Bill C-4

2nd Session, 41st Parliament,

62 Elizabeth II, 2013

house of commons of canada

BILL C-4

A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures

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 Economic Action Plan 2013 Act, No. 2.

PART 1

MEASURES RELATING TO INCOME TAX

Income Tax Act

2. (1) Subsections 10(10) and (11) of the Income Tax Act are replaced by the following:

(10) Notwithstanding subsection (1.01), property described in an inventory of a taxpayer’s business that is an adventure or concern in the nature of trade at the end of the taxpayer’s taxation year that ends immediately before the time at which the taxpayer is subject to a loss restriction event is to be valued at the cost at which the taxpayer acquired the property, or its fair market value at the end of the year, whichever is lower, and after that time the cost at which the taxpayer acquired the property is, subject to a subsequent application of this subsection, deemed to be that lower amount.

(11) For the purposes of subsections 88(1.1) and 111(5), a taxpayer’s business that is at any time an adventure or concern in the nature of trade is deemed to be a business carried on at that time by the taxpayer.

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

3. (1) Subsection 11(1) of the Act is replaced by the following:

11. (1) Subject to section 34.1, if an individ- ual is a proprietor of a business, the individ- ual’s income from the business for a taxation year is deemed to be the individual’s income from the business for the fiscal periods of the business that end in the year.

(2) Subsection (1) applies to taxation years that end after March 22, 2011.

4. (1) Subsection 12(1) of the Act is amended by striking out “and” at the end of paragraph (z.5), by adding “and” at the end of paragraph (z.6) and by adding the following after paragraph (z.6):

(2) Section 12 of the Act is amended by adding the following after subsection (2.01):

(3) Subsection (1) applies to acquisitions and dispositions of property by a taxpayer that occur

(a) under a derivative forward agreement entered into after March 20, 2013 unless

(i) the agreement is part of a series of agreements and the series

(A) includes a derivative forward agreement entered into after March 20, 2013 and before July 11, 2013, and

(B) has a term of 180 days or less (determined without reference to agreements entered into before March 21, 2013), or

(ii) the agreement is entered into after the final settlement of another derivative forward agreement (in this paragraph referred to as the “prior agreement”) and

(A) having regard to the source of the funds used to purchase the property to be sold under the agreement, it is reasonable to conclude that the agreement is a continuation of the prior agreement,

(B) the terms of the agreement and the prior agreement are substantially similar,

(C) the final settlement date under the agreement is before 2015,

(D) subsection (1) would not apply to any acquisitions or dispositions under the prior agreement if this subsection were read without reference to subparagraph (i), and

(E) the notional amount of the agreement is at all times less than or equal to the amount determined by the formula

(A + B + C + D + E) – (F + G)

where

A      is the notional amount of the agreement when it is entered into,

B      is the total of all amounts each of which is an increase in the notional amount of the agreement, at or before that time, that is attrib- utable to the underlying interest,

C      is the amount of the taxpayer’s cash on hand immediately before March 21, 2013 that was committed, before March 21, 2013, to be invested under the agreement,

D      is the total of all amounts each of which is an increase, at or before that time, in the notional amount of the agreement that is attrib- utable to the final settlement of another derivative forward agreement (in this description referred to as the “terminated agreement”) if subsection (1) would not apply to any acquisitions or dispositions under the terminated agreement if this subsection were read without reference to subparagraph (i),

E      is the lesser of

(I) either

1. if the prior agreement was entered into before March 21, 2013, the amount, if any, by which the amount determined under clause (A) of the description of F in subparagraph (b)(ii) for the prior agreement immediately before it was finally settled exceeds the total determined under clause (B) of the description of F in subparagraph (b)(ii) for the prior agreement immediately before it was finally settled, or

2. in any other case, the amount, if any, by which the amount determined under this subclause for the prior agreement immediately before it was finally settled exceeds the total determined under subclause (II) for the prior agreement immediately before it was finally settled, and

(II) the total of all amounts each of which is an increase in the notional amount of the agreement before July 11, 2013 that is not otherwise described in this formula,

F      is the total of all amounts each of which is a decrease in the notional amount of the agreement, at or before that time, that is attributable to the underlying interest, and

G      is the total of all amounts each of which is the amount of a partial settlement of the agreement, at or before that time, to the extent that it is not reinvested in the agreement;

(b) after March 20, 2013 and before March 22, 2018 under a derivative forward agreement entered into before March 21, 2013, if

(i) after March 20, 2013, the term of the agreement is extended beyond 2014, or

(ii) at any time after March 20, 2013, the notional amount of the agreement exceeds the amount determined by the formula

(A + B + C + D + E + F) – (G + H)

where

A      is the notional amount of the agreement immediately before March 21, 2013,

B      is the total of all amounts each of which is an increase in the notional amount of the agreement, after March 20, 2013 and at or before that time, that is attributable to the underlying interest,

C      is the amount of the taxpayer’s cash on hand immediately before March 21, 2013 that was committed, before March 21, 2013, to be invested under the agreement,

D      is the amount, if any, of an increase, after March 20, 2013 and at or before that time, in the notional amount of the agreement as a consequence of the exercise of an over-allotment option granted before March 21, 2013,

E      is the total of all amounts each of which is an increase, after March 20, 2013 and at or before that time, in the notional amount of the agreement that is attributable to the final settlement of another derivative forward agreement (in this description referred to as the “terminated agreement”) if

(A) the final settlement date under the agreement is

(I) before 2015, or

(II) on or before the date on which the terminated agreement, as it read immediately before March 21, 2013, was to be finally settled, and

(B) subsection (1) would not apply to any acquisitions or dispositions under the terminated agreement if this subsection were read without reference to subparagraph (a)(i),

F      is the lesser of

(A) 5% of the notional amount of the agreement immediately before March 21, 2013, and

(B) the total of all amounts each of which is an increase in the notional amount of the agreement after March 20, 2013 and before July 11, 2013 that is not otherwise described in this formula,

G      is the total of all amounts each of which is a decrease in the notional amount of the agreement, after March 20, 2013 and at or before that time, that is attributable to the underlying interest, and

H      is the total of all amounts each of which is the amount of a partial settlement of the agreement, after March 20, 2013 and at or before that time, to the extent that it is not reinvested in the agreement; or

(c) after March 21, 2018.

(4) For the purposes of subsection (3), the notional amount of a derivative forward agreement at any time is

(a) in the case of a purchase agreement, the fair market value at that time of the property that would be acquired under the agreement if the agreement were finally settled at that time; or

(b) in the case of a sale agreement, the sale price of the property that would be sold under the agreement if the agreement were finally settled at that time.

(5) Subsection (2) applies to taxation years that begin after 2013.

5. (1) The Act is amended by adding the following after section 12.5:

(2) Subsection (1) is deemed to have come into force on July 20, 2011.

6. (1) Paragraph 13(7)(f) of the Act is replaced by the following:

(f) if a taxpayer is deemed under paragraph 111(4)(e) to have disposed of and reacquired depreciable property (other than a timber resource property), the capital cost to the taxpayer of the property at the time of the reacquisition is deemed to be equal to the total of

(i) the capital cost to the taxpayer of the property at the time of the disposition, and

(ii) 1/2 of the amount, if any, by which the taxpayer’s proceeds of disposition of the property exceed the capital cost to the taxpayer of the property at the time of the disposition;

(2) Subsection 13(18.1) of the Act is replaced by the following:

(18.1) For the purpose of determining whether property meets the criteria set out in the Income Tax Regulations in respect of prescribed energy conservation property, the Technical Guide to Class 43.1 and 43.2, as amended from time to time and published by the Department of Natural Resources, shall apply conclusively with respect to engineering and scientific matters.

(3) Clause 13(21.2)(e)(iii)(D) of the Act is replaced by the following:

(D) that is immediately before the transferor is subject to a loss restriction event, or

(4) Subsections 13(24) and (25) of the Act are replaced by the following:

(24) If at any time a taxpayer is subject to a loss restriction event and, within the 12-month period that ended immediately before that time, the taxpayer, a partnership of which the taxpayer was a majority-interest partner or a trust of which the taxpayer was a majority-interest beneficiary (as defined in subsection 251.1(3)) acquired depreciable property (other than property that was held, by the taxpayer, partnership or trust or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition “controlled” in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer, partnership or trust) that was not used, or acquired for use, by the taxpayer, partnership or trust in a business that was carried on by it immediately before the 12-month period began

(a) subject to paragraph (b), for the purposes of the description of A in the definition “undepreciated capital cost” in subsection (21) and of sections 127 and 127.1, the property is deemed

(i) not to have been acquired by the taxpayer, partnership or trust, as the case may be, before that time, and

(ii) to have been acquired by it immediately after that time; and

(b) if the property was disposed of by the taxpayer, partnership or trust, as the case may be, before that time and was not reacquired by it before that time, for the purposes of the description of A in that definition, the property is deemed to have been acquired by it immediately before the property was disposed of.

(25) For the purposes of subsection (24), if the taxpayer referred to in that subsection was formed or created in the 12-month period referred to in that subsection, the taxpayer is deemed to have been, throughout the period that began immediately before the 12-month period and ended immediately after it was formed or created,

(a) in existence; and

(b) affiliated with every person with whom it was affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) throughout the period that began when it was formed or created and that ended immediately before the time at which the taxpayer was subject to the loss restriction event referred to in that subsection.

(5) Subsections (1), (3) and (4) are deemed to have come into force on March 21, 2013, except that subsection 13(24) of the Act, as enacted by subsection (4), is to be read as follows before September 13, 2013:

(24) If at any time a taxpayer is subject to a loss restriction event and, within the 12-month period that ended immediately before that time, the taxpayer or a partnership of which the taxpayer was a majority-interest partner acquired depreciable property (other than property that was held, by the taxpayer or partnership or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition “controlled” in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer or partnership) that was not used, or acquired for use, by the taxpayer or partnership in a business that was carried on by it immediately before the 12-month period began

(a) subject to paragraph (b), for the purposes of the description of A in the definition “undepreciated capital cost” in subsection (21) and of sections 127 and 127.1, the property is deemed

(i) not to have been acquired by the taxpayer or partnership, as the case may be, before that time, and

(ii) to have been acquired by it immediately after that time; and

(b) if the property was disposed of by the taxpayer or partnership, as the case may be, before that time and was not reacquired by it before that time, for the purposes of the description of A in that definition, the property is deemed to have been acquired by it immediately before the property was disposed of.

(6) Subsection (2) comes into force, or is deemed to have come into force, on the day on which the Technical Guide to Class 43.1 and 43.2 is first published by the Department of Natural Resources.

7. (1) Paragraph 14(12)(f) of the Act is replaced by the following:

(f) that is immediately before the transferor is subject to a loss restriction event, or

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

8. (1) Subsection 18(4) of the Act is replaced by the following:

(4) Notwithstanding any other provision of this Act (other than subsection (8)), in computing the income for a taxation year of a corporation or a trust from a business (other than the Canadian banking business of an authorized foreign bank) or property, no deduction shall be made in respect of that proportion of any amount otherwise deductible in computing its income for the year in respect of interest paid or payable by it on outstanding debts to specified non-residents that

(a) the amount, if any, by which

(i) the average of all amounts each of which is, in respect of a calendar month that ends in the year, the greatest total amount at any time in the month of the outstanding debts to specified non-residents of the corporation or trust,

exceeds

(ii) 1.5 times the equity amount of the corporation or trust for the year,

is of

(b) the amount determined under subparagraph (a)(i) in respect of the corporation or trust for the year.

(2) The portion of the definition “outstanding debts to specified non-residents” in subsection 18(5) of the Act before paragraph (b) is replaced by the following:

“outstanding debts to specified non-residents”, of a corporation or trust at any particular time in a taxation year, means

(a) the total of all amounts each of which is an amount outstanding at that time as or on account of a debt or other obligation to pay an amount

(i) that was payable by the corporation or trust to a person who was, at any time in the year,

(A) a specified non-resident shareholder of the corporation or a specified non-resident beneficiary of the trust, or

(B) a non-resident person who was not dealing at arm’s length with a specified shareholder of the corporation or a specified beneficiary of the trust, as the case may be, and

(ii) on which any amount in respect of interest paid or payable by the corporation or trust is or would be, but for subsection (4), deductible in computing the income of the corporation or trust for the year,

but does not include

(3) Subsection 18(5) of the Act is amended by adding the following in alphabetical order:

(4) Subsections 18(5.1) and (6) of the Act are replaced by the following:

(5.1) For the purposes of subsections (4) to (6), if

(a) a particular person would, but for this subsection, be a specified shareholder of a corporation or a specified beneficiary of a trust at any time,

(b) there was in effect at that time an agreement or arrangement under which, on the satisfaction of a condition or the occurrence of an event that it is reasonable to expect will be satisfied or will occur, the particular person will cease to be a specified shareholder of the corporation or a specified beneficiary of the trust, and

(c) the purpose for which the particular person became a specified shareholder or specified beneficiary was the safeguarding of rights or interests of the particular person or a person with whom the particular person is not dealing at arm’s length in respect of any indebtedness owing at any time to the particular person or a person with whom the particular person is not dealing at arm’s length,

the particular person is deemed not to be a specified shareholder of the corporation or a specified beneficiary of the trust, as the case may be, at that time.

(6) If any loan (in this subsection referred to as the “first loan”) has been made

(a) by a specified non-resident shareholder of a corporation or a specified non-resident beneficiary of a trust, or

(b) by a non-resident person who was not dealing at arm’s length with a specified shareholder of a corporation or a specified non-resident beneficiary of a trust,

to another person on condition that a loan (in this subsection referred to as the “second loan”) be made by any person to a particular corporation or trust, for the purposes of subsections (4) and (5), the lesser of

(c) the amount of the first loan, and

(d) the amount of the second loan

is deemed to be a debt incurred by the particular corporation or trust to the person who made the first loan.

(5) The portion of paragraph 18(7)(a) of the Act before subparagraph (i) is replaced by the following:

(a) to owe the portion (in this subsection and paragraph 12(1)(l.1) referred to as the “debt amount”) of each debt or other obligation to pay an amount of the partnership and to own the portion of each property of the partnership that is equal to

(6) Subparagraph 18(15)(b)(iii) of the Act is replaced by the following:

(iii) that is immediately before the transferor is subject to a loss restriction event, or

(7) Subsections (1) to (5) apply to taxation years that begin after 2013, except that if a trust that is resident in Canada on March 21, 2013 elects in writing and files the election with the Minister of National Revenue on or before the trust’s filing-due date for its first taxation year that begins after 2013,

(a) for the purpose of determining the trust’s equity amount, as defined in subsection 18(5) of the Act, as enacted by subsection (3), the trust is deemed

(i) to not have received any equity contributions, as defined in subsection 18(5) of the Act, as enacted by subsection (3), before March 21, 2013,

(ii) to not have paid or made payable any amount to a beneficiary of the trust before March 21, 2013, and

(iii) to have tax-paid earnings, as defined in subsection 18(5) of the Act, as enacted by subsection (3), of nil for each taxation year that ends before March 21, 2013, and

(b) each beneficiary of the trust at the beginning of March 21, 2013 is deemed to have made an equity contribution at that time to the trust equal to the amount determined by the formula

A/B × (C – D)

where

A      is the fair market value of the beneficiary’s interest as a beneficiary under the trust at that time,

B      is the fair market value of all the beneficial interests under the trust at that time,

C      is the total fair market value of all the properties of the trust at that time, and

D      is the total amount of the trust’s liabilities at that time.

(8) Subsection (6) is deemed to have come into force on March 21, 2013.

9. (1) Subparagraph 18.1(10)(b)(ii) of the Act is replaced by the following:

(ii) that is immediately before the taxpayer is subject to a loss restriction event,

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

10. (1) The Act is amended by adding the following before section 19:

(2) Subsection (1) is deemed to have come into force on July 20, 2011.

11. (1) The portion of paragraph 20(1)(e.2) of the Act before clause (i)(A) is replaced by the following:

(e.2) the least of the following amounts in respect of a life insurance policy (other than an annuity contract or LIA policy):

(i) the premiums payable by the taxpayer under the policy in respect of the year, if

(2) The portion of paragraph 20(1)(e.2) of the Act after clause (i)(C) is replaced by the following:

(ii) the net cost of pure insurance in respect of the year (other than in respect of a period after 2013 during which the policy is a 10/8 policy), as determined in accordance with the regulations, in respect of the interest in the policy referred to in clause (i)(A), and

(iii) the portion, of the lesser of the amounts determined under subparagraphs (i) and (ii) in respect of the policy, that can reasonably be considered to relate to the amount owing from time to time during the year by the taxpayer to the institution under the borrowing;

(3) Subsection 20(1) of the Act is amended by striking out “and” at the end of paragraph (vv), by adding “and” at the end of paragraph (ww) and by adding the following after paragraph (ww):

(4) Section 20 of the Act is amended by adding the following after subsection (2):

(5) Paragraph 20(8)(d) of the English version of the Act is replaced by the following:

(d) the purchaser of the property sold was a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner.

(6) Subsections (1), (2) and (4) apply to taxation years that end after March 20, 2013.

(7) Subsection (3) applies to acquisitions and dispositions of property to which subsection 4(1) applies.

12. Subclause 20.01(2)(b)(i)(A)(II) of the English version of the Act is replaced by the following:

(II) a partnership of which the individual is a majority-interest partner, or

13. Subparagraph 28(1)(a)(ii) of the English version of the Act is replaced by the following:

(ii) were in payment of or on account of an amount that would, if the income from the business were not computed in accordance with the cash method, be included in computing income from the business for that or any other year, and

14. (1) The portion of subsection 31(1) of the Act before paragraph (a) is replaced by the following:

31. (1) If a taxpayer’s chief source of income for a taxation year is neither farming nor a combination of farming and some other source of income that is a subordinate source of income for the taxpayer, then for the purposes of sections 3 and 111 the taxpayer’s loss, if any, for the year from all farming businesses carried on by the taxpayer is deemed to be the total of

(2) Subparagraph 31(1)(a)(i) of the Act is replaced by the following:

(i) the amount by which the total of the taxpayer’s losses for the year, determined without reference to this section and before making any deduction under section 37, from all farming businesses carried on by the taxpayer exceeds the total of the taxpayer’s incomes for the year, so determined from all such businesses, and

(3) Clause 31(1)(a)(ii)(B) of the Act is replaced by the following:

(B) $15,000, and

(4) Subparagraph 31(1)(b)(i) of the Act is replaced by the following:

(i) the amount that would be determined under subparagraph (a)(i) if it were read without reference to “and before making any deduction under section 37”,

(5) Subsection 31(2) of the Act is replaced by the following:

(6) Subsections (1) to (5) apply to taxation years that end after March 20, 2013.

15. Subsections 34.1(4) to (7) of the Act are repealed.

16. (1) Subsection 34.2(4) of the Act is replaced by the following:

(4) If an amount was included in computing the income of a corporation in respect of a partnership for the immediately preceding taxation year under subsection (2) or (3),

(2) Subparagraphs 34.2(5)(a)(i) to (v) of the Act are replaced by the following:

(i) an adjusted stub period accrual included under subsection (2) in respect of a partnership for the year is deemed to be income, and taxable capital gains from the disposition of property, having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for all fiscal periods of the partnership ending in the year,

(ii) an amount included under subsection (3) in respect of a partnership for the year is deemed to be income, and taxable capital gains from the disposition of property, having the same character and to be in the same proportions as any income and taxable capital gains that were allocated by the partnership to the corporation for the particular period referred to in that subsection,

(iii) an amount, a portion of which is deductible or is an allowable capital loss under subsection (4) in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the income and taxable capital gains included in the corporation’s income for the immediately preceding taxation year under subsection (2) or (3) in respect of the partnership,

(iv) an amount claimed as a reserve under subsection (11) in respect of a partnership for the year is deemed to have the same character and to be in the same proportions as the qualifying transitional income in respect of the partnership for the year, and

(v) an amount, a portion of which is included in income under paragraph (12)(a), or is deemed to be a taxable capital gain under paragraph (12)(b), in respect of a partnership for the year, is deemed to have the same character and to be in the same proportions as the amount claimed as a reserve under subsection (11) in respect of the partnership for the immediately preceding taxation year;

(3) Paragraph 34.2(5)(b) of the Act is replaced by the following:

(4) Subsection 34.2(11) of the Act is replaced by the following:

(11) If a corporation has qualifying transitional income in respect of a partnership for a particular taxation year,

(a) the corporation may, in computing its income for the particular year, claim an amount, as a reserve, not exceeding the least of

(i) the specified percentage for the partic- ular year of the corporation’s qualifying transitional income in respect of the partnership,

(ii) if, for the immediately preceding taxation year, an amount was claimed under this subsection in computing the corporation’s income in respect of the partnership, the amount that is the total of

(A) the amount included under subsection (12) in computing the corporation’s income for the particular year in respect of the partnership, and

(B) the amount by which the corporation’s qualifying transitional income in respect of the partnership is increased in the particular year because of the application of subsections (16) and (17), and

(iii) the amount determined by the formula

(5) Subsection 34.2(12) of the Act is replaced by the following:

(12) Subject to subsection (5), if a reserve was claimed by a corporation under subsection (11) in respect of a partnership for the immediately preceding taxation year,

(6) The portion of subsection 34.2(13) of the Act that is before paragraph (a) is replaced by the following

(13) No claim shall be made under subsection (11) in computing a corporation’s income for a taxation year in respect of a partnership

(7) The portion of subsection 34.2(14) of the Act that is before paragraph (a) is replaced by the following:

(14) A corporation that cannot claim an amount under subsection (11) for a taxation year in respect of a partnership solely because it has disposed of its interest in the partnership is deemed for the purposes of paragraph (13)(a) to be a member of a partnership continuously until the end of the taxation year if

(8) The portion of subsection 34.2(16) of the Act that is before paragraph (a) is replaced by the following:

(16) Subsection (17) applies for a particular taxation year of a corporation and for each subsequent taxation year for which the corporation may claim an amount under subsection (11) in respect of a partnership if the particular year is the first taxation year

(9) The description of C in paragraph 34.2(17)(b) of the Act is replaced by the following:

C      is nil,

(10) Subsections (1) to (9) apply to taxation years that end after March 22, 2011.

17. (1) Section 36 of the Act is repealed.

(2) Subsection (1) applies in respect of expenditures incurred in taxation years that begin after December 21, 2012.

18. (1) Paragraph 37(1)(h) of the Act is replaced by the following:

(h) if the taxpayer was subject to a loss restriction event before the end of the year, the amount determined for the year under subsection (6.1) with respect to the taxpayer.

(2) The portion of subsection 37(6.1) of the Act before paragraph (a) is replaced by the following:

(6.1) If a taxpayer was, at any time (in this subsection referred to as “that time”) before the end of a taxation year of the taxpayer, last subject to a loss restriction event, the amount determined for the purposes of paragraph (1)(h) for the year with respect to the taxpayer in respect of a business is the amount, if any, by which

(3) Clauses 37(6.1)(a)(i)(A) to (C) of the Act are replaced by the following:

(A) an expenditure described in paragraph (1)(a) or (c) that was made by the taxpayer before that time,

(B) the lesser of the amounts determined immediately before that time in respect of the taxpayer under subparagraphs (1)(b)(i) and (ii), as those paragraphs read on March 29, 2012, in respect of expenditures made, and property acquired, by the taxpayer before 2014, or

(C) an amount determined in respect of the taxpayer under paragraph (1)(c.1) for its taxation year that ended immediately before that time

(4) Subparagraphs 37(6.1)(a)(ii) and (iii) of the Act are replaced by the following:

(ii) the total of all amounts determined in respect of the taxpayer under paragraphs (1)(d) to (g) for its taxation year that ended immediately before that time, or

(iii) the amount deducted under subsection (1) in computing the taxpayer’s income for its taxation year that ended immediately before that time

(5) Subparagraphs 37(6.1)(b)(i) and (ii) of the Act are replaced by the following:

(i) if the business to which the amounts described in any of clauses (a)(i)(A) to (C) can reasonably be considered to have been related was carried on by the taxpayer for profit or with a reasonable expectation of profit throughout the year, the total of

(A) the taxpayer’s income for the year from the business before making any deduction under subsection (1), and

(B) if properties were sold, leased, rented or developed, or services were rendered, in the course of carrying on the business before that time, the taxpayer’s income for the year, before making any deduction under subsection (1), from any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services, and

(ii) the total of all amounts each of which is an amount determined in respect of a preceding taxation year of the taxpayer that ended after that time equal to the lesser of

(A) the amount determined under subparagraph (i) with respect to the taxpayer in respect of the business for that preceding year, and

(B) the amount in respect of the business deducted under subsection (1) in computing the taxpayer’s income for that preceding year.

(6) The portion of paragraph 37(9.5)(b) of the English version of the Act before subparagraph (i) is replaced by the following:

(b) partnership of which a majority-interest partner is

(7) Subsections (1) to (5) are deemed to have come into force on March 21, 2013, except that, before January 1, 2014, clause 37(6.1)(a)(i)(B) of the Act, as enacted by subsection (3), is to be read as follows:

(B) the lesser of the amounts determined immediately before that time in respect of the taxpayer under subparagraphs (1)(b)(i) and (ii), as those paragraphs read on March 29, 2012, in respect of expenditures made, and property acquired, by the taxpayer before that time, or

19. (1) Subparagraph 40(2)(a)(iii) of the English version of the Act is replaced by the following:

(iii) the purchaser of the property sold is a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner;

(2) Subparagraph 40(3.4)(b)(iii) of the Act is replaced by the following:

(iii) that is immediately before the transferor is subject to a loss restriction event,

(3) Subsections 40(10) and (11) of the Act are replaced by the following:

(10) Subsection (11) applies in computing at any particular time a taxpayer’s gain or loss (in this subsection and subsection (11) referred to as the “new gain” or “new loss”, as the case may be), in respect of any part (which in this subsection and subsection (11) is referred to as the “relevant part” and which may for greater certainty be the whole) of a foreign currency debt of the taxpayer, arising from a fluctuation in the value of the currency of the foreign currency debt (other than, for greater certainty, a gain or a capital loss that arises because of the application of subsection 111(12)), if at any time before the particular time the taxpayer realized a capital loss or gain in respect of the foreign currency debt because of subsection 111(12).

(11) If this subsection applies, the new gain is the positive amount, or the new loss is the negative amount, as the case may be, determined by the formula

A + B – C

where

A      is

(a) if the taxpayer would, but for any application of subsection 111(12), recognize a new gain, the amount of the new gain, determined without reference to this subsection, or

(b) if the taxpayer would, but for any application of subsection 111(12), recognize a new loss, the amount of the new loss, determined without reference to this subsection, multiplied by (–1);

B      is the total of all amounts each of which is that portion of the amount of a capital loss realized by the taxpayer at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to

(a) the relevant part of the foreign currency debt at the particular time, or

(b) the forgiven amount, if any, (as defined in subsection 80(1)) in respect of the foreign currency debt at the particular time; and

C      is the total of all amounts each of which is that portion of the amount of a gain realized by the taxpayer at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to

(a) the relevant part of the foreign currency debt at the particular time, or

(b) the forgiven amount, if any, (as defined in subsection 80(1)) in respect of the foreign currency debt at the particular time.

(4) Subsections (2) and (3) are deemed to have come into force on March 21, 2013.

20. Paragraph 44(7)(c) of the English version of the Act is replaced by the following:

(c) the former property of the taxpayer was disposed of to a partnership in which the taxpayer was, immediately after the disposition, a majority-interest partner.

21. (1) Subparagraph 50(1)(b)(i) of the Act is replaced by the following:

(i) the corporation has during the year become a bankrupt,

(2) Subsection (1) is deemed to have come into force on December 21, 2012.

22. (1) Clause 53(1)(e)(i)(A) of the Act is replaced by the following:

(A) paragraphs 38(a.1) to (a.3) and the fractions set out in the formula in paragraph 14(1)(b) and in subsection 14(5), paragraph 38(a) and subsection 41(1),

(2) The portion of paragraph 53(1)(r) of the Act before the formula is replaced by the following:

(r) if the time is before 2005, the property is an interest in, or a share of the capital stock of, a flow-through entity described in any of paragraphs (a) to (f) and (h) of the definition “flow-through entity” in subsection 39.1(1) and immediately after that time the taxpayer disposed of all their interests in, and shares of the capital stock of, the entity, the amount determined by the formula

(3) Subsection 53(1) of the Act is amended by striking out “and” at the end of paragraph (q) and by adding the following after paragraph (r):

(4) Section 53 of the Act is amended by adding the following after subsection (1.1):

(5) Paragraph 53(2)(b.2) of the Act is replaced by the following:

(b.2) if the property is property of a taxpayer that was subject to a loss restriction event at or before that time, any amount required by paragraph 111(4)(c) to be deducted in computing the adjusted cost base of the property;

(6) Subsection 53(2) of the Act is amended by striking out “and” at the end of paragraph (u) and by adding the following after paragraph (v):

(7) Subsection (1) applies in respect of gifts made after February 25, 2008.

(8) Subsections (2) and (4) apply to dispositions that occur after 2001.

(9) Subsections (3), (5) and (6) are deemed to have come into force on March 21, 2013.

23. (1) Paragraph (c) of the definition “superficial loss” in section 54 of the Act is replaced by the following:

(c) a disposition deemed to have been made by subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 142.5(2), section 142.6 or any of subsections 144(4.1) and (4.2) and 149(10),

(2) Paragraph (f) of the definition “superficial loss” in section 54 of the Act is replaced by the following:

(f) a disposition by a taxpayer that was subject to a loss restriction event within 30 days after the disposition,

(3) Subsection (1) applies to taxation years that begin after March 20, 2013.

(4) Subsection (2) is deemed to have come into force on March 21, 2013.

24. (1) Clause 55(3)(a)(iii)(B) of the Act is replaced by the following:

(B) property (other than shares of the capital stock of the dividend recipient) more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend payer,

(2) Clause 55(3)(a)(iv)(B) of the Act is replaced by the following:

(B) property more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend recipient, and

(3) Subsection 55(3.01) of the Act is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (e):

(4) The portion of paragraph 55(3.1)(a) of the Act before subparagraph (i) is replaced by the following:

(a) in contemplation of and before a distribution (other than a distribution by a specified corporation) made in the course of the reorganization in which the dividend was received, property became property of the distributing corporation, a corporation controlled by it or a predecessor corporation of any such corporation otherwise than as a result of

(5) Clause 55(3.1)(c)(i)(A) of the Act is replaced by the following:

(A) as a result of a disposition

(I) in the ordinary course of business, or

(6) Clause 55(3.1)(d)(i)(A) of the Act is replaced by the following:

(A) as a result of a disposition

(I) in the ordinary course of business, or

(7) Subsections (1) and (2) apply in respect of dividends received after December 20, 2012.

(8) Subsections (3) to (6) apply in respect of dividends received after 2003.

25. (1) Subparagraph 56(1)(a)(i) of the Act is amended by striking out “and” at the end of clause (E), by adding “and” at the end of clause (F) and by adding the following after clause (F):

(2) Subsection 56(8) of the French version of the Act is replaced by the following:

(3) Paragraph 56(8)(a) of the English version of the Act is replaced by the following:

(a) one or more amounts

(i) are received by an individual (other than a trust) in a taxation year as, on account of, in lieu of payment of or in satisfaction of, any benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act, or

(4) Subsection (1) applies to contributions made on or after the later of January 1, 2014 and the day on which this Act receives royal assent.

(5) Subsections (2) and (3) apply to the 2006 and subsequent taxation years.

26. (1) Subparagraph 60(q)(i) of the Act is replaced by the following:

(i) the amount has been included in computing the income of the taxpayer for the year or a preceding taxation year as an amount described in subparagraph 56(1)(n)(i) or paragraph 56(1)(o) paid to the taxpayer by the payer,

(2) Subsection (1) is deemed to have come into force on March 1, 1994.

27. (1) Section 60.001 of the Act is repealed.

(2) Subsection (1) applies to orders made after the day on which this Act receives royal assent.

28. The portion of subsection 60.1(1) of the French version of the Act before paragraph (a) is replaced by the following:

29. Section 60.11 of the Act is repealed.

30. (1) Subsections 66(11.4) and (11.5) of the Act are replaced by the following:

(11.4) If

(a) at any time a taxpayer is subject to a loss restriction event,

(b) within the 12-month period that ended immediately before that time, the taxpayer, a partnership of which the taxpayer was a majority-interest partner or a trust of which the taxpayer was a majority-interest beneficiary (as defined in subsection 251.1(3)) acquired a Canadian resource property or a foreign resource property (other than a property that was held, by the taxpayer, partnership or trust or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition “controlled” in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer, partnership or trust), and

(c) immediately before the 12-month period began the taxpayer, partnership or trust was not, or would not be if it were a corporation, a principal-business corporation,

for the purposes of subsection (4) and sections 66.2, 66.21 and 66.4, except as those provisions apply for the purposes of section 66.7, the property is deemed not to have been acquired by the taxpayer, partnership or trust, as the case may be, before that time, except that if the property has been disposed of by it before that time and not reacquired by it before that time, the property is deemed to have been acquired by the taxpayer, partnership or trust, as the case may be, immediately before it disposed of the property.

(11.5) For the purposes of subsection (11.4), if the taxpayer referred to in that subsection was formed or created in the 12-month period referred to in that subsection, the taxpayer is deemed to have been, throughout the period that began immediately before the 12-month period and ended immediately after it was formed or created,

(a) in existence; and

(b) affiliated with every person with whom it was affiliated (otherwise than because of a right referred to in paragraph 251(5)(b)) throughout the period that began when it was formed or created and that ended immediately before the time at which the taxpayer was subject to the loss restriction event referred to in that subsection.

(2) Subparagraph 66(12.66)(b)(ii) of the Act is replaced by the following:

(ii) would be described in paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6) if the reference to “paragraphs (a) to (d) and (f) to (g.4)” in that paragraph were read as “paragraphs (a), (d), (f) and (g.1)”, or

(3) Subsection (1) is deemed to have come into force on March 21, 2013, except that subsection 66(11.4) of the Act, as enacted by subsection (1), is to be read as follows before September 13, 2013:

(11.4) If

(a) at any time a taxpayer is subject to a loss restriction event,

(b) within the 12-month period that ended immediately before that time, the taxpayer or a partnership of which the taxpayer was a majority-interest partner acquired a Canadian resource property or a foreign resource property (other than a property that was held, by the taxpayer or partnership or by a person that would be affiliated with the taxpayer if section 251.1 were read without reference to the definition “controlled” in subsection 251.1(3), throughout the period that began immediately before the 12-month period began and ended at the time the property was acquired by the taxpayer or partnership), and

(c) immediately before the 12-month period began the taxpayer or partnership was not, or would not be if it were a corporation, a principal-business corporation,

for the purposes of subsection (4) and sections 66.2, 66.21 and 66.4, except as those provisions apply for the purposes of section 66.7, the property is deemed not to have been acquired by the taxpayer or partnership, as the case may be, before that time, except that if the property has been disposed of by it before that time and not reacquired by it before that time, the property is deemed to have been acquired by the taxpayer or partnership, as the case may be, immediately before it disposed of the property.

(4) Subsection (2) is deemed to have come into force on March 22, 2011, except that before March 21, 2013 subparagraph 66(12.66)(b)(ii) of the Act, as enacted by subsection (2), is to be read as follows:

(ii) would be described in paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6) if the reference to “paragraphs (a) to (d) and (f) to (g.2)” in that paragraph were read as “paragraphs (a), (d), (f) and (g.1)”, or

31. (1) The definition “Canadian renewable and conservation expense” in subsection 66.1(6) of the Act is replaced by the following:

“Canadian renewable and conservation expense” has the meaning assigned by regulation, and for the purpose of determining whether an outlay or expense in respect of a prescribed energy conservation property is a Canadian renewable and conservation expense, the Technical Guide to Canadian Renewable and Conservation Expenses (CRCE), as amended from time to time and published by the Department of Natural Resources, shall apply conclusively with respect to engineering and scientific matters;

(2) Paragraph (g) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act is replaced by the following:

(g) any expense incurred by the taxpayer after November 16, 1978 and before March 21, 2013 for the purpose of bringing a new mine in a mineral resource in Canada, other than a bituminous sands deposit or an oil shale deposit, into production in reasonable commercial quantities and incurred before the new mine comes into production in such quantities, including an expense for clearing, removing overburden, stripping, sinking a mine shaft or constructing an adit or other underground entry, but not including any expense that results in revenue or can reasonably be expected to result in revenue earned before the new mine comes into production in reasonable commercial quantities, except to the extent that the total of all such expenses exceeds the total of those revenues,

(3) The definition “Canadian exploration expense” in subsection 66.1(6) of the Act is amended by adding the following after paragraph (g.2):

(4) Paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act is replaced by the following:

(h) subject to section 66.8, the taxpayer’s share of any expense referred to in any of paragraphs (a) to (d) and (f) to (g.4) incurred by a partnership in a fiscal period of the partnership, if at the end of the period the taxpayer is a member of the partnership, or

(5) The description of A in the definition “eligible oil sands mine development expense” in subsection 66.1(6) of the Act is replaced by the following:

A      is an expense that would be a Canadian exploration expense of the taxpayer described in paragraph (g) of the definition “Canadian exploration expense” if that paragraph were read without reference to “and before March 21, 2013” and “other than a bituminous sands deposit or an oil shale deposit”, but does not include an expense that is a specified oil sands mine development expense, and

(6) Paragraph (a) of the definition “specified oil sands mine development expense” in subsection 66.1(6) of the Act is replaced by the following:

(a) would be a Canadian exploration expense described in paragraph (g) of the definition “Canadian exploration expense” if that paragraph were read without reference to “and before March 21, 2013” and “other than a bituminous sands deposit or an oil shale deposit”,

(7) Subsection (1) is deemed to have come into force on December 21, 2012.

(8) Subsections (2), (3), (5) and (6) are deemed to have come into force on March 21, 2013.

(9) Subsection (4) is deemed to have come into force on March 22, 2011, except that before March 21, 2013 paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6) of the Act, as enacted by subsection (4), is to be read as follows:

(h) subject to section 66.8, the taxpayer’s share of any expense referred to in any of paragraphs (a) to (d) and (f) to (g.2) incurred by a partnership in a fiscal period of the partnership, if at the end of the period the taxpayer is a member of the partnership, or

32. (1) The definition “Canadian development expense” in subsection 66.2(5) of the Act is amended by adding the following after paragraph (c.1):

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

33. (1) Subparagraph 67.1(2)(e)(iii) of the Act is replaced by the following:

(iii) is paid or payable in respect of the taxpayer’s duties performed at a work site in Canada that is

(A) outside any population centre, as defined by the last Census Dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year, and

(B) at least 30 kilometres from the nearest point on the boundary of the nearest such population centre;

(2) Subsection (1) applies to the 2013 and subsequent taxation years.

34. (1) Section 70 of the Act is amended by adding the following after subsection (5.3):

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

35. (1) The portion of subsection 75(2) of the Act before paragraph (a) is replaced by the following:

(2) If a trust, that is resident in Canada and that was created in any manner whatever since 1934, holds property on condition

(2) Paragraphs 75(3)(c) to (c.3) of the Act are replaced by the following:

(c) by a qualifying environmental trust; or

(3) Subsections (1) and (2) apply to taxation years that end after March 20, 2013.

36. (1) The definition “relevant loss balance” in subsection 80(1) of the Act is replaced by the following:

“relevant loss balance”, at a particular time for a commercial obligation and in respect of a debtor’s non-capital loss, farm loss, restricted farm loss or net capital loss, as the case may be, for a particular taxation year, is

(a) subject to paragraph (b), the amount of such loss that would be deductible in computing the debtor’s taxable income or taxable income earned in Canada, as the case may be, for the taxation year that includes that time if

(i) the debtor had sufficient incomes from all sources and sufficient taxable capital gains,

(ii) subsections (3) and (4) did not apply to reduce such loss at or after that time, and

(iii) paragraph 111(4)(a) and subsection 111(5) did not apply to the debtor, and

(b) nil if the debtor is a taxpayer that was at a previous time subject to a loss restriction event and the particular year ended before the previous time, unless

(i) the obligation was issued by the debtor before, and not in contemplation of, the loss restriction event, or

(ii) all or substantially all of the proceeds from the issue of the obligation were used to satisfy the principal amount of another obligation to which subparagraph (i) or this subparagraph would apply if the other obligation were still outstanding;

(2) The portion of the definition “unrecognized loss” in subsection 80(1) of the Act before paragraph (b) is replaced by the following:

“unrecognized loss”, at a particular time, in respect of an obligation issued by a debtor, from the disposition of a property, is the amount that would, but for subparagraph 40(2)(g)(ii), be a capital loss from the disposition by the debtor at or before the particular time of a debt or other right to receive an amount, except that if the debtor is a taxpayer that is subject to a loss restriction event before the particular time and after the time of the disposition, the unrecognized loss at the particular time in respect of the obligation is nil unless

(a) the obligation was issued by the debtor before, and not in contemplation of, the loss restriction event, or

(3) Subparagraph 80(15)(c)(iv) of the Act is replaced by the following:

(iv) if the member is a taxpayer that was subject to a loss restriction event at a particular time that is before the end of that fiscal period and before the taxpayer became a member of the partnership, and the partnership obligation was issued before the particular time,

(A) subject to the application of this subparagraph to the taxpayer after the particular time and before the end of that fiscal period, the obligation referred to in subparagraph (i) is deemed to have been issued by the member after the particular time, and

(B) subparagraph (b)(ii) of the definition “relevant loss balance” in subsection (1), paragraph (f) of the definition “successor pool” in that subsection and paragraph (b) of the definition “unrecognized loss” in that subsection do not apply in respect of the loss restriction event, and

(4) Subsections (1) to (3) are deemed to have come into force on March 21, 2013.

37. (1) Paragraph 80.04(4)(h) of the Act is replaced by the following:

(h) if the transferee is a taxpayer that is subject to a loss restriction event after the time of issue and the transferee and the debtor were, if the transferee is a corporation, not related to each other — or, if the transferee is a trust, not affiliated with each other — immediately before the loss restriction event,

(i) the obligation referred to in paragraph (e) is deemed to have been issued after the loss restriction event, and

(ii) subparagraph (b)(ii) of the definition “relevant loss balance” in subsection 80(1), paragraph (f) of the definition “successor pool” in that subsection and paragraph (b) of the definition “unrecognized loss” in that subsection do not apply in respect of the loss restriction event,

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

38. (1) The Act is amended by adding the following after section 80.5:

(2) Subsection (1) applies to agreements and arrangements entered into after March 20, 2013. Subsection (1) also applies to an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.

39. (1) Paragraph 87(2)(g.1) of the Act is replaced by the following:

(g.1) for the purposes of sections 12.4 and 26, subsection 97(3) and section 256.1, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

(2) Paragraph 87(2)(oo.1) of the Act is amended by striking out “and” at the end of subparagraph (ii), by adding “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

(3) Subsection (1) is deemed to have come into force on March 21, 2013.

(4) Subsection (2) applies to amalgamations that occur after February 25, 2008.

40. (1) Subparagraph 88(1)(c.2)(i) of the Act is replaced by the following:

(i) “specified person”, at any time, means

(A) the parent,

(B) each person who would be related to the parent at that time if

(I) this Act were read without reference to paragraph 251(5)(b), and

(i.1) a person described in clause (i)(B) or (C) is deemed not to be a specified person if it can reasonably be considered that one of the main purposes of one or more transactions or events is to cause the person to be a specified person so as to prevent a property that is distributed to the parent on the winding-up from being an ineligible property for the purposes of paragraph (c),

(2) Subparagraph 88(1)(c.2)(iii) of the Act is amended by striking out “and” at the end of clause (A) and by adding the following after clause (A):

(3) Paragraph 88(1)(c.2) of the Act is amended by striking out “and” at the end of subparagraph (ii), by adding “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

(4) Subparagraph 88(1)(c.3)(i) of the Act is replaced by the following:

(i) property (other than a specified property) owned by the person at any time after the acquisition of control referred to in clause (c)(vi)(A) more than 10% of the fair market value of which is, at that time, attributable to the particular property or properties, and

(5) Subparagraph 88(1)(c.4)(ii) of the Act is replaced by the following:

(ii) an indebtedness that was issued

(A) by the parent as consideration for the acquisition of a share of the capital stock of the subsidiary by the parent, or

(6) Subparagraphs 88(1)(c.4)(v) and (vi) of the Act are replaced by the following:

(v) if the subsidiary was formed on the amalgamation of two or more predecessor corporations at least one of which was a subsidiary wholly-owned corporation of the parent,

(A) a share of the capital stock of the subsidiary that was issued on the amalgamation and that is, before the beginning of the winding-up,

(I) redeemed, acquired or cancelled by the subsidiary for consideration that consists solely of money or shares of the capital stock of the parent, or of any combination of the two, or

(B) a share of the capital stock of the parent issued on the amalgamation in exchange for a share of the capital stock of a predecessor corporation, and

(7) Paragraph 88(1)(c.4) of the Act, as amended by subsection (6), is amended by adding “and” at the end of subparagraph (iv), by striking out “and” at the end of subparagraph (v) and by repealing subparagraph (vi).

(8) Subsection 88(1) of the Act is amended by adding the following after paragraph (c.8):

(9) Subparagraph 88(1)(d)(ii) of the Act is replaced by the following:

(ii) the amount designated in respect of any such capital property may not exceed the amount determined by the formula

where

A      is the fair market value of the property at the time the parent last acquired control of the subsidiary,

B      is the greater of the cost amount to the subsidiary of the property at the time the parent last acquired control of the subsidiary and the cost amount to the subsidiary of the property immediately before the winding-up, and

C      is the prescribed amount, and

(10) Subparagraph 88(1)(e.9)(i) of the Act is amended by striking out “and” at the end of clause (A), by adding “and” at the end of clause (B) and by adding the following after clause (B):

(11) Subparagraph 88(1)(e.9)(ii) of the Act is amended by striking out “and” at the end of clause (A), by adding “and” at the end of clause (B) and by adding the following after clause (B):

(12) Subparagraph 88(1)(e.9)(iii) of the Act is replaced by the following:

(iii) where the parent and the subsidiary are associated with each other in the current year, the subsidiary’s taxable income, the subsidiary’s business limit and the subsidiary’s qualifying income limit for each taxation year that ends after the first time that the parent receives an asset of the subsidiary on the winding-up are deemed to be nil;

(13) Subsections (1) to (3), (5), (6) and (8) apply to windings-up that begin, and amalgamations that occur, after 2001.

(14) Subsection (4) applies to windings-up that begin, and amalgamations that occur, after December 20, 2012.

(15) Subsections (7) and (9) apply to windings-up that begin, and amalgamations that occur, after December 20, 2012 other than — if a taxable Canadian corporation (in this subsection referred to as the “parent corporation”) has acquired control of another taxable Canadian corporation (in this subsection referred to as the “subsidiary corporation”) — an amalgamation of the parent corporation and the subsidiary corporation that occurs, or a winding-up of the subsidiary corporation into the parent corporation that begins, before July 2013 if

(a) the parent corporation acquired control of the subsidiary corporation before December 21, 2012, or was obligated as evidenced in writing before December 21, 2012 to acquire control of the subsidiary corporation (except that the parent corporation shall not be considered to be obligated if, as a result of amendments to the Act, it may be excused from the obligation to acquire control); and

(b) the parent corporation had the intention as evidenced in writing before December 21, 2012 to amalgamate with, or wind up, the subsidiary corporation.

(16) Subsections (10) to (12) apply to windings-up that begin after February 25, 2008.

41. (1) The portion of paragraph (d) of the definition “capital dividend account” in subsection 89(1) of the Act after subparagraph (i) is replaced by the following:

(ii) all amounts each of which is the proceeds of a life insurance policy (other than an LIA policy) of which the corporation was not a beneficiary on or before June 28, 1982 received by the corporation in the period and after May 23, 1985 in consequence of the death of any person

exceeds the total of all amounts each of which is

(iii) the adjusted cost basis (within the meaning assigned by subsection 148(9)) of a policy referred to in subparagraph (i) or (ii) to the corporation immediately before the death, or

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

42. (1) Subparagraph (b)(vi) of the definition “arm’s length transfer” in subsection 94(1) of the English version of the Act is replaced by the following:

(vi) a payment made before 2002 to a trust, to a corporation controlled by a trust or to a partnership of which a trust is a majority-interest partner in repayment of or otherwise in respect of a loan made by a trust, corporation or partnership to the transferor, or

(2) The portion of subparagraph (b)(vii) of the definition “arm’s length transfer” in subsection 94(1) of the English version of the Act before clause (A) is replaced by the following:

(vii) a payment made after 2001 to a trust, to a corporation controlled by the trust or to a partnership of which the trust is a majority-interest partner, in repayment of or otherwise in respect of a particular loan made by the trust, corporation or partnership to the transferor and either

(3) Subparagraph (b)(ii) of the definition “specified party” in subsection 94(1) of the English version of the Act is replaced by the following:

(ii) would be a controlled foreign affiliate of a partnership, of which the particular person is a majority-interest partner, if the partnership were a person resident in Canada at that time;

(4) The portion of paragraph (c) of the definition “specified party” in subsection 94(1) of the English version of the Act before subparagraph (i) is replaced by the following:

(c) a person, or a partnership of which the particular person is a majority-interest partner, for which it is reasonable to conclude that the benefit referred to in subparagraph (8)(a)(iv) was conferred

(5) The portion of paragraph (d) of the definition “specified party” in subsection 94(1) of the English version of the Act before subparagraph (i) is replaced by the following:

(d) a corporation in which the particular person, or partnership of which the particular person is a majority-interest partner, is a shareholder if

(6) Paragraph 94(4)(b) of the Act is replaced by the following:

(b) subsections (8.1) and (8.2), paragraph (14)(a), subsections 70(6) and 73(1), the definition “Canadian partnership” in subsection 102(1), paragraph 107.4(1)(c) and paragraph (a) of the definition “mutual fund trust” in subsection 132(6);

(7) Paragraph 94(4)(h) of the Act is replaced by the following:

(h) determining whether subsection 75(2) applies.

(8) Section 94 of the Act is amended by adding the following after subsection (8):

(9) Subsections (6) to (8) apply to taxation years that end after March 20, 2013.

43. (1) Subsection 96(1.6) of the Act is replaced by the following:

(1.6) If a partnership carries on a business in Canada at any time, each taxpayer who is deemed by paragraph (1.1)(a) to be a member of the partnership at that time is deemed to carry on the business in Canada at that time for the purposes of subsection 2(3), sections 34.1 and 150 and (subject to subsection 34.2(18)) section 34.2.

(2) Subsection (1) applies to taxation years that end after March 22, 2011.

44. (1) The portion of paragraph 107(4.1)(b) of the Act before subparagraph (i) is replaced by the following:

(b) subsection 75(2) was applicable (determined without its reference to “while the person is resident in Canada” and as if subsection 75(3) as it read before March 21, 2013 were read without reference to its paragraph (c.2)), or subsection 94(8.2) was applicable (determined without reference to paragraph 94(8.1)(a)), at a particular time in respect of any property of

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

45. (1) Subsection 107.3(3) of the Act is replaced by the following:

(3) If at any time a trust ceases to be a qualifying environmental trust,

(b) each beneficiary under the trust immediately before that time is deemed to receive at that time from the trust an amount equal to the percentage of the fair market value of the properties of the trust immediately after that time that can reasonably be considered to be the beneficiary’s interest in the trust; and

(c) each beneficiary under the trust is deemed to acquire immediately after that time an interest in the trust at a cost equal to the amount deemed by paragraph (b) to be received by the beneficiary from the trust.

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

46. (1) The formula in paragraph 110.6(2)(a) of the Act is replaced by the following:

[$400,000 – (A + B + C + D)] × E

(2) Subsections 110.6(31) and (32) of the Act are replaced by the following:

(3) Subsection (1) applies to the 2014 and subsequent taxation years.

(4) Subsection (2) applies to taxation years that begin after March 19, 2007.

47. (1) Subsections 111(4) to (5.3) of the Act are replaced by the following:

(4) Notwithstanding subsection (1), and subject to subsection (5.5), if at any time (in this subsection referred to as “that time”) a taxpayer is subject to a loss restriction event,

(a) no amount in respect of a net capital loss for a taxation year that ended before that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends after that time;

(b) no amount in respect of a net capital loss for a taxation year that ends after that time is deductible in computing the taxpayer’s taxable income for a taxation year that ends before that time;

(c) in computing the adjusted cost base to the taxpayer at and after that time of each capital property, other than a depreciable property, of the taxpayer immediately before that time, there is to be deducted the amount, if any, by which the adjusted cost base to the taxpayer of the property immediately before that time exceeds its fair market value immediately before that time;

(d) each amount required by paragraph (c) to be deducted in computing the adjusted cost base to the taxpayer of a property is deemed to be a capital loss of the taxpayer for the taxation year that ended immediately before that time from the disposition of the property;

(e) if the taxpayer designates — in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the taxpayer — a property that was a capital property of the taxpayer immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the taxpayer or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply),

(i) the taxpayer is deemed to have disposed of the property at the time that is immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of

(A) the fair market value of the property immediately before that time, and

(B) the greater of the adjusted cost base to the taxpayer of the property immediately before the disposition and such amount as is designated by the taxpayer in respect of the property,

(ii) subject to subparagraph (iii), the taxpayer is deemed to have reacquired the property at that time at a cost equal to those proceeds of disposition, and

(iii) if the property is depreciable property of the taxpayer the capital cost of which to the taxpayer immediately before the disposition exceeds those proceeds of disposition, for the purposes of sections 13 and 20 and any regulations made for the purposes of paragraph 20(1)(a),

(A) the capital cost of the property to the taxpayer at that time is deemed to be the amount that was its capital cost immediately before the disposition, and

(B) the excess is deemed to have been allowed to the taxpayer in respect of the property under regulations made for the purposes of paragraph 20(1)(a) in computing the taxpayer’s income for taxation years that ended before that time; and

(f) for the purposes of the definition “capital dividend account” in subsection 89(1), each amount that because of paragraph (d) or (e) is a capital loss or gain of the taxpayer from a disposition of a property for the taxation year that ended immediately before that time is deemed to be a capital loss or gain, as the case may be, of the taxpayer from the disposition of the property immediately before the time that a capital property of the taxpayer in respect of which paragraph (e) would be applicable would be deemed by that paragraph to have been disposed of by the taxpayer.

(5) If at any time a taxpayer is subject to a loss restriction event,

(a) no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ended before that time is deductible by the taxpayer for a taxation year that ends after that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended before that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends after that time

(i) only if that business was carried on by the taxpayer for profit or with a reasonable expectation of profit throughout the partic- ular year, and

(ii) only to the extent of the total of the taxpayer’s income for the particular year from

(A) that business, and

(B) if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services; and

(b) no amount in respect of the taxpayer’s non-capital loss or farm loss for a taxation year that ends after that time is deductible by the taxpayer for a taxation year that ended before that time, except that the portion of the taxpayer’s non-capital loss or farm loss, as the case may be, for a taxation year that ended after that time as may reasonably be regarded as the taxpayer’s loss from carrying on a business and, if a business was carried on by the taxpayer in that year, the portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing the taxpayer’s taxable income for that year is deductible by the taxpayer for a particular taxation year that ends before that time

(i) only if throughout the taxation year and in the particular year that business was carried on by the taxpayer for profit or with a reasonable expectation of profit, and

(ii) only to the extent of the taxpayer’s income for the particular year from

(A) that business, and

(B) if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services.

(5.1) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event and, if this Act were read without reference to subsection 13(24), the undepreciated capital cost to the taxpayer of depreciable property of a prescribed class immediately before that time would have exceeded the total of

(a) the fair market value of all the property of that class immediately before that time, and

(b) the amount in respect of property of that class otherwise allowed under regulations made under paragraph 20(1)(a) or deductible under subsection 20(16) in computing the taxpayer’s income for the taxation year that ended immediately before that time,

the excess is to be deducted in computing the taxpayer’s income for the taxation year that ended immediately before that time and is deemed to have been allowed in respect of property of that class under regulations made under paragraph 20(1)(a).

(5.2) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event and immediately before that time the taxpayer’s cumulative eligible capital in respect of a business exceeds the total of

(a) 3/4 of the fair market value of the eligible capital property in respect of the business, and

(b) the amount otherwise deducted under paragraph 20(1)(b) in computing the taxpayer’s income from the business for the taxation year that ended immediately before that time,

the excess is to be deducted under paragraph 20(1)(b) in computing the taxpayer’s income for the taxation year that ended immediately before that time.

(5.3) Subject to subsection (5.5), if at any time a taxpayer is subject to a loss restriction event,

(a) no amount may be deducted under paragraph 20(1)(l) in computing the taxpayer’s income for the taxation year that ended immediately before that time; and

(b) in respect of each debt owing to the taxpayer immediately before that time

(i) the amount that is the greatest amount that would, but for this subsection and subsection 26(2) of this Act and subsection 33(1) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, have been deductible under paragraph 20(1)(l)

(A) is deemed to be a separate debt, and

(B) notwithstanding any other provision of this Act, is to be deducted as a bad debt under paragraph 20(1)(p) in computing the taxpayer’s income for its taxation year that ended immediately before that time, and

(ii) the amount by which the debt exceeds that separate debt is deemed to be a separate debt incurred at the same time and under the same circumstances as the debt was incurred.

(2) Subsection 111(5.5) of the Act is replaced by the following:

(5.5) If at any time a taxpayer is subject to a loss restriction event,

(b) if it can reasonably be considered that the main reason that the taxpayer is subject to the loss restriction event is to cause paragraph (4)(d) or any of subsections (5.1) to (5.3) to apply with respect to the loss restriction event, the following do not apply with respect to the loss restriction event:

(i) that provision and paragraph (4)(e), and

(ii) if that provision is paragraph (4)(d), paragraph (4)(c).

(3) Paragraph (b) of the description of A in the definition “farm loss” in subsection 111(8) of the Act is replaced by the following:

(b) the amount that would be the taxpayer’s non-capital loss for the year if the amount determined for D in the definition “non-capital loss” in this subsection were nil, and

(4) Paragraph (c) of the description of C in the definition “net capital loss” in subsection 111(8) of the Act is replaced by the following:

(c) if the taxpayer was subject to a loss restriction event before the end of the year and after the end of the taxpayer’s tenth preceding taxation year, nil, and

(5) Subsection 111(12) of the Act is replaced by the following:

(12) For the purposes of subsection (4), if at any time a taxpayer owes a foreign currency debt in respect of which the taxpayer would have had, if the foreign currency debt had been repaid at that time, a capital loss or gain, the taxpayer is deemed to own at the time (in this subsection referred to as the “measurement time”) that is immediately before that time a property

(a) the adjusted cost base of which at the measurement time is the amount determined by the formula

A + B – C

where

A      is the amount of principal owed by the taxpayer under the foreign currency debt at the measurement time, calculated, for greater certainty, using the exchange rate applicable at the measurement time,

B      is the portion of any gain, previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A, and

C      is the portion of any capital loss previously recognized in respect of the foreign currency debt because of this section, that is reasonably attributable to the amount described in A; and

(b) the fair market value of which is the amount that would be the amount of the principal owed by the taxpayer under the foreign currency debt at the measurement time if that amount were calculated using the exchange rate applicable at the time of the original borrowing.

(6) Subsections (1), (2), (4) and (5) are deemed to have come into force on March 21, 2013.

48. (1) Section 112 of the Act is amended by adding the following after subsection (7):

(2) Subject to subsection (3), subsection (1) applies to:

(a) an agreement or arrangement entered into after March 20, 2013; and

(b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.

(3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 112(9) of the Act, as enacted by subsection (1), is to be read as follows:

(9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period that ended immediately before the synthetic disposition period of the arrangement.

49. (1) The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:

117.1 (1) The amount of $1,000 referred to in the formula in paragraph 8(1)(s), each of the amounts expressed in dollars in subparagraph 6(1)(b)(v.1), subsection 117(2), the description of B in subsection 118(1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1) and subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a), the amounts of $925 and $1,680 referred to in the description of A, and the amounts of $10,500 and $14,500 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $462.50 referred to in the description of C, and the amounts of $16,667 and $25,700 referred to in the description of D, in the formula in subsection 122.7(3), and each of the amounts expressed in dollars in Part I.2 in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of

(2) Subsection (1) applies to the 2015 and subsequent taxation years.

50. (1) Subparagraph 118.5(3)(c)(iv) of the Act is replaced by the following:

(iv) the provision of financial assistance to students, except to the extent that, if this Act were read without reference to subsection 56(3), the amount of the assistance would be required to be included in computing the income, and not be deduct- ible in computing the taxable income, of the students to whom the assistance is provided, or

(2) Subsection (1) applies to the 2012 and subsequent taxation years.

51. (1) The definition “non-portfolio property” in subsection 122.1(1) of the Act is replaced by the following:

“non-portfolio property”, of a particular entity for a taxation year, means a property, held by the particular entity at any time in the taxation year, that is

(a) a security of a subject entity (other than a portfolio investment entity), if at that time the particular entity holds

(i) securities of the subject entity that have a total fair market value that is greater than 10% of the equity value of the subject entity, or

(ii) securities of the subject entity that, together with all the securities that the particular entity holds of entities affiliated with the subject entity, have a total fair market value that is greater than 50% of the equity value of the particular entity;

(b) a Canadian real, immovable or resource property, if at any time in the taxation year the total fair market value of all properties held by the particular entity that are Canadian real, immovable or resource properties is greater than 50% of the equity value of the particular entity; or

(c) a property that the particular entity, or a person or partnership with whom the particular entity does not deal at arm’s length, uses at that time in the course of carrying on a business in Canada.

(2) Paragraph (b) of the definition “excluded subsidiary entity” in subsection 122.1(1) of the Act is amended by striking out “or” at the end of subparagraph (iv) and by replacing subparagraph (v) with the following:

(vi) an excluded subsidiary entity for the taxation year.

(3) Subsection (1) applies to taxation years that end after July 20, 2011.

(4) Subsection (2) is deemed to have come into force on October 31, 2006, except that it does not apply for the purpose of determining if an entity is an excluded subsidiary entity for taxation years of the entity that began before July 21, 2011 if the entity so elects in writing filed with the Minister of National Revenue within 365 days after the day on which this Act receives royal assent.

52. Subsection 122.61(3) of the Act is replaced by the following:

(3) For the purposes of this section, if a person was non-resident at any time in a taxation year, the person’s income for the year is, for greater certainty, deemed to be the amount that would have been the person’s income for the year had the person been resident in Canada throughout the year.

53. Section 122.64 of the Act is repealed.

54. (1) Subparagraph (a)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following:

(iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, that is the product of the amount, if any, determined for B in subsection 137(3) multiplied by the amount determined for C in subsection 137(3) in respect of the corporation for the year;

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

55. (1) The descriptions of G and H in the definition “specified partnership income” in subsection 125(7) of the Act are replaced by the following:

G      is the total of all amounts each of which is the corporation’s share of the income (determined in accordance with subdivision j of Division B) of the partnership for a fiscal period of the business that ends in the year, or an amount included in the corporation’s income for the year in respect of the business under any of subsections 34.2(2), (3) and (12), and

H      is the total of all amounts deducted in computing the corporation’s income for the year from the business (other than amounts that were deducted in computing the income of the partnership from the business) or in respect of the business under subsection 34.2(4) or (11), and

(2) Subsection (1) applies to taxation years that end after March 22, 2011.

56. (1) Section 126 of the Act is amended by adding the following after subsection (4.4):

(2) Subject to subsection (3), subsection (1) applies to:

(a) an agreement or arrangement entered into after March 20, 2013; and

(b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.

(3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 126(4.6) of the Act, as enacted by subsection (1), is to be read as follows:

(4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period that ended immediately before the synthetic disposition period of the arrangement.

57. (1) The definition “non-government assistance” in subsection 127(9) of the Act is replaced by the following:

“non-government assistance” means an amount that would be included in income under paragraph 12(1)(x) if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to (vii);

(2) Paragraphs (j) and (k) of the definition “investment tax credit” in subsection 127(9) of the Act are replaced by the following:

(j) if the taxpayer is subject to a loss restriction event at any time before the end of the year, the amount determined under subsection (9.1) in respect of the taxpayer, and

(k) if the taxpayer is subject to a loss restriction event at any time after the end of the year, the amount determined under subsection (9.2) in respect of the taxpayer,

(3) The definition “pre-production mining expenditure” in subsection 127(9) of the Act is amended by striking out “or” at the end of subparagraph (a)(i) and by replacing subparagraph (a)(ii) with the following:

(ii) described in paragraph (g), (g.3) or (g.4) and not in paragraph (f), of the definition “Canadian exploration expense” in subsection 66.1(6) if the expression “mineral resource” in paragraph (g) of that definition were defined to mean a mineral deposit from which the principal mineral to be extracted is diamond, a base or precious metal deposit, or a mineral deposit from which the principal mineral to be extracted is an industrial mineral that, when refined, results in a base or precious metal, and

(4) Clause (k)(iii)(B) of the definition “specified percentage” in subsection 127(9) of the Act is replaced by the following:

(5) The portion of subsection 127(9.1) of the Act before paragraph (a) is replaced by the following:

(9.1) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) before the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (j) of the definition “investment tax credit” in subsection (9) with respect to the taxpayer is the amount, if any, by which

(6) Subparagraph 127(9.1)(d)(i) of the Act is replaced by the following:

(i) if throughout the year the taxpayer carried on a particular business in the course of which a property was acquired, or an expenditure was made, before that time in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is

(A) its income for the year from the particular business, or

(B) its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time

exceeds

(C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business,

(7) The portion of subsection 127(9.2) of the Act before paragraph (a) is replaced by the following:

(9.2) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) after the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (k) of the definition “investment tax credit” in subsection (9) is the amount, if any, by which

(8) Subparagraph 127(9.2)(d)(i) of the Act is replaced by the following:

(i) if the taxpayer acquired a property or made an expenditure, in the course of carrying on a particular business throughout the portion of a taxation year that is after that time, in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is

(A) its income for the year from the particular business, or

(B) if the taxpayer carried on a partic- ular business in the year, its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time

exceeds

(C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business

(9) Subsection (1) is deemed to have come into force on December 21, 2012.

(10) Subsections (2) to (8) are deemed to have come into force on March 21, 2013.

58. (1) The definition “qualifying corporation” in subsection 127.1(2) of the Act is replaced by the following:

“qualifying corporation”, for a particular taxation year that ends in a calendar year, means a particular corporation that is a Canadian-controlled private corporation in the particular taxation year the taxable income of which for its immediately preceding taxation year — together with, if the particular corporation is associated in the particular taxation year with one or more other corporations (in this subsection referred to as “associated corporations”), the taxable income of each associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year) — does not exceed the qualifying income limit, if any, of the particular corporation for the particular taxation year;

(2) Subsection (1) applies to taxation years that begin after December 21, 2012.

59. (1) Subsection 127.4(2) of the Act is repealed.

(2) Paragraph 127.4(5)(a) of the Act is replaced by the following:

(a) $500, and

(3) Paragraph 127.4(5)(a) of the Act, as enacted by subsection (2), is replaced by the following:

(a) $250, and

(4) Subsection 127.4(5) of the Act, as amended by subsection (3), is repealed.

(5) Paragraph 127.4(6)(a) of the Act is replaced by the following:

(a) 10% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2015,

(6) Subsection 127.4(6) of the Act, as amended by subsection (5), is repealed.

(7) Subsections (1), (4) and (6) apply to the 2017 and subsequent taxation years.

(8) Subsection (2) applies to the 2015 taxation year.

(9) Subsection (3) applies to the 2016 taxation year.

(10) Subsection (5) applies to the 2015 and 2016 taxation years.

60. (1) The portion of paragraph 127.52(1)(c.1) of the Act before subparagraph (i) is replaced by the following:

(c.1) if, during a partnership’s fiscal period that ends in the year (other than a fiscal period that ends because of subsection 99(1)), the individual’s interest in the partnership is an interest for which an identification number is required to be, or has been, obtained under section 237.1,

(2) Clause 127.52(1)(i)(i)(B) of the Act is amended by striking out “and” at the end of subclause (I) and by replacing subclause (II) with the following:

(II) paragraphs (b) to (c.3), (e) and (e.1) of this subsection, as they read in respect of taxation years that began after 1994 and ended before 2012, applied in computing the individual’s non-capital loss, restricted farm loss, farm loss and limited partnership loss for any of those years, and

(3) Clause 127.52(1)(i)(ii)(B) of the Act is amended by striking out “and” at the end of subclause (I) and by replacing subclause (II) with the following:

(II) paragraphs (c.1) and (d) of this subsection, as they read in respect of taxation years that began after 1994 and ended before 2012, applied in computing the individual’s net capital loss for any of those years, and

(4) Subsections (1) to (3) apply to the 2012 and subsequent taxation years and, if an individual files an election in writing with the Minister of National Revenue before the day that is 90 days after the day on which this Act receives royal assent, for the individual

(a) subsections (1) to (3) also apply to the 2006 to 2011 taxation years; and

(b) the references in clauses 127.52(1)(i)(i)(B) and (ii)(B) of the Act, as amended by subsections (2) and (3), to “2011” and “2012” are to be read as “2005” and “2006”, respectively.

(5) Notwithstanding subsection 152(4) of the Act, the Minister of National Revenue may make such assessments, reassessments and determinations under Part I of the Act as are necessary to give effect to an election under subsection (4).

61. (1) Subsection 136(1) of the Act is replaced by the following:

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 section 15.1, 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).

(2) Subsection (1) applies to taxation years that begin after December 21, 2012.

62. (1) Subsection 137(4.1) of the Act is replaced by the following:

(4.1) Notwithstanding any other provision of this Act, an amount paid or payable by a credit union to a person is deemed to be paid or payable, as the case may be, by the credit union as interest and to be received or receivable, as the case may be, by the person as interest, if

(a) the amount is in respect of a share held by the person of the capital stock of the credit union, other than an amount paid or payable as or on account of a reduction of the paid-up capital, redemption, acquisition or cancellation of the share by the credit union to the extent of the paid-up capital of the share;

(b) the share is not listed on a stock exchange; and

(2) Subsection (1) applies to the 2012 and subsequent taxation years.

63. The portion of subsection 142.2(2) of the Act before paragraph (a) is replaced by the following:

(2) For the purposes of the definitions “excluded property” and “specified debt obligation” in subsection (1) and subsection 142.6(1.6), a taxpayer has a significant interest in a corporation at any time if

64. (1) Section 147.1 of the Act is amended by adding the following after subsection (18):

(2) Subsection (1) applies to contributions made on or after the later of January 1, 2014 and the day on which this Act receives royal assent.

65. (1) Section 148 of the Act is amended by adding the following after subsection (4):

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

66. (1) Subsection 149(10) of the Act is replaced by the following:

(10) If at any time (in this subsection referred to as “that time”), a person — that is a corporation or, if that time is after September 12, 2013, a trust — becomes or ceases to be exempt from tax under this Part on its taxable income otherwise than by reason of paragraph (1)(t), the following rules apply:

(a) the taxation year of the person that would, but for this paragraph, have included that time is deemed to end immediately before that time, a new taxation year of the person is deemed to begin at that time and, for the purpose of determining the person’s fiscal period after that time, the person is deemed not to have established a fiscal period before that time;

(a.1) for the purpose of computing the person’s income for its first taxation year that ends after that time, the person is deemed to have deducted under sections 20, 138 and 140 in computing the person’s income for its taxation year that ended immediately before that time, the greatest amount that could have been claimed or deducted by the person for that year as a reserve under those sections;

(b) the person is deemed to have disposed, at the time (in this subsection referred to as the “disposition time”) that is immediately before the time that is immediately before that time, of each property held by the person immediately before that time for an amount equal to its fair market value at that time and to have reacquired the property at that time at a cost equal to that fair market value;

(c) for the purposes of applying sections 37, 65 to 66.4, 66.7, 111 and 126, subsections 127(5) to (36) and section 127.3 to the person, the person is deemed to be a new corporation or trust, as the case may be, the first taxation year of which began at that time; and

(d) there is to be deducted under paragraph 20(1)(b) in computing the person’s income from a business for the taxation year that ended immediately before that time the amount, if any, by which the person’s cumulative eligible capital immediately before the disposition time in respect of the business exceeds the total of

(i) 3/4 of the fair market value of the eligible capital property in respect of the business, and

(ii) the amount otherwise deducted under paragraph 20(1)(b) in computing the person’s income from the business for the taxation year that ended immediately before that time.

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

67. (1) Paragraph 152(4)(c) of the Act is replaced by the following:

(c) the taxpayer or person filing the return of income has filed with the Minister a waiver in prescribed form within the additional three-year period referred to in paragraph (b) or (b.1);

(2) The portion of subsection 152(4.01) of the Act before paragraph (a) is replaced by the following:

(4.01) Notwithstanding subsections (4) and (5), an assessment, reassessment or additional assessment to which paragraph (4)(a), (b), (b.1) or (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,

(3) The portion of paragraph 152(4.01)(b) of the Act before subparagraph (i) is replaced by the following:

(b) if paragraph 4(b), (b.1) or (c) applies to the assessment, reassessment or additional assessment,

(4) Paragraph 152(4.01)(b) of the Act is amended by striking out “or” at the end of subparagraph (v), by adding “or” at the end of subparagraph (vi) and by adding the following after subparagraph (vi):

(5) Subsection 152(4.1) of the Act is replaced by the following:

(4.1) If the Minister would, but for this subsection, be entitled to reassess, make an additional assessment or assess tax, interest or penalties by virtue only of the filing of a waiver under subparagraph (4)(a)(ii) or paragraph (4)(c) or (c.1), the Minister may not make such a reassessment, additional assessment or assessment after the day that is six months after the date on which a notice of revocation of the waiver in prescribed form is filed.

(6) Subsections (1) and (5) apply to the 2013 and subsequent taxation years, except that, in its application to taxation years that end before March 21, 2013, subsection 152(4) of the Act, as amended by subsection (1), is to be read without reference to paragraph (b.1).

(7) Subsections (2) to (4) apply to taxation years that end after March 20, 2013.

68. (1) Section 156 of the Act is amended by adding the following after subsection (3):

(2) Subsection (1) applies to taxation years that begin after July 20, 2011.

69. (1) Clause 157(1.5)(a)(ii)(B) of the English version of the Act is replaced by the following:

(B) the amount obtained when the estimated tax payable by the corporation, if any, under Parts VI and XIII.1 for the taxation year is divided by the number of months that end in the taxation year and after the particular time; and

(2) Paragraph 157(1.5)(b) of the English version of the Act is replaced by the following:

(b) the remainder of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year on or before its balance-due day for the year.

(3) Section 157 of the Act is amended by adding the following after subsection (1.5):

(4) Subsections (1) and (2) apply to taxation years that begin after 2007.

(5) Subsection (3) applies to taxation years that begin after July 20, 2011.

70. (1) Section 162 of the Act is amended by adding the following after subsection (5):

(2) Subsection (1) comes into force on the later of January 1, 2014 and the day on which this Act receives royal assent.

71. (1) The Act is amended by adding the following after section 163.2:

(2) Subsection (1) comes into force on the later of the day on which this Act receives royal assent and January 1, 2014.

72. (1) The portion of subsection 197(6) of the Act before paragraph (a) is replaced by the following:

(6) Subsection 150(2), section 152, subsections 157(1), (2.1) and (4), sections 158, 159 and 161 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require, and for greater certainty,

(2) Subsection (1) applies to taxation years that begin after July 20, 2011.

73. (1) The portion of subsection 204.81(1) of the Act before paragraph (a) is replaced by the following:

204.81 (1) The Minister may register a corporation for the purposes of this Part if the corporation’s application for registration was received before March 21, 2013 and if, in the opinion of the Minister, it complies with the following conditions:

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

74. (1) The portion of subsection 207.01(1) of the Act before the first definition is replaced by the following:

207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition “benefit”), 146.2(1) and 146.3(1) apply in this Part and Part XLIX of the Income Tax Regulations.

(2) The definition “specified non-qualified investment income” in subsection 207.01(1) of the Act is replaced by the following:

“specified non-qualified investment income”, in respect of a registered plan and its controlling individual, means income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the registered plan or by any other registered plan of the controlling individual.

(3) Paragraph (a) of the definition “advantage” in subsection 207.01(1) of the Act is amended by striking out “and” at the end of subparagraph (iii), by adding “and” at the end of subparagraph (iv) and by adding the following after subparagraph (iv):

(4) Clause (b)(i)(A) of the definition “advantage” in subsection 207.01(1) of the Act is replaced by the following:

(A) would not have occurred in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and

(5) The portion of paragraph (c) of the definition “advantage” in subsection 207.01(1) of the Act before subparagraph (i) is replaced by the following:

(c) a benefit that is income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to

(6) Paragraph (c) of the definition “exempt contribution” in subsection 207.01(1) of the Act is replaced by the following:

(c) the survivor designates, in prescribed form filed in prescribed manner within 30 days after the day on which the contribution is made (or at any later time that is acceptable to the Minister), the contribution in relation to the survivor payment; and

(7) The portion of the definition “prohibited investment” in subsection 207.01(1) of the Act before paragraph (a) is replaced by the following:

“prohibited investment”, at any time for a trust governed by a registered plan, means property (other than excluded property for the trust) that is at that time

(8) Subparagraph (b)(ii) of the definition “prohibited investment” in subsection 207.01(1) of the Act is replaced by the following:

(ii) a person or partnership that does not deal at arm’s length with the controlling individual;

(9) The portion of the definition “RRSP strip” in subsection 207.01(1) of the Act before paragraph (a) is replaced by the following:

“RRSP strip”, in respect of a RRIF or RRSP, means the amount of a reduction in the fair market value of property held in connection with the RRIF or RRSP, if the value is reduced as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable the controlling individual of the RRIF or RRSP, or a person who does not deal at arm’s length with the controlling individual, to obtain a benefit in respect of property held in connection with the RRIF or RRSP or to obtain a benefit as a result of the reduction, but does not include an amount that is

(10) The definition “RRSP strip” in subsection 207.01(1) of the Act is amended by adding “or” at the end of paragraph (b), by striking out “or” at the end of paragraph (c) and by repealing paragraph (d).

(11) Paragraph (c) of the definition “swap transaction” in subsection 207.01(1) of the Act is replaced by the following:

(c) a transfer of a prohibited investment or a non-qualified investment from the registered plan for consideration, in circumstances where the controlling individual is entitled to a refund under subsection 207.04(4) on the transfer;

(12) The definition “swap transaction” in subsection 207.01(1) of the Act is amended by adding the following after paragraph (d):

(13) The descriptions of A and B in the definition “transitional prohibited investment benefit” in subsection 207.01(1) of the Act are replaced by the following:

A      is the total of all amounts each of which is income (determined without reference to paragraph 82(1)(b)) earned, or a capital gain realized, in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

(a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and

(b) in the case of income, is earned after March 22, 2011 and, in the case of a capital gain, accrues after March 22, 2011; and

B      is the total of all amounts each of which is a capital loss (determined without reference to subparagraph 40(2)(g)(i) and subsection 40(3.4)) realized in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

(a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and

(b) accrues after March 22, 2011.

(14) Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:

(15) Paragraph 207.01(4)(a) of the Act is replaced by the following:

(a) in the case of a corporation, the individ- ual would, at that time, be a specified shareholder of the corporation if the references in the portion of the definition “specified shareholder” in subsection 248(1) before paragraph (a) to “in a taxation year” and “at any time in the year” were read as “at any time” and “at that time”, respectively;

(16) Section 207.01 of the Act is amended by adding the following after subsection (5):

(17) Subsections (1) to (6), (9), (10), (13), (14) and (16) are deemed to have come into force on March 23, 2011, except that an election referred to in paragraph 207.01(8)(d) or (10)(d) of the Act, as enacted by subsection (16), is deemed to have been filed with the Minister of National Revenue on a timely basis if it is filed with the Minister on or before the day that is 90 days after the day on which this Act receives royal assent.

(18) Subsections (7) and (8) apply after March 22, 2011 in respect of investments acquired at any time.

(19) Subsections (11) and (12) are deemed to have come into force on July 1, 2011, except that they do not apply in relation to a swap transaction undertaken before 2022 to remove a property from a RRIF or RRSP if it is reasonable to conclude that tax would be payable under Part XI.01 of the Act if

(a) that Part were read without reference to subsection 207.05(4) of the Act; and

(b) the property were retained in the RRIF or RRSP.

(20) Subsection (15) is deemed to have come into force on January 1, 2009.

75. (1) Subsection 207.04(1) of the Act is replaced by the following:

207.04 (1) The controlling individual of a registered plan that governs a trust shall pay a tax under this Part for a calendar year if, at any time in the year, the trust acquires property that is a prohibited investment, or a non-qualified investment, for the trust.

(2) Subsection 207.04(3) of the Act is replaced by the following:

(3) For the purposes of this section and subsections 146(10.1), 146.2(6), 146.3(9) and 207.01(6), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.

(3) Subsection 207.04(5) of the Act is repealed.

(4) Subsections (1) to (3) are deemed to have come into force on March 23, 2011.

76. (1) The portion of subsection 207.05(4) of the Act before paragraph (b) is replaced by the following:

(4) If an individual so elects before March 2, 2013 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit

(a) is paid to the individual, from a RRIF or RRSP of the individual, on or before the later of April 2, 2013 and the day that is 90 days after the end of the taxation year; and

(2) Subsection (1) is deemed to have come into force on March 23, 2011.

77. (1) Subsection 207.06(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(2) Subsection 207.06(3) of the Act is repealed.

(3) Subsections (1) and (2) are deemed to have come into force on March 23, 2011.

78. (1) Section 207.061 of the Act is replaced by the following:

207.061 A holder of a TFSA shall include in computing the holder’s income for a taxation year under Part I any portion of a distribution made in the year that is described in subparagraph (a)(ii) of the definition “specified distribution” in subsection 207.01(1) or subparagraph 207.06(1)(b)(ii) or that is specified by the Minister as part of an agreement to waive or cancel a liability for tax under this Part.

(2) Subsection (1) is deemed to have come into force on March 23, 2011.

79. The portion of subsection 207.07(1) of the Act before paragraph (a) is replaced by the following:

207.07 (1) A person who is liable to pay tax under this Part for all or any part of a calendar year shall before July of the following calendar year

80. (1) The definition “labour-sponsored funds tax credit” in subsection 211.7(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:

(b) if the original acquisition of the share occurred after 1995 and before March 2, 2017, the amount that would be determined under subsection 127.4(6) — as that subsection would apply in respect of a claim made by the taxpayer under subsection 127.4(2) in respect of the original acquisition if subsection 127.4(6) were read without reference to paragraphs 127.4(6)(b) and (d) — in respect of the share; and

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

81. (1) Section 211.81 of the Act is replaced by the following:

211.81 If a particular amount is payable under a prescribed provision of a provincial law for a taxation year of an individual as determined for the purposes of that provincial law (referred to in this section as the “relevant provincial year”), and an amount has been included in the computation of the labour-sponsored funds tax credit of the individual under subsection 127.4(6) in respect of an approved share that has been disposed of by a qualifying trust in respect of the individual, the individual shall pay a tax for the taxation year in which the relevant provincial year ends equal to the amount deducted by the individual under subsection 127.4(2) in respect of the share.

(2) Subsection (1) is deemed to have come into force on October 24, 2012.

82. (1) Subparagraph 212.1(3)(b)(iv) of the English version of the Act is replaced by the following:

(iv) a partnership of which the taxpayer or a person described in one of subparagraphs (i) to (iii) is a majority-interest partner or a member of a majority-interest group of partners (as defined in subsection 251.1(3))

(2) Paragraph 212.1(3)(e) of the Act is replaced by the following:

(e) a “designated partnership” means a partnership of which either a majority-interest partner or every member of a majority-interest group of partners (as defined in subsection 251.1(3)) is a non-resident person; and

83. (1) Paragraph 214(3)(f) of the Act is replaced by the following:

(f) where subsection 104(13) would, if Part I were applicable, require any part of an amount payable by a trust in its taxation year to a beneficiary to be included in computing the income of the non-resident person who is a beneficiary of the trust, that part is deemed to be an amount paid or credited to that person as income of or from the trust

(i) on, or at, the earliest of

(A) the day on which the amount was paid or credited,

(B) the day that is 90 days after the end of the taxation year, and

(ii) not at any later time;

(2) Subsection (1) is deemed to have come into force on July 25, 2012.

84. (1) Subparagraph 219(1)(d)(ii) of the Act is replaced by the following:

(ii) an amount deductible because of paragraphs 111(1)(b) and 115(1)(d) in computing the corporation’s base amount,

(2) Subsection 219(1.1) of the Act is replaced by the following:

(1.1) For the purposes of subsection (1), the definition “taxable Canadian property” in subsection 248(1) shall be read without reference to paragraphs (a) and (c) to (e) of that definition and as if the only options, interests or rights referred to in paragraph (f) of that definition were those in respect of property described in paragraph (b) of that definition.

(3) Subsection (1) applies to the 1998 and subsequent taxation years.

(4) Subsection (2) is deemed to have come into force on March 5, 2010.

85. (1) Paragraph 239(2.21)(b) of the Act is replaced by the following:

(b) who is an official to whom taxpayer information has been provided for a particular purpose under paragraph 241(4)(a), (d), (f), (f.1), (i), (j.1) or (j.2)

(2) Subsection 239(3) of the Act is replaced by the following:

(3) If a person is convicted under this section, the person is not liable to pay a penalty imposed under any of sections 162, 163, 163.2 and 163.3 for the same contravention unless the penalty is assessed before the information or complaint giving rise to the conviction was laid or made.

(3) Subsection (2) comes into force on the later of the day on which this Act receives royal assent and January 1, 2014.

86. (1) The Act is amended by adding the following after section 239:

(2) Subsection (1) comes into force on the later of the day on which this Act receives royal assent and January 1, 2014.

87. (1) Subparagraphs 241(4)(d)(ix) and (x) of the Act are replaced by the following:

(ix) to an official of a department or agency of the Government of Canada or of a province as to the name, address, telephone number, occupation, size or type of business of a taxpayer, solely for the purpose of enabling that department or agency to obtain statistical data for research and analysis,

(x) to an official of the Canada Employment Insurance Commission or the Department of Employment and Social Development, solely for the purpose of the administration or enforcement of the Employment Insurance Act, an employment program of the Government of Canada (including, for greater certainty, any activity relating to a program for temporary foreign workers for which the administration or enforcement is the responsibility of the Minister of Employment and Social Development under the Immigration and Refugee Protection Regulations) or the evaluation or formation of policy for that Act or program,

(2) Paragraph 241(4)(j.1) of the Act is replaced by the following:

(j.1) provide taxpayer information to an official or a designated person solely for the purpose of permitting the making of an adjustment to a social assistance payment made on the basis of a means, needs or income test if the purpose of the adjustment is to take into account the amount determined for C in subsection 122.61(1) in respect of a person for a taxation year;

88. (1) Section 247 of the Act is amended by adding the following after subsection (7):

(2) Subsection (1) applies to taxation years that begin after 1997 and in applying subsection 247(7.1) of the Act, as enacted by subsection (1), to taxation years that begin before February 24, 1998, section 17 of the Act is to be read as it read on January 24, 2005, except that if a taxpayer elects under this subsection in writing and files the election with the Minister of National Revenue on or before the taxpayer’s filing-due date for the taxation year that includes the day on which this Act receives royal assent,

(a) notwithstanding the time limitations in subsection 152(4) of the Act, the Minister of National Revenue may make such assessments, reassessments and determinations under Part I of the Act as are necessary to give effect to this subsection for a taxation year that ends before that day; and

(b) if the taxpayer so indicates in the election, subsection (1) does not apply to taxation years of the taxpayer that begin before December 22, 2012.

89. (1) The definition “trust” in subsection 248(1) of the Act is replaced by the following:

“trust” has the meaning assigned by subsection 104(1) and, unless the context otherwise requires, includes an estate;

(2) The definition “estate” in subsection 248(1) of the English version of the Act is replaced by the following:

“estate” has the meaning assigned by subsection 104(1) and includes, for civil law, a succession;

(3) Clause (e)(iii)(B) of the definition “automobile” in subsection 248(1) of the Act is replaced by the following:

(B) at least 30 kilometres outside the nearest point on the boundary of the nearest population centre, as defined by the last census dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year;

(4) The portion of the definition “majority interest partner” in subsection 248(1) of the Act before paragraph (a) is replaced by the following:

“majority-interest partner”, of a particular partnership at any time, means a person or partnership (in this definition referred to as the “taxpayer”)

(5) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:

(6) Subsection (3) applies to the 2013 and subsequent taxation years.

(7) Subsection (5) is deemed to have come into force on March 21, 2013, except that the definitions “LIA policy” and “10/8 policy” in subsection 248(1) of the Act, as amended by subsection (5), apply to taxation years that end after March 20, 2013.

90. (1) Subsection 249(4) of the Act is replaced by the following:

(4) If at any time a taxpayer is subject to a loss restriction event (other than a foreign affiliate, of a taxpayer resident in Canada, that did not carry on a business in Canada at any time in its last taxation year that began before that time), then for the purposes of this Act,

(a) subject to paragraph (b), the taxpayer’s taxation year that would, but for this paragraph, have included that time is deemed to end immediately before that time, a new taxation year of the taxpayer is deemed to begin at that time and, for the purpose of determining the taxpayer’s fiscal period after that time, the taxpayer is deemed not to have established a fiscal period before that time; and

(b) subject to paragraph 128(1)(d), section 128.1 and paragraphs 142.6(1)(a) and 149(10)(a), and notwithstanding subsections (1) and (3), if the taxpayer’s taxation year that would, but for this subsection, have been its last taxation year that ended before that time, would, but for this paragraph, have ended within the seven-day period that ended immediately before that time, that taxation year is, except if the taxpayer is subject to a loss restriction event within that period, deemed to end immediately before that time, provided that the taxpayer so elects in its return of income under Part I for that taxation year.

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

91. (1) Paragraph 251.1(1)(e) of the English version of the Act is replaced by the following:

(e) a partnership and a majority-interest partner of the partnership;

(2) Paragraph (a) of the definition “majority-interest group of partners” in subsection 251.1(3) of the English version of the Act is replaced by the following:

(a) if one person held the interests of all members of the group, that person would be a majority-interest partner of the partnership; and

(3) Subparagraph 251.1(4)(d)(iv) of the English version of the Act is replaced by the following:

(iv) in determining whether a contributor to one trust is affiliated with a contributor to another trust, individuals connected by blood relationship, marriage, common-law partnership or adoption are deemed to be affiliated with one another.

92. (1) The Act is amended by adding the following after section 251.1:

(2) Subsection (1) is deemed to have come into force on March 21, 2013.

93. (1) The portion of subsection 256(7) of the Act before paragraph (a) is replaced by the following:

(7) For the purposes of this subsection, of section 55, subsections 66(11), 66.5(3), 66.7(10) and (11), 85(1.2), 88(1.1) and (1.2), 110.1(1.2) and 111(5.4) and paragraph 251.2(2)(a) and of subsection 5905(5.2) of the Income Tax Regulations,

(2) Clause 256(7)(a)(i)(D) of the Act is replaced by the following:

(D) a particular person who acquired the shares from an estate that arose on and as a consequence of the death of an individual, if the estate acquired the shares from the individual as a consequence of the death and the individual was related to the particular person immediately before the death,

(3) Subsection 256(7) of the Act is amended by striking out “and” at the end of paragraph (f) and by adding the following after paragraph (g):

(4) The portion of subsection 256(8) of the French version of the Act before paragraph (a) is replaced by the following:

(5) Paragraph 256(8)(b) of the Act is replaced by the following:

(b) to avoid the application of subsection 10(10) or 13(24), paragraph 37(1)(h) or subsection 55(2) or 66(11.4) or (11.5), paragraph 88(1)(c.3) or subsection 111(4), (5.1), (5.2) or (5.3), 181.1(7), 190.1(6) or 251.2(2),

(6) The portion of subsection 256(8) of the English version of the Act after paragraph (e) is replaced by the following:

the taxpayer is deemed to be in the same position in relation to the control of the corporation as if the right were immediate and absolute and as if the taxpayer had exercised the right at that time for the purpose of determining whether control of a corporation has been acquired for the purposes of subsections 10(10) and 13(24), section 37, subsections 55(2), 66(11), (11.4) and (11.5), 66.5(3), 66.7(10) and (11), section 80, paragraph 80.04(4)(h), subparagraph 88(1)(c)(vi), paragraph 88(1)(c.3), subsections 88(1.1) and (1.2), sections 111 and 127, subsections 181.1(7), 190.1(6) and 249(4) and paragraph 251.2(2)(a) and in determining for the purposes of section 251.1 and paragraphs 251.2(3)(c) and (d) whether a corporation is controlled by any other person or group of persons.

(7) Subsections (1) and (3) to (6) are deemed to have come into force on March 21, 2013.

(8) Subsection (2) is deemed to have come into force on September 13, 2013.

94. (1) The Act is amended by adding the following after section 256:

(2) Subsection (1) is deemed to have come into force on March 21, 2013, except that it does not apply to an event or transaction that occurs

(a) before March 21, 2013, or

(b) after March 20, 2013 pursuant to an obligation created by the terms of an agreement in writing entered into between parties before March 21, 2013, and for the purposes of this paragraph, parties will be considered not to be obligated if one or more of those parties may be excused from fulfilling the obligation as a result of changes to the Act.