Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)
Full Document:
Assented to 2017-12-14
46 (1) The formula in paragraph 122(1)(c) of the Act is replaced by the following:
A − (B − C)
(2) Paragraph 122(1)(c) of the Act is amended by striking out “and” at the end of the description of A, by adding “and” at the end of the description of B and by adding the following after the description of B:
- C
- is the total of all amounts each of which is an amount determined for clause (ii)(B) of the description of A in determining the amount for A for the year.
(3) Subsections (1) and (2) apply to taxation years that end after September 15, 2016.
47 (1) The formula in subparagraph (b)(i) of the description of A in subsection 122.51(2) of the Act is replaced by the following:
(0.25/C) × D
(2) Subsection (1) applies to the 2005 and subsequent taxation years.
48 (1) The portion of subparagraph (a)(i) of the definition specified corporate income in subsection 125(7) of the Act before clause (A) is replaced by the following:
(i) the total of all amounts each of which is income (other than specified cooperative income) from an active business of the corporation for the year from the provision of services or property to a private corporation (directly or indirectly, in any manner whatever) if
(2) Subsection 125(7) of the Act is amended by adding the following in alphabetical order:
- specified cooperative income
specified cooperative income, of a corporation (in this definition referred to as the “selling corporation”) for a taxation year, means income of the selling corporation (other than an amount included in the selling corporation’s income under subsection 135(7)) from the sale of the farming products or fishing catches of the selling corporation’s farming or fishing business to a corporation (in this definition referred to as the “purchasing corporation”) if
(a) the purchasing corporation deals at arm’s length with the selling corporation, and
(b) either
(i) the purchasing corporation would be a cooperative corporation, as defined in subsection 136(2), if the reference in paragraph (c) of that subsection to “business of farming” were read as “business of farming or fishing”, or
(ii) the following conditions are met:
(A) the selling corporation (or one of its shareholders) or a person who does not deal at arm’s length with the selling corporation (or one of its shareholders) holds a direct or indirect interest in a corporation that
(B) the income from the sale of the farming products or fishing catches would not be an amount described in subparagraph (a)(i) of the definition specified corporate income if
(3) Subsections (1) and (2) apply to taxation years that begin after March 21, 2016.
49 (1) Paragraph 126(4.4)(a) of the Act is replaced by the following:
(a) a disposition or acquisition of property deemed to be made by subsection 10(12) or (13) or 45(1), section 70, 128.1 or 132.2, subsections 138(11.3), 138.2(4) or 142.5(2), paragraph 142.6(1)(b) or subsections 142.6(1.1) or (1.2) or 149(10) is not a disposition or acquisition, as the case may be; and
(2) Subsection (1) applies to taxation years that begin after 2017.
50 (1) The definition pre-production mining expenditure in subsection 127(9) of the English version of the Act is amended by adding “or” at the end of subparagraph (a)(i).
(2) Subparagraph (f.1)(i) of the definition specified percentage in subsection 127(9) of the Act is replaced by the following:
(3) Subsection (1) is deemed to have come into force on March 21, 2013.
(4) Subsection (2) applies to repayments made after September 16, 2016.
51 (1) Paragraph 129(1.1)(b) of the Act is replaced by the following:
(b) was a bankrupt at any time during that taxation year of the particular corporation.
(2) Subsection (1) applies in respect of bankruptcies that occur after April 26, 1995.
52 (1) The definition qualifying exchange in subsection 132.2(1) of the Act is replaced by the following:
- qualifying exchange
qualifying exchange means a transfer at any time (in this section referred to as the “transfer time”) if
(a) the transfer is a transfer of all or substantially all of the property (including an exchange of a unit of a mutual fund trust for another unit of that trust) of
(b) all or substantially all of the shares issued by the mutual fund corporation referred to in subparagraph (a)(i) or the first mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as the “transferor”) and outstanding immediately before the transfer time are within 60 days after the transfer time disposed of to the transferor;
(c) no person disposing of shares of the transferor to the transferor within that 60-day period (otherwise than pursuant to the exercise of a statutory right of dissent) receives any consideration for the shares other than units of one or more mutual fund trusts referred to in subparagraph (a)(i) or the second mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as a “transferee” and, together with the transferor, as the “funds”);
(d) if property of the transferor has been transferred to more than one transferee,
(i) all shares of each class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are disposed of to the transferor within 60 days after the transfer time, and
(ii) the units received in consideration for a particular share of a class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are units of the transferee to which all or substantially all of the assets that were allocated to that investment fund immediately before the transfer time were transferred; and
(e) the funds jointly so elect, by filing a prescribed form with the Minister on or before the election’s due date. (échange admissible)
(2) The portion of paragraph 132.2(3)(a) of the Act before subparagraph (i) is replaced by the following:
(a) each property of a fund, other than property disposed of by the transferor to a transferee at the transfer time and depreciable property, is deemed to have been disposed of, and to have been reacquired by the fund, at the first intervening time, for an amount equal to the lesser of
(3) Subsection 132.2(3) of the Act is amended by adding the following after paragraph (a):
(a.1) in respect of each property transferred by the transferor to a transferee, including an exchange of a unit of a transferee for another unit of that transferee, the transferor is deemed to have disposed of the property to the transferee, and to have received units of the transferee as consideration for the disposition of the property, at the transfer time;
(4) The portion of paragraph 132.2(3)(e) of the Act before subparagraph (i) is replaced by the following:
(e) except as provided in paragraph (m), the transferor’s cost of any particular property received by the transferor from a transferee as consideration for the disposition of the property is deemed to be
(5) Paragraph 132.2(3)(f) of the Act is replaced by the following:
(f) the transferor’s proceeds of disposition of any units of a transferee that were disposed of by the transferor at any particular time that is within 60 days after the transfer time in exchange for shares of the transferor, are deemed to be equal to the cost amount of the units to the transferor immediately before the particular time;
(6) The portion of paragraph 132.2(3)(g) of the Act before subparagraph (i) is replaced by the following:
(g) if, at any particular time that is within 60 days after the transfer time, a taxpayer disposes of shares of the transferor to the transferor in exchange for units of a transferee
(7) The portion of subparagraph 132.2(3)(g)(vi) of the Act before clause (A) is replaced by the following:
(vi) if the taxpayer is at the particular time affiliated with the transferor or the transferee,
(8) Paragraph 132.2(3)(h) of the Act is replaced by the following:
(h) where a share to which paragraph (g) applies would, if this Act were read without reference to this paragraph, cease to be a qualified investment (within the meaning assigned by subsection 146(1), 146.1(1), 146.3(1) or 146.4(1), section 204 or subsection 207.01(1)) as a consequence of the qualifying exchange, the share is deemed to be a qualified investment until the earlier of the day that is 60 days after the day that includes the transfer time and the time at which it is disposed of in accordance with paragraph (g);
(9) Paragraphs 132.2(3)(i) and (j) of the Act are replaced by the following:
(i) there shall be added to the amount determined under the description of A in the definition refundable capital gains tax on hand in subsection 132(4) in respect of a transferee for its taxation years that begin after the transfer time the amount determined by the formula
(A − B) × C/D
where
- A
- is the transferor’s refundable capital gains tax on hand (within the meaning assigned by subsection 131(6) or 132(4), as the case may be) at the end of its taxation year that includes the transfer time,
- B
- is the transferor’s capital gains refund (within the meaning assigned by paragraph 131(2)(a) or 132(1)(a), as the case may be) for that year,
- C
- is the total fair market value of property of the transferor disposed of to, net of liabilities assumed by, the transferee on the qualifying exchange, and
- D
- is the total fair market value of property of the transferor disposed of to, net of liabilities assumed by, all transferees on the qualifying exchange;
(j) no amount in respect of a non-capital loss, net capital loss, restricted farm loss, farm loss or limited partnership loss of a fund for a taxation year that began before the transfer time is deductible in computing the taxable income of any of the funds for a taxation year that begins after the transfer time;
(10) Paragraph 132.2(3)(l) of the Act is amended by striking out “and” at the end of subparagraph (i), by adding “and” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) for the purpose of subsection 131(1), a dividend that is made payable at a particular time after the acquisition time but within the 60-day period commencing immediately after the transfer time, and paid before the end of that period, by the transferor to taxpayers that held shares of a class of shares of the transferor, that was recognized under securities legislation as or as part of an investment fund, immediately before the transfer time is deemed to have become payable at the first intervening time if the transferor so elects in respect of the full amount of the dividend in prescribed manner on or before the day on which any part of the dividend was paid;
(11) Subparagraph 132.2(3)(m)(ii) of the Act is replaced by the following:
(ii) a transferee is deemed not to have acquired any property that was transferred to it on the qualifying exchange; and
(12) Paragraph 132.2(3)(m) of the Act is amended by striking out “and” at the end of subparagraph (i) and by adding the following after subparagraph (ii):
(iii) the amounts determined under the descriptions of A and B in the definition capital gains redemptions shall be determined as if the year ended immediately before the transfer time; and
(13) Paragraph 132.2(3)(n) of the Act is replaced by the following:
(n) except as provided in subparagraph (l)(i), the transferor is, notwithstanding subsections 131(8) and (8.01) and 132(6), deemed to be neither a mutual fund corporation nor a mutual fund trust for taxation years that begin after the transfer time.
(14) Clause 132.2(4)(b)(ii)(B) of the Act is replaced by the following:
(B) the amount that the transferor and the transferee agree on in respect of the property in their election, and
(15) Subsection 132.2(4) 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):
(c) if the property is a unit of the transferee and the unit ceases to exist when the transferee acquires it (or, for greater certainty, when the transferee would but for that cessation have acquired it), paragraphs (a) and (b) do not apply to the transferee.
(16) Clause 132.2(5)(c)(ii)(B) of the Act is replaced by the following:
(B) the amount that the transferor and the transferee agree on in respect of the property in their election, and
(17) Subsection 132.2(7) of the Act is replaced by the following:
Marginal note:Amendment or revocation of election
(7) The Minister may, on joint application by the funds on or before the due date of an election referred to in paragraph (e) of the definition qualifying exchange in subsection (1), grant permission to amend or revoke the election.
(18) Subsections (1) to (7), (9) to (11) and (13) to (17) apply in respect of transfers that occur after March 21, 2017.
(19) Subsection (8) is deemed to have come into force on March 23, 2017.
(20) Subsection (12) applies in respect of qualifying exchanges where an election in respect of the qualifying exchange is filed or amended after September 7, 2017.
- Date modified: