficiaries are taxpayers described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s), or

(B) not fewer than 100 beneficiaries are taxpayers described in paragraph 149(1)(r) or (x),

(2) Subparagraphs 204.4(2)(a)(vi) and (vii) of the Act are replaced by the following:

(vi) the total value of all interests in the applicant owned by all trusts or corporations described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s) to which any one employer, either alone or together with persons with whom the employer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property,

(vii) the total value of all interests in the applicant owned by all trusts described in paragraph 149(1)(r) or (x) to which any one taxpayer, either alone or together with persons with whom the taxpayer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property, and

(3) Subsection 204.4(4) of the Act is replaced by the following:

(4) Notwithstanding a notification to a taxpayer under subsection (3), for the purposes of sections 204.6 and 204.7, the taxpayer is deemed to be a registered investment for each month or part of a month after the notification during which an interest in, or a share of the capital stock of, the taxpayer continues, by virtue of having been a registered investment, to be a qualified investment for a plan or fund referred to in subsection (1).

(4) Subsections (1) to (3) apply to taxation years that begin after 2004.

13. (1) Clause (b)(iii)(A) of the definition “eligible investment” in subsection 204.8(1) of the Act is replaced by the following:

(A) a debt obligation, issued by the entity, that is prescribed to be a small business security, or

(2) Subsection (1) applies to taxation years that begin after 2004.

14. (1) Part XI of the Act is repealed.

(2) Subsection (1) applies to months that end after 2004.

15. (1) The heading of Part X1.1 of the Act is replaced by the following:

TAX IN RESPECT OF DEFERRED INCOME PLANS AND OTHER TAX EXEMPT PERSONS

(2) Subsection (1) applies to months that end after 2004.

16. (1) Section 207.1 of the Act is amended by adding the following after subsection (4):

(5) Where at any time a taxpayer whose taxable income is exempt from tax under Part I makes an agreement (otherwise than as a consequence of the acquisition or writing by it of an option listed on a prescribed stock exchange) to acquire a share of the capital stock of a corporation (otherwise than from the corporation) at a price that may differ from the fair market value of the share at the time the share may be acquired, the taxpayer shall, in respect of each month during which the taxpayer is a party to the agreement, pay a tax under this Part equal to the total of all amounts each of which is the amount, if any, by which the amount of a dividend paid on the share at a time in the month at which the taxpayer is a party to the agreement exceeds the amount, if any, of the dividend that is received by the taxpayer.

(2) Subsection (1) applies to months that end after 2004.

17. (1) The definition “automobile” in subsection 248(1) of the Act is amended by adding the following after paragraph (b.1):

(b.2) a clearly marked emergency medical response vehicle that is used, in connection with or in the course of an individual’s office or employment with an emergency medical response or ambulance service, to carry emergency medical equipment together with one or more emergency medical attendants or paramedics,

(2) Paragraph (c) of the definition “disposition” in subsection 248(1) of the Act is replaced by the following:

(c) any transfer of the property to a trust or, where the property is property of a trust, any transfer of the property to any beneficiary under the trust, except as provided by paragraph (f) or (k), and

(3) Paragraph (g) of the definition “disposition” in subsection 248(1) of the Act is repealed.

(4) Subsection (1) applies to the 2005 and subsequent taxation years.

(5) Subsections (2) and (3) apply to dispositions that occur after 2004.

18. (1) The portion of subsection 259(1) of the Act before paragraph (a) is replaced by the following:

259. (1) For the purposes of subsections 146(6), (10) and (10.1) and 146.3(7), (8) and (9) and Parts X, X.2 and XI.1, if at any time a taxpayer that is a registered investment or that is described in paragraph 149(1)(r), (s), (u) or (x) acquires, holds or disposes of a particular unit in a qualified trust and the qualified trust elects for any period that includes that time to have this subsection apply,

(2) Paragraph 259(1)(c) of the Act is repealed.

(3) Subsection 259(2) of the Act is repealed.

(4) Subsections 259(3) and (4) of the Act are replaced by the following:

(3) An election by a qualified trust under subsection (1) shall be made by the qualified trust filing a prescribed form with the Minister and shall apply for the period

(a) that begins on the later of

(i) the day that is 15 months before the day on which the election is filed, and

(ii) the day, if any, that is designated by the qualified trust in the election; and

(b) that ends on the earlier of

(i) the day on which the qualified trust files with the Minister a notice of revocation of the election, and

(ii) the day, if any, that is designated by the qualified trust in the notice of revocation and that is not before the day that is 15 months before the day on which the notice of revocation is filed.

(4) Where a qualified trust elects under subsection (1),

(a) it shall provide notification of the election

(i) within 30 days after making the election, to each person who held a unit in the qualified trust at any time in the period before the election was made and during which the election is applicable, and

(ii) at the time of acquisition, to each person who acquires a unit in the qualified trust at any time in the period after the election was made and during which the election is applicable; and

(b) if a person who holds a unit in the qualified trust at any time in the period during which the election is applicable makes a written request to the qualified trust for information that is necessary for the purpose of determining the consequences under this Act of the election for that person, the qualified trust shall provide to the person that information within 30 days after receiving the request.

(5) The definition “qualified corporation” in subsection 259(5) of the Act is repealed.

(6) Subsections (1) to (5) apply to taxation years that begin after 2004.

Income Tax Application Rules

19. (1) Section 65 of the Income Tax Application Rules is repealed.

(2) Subsection (1) applies to months that end after 2004.

PART 2

AMENDMENTS IN RESPECT OF THE AIR TRAVELLERS SECURITY CHARGE

Air Travellers Security Charge Act

20. (1) The portion of paragraph 12(1)(a) of the Air Travellers Security Charge Act before subparagraph (i) is replaced by the following:

(a) $4.67 for each chargeable emplanement included in the service, to a maximum of $9.35, if

(2) The portion of paragraph 12(1)(b) of the Act before subparagraph (i) is replaced by the following:

(b) $5.00 for each chargeable emplanement included in the service, to a maximum of $10.00, if

(3) The portion of paragraph 12(1)(c) of the Act before subparagraph (i) is replaced by the following:

(c) $7.94 for each chargeable emplanement included in the service, to a maximum of $15.89, if

(4) The portion of paragraph 12(1)(d) of the Act before subparagraph (i) is replaced by the following:

(d) $8.50 for each chargeable emplanement included in the service, to a maximum of $17.00, if

(5) Paragraph 12(1)(e) of the Act is replaced by the following:

(e) $17.00, if the service includes transportation to a destination outside the continental zone.

(6) The portion of paragraph 12(2)(a) of the Act before subparagraph (i) is replaced by the following:

(a) $7.94 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $15.89, if

(7) The portion of paragraph 12(2)(b) of the Act before subparagraph (i) is replaced by the following:

(b) $8.50 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $17.00, if

(8) Paragraph 12(2)(c) of the Act is replaced by the following:

(c) $17.00, if the service includes transportation to a destination outside the continental zone.

(9) Subsections (1) to (8) apply in respect of any air transportation service that includes a chargeable emplanement on or after March 1, 2005 and for which any consideration is paid or becomes payable on or after that day.

Coordinating Amendment

21. (1) Subsections (2) and (3) apply if Bill C-33, introduced in the 1st session of the 38th Parliament and entitled the Budget Implementation Act, 2004, No. 2 (the “other Act”), receives royal assent.

(2) If the other Act receives royal assent on the same day as this Act, section 2 of the other Act is deemed to have come into force immediately before section 20 of this Act.

(3) If the other Act receives royal assent after this Act, then, on the day on which the other Act is assented to, subsection 2(9) of the other Act is replaced by the following:

(9) Subsections (1) to (8) apply in respect of any air transportation service that includes a chargeable emplanement on or after April 1, 2004 and for which any consideration is paid or becomes payable on or after April 1, 2004 but do not apply in respect of any air transportation service that includes a chargeable emplanement on or after March 1, 2005 and for which any consideration is paid or becomes payable on or after March 1, 2005.

PART 3

AMENDMENTS IN RESPECT OF THE GOODS AND SERVICES TAX AND HARMONIZED SALES TAX

Excise Tax Act

22. (1) The definition “selected public service body” in subsection 259(1) of the Excise Tax Act is amended by striking out the word “or” at the end of paragraph (d) and by adding the following after paragraph (e):

(f) a facility operator, or

(g) an external supplier;

(2) Paragraph (b) of the definition “specified percentage” in subsection 259(1) of the Act is replaced by the following:

(b) in the case of a hospital authority, a facility operator or an external supplier, 83%,

(3) Subsection 259(1) of the Act is amended by adding the following in alphabetical order:

“ancillary supply” means

(a) an exempt supply of a service of organizing or coordinating the making of facility supplies or home medical supplies in respect of which supply an amount, other than a nominal amount, is paid or payable to the supplier as medical funding, or

(b) the portion of an exempt supply (other than a facility supply, a home medical supply or a prescribed supply) of property or a service (other than a financial service) that represents the extent to which the property or service is, or is reasonably expected to be, consumed or used for making a facility supply and in respect of which portion an amount, other than a nominal amount, is paid or payable to the supplier as medical funding;

“external supplier” means a charity, a public institution or a qualifying non-profit organization (other than a hospital authority or a facility operator), that makes ancillary supplies, facility supplies or home medical supplies;

“facility operator” means a charity, a public institution or a qualifying non-profit organization (other than a hospital authority), that operates a qualifying facility;

“facility supply” means an exempt supply (other than a prescribed supply) of property or a service in respect of which

(a) the property is made available, or the service is rendered, to an individual at a public hospital or qualifying facility as part of a medically necessary process of health care for the individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, which process

(i) is undertaken in whole or in part at the public hospital or qualifying facility,

(ii) is reasonably expected to take place under the active direction or supervision, or with the active involvement, of

(A) a physician acting in the course of the practise of medicine,

(B) a midwife acting in the course of the practise of midwifery,

(C) if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner acting in the course of the practise of a nurse practitioner, or

(D) a prescribed person acting in prescribed circumstances, and

(iii) in the case of chronic care that requires the individual to stay overnight at the public hospital or qualifying facility, requires or is reasonably expected to require that

(A) a registered nurse be at the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(B) a physician or, if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner, be at, or be on-call to attend at, the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(C) throughout the process, the individual be subject to medical management and receive a range of therapeutic health care services that includes registered nursing care, and

(D) it not be the case that all or substantially all of each calendar day or part during which the individual stays at the public hospital or qualifying facility is time during which the individual does not receive therapeutic health care services referred to in clause (C), and

(b) if the supplier does not operate the public hospital or qualifying facility, an amount, other than a nominal amount, is paid or payable as medical funding to the supplier;

“home medical supply” means an exempt supply (other than a facility supply or a prescribed supply) of property or a service

(a) that is made

(i) as part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, and

(ii) after a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances, has identified or confirmed that it is appropriate for the process to take place at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility),

(b) in respect of which the property is made available, or the service is rendered, to the individual at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility), on the authorization of a person who is responsible for coordinating the process and under circumstances in which it is reasonable to expect that the person will carry out that responsibility in consultation with, or with ongoing reference to instructions for the process given by, a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances,

(c) all or substantially all of which is of property or a service other than meals, accommodation, domestic services of an ordinary household nature, assistance with the activities of daily living and social, recreational and other related services to meet the psycho-social needs of the individual, and

(d) in respect of which an amount, other than a nominal amount, is paid or payable as medical funding to the supplier;

“medical funding” of a supplier in respect of a supply means an amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the supplier in respect of health care services for the purpose of financially assisting the supplier in making the supply or as consideration for the supply by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made;

“midwife” means a person who is entitled under the laws of a province to practise the profession of midwifery;

“physician” means a person who is entitled under the laws of a province to practise the profession of medicine;

“qualifying funding” of the operator of a facility for all or part of a fiscal year of the operator means a readily ascertainable amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the operator in respect of the delivery of health care services to the public for the purpose of financially assisting in operating the facility during the fiscal year or part, as consideration for an exempt supply of making the facility available for use in making facility supplies at the facility during the fiscal year or part or as consideration for facility supplies of property that are made available, or services that are rendered, at the facility during the fiscal year or part and is paid or payable by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made;

“specified activities” means activities referred to in any of clauses (4.1)(b)(iii)(B) to (D), other than the operation of a public hospital;

“specified supply” of property of a person means

(a) a taxable supply made to the person at any time after December 31, 2004, of property that was owned on that day by the person or by another person who is related to the person at that time, or

(b) a taxable supply that the person is deemed under subsection 211(4) to have made after December 30, 2004, of property that was, on that day, owned by the person, or by another person who last supplied the property to the person by way of sale and who was related to the person on the day the supply by way of sale was made.

(4) Section 259 of the Act is amended by adding the following after subsection (2):

(2.1) For the purposes of this section, a facility, or part of a facility, other than a public hospital, is a qualifying facility for a fiscal year, or any part of a fiscal year, of the operator of the facility or part, if

(a) supplies of services that are ordinarily rendered during that fiscal year or part to the public at the facility or part would be facility supplies if the references in the definition “facility supply” in subsection (1) to “public hospital or qualifying facility” were references to the facility or part;

(b) an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part; and

(c) an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

(5) Subparagraphs 259(4.1)(b)(i) to (iii) of the Act are replaced by the following:

(i) the reference in subsection (4) to “specified percentage” were read as a reference to “specified percentage appli­cable to a selected public service body described in whichever of paragraphs (a) to (g) of the definition of that expression in subsection (1) applies to the person minus 50%”,

(ii) the reference in subsection (4) to “specified provincial percentage” were read as a reference to the greater of “specified provincial percentage applicable to a selected public service body described in whichever of paragraphs (a) to (e) of the definition of that expression in subsection (1) applies to the person minus 50%” and “0%”,

(iii) in the case of a person who is not designated to be a municipality for the purposes of this section, the reference in the description of C in subsection (4) to “designated activities” were read as a reference to

(A) in the case of a person determined to be a municipality under paragraph (b) of the definition “municipality” in subsection 123(1), activities engaged in by the person in the course of fulfilling the person’s responsibilities as a local authority,

(B) in the case of a person acting in the person’s capacity as a hospital authority, activities engaged in by the person in the course of operating a public hospital, operating a qualifying facility for use in making facility supplies, or of making facility supplies, ancillary supplies or home medical supplies,

(C) in the case of a person acting in the person’s capacity as a facility operator, activities engaged in by the person in the course of operating a qualifying facility for use in making facility supplies, or of making facility supplies, ancillary supplies or home medical supplies,

(D) in the case of a person acting in the person’s capacity as an external supplier, activities engaged in by the person in the course of making ancillary supplies, facility supplies or home medical supplies, or

(E) in any other case, activities engaged in by the person in the course of operating a recognized degree-granting institution, a college affiliated with, or research body of, such an institution, an elementary or secondary school or a post-secondary college or technical institute, as the case may be, and

(iv) in the case of a person who is not designated to be a municipality for the purposes of this section, the reference in the description of F in subsection (4) to “designated activities” were read as a reference to

(A) in the case of a person determined to be a municipality under paragraph (b) of the definition “municipality” in subsection 123(1), activities engaged in by the person in the course of fulfilling the person’s responsibilities as a local authority, or

(B) in any other case, activities engaged in by the person in the course of operating a recognized degree-granting institution, a college affiliated with, or research body of, such an institution, a public hospital, an elementary or secondary school or a post-secondary college or technical institute, as the case may be.

(6) The portion of subsection 259(4.2) of the Act before paragraph (a) is replaced by the following:

(4.2) For the purposes of determining a rebate payable to a person, in determining an amount under paragraphs (3)(a) and (4)(a), or under paragraph (4.1)(a) if the applicable specified provincial percentage is 0% and the person is a selected public service body described in any of paragraphs (a) to (e) of the definition “selected public service body” in subsection (1) or in paragraph (f) or (g) of that definition if the person is resident in Newfoundland and Labrador, no tax under any of subsection 165(2), sections 212.1 and 218.1 and Division IV.1 payable or deemed to have been paid or collected by the person shall be included

(7) Subparagraph 259(4.3)(c)(ii) of the Act is replaced by the following:

(ii) in any other case, that it engages in otherwise than in the course of

(A) fulfilling its responsibilities as a local authority,

(B) operating a public hospital, an elementary or secondary school, a post-secondary college or technical institute, a recognized degree-granting institution or a college affiliated with or research body of such a degree-granting institution, or

(C) making facility supplies, ancillary supplies or home medical supplies or operating a qualifying facility for use in making facility supplies,

(8) Subsection 259(7) of the English version of the Act is replaced by following:

(7) If a selected public service body acquires or imports property or a service primarily for consumption, use or supply in the course of activities engaged in by another selected public service body, for the purpose of determining the amount of a rebate under this section to the body in respect of the non-creditable tax charged in respect of the property or service for any claim period of the body, the body is deemed to be engaged in those activities.

(9) Subsection 259(8) of the Act is replaced by the following:

(8) If a person acquires or imports property or a service primarily for consumption, use or supply in the course of activities engaged in by the person acting in the capacity of a selected public service body described in any of paragraphs (a) to (g) of the definition “selected public service body” in subsection (1), the amount of any rebate under this section to the person in respect of the non-creditable tax charged in respect of the property or service for a claim period shall be determined as if the person were not a selected public service body described in any other of those paragraphs.

(10) Section 259 of the Act is amended by adding the following after subsection (13):

(14) For the purposes of this section, if a person incurs all or substantially all of the tax that is included in determining the amount of the non-creditable tax charged in respect of property or a service for a claim period of the person acting in the person’s capacity as a hospital authority, a facility operator or an external supplier, the person is deemed to have incurred all of the tax that is included in determining that amount in the course of fulfilling the person’s responsibilities as a hospital authority, a facility operator or an external supplier, as the case may be.

(15) Despite subsections (3), (4) and (4.1), for the purpose of applying subsection (4.1) to determine a rebate payable under subsection (3) or (4) to a person that is a hospital authority, a facility operator or an external supplier, for a claim period of the person, if the person is required to determine under paragraph (4.1)(b) a particular amount, in respect of a specified supply of property of the person made at any time, that would, if subsection (4) applied to the person, be determined by the formula in paragraph (4)(a) for the claim period and the value of C in that paragraph is the extent to which the person intended, at that time, to consume, use or supply the property in the course of specified activities, the particular amount shall be determined by the formula

A x B

where

A      is the amount that would, in the absence of this subsection, be determined to be the particular amount; and

B      is the amount determined by the formula

(B₁ - B₂) / B₁

where

B1      is the fair market value of the property at the time of the supply, and

B2      is the fair market value of the property on January 1, 2005.

(11) Subsections (1) to (10) apply for the purposes of determining a rebate under section 259 of the Act of a person for claim periods ending on or after January 1, 2005, except that the rebate shall be determined as if those subsections had not come into force for the purposes of determining a rebate of a person for the claim period that includes that day in respect of

(a) an amount of tax that became payable by the person before that day;

(b) an amount that is deemed to have been paid or collected by the person before that day; or

(c) an amount that is required to be added in determining the person’s net tax

(i) as a result of a branch or division of the person becoming a small supplier division before that day, or

(ii) as a result of the person ceasing before that day to be a registrant.

23. Section 295 of the Act is amended by adding the following after subsection (6):

(6.1) On being provided by any person with information specified by the Minister sufficient to identify a single person and a number, an official may confirm or deny that the following statements are both true:

(a) the identified person is registered under Subdivision d of Division V; and

(b) the number is the business number of the identified person.

24. Subsection 323(1) of the Act is replaced by the following:

323. (1) If a corporation fails to remit an amount of net tax as required under subsection 228(2) or (2.3) or to pay an amount as required under section 230.1 that was paid to, or was applied to the liability of, the corporation as a net tax refund, the directors of the corporation at the time the corporation was required to remit or pay, as the case may be, the amount are jointly and severally, or solidarily, liable, together with the corporation, to pay the amount and any interest on, or penalties relating to, the amount.

PART 4

AMENDMENTS IN RESPECT OF EXCISE TAX ON JEWELLERY, ETC.

Excise Tax Act

25. (1) Section 5 of Schedule I to the Excise Tax Act is replaced by the following:

5. Clocks and watches adapted to household or personal use, except railway men’s watches, and those specially designed for the use of the blind,

(a) eight per cent of the amount by which the sale price or duty paid value exceeds fifty dollars, applicable after February 23, 2005 and before March 2006;

(b) six per cent of the amount by which the sale price or duty paid value exceeds fifty dollars, applicable after February 2006 and before March 2007;

(c) four per cent of the amount by which the sale price or duty paid value exceeds fifty dollars, applicable after February 2007 and before March 2008; and

(d) two per cent of the amount by which the sale price or duty paid value exceeds fifty dollars, applicable after February 2008 and before March 2009.

5.1 Articles of all kinds made in whole or in part of ivory, jet, amber, coral, mother of pearl, natural shells, tortoise shell, jade, onyx, lapis lazuli or other semi-precious stones,

(a) eight per cent, applicable after February 23, 2005 and before March 2006;

(b) six per cent, applicable after February 2006 and before March 2007;

(c) four per cent, applicable after February 2007 and before March 2008; and

(d) two per cent, applicable after February 2008 and before March 2009.

5.2 The following articles, namely, articles commonly or commercially known as jewellery, whether real or imitation, including diamonds and other precious or semi-precious stones for personal use or for adornment of the person, and goldsmiths’ and silversmiths’ products except gold-plated or silver-plated ware for the preparation or serving of food or drink,

(a) eight per cent, applicable after February 23, 2005 and before March 2006;

(b) six per cent, applicable after February 2006 and before March 2007;

(c) four per cent, applicable after February 2007 and before March 2008; and

(d) two per cent, applicable after February 2008 and before March 2009.

(2) Subsection (1) is deemed to have come into force on February 24, 2005.

26. (1) Sections 5 to 5.2 of Schedule I to the Act are repealed.

(2) Subsection (1) comes into force on March 1, 2009.

PART 5

AMENDMENTS TO THE FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT

Federal-Provincial Fiscal Arrangements Act

27. The headings before section 24 of the Federal-Provincial Fiscal Arrangements Act are replaced by the following:

PART V.1

CANADA HEALTH TRANSFER, CANADA SOCIAL TRANSFER, HEALTH REFORM TRANSFER AND EARLY LEARNING AND CHILD CARE TRANSFER

Canada Health Transfer

28. The Act is amended by adding the following after section 24.7:

Early Learning and Child Care Transfer

24.71 (1) The Minister may make direct payments, in an aggregate amount of not more than $700 million, to a trust established to provide the provinces with funding for the purpose of assisting them to invest in early learning and child care in accordance with four key principles: quality, universal inclusiveness, accessibility and development.

(2) The amount that may be provided to a province under this section is to be determined in accordance with the terms of the trust indenture establishing the trust.

(3) Despite section 24.8, any amount payable under this section may be paid by the Minister out of the Consolidated Revenue Fund at the times and in the manner that the Minister considers appropriate.

Coordinating Amendment

29. If Bill C-39, introduced in the 1st session of the 38th Parliament and entitled An Act to amend the Federal-Provincial Fiscal Arrangements Act and to enact an Act respecting the provision of funding for diagnostic and medical equipment (the “other Act”), receives royal assent, then, on the later of the coming into force of section 1 of the other Act and section 27 of this Act, the headings before section 24 of the Federal-Provincial Fiscal Arrangements Act are replaced by the following:

PART V.1

CANADA HEALTH TRANSFER, CANADA SOCIAL TRANSFER, HEALTH REFORM TRANSFER, WAIT TIMES REDUCTION TRANSFER AND EARLY LEARNING AND CHILD CARE TRANSFER

Canada Health Transfer

PART 6

NORTHERN STRATEGY

30. (1) The Minister of Finance may make direct payments, in an aggregate amount of not more than one hundred and twenty million dollars, to a trust established to provide the territories with funding for the purpose of assisting them to achieve the goals of the Northern Strategy developed jointly by the federal government and the territories.

(2) The amount that may be provided to a territory under this section is to be determined in accordance with the terms of the trust indenture establishing the trust.

(3) Any amount payable under this section may be paid by the Minister of Finance out of the Consolidated Revenue Fund at the times and in the manner that the Minister of Finance considers appropriate.

PART 7

AUDITOR GENERAL OF CANADA

Amendments to the Auditor General Act

31. The heading before section 2 of the French version of the Auditor General Act is replaced by the following:

32. Section 2 of the Act is amended by adding the following in alphabetical order:

“funding agreement”, in respect of a corporation, means an agreement in writing under which the corporation receives funding from Her Majesty in right of Canada, either directly or through an agent or mandatary of Her Majesty, including by way of a loan, but does not include a construction contract, a goods contract or a service contract;

“not-for-profit corporation” means a corporation no part of whose income is payable to or otherwise available for the personal benefit of any of its members or shareholders;

“recipient corporation” means any not-for-profit corporation, or any corporation without share capital, that has, in any five consecutive fiscal years, received a total of $100,000,000 or more under one or more funding agreements, but does not include any such corporation that is

(a) a Crown corporation,

(b) a departmental corporation as defined in section 2 of the Financial Administration Act,

(c) a municipality,

(d) a cooperative, other than a non-profit cooperative,

(e) a corporation that receives, on an ongoing basis, at least half of its funding from a municipality or the government of a province or of a foreign state, or from any agency of a municipality or any such government,

(f) a corporation that is controlled by a municipality or a government other than the Government of Canada, or

(g) an international organization;

33. The Act is amended by adding the following after section 2:

2.1 (1) For the purpose of paragraph (f) of the definition “recipient corporation” in section 2, a municipality or government controls a corporation with share capital if

(a) shares of the corporation to which are attached more than fifty per cent of the votes that may be cast to elect directors of the corporation are held, otherwise than by way of security only, by, on behalf of or in trust for that municipality or government; and

(b) the votes attached to those shares are sufficient, if exercised, to elect a majority of the directors of the corporation.

(2) For the purpose of paragraph (f) of the definition “recipient corporation” in section 2, a corporation without share capital is controlled by a municipality or government if it is able to appoint the majority of the directors of the corporation, whether or not it does so.

34. The Act is amended by adding the following after section 7:

7.1 (1) The Auditor General may, with respect to any recipient corporation, inquire into its use of funds received from Her Majesty in right of Canada and inquire into whether

(a) the corporation has failed to fulfil its obligations under any funding agreement;

(b) money the corporation has received under any funding agreement has been used without due regard to economy and efficiency;

(c) the corporation has failed to establish satisfactory procedures to measure and report on the effectiveness of its activities in relation to the objectives for which it received funding under any funding agreement;

(d) the corporation has failed to faithfully and properly maintain accounts and essential records in relation to any amount it has received under any funding agreement; or

(e) money the corporation has received under any funding agreement has been expended without due regard to the environmental effects of those expenditures in the context of sustainable development.

(2) The Auditor General may set out his or her conclusions in respect of an inquiry into any matter referred to in subsection (1) in the annual report, or in any of the three additional reports, referred to in subsection 7(1). The Auditor General may also set out in that report anything emerging from the inquiry that he or she considers to be of significance and of a nature that should be brought to the attention of the House of Commons.

Amendments to the Financial Administration Act

35. Subsection 85(1) of the Financial Administration Act is replaced by the following:

85. (1) Divisions I to IV do not apply to the Bank of Canada or the Canada Pension Plan Investment Board.

(1.1) Divisions I to IV, except for sections 131 to 148, do not apply to the Canada Council for the Arts, the Canadian Broadcasting Corporation, Telefilm Canada, the International Development Research Centre or the National Arts Centre Corporation.

36. (1) Subsections 134(1) and (2) of the Act are replaced by the following:

134. (1) Subject to subsection (2), the auditor of a Crown corporation shall be appointed annually by the Governor in Council, after the appropriate Minister has consulted the board of directors of the corporation, and may be removed at any time by the Governor in Council, after the appropriate Minister has consulted the board.

(2) The Auditor General of Canada shall be appointed by the Governor in Council as the auditor, or a joint auditor, of each Crown corporation, unless the Auditor General waives the requirement of being so appointed.

(2) Subsections 134(4) to (7) of the Act are replaced by the following:

(5) The Governor in Council may make regulations prescribing the criteria to be applied in selecting an auditor for appointment pursuant to subsection (1).

(6) An auditor of a Crown corporation is eligible for re-appointment on the expiration of the auditor’s appointment.

(7) Notwithstanding subsection (1), if an auditor of a Crown corporation is not appointed to take office on the expiration of the appointment of an incumbent auditor, the incumbent auditor continues in office until a successor is appointed.

37. Sections 135 to 137 of the Act are replaced by the following:

135. (1) A person is disqualified from being appointed or re-appointed or continuing as an auditor of a Crown corporation pursuant to section 134 if that person is not independent of the corporation, any of its affiliates, or the directors or officers of the corporation or any of its affiliates.

(2) For the purposes of this section,

(a) independence is a question of fact; and

(b) a person is deemed not to be independent if that person or any of that person’s business partners

(i) is a business partner, director, officer or employee of the Crown corporation or any of its affiliates, or a business partner of any director, officer or employee of the corporation or any of its affiliates,

(ii) beneficially owns or controls, directly or indirectly through a trustee, legal representative, agent or other intermediary, a material interest in the shares or debt of the Crown corporation or any of its affiliates, or

(iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the Crown corporation or any of its affiliates within two years of the person’s proposed appointment as auditor of the corporation.

(3) An auditor of a Crown corporation who becomes disqualified under this section shall resign immediately after becoming aware of the disqualification.

136. Nothing in sections 134 and 135 shall be construed as empowering the appointment, re-appointment or continuation in office as an auditor of a Crown corporation of any person who does not meet any qualifications for such appointment, re-appointment or continuation established by any other Act of Parliament.

137. A resignation of an auditor of a Crown corporation becomes effective at the time the corporation receives a written resignation from the auditor or at the time specified in the resignation, whichever is later.

38. Sections 140 and 141 of the Act are replaced by the following:

140. Where the examiner of a parent Crown corporation, or a wholly-owned subsidiary of a parent Crown corporation, is of the opinion that the report under subsection 139(1) contains information that should be brought to the attention of the appropriate Minister, the examiner shall, after consultation with the board of directors of the corporation, or with the boards of the subsidiary and corporation, as the case may be, report that information to the Minister and furnish the board or boards with a copy of the report.

141. Where the examiner of a parent Crown corporation, or a wholly-owned subsidiary of a parent Crown corporation, is of the opinion that the report under subsection 139(1) contains information that should be brought to the attention of Parliament, the examiner shall, after consultation with the appropriate Minister and the board of directors of the corporation, or with the boards of the subsidiary and corporation, as the case may be, prepare a report on that information for inclusion in the next annual report of the corporation and furnish the board or boards, the appropriate Minister and the Auditor General of Canada with copies of the report.

39. Subsections 142(1) to (3) of the Act are replaced by the following:

142. (1) Subject to subsection (2), a special examination referred to in section 138 shall be carried out by the auditor of a Crown corporation.

(2) Where, in the opinion of the Governor in Council, a person other than the auditor of a Crown corporation should carry out a special examination, the Governor in Council may, after the appropriate Minister has consulted the board of directors of the corporation, appoint an auditor who is qualified for the purpose to carry out the examination in lieu of the auditor of the corporation and may, after the appropriate Minister has consulted the board, remove that qualified auditor at any time.

40. Section 146 of the Act is replaced by the following:

146. Any oral or written statement or report made under this Part or the regulations by the auditor or a former auditor, or the examiner or a former examiner, of a Crown corporation has qualified privilege.

Consequential Amendments

Broadcasting Act

41. Subsections 60(1) to (6) of the Broadcasting Act are repealed.

42. Sections 62 to 69 of the Act are repealed.

43. Paragraphs 71(3)(a) and (b) of the Act are replaced by the following:

(a) the financial statements of the Corporation referred to in subsection 131(4) of the Financial Administration Act,

(b) the annual auditor’s report referred to in section 132 of the Financial Administration Act,

Canada Post Corporation Act

44. Section 33 of the Canada Post Corporation Act is repealed.

Canadian Race Relations Foundation Act

45. Subsection 17(3) of the Canadian Race Relations Foundation Act is replaced by the following:

(3) Part X of the Financial Administration Act, except for sections 131 to 148, does not apply to the Foundation.

46. Subsection 25(2) of the Act is repealed.

Public Sector Pension Investment Board Act

47. Subsection 3(6) of the Public Sector Pension Investment Board Act is replaced by the following:

(6) Part X of the Financial Administration Act, except for sections 132 to 147, does not apply to the Board. For the purposes of those sections, any reference to section 131 of that Act shall be read as a reference to section 35 of this Act.

(7) Any report or information in respect of the Board that is provided to the Minister under sections 132 to 147 of the Financial Administration Act shall also be provided to the Minister of National Defence and the Solicitor General of Canada. The Minister may only require a special examination under subsection 138(2) of that Act after consultation with those Ministers.

48. The heading before section 36 and sections 36 to 46 of the Act are repealed.

49. (1) Paragraph 48(4)(b) of the Act is replaced by the following:

(b) the annual auditor’s report referred to in section 132 of the Financial Administration Act;

(2) Paragraph 48(4)(i) of the Act is replaced by the following:

(i) a report of any special examination referred to in subsection 139(1) of the Financial Administration Act; and

Coordinating Amendments

50. If Bill C-6, introduced in the 1st session of the 38th Parliament and entitled the Department of Public Safety and Emergency Preparedness Act (the “other Act”), receives royal assent, then, on the later of the coming into force of section 1 of the other Act and section 47 of this Act, subsection 3(7) of the Public Sector Pension Investment Board Act is replaced by the following:

(7) Any report or information in respect of the Board that is provided to the Minister under sections 132 to 147 of the Financial Administration Act shall also be provided to the Minister of National Defence and the Minister of Public Safety and Emergency Preparedness. The Minister may only require a special examination under subsection 138(2) of that Act if the Minister has consulted with those Ministers.

51. If Bill C-18, introduced in the 1st session of the 38th Parliament and entitled An Act to amend the Telefilm Canada Act and another Act (the “other Act”), receives royal assent, then, on the later of the coming into force of section 35 of this Act and section 8 of the other Act, the portion of section 85 of the Financial Administration Act before subsection (2) is replaced by the following:

85. (1) Divisions I to IV do not apply to the Bank of Canada or the Canada Pension Plan Investment Board.

(1.1) Divisions I to IV, except for sections 131 to 148, do not apply to the Canada Council for the Arts, the Canadian Broadcasting Corporation, the International Development Research Centre or the National Arts Centre Corporation.

(1.2) Divisions I to IV, except for sections 131 to 148 and subject to subsection 21(2) of the Telefilm Canada Act, do not apply to Telefilm Canada.

PART 8

PAYMENTS TO CERTAIN ENTITIES

Aboriginal Healing Foundation

52. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister responsible for Indian Residential Schools Resolution, be paid and applied a sum not exceeding forty million dollars for payment to the Aboriginal Healing Foundation for its use.

Asia-Pacific Foundation of Canada

53. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Foreign Affairs, be paid and applied a sum not exceeding fifty million dollars for payment to the Asia-Pacific Foundation of Canada for its use.

Canadian Academies of Science

54. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Industry, be paid and applied a sum not exceeding thirty million dollars for payment to the Canadian Academies of Science for its use.

Canadian Cattlemen’s Association

55. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Agriculture and Agri-Food, be paid and applied a sum not exceeding fifty million dollars for payment to the Canadian Cattlemen’s Association for the purpose of establishing a legacy fund to support the Canadian cattle and beef industry and ensure its long-term viability.

Canadian Youth Business Foundation

56. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Industry, be paid and applied a sum not exceeding ten million dollars for payment to the Canadian Youth Business Foundation for its use.

Federation of Canadian Municipalities

57. (1) From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of the Environment, be paid and applied a sum not exceeding one hundred and fifty million dollars for payment to the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.

(2) From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Natural Resources, be paid and applied a sum not exceeding one hundred and fifty million dollars for payment to the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.

Genome Canada

58. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Industry, be paid and applied a sum not exceeding one hundred and sixty-five million dollars for payment to Genome Canada for its use.

Precarn Incorporated

59. From and out of the Consolidated Revenue Fund there may, on the requisition of the Minister of Industry, be paid and applied a sum not exceeding twenty million dollars for payment to Precarn Incorporated for its use.

PART 9

ASIA-PACIFIC FOUNDATION OF CANADA

Asia-Pacific Foundation of Canada Act

60. (1) The portion of section 3 of the Asia-Pacific Foundation of Canada Act before paragraph (a) is replaced by the following:

3. The purpose of the Foundation is to develop closer ties between the peoples and institutions of Canada and the peoples and institutions of the Asia-Pacific region and to promote capacity development in persons and entities that share an interest in the Asia-Pacific region and the building of networks between them by

(2) Section 3 of the Act is amended by adding the following after paragraph (a):

(a.1) promoting dialogue on, and understanding of, foreign policy issues as they relate to Canada and the Asia-Pacific region;

61. Paragraph 4(l) of the Act is replaced by the following:

(l) expend, for the purpose of the Foundation, all amounts received by it as grants, contributions and donations of money for its activities; and

62. Section 7 of the Act is replaced by the following:

7. The affairs of the Foundation are to be managed by a Board of Directors, in this Act referred to as the “Board”.

63. Section 8 of the Act is repealed.

64. Section 9 of the Act is replaced by the following:

9. The Board consists of the following directors:

(a) the Chairperson and up to six other directors appointed by the Governor in Council after consultation with the Board by the Minister of Foreign Affairs, in this Act referred to as the “Minister”;

(b) up to eighteen directors appointed by the Board after consultations with the governments of the provinces and any interested individuals, corporations and organizations; and

(c) the President of the Foundation appointed under section 17.

65. Section 10 of the Act is replaced by the following:

10. When considering the appointment to the Board under paragraph 9(b) of any person proposed by the government of a province, the Board, subject to the criteria that it may establish for the purpose, is to have regard to the amounts contributed to the Foundation by that province.

10.1 The appointment of directors is to be made from persons whose background or experience would assist the Foundation in the fulfilment of its purpose and having regard to the following considerations:

(a) the need to ensure, as far as possible, that at least one half of the membership has experience or expertise concerning relations between Canada and the Asia-Pacific region;

(b) the need for a membership that has sufficient knowledge of corporate governance, investment management, auditing and evaluations; and

(c) the importance of having membership that is representative of Canadian society.

10.2 A person is not eligible to be appointed as a director if the person is a member of the Senate or the House of Commons.

66. The Act is amended by adding the following after section 12:

12.1 The Chairperson and any director appointed under paragraph 9(a) may be removed for cause by the Governor in Council. Any director appointed under paragraph 9(b) may be removed for cause by the Board.

67. The Act is amended by adding the following after section 16:

16.1 A director who is part of the public service of Canada does not have the right to vote on any matter before the Board or a committee of the Board.

16.2 The Chairperson, the President and every other director of the Foundation, in exercising any of their powers and in discharging any of their duties, shall

(a) act honestly and in good faith with a view to the best interests of the Foundation;

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; and

(c) comply with this Act and the by-laws of the Foundation.

16.3 Except in respect of an action by or on behalf of the Foundation to procure a judgment in its favour, the Foundation may indemnify a present or former Chairperson, President or other director or officer of the Foundation against all costs, charges and expenses, including amounts paid to settle an action or to satisfy a judgment, that are reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is a party by reason of being or having been a director or officer of the Foundation, if

(a) he or she acted honestly and in good faith with a view to the best interests of the Foundation; and

(b) in the case of a criminal or administrative action or proceeding enforced by a monetary penalty, he or she had reasonable grounds for believing that the impugned conduct was lawful.

16.4 The Board or a committee of the Board may not, for the purpose of making a decision other than a decision to appoint a director under paragraph 9(b), be comprised of a majority of directors appointed under paragraph 9(a) who have the right to vote.

16.5 (1) The Board may delegate to the Chairperson, a committee of directors or an officer of the Foundation any of the powers or rights of the Board.

(2) The Board may not, however, delegate any power or right of the Board

(a) to make, amend or repeal by-laws;

(b) to appoint directors to, or fill vacancies on, a committee of the Board;

(c) to appoint officers of the Foundation or fix their remuneration;

(d) to accept grants, contributions and donations; or

(e) to approve the annual financial statements or annual reports of the Foundation.

16.6 The Foundation shall offer its services in both official languages.

68. Section 17 of the Act is replaced by the following:

17. (1) The Board shall appoint a President of the Foundation who shall have supervision over and direction of the activities and staff of the Foundation.

(2) In order to be appointed as President, a person must have experience or expertise concerning relations between Canada and the Asia-Pacific region and must possess any other qualifications specified by the Board.

(3) The President must be selected through a transparent and competitive process.

69. Sections 18 and 19 of the French version of the Act are replaced by the following:

70. Section 20 of the Act is replaced by the following:

20. A President whose term of office has expired is eligible for re-appointment in that capacity but no person may be appointed as President more than three times.

71. Sections 21 to 23 of the French version of the Act are replaced by the following:

72. The Act is amended by adding the following after section 25:

25.1 (1) The Board shall appoint an audit and evaluation committee consisting of not fewer than three directors and fix the duties and functions of the committee and may, by by-law, provide for the payment of expenses to the members of the committee.

(2) In addition to any other duties and functions that it is required to perform, the audit and evaluation committee shall cause internal audits to be conducted to ensure compliance by the officers and employees of the Foundation with management systems and controls established by the Board.

73. Section 27 of the Act is replaced by the following:

27. The Foundation is not an agent of Her Majesty and the Chairperson, the President and the other directors, as well as the officers and employees of the Foundation are not, by virtue of their office or employment, part of the public service of Canada.

27.1 For greater certainty, the Foundation is not, for the purposes of Part X of the Financial Administration Act or for any other purpose, to be considered to be wholly owned directly by Her Majesty in right of Canada.

74. Sections 31 and 32 of the Act are repealed.

75. Section 33 of the Act is replaced by the following:

33. (1) Subject to subsection (3), the Foundation may accept grants, contributions and conditional or unconditional donations of money from any person, including the Government of Canada and the government of a province.

(2) All grants, contributions and donations of money received by the Foundation, and any income arising from the investment of those grants, contributions and donations, shall be used by the Foundation in fulfilling its purpose and in accordance with the terms and conditions of any agreement for the provision of funding.

(3) The Foundation may not accept a grant, contribution or donation of money that is made on the condition that the Foundation use the grant, contribution or donation, or any income arising from it, for any purpose that is not consistent with the purpose of the Foundation.

33.1 The Board shall establish investment policies, standards and procedures that a reasonably prudent person would apply in respect of a portfolio of investments to avoid undue risk of loss and obtain a reasonable return, having regard to the Foundation’s obligations and anticipated obligations.

33.2 (1) Subject to any conditions of a grant, contribution or donation restricting the investment of money, the Foundation shall invest its funds, and reinvest any income from those funds, in accordance with the investment policies, standards and procedures established by the Board.

(2) The Foundation may not, without the prior written authorization of the Minister, cause any corporation to be incorporated or participate in the incorporation of a corporation or become a partner in a partnership.

76. Section 34 of the Act and the heading before it are replaced by the following: