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Budget Implementation Act, 2021, No. 1 (S.C. 2021, c. 23)

Assented to 2021-06-29

PART 1Amendments to the Income Tax Act and Other Legislation (continued)

C.R.C., c. 945Income Tax Regulations (continued)

  •  (1) Subsection 1102(14.13) of the Regulations is replaced by the following:

    • (14.13) Subsection (14) does not apply to an acquisition of property by a taxpayer from a person in respect of which the property was included in any of Classes 54 to 56.

  • (2) Subsection 1102(20.1) of the Regulations is replaced by the following:

    • (20.1) For the purposes of subsections 1100(2.02) and 1104(4), a particular person or partnership and another person or partnership shall be considered not to be dealing at arm’s length with each other in respect of the acquisition or ownership of a property if, in the absence of this subsection, they would be considered to be dealing at arm’s length with each other and it may reasonably be considered that the principal purpose of any transaction or event, or a series of transactions or events, is to cause

      • (a) the property to qualify as accelerated investment incentive property; or

      • (b) the particular person or partnership and the other person or partnership to satisfy the condition in subclause 1100(2.02)(a)(i)(C)(I).

  • (3) Subsection (1) is deemed to have come into force on March 2, 2020.

  • (4) Subsection (2) applies in respect of property acquired after July 30, 2019.

  •  (1) Subsection 1103(2j) of the Regulations is replaced by the following:

    • (2j) A taxpayer may, in its return of income filed with the Minister on or before its filing-due date for the taxation year in which a property is acquired, elect not to include the property in any of Classes 54 to 56 in Schedule II, as the case may be.

  • (2) Subsection (1) is deemed to have come into force on March 2, 2020.

  •  (1) The portion of subsection 1104(4) of the Regulations before paragraph (a) is replaced by the following:

    • (4) For the purposes of this Part and Schedules II to VI, accelerated investment incentive property means property of a taxpayer (other than property included in any of Classes 54 to 56) that

  • (2) Subparagraph 1104(4)(b)(i) of the Regulations is replaced by the following:

    • (i) the property is not a property in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act by any person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or

  • (3) Section 1104 of the Regulations is amended by adding the following after subsection (4):

    • Marginal note:Deemed separate properties

      (4.1) For the purpose of subparagraph (4)(b)(i), if the capital cost to a taxpayer of a depreciable property (referred to in this subsection as the “single property”) includes amounts incurred at different times, then amounts deducted under paragraph 20(1)(a) or subsection 20(16) of the Act in respect of the single property are deemed to have been deducted in respect of a separate property that is not part of the single property to the extent the deducted amounts can reasonably be considered to be in respect of amounts

      • (a) incurred before November 21, 2018; or

      • (b) incurred after November 20, 2018, if any portion of the single property is considered to have become available for use before the time the single property is first used for the purpose of earning income.

  • (4) Subsection (1) is deemed to have come into force on March 2, 2020.

  • (5) Subsections (2) and (3) apply in respect of property acquired after November 20, 2018.

  •  (1) Subparagraph 8502(e)(i) of the Regulations is amended by striking out “and” at the end of clause (A) and by adding the following after clause (B):

    • (C) in the case of benefits provided under a money purchase provision in accordance with paragraph 8506(1)(e.2), the benefits may begin to be paid not later than the later of

      • (I) the end of the calendar year in which the member attains 71 years of age, and

      • (II) the end of the calendar year in which a transfer was made from the member’s account to acquire rights under the VPLA fund, and

  • (2) Subsection (1) is deemed to have come into force on January 1, 2020.

  •  (1) The portion of clause 8503(3)(a)(v)(A) of the Regulations before subclause (I) is replaced by the following:

    • (A) unless the provision is a provision of an individual pension plan,

  • (2) The portion of subparagraph 8503(3)(a)(v.1) of the Regulations before clause (A) is replaced by the following:

    • (v.1) unless the provision is a provision of an individual pension plan, a portion — determined by reference to the proportion of property that has been transferred, as described in clause (B) — of a period in respect of which

  • (3) Subparagraph 8503(3)(a)(vi) of the Regulations is replaced by the following:

    • (vi) unless the provision is a provision of an individual pension plan, a period throughout which the member was employed in Canada by a former employer where the period was an eligibility period for the participation of the member in another registered pension plan, and

  • (4) Subsections (1) to (3) are deemed to have come into force on March 19, 2019. However, subsections (1) to (3) do not apply to a period that was pensionable service (as defined in subsection 8500(1) of the Regulations) in respect of a member under a defined benefit provision of an individual pension plan before March 19, 2019.

  •  (1) The portion of paragraph 8506(1)(e.1) of the Regulations before subparagraph (i) is replaced by the following:

    • Marginal note:Variable benefits

      (e.1) retirement benefits (in this paragraph referred to as “variable benefits”), other than benefits permissible under any of paragraphs (a) to (e) and (e.2), provided to a member and, after the death of the member, to one or more beneficiaries of the member if

  • (2) Subsection 8506(1) of the Regulations is amended by adding the following after paragraph (e.1):

    • Marginal note:Variable Payment Life Annuity

      (e.2) retirement benefits (referred to in this paragraph as “VPLA benefits”), other than benefits permissible under any of paragraphs (a) to (e.1), provided to a member and, after the death of the member, to one or more beneficiaries of the member if

      • (i) the VPLA benefits are paid from a VPLA fund,

      • (ii) the VPLA benefits are provided to the member (or, after the death of the member, to one or more beneficiaries of the member) because of a transfer of one or more amounts from the member’s account to the VPLA fund,

      • (iii) each VPLA benefit is any of the following:

        • (A) a retirement benefit described in any of paragraphs (b) to (e), (g) and (i),

        • (B) in the case of the wind-up of the VPLA fund, a payment described in paragraph (h), and

        • (C) a retirement benefit that would be described in paragraph (a) if its subparagraph (ii) read as follows:

          • (ii) the benefits are adjusted annually, after they commence to be paid, in whole or in part to reflect

            • (A) increases in the Consumer Price Index, as published by Statistics Canada under the authority of the Statistics Act, or

            • (B) increases at a rate specified under the terms of the plan not exceeding 2% per annum;

      • (iv) the VPLA benefits are increased or decreased to the extent that the following differ materially from the actuarial assumptions used to determine the VPLA benefits:

        • (A) the amount or rate of return earned by the VPLA fund, or

        • (B) the rate of mortality of the members and beneficiaries who are entitled to receive the VPLA benefits;

  • (3) Paragraph 8506(2)(g) of the Regulations is replaced by the following:

    • (g) retirement benefits (other than benefits permissible under paragraph (1)(e.1) or (e.2)) under the provision are provided by means of annuities that are purchased from a licensed annuities provider;

  • (4) Section 8506 of the Regulations is amended by adding the following after subsection (12):

    • Marginal note:VPLA fund

      (13) For the purposes of paragraph (1)(e.2) and clause 8502(e)(i)(C), a VPLA fund under a money purchase provision of a pension plan is an arrangement that meets the following conditions:

      • (a) no amounts are contributed to the arrangement other than amounts that are transferred from accounts of the members of the plan;

      • (b) the arrangement has at least 10 members at the time it is established and, at all times after it is established, it is reasonable to expect that the arrangement will have at least 10 members on an ongoing basis; and

      • (c) no benefit may be paid from the arrangement other than retirement benefits described in subparagraph (1)(e.2)(iii).

  • (5) Subsections (1) to (4) are deemed to have come into force on January 1, 2020.

  •  (1) Subsection 8510(7) of the Regulations 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) no contributions are made

      • (i) to the plan with respect to a member at any time after the end of the calendar year in which the member attains 71 years of age, or

      • (ii) to a defined benefit provision of the plan with respect to a member during a period (other than a qualifying period, as defined in subsection 8503(16)) in which the member is in receipt of retirement benefits from a defined benefit provision of the plan.

  • (2) Subsection (1) applies in respect of contributions made pursuant to any collective bargaining agreement entered into after 2019, except that it does not apply in respect of contributions made on or before the date the agreement is entered into.

 Section 8901.2 of the Regulations is replaced by the following:

8901.2 The amount determined by regulation in respect of a qualifying entity for the purposes of clause (b)(iv)(B) of the description of A in subsection 125.7(2) of the Act for a week in a qualifying period is

  • (a) for the seventh qualifying period and the eighth qualifying period, the greater of

    • (i) the amount determined for the week under subparagraph (a)(i) of the description of A in subsection 125.7(2) of the Act, and

    • (ii) the amount determined for the week under subparagraph (a)(ii) of the description of A in subsection 125.7(2) of the Act;

  • (b) for the ninth qualifying period and the tenth qualifying period, the greater of

    • (i) $500, and

    • (ii) the lesser of

      • (A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible employee determined for that week, and

      • (B) $573;

  • (c) for any of the eleventh qualifying period to the nineteenth qualifying period, the greater of

    • (i) $500, and

    • (ii) the lesser of

      • (A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible employee determined for that week, and

      • (B) $595; and

  • (d) for the twentieth qualifying period and any subsequent qualifying period, nil.

 Schedule II to the Regulations is amended by adding the following after Class 55:

CLASS 56

Property that is acquired, and becomes available for use, by a taxpayer after March 1, 2020 and before 2028, if the property

  • (a) is either

    • (i) automotive equipment (other than a motor vehicle) that is fully electric or powered by hydrogen, or

    • (ii) an addition or alteration made by the taxpayer to automotive equipment (other than a motor vehicle) to the extent it causes the automotive equipment to become fully electric or powered by hydrogen; and

  • (b) would be accelerated investment incentive property of the taxpayer if subsection 1104(4) were read without its exclusion for property included in Class 56.

SOR/2008-186Canada Disability Savings Regulations

  •  (1) Paragraph (b) of the definition montant de retenue in section 1 of the French version of the Canada Disability Savings Regulations is replaced by the following:

    • b) dans les autres cas, le montant total des subventions et des bons qui ont été versés dans un REEI au cours des dix années précédant ce moment, déduction faite du montant de toute subvention ou de tout bon versé au cours de cette période qui a été remboursé au ministre. (assistance holdback amount)

  • (2) Subsection (1) is deemed to have come into force on January 1, 2021.

  •  (1) The portion of subsection 5(1) of the Regulations before paragraph (a) is replaced by the following:

    • 5 (1) Subject to section 5.1, an issuer of an RDSP shall repay to the Minister, within the period set out in the issuer agreement, the amount referred to in subsection (2) if

  • (2) Subsection 5(1) of the Regulations is amended by adding “or” at the end of paragraph (b) and by repealing paragraph (c).

  • (3) Subsection 5(3) of the Regulations is replaced by the following:

    • (3) Despite subsections (1) and (2), if the beneficiary of an RDSP that is a specified disability savings plan dies, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, any portion of an amount paid into the RDSP as a grant or bond within the 10-year period preceding the time of the death that remains in the RDSP at that time.

    • (4) This section does not apply if the event described in subsection (1) or (3) occurs after the calendar year in which the beneficiary attains 59 years of age.

  • (4) Subsections (1) to (3) are deemed to have come into force on January 1, 2021.

  •  (1) The portion of section 5.1 of the Regulations before paragraph (a) is replaced by the following:

    5.1 If an event described in paragraph 5(1)(a), (b) or (d) occurs while the beneficiary of an RDSP is no longer a DTC-eligible individual, the issuer of the RDSP shall repay to the Minister, within the period set out in the issuer agreement, the lesser of

  • (2) The description of A in paragraph 5.1(b) of the Regulations is replaced by the following:

    A
    is
    • (i) if the event occurs before the calendar year in which the beneficiary attains 51 years of age, the total amount of grants and bonds paid into the RDSP within the 10-year period before the day on which the beneficiary ceased to be a DTC-eligible individual, less any portion of that amount that was repaid to the Minister within that period,

    • (ii) if the event occurs after the calendar year in which the beneficiary attains 50 years of age but before the calendar year in which they attain 60 years of age and the beneficiary ceased to be a DTC-eligible individual before the calendar year in which they attained 50 years of age, the total amount of grants and bonds paid into the RDSP within the period (expressed in number of years) determined by the following formula that ended before the day on which the beneficiary ceased to be a DTC-eligible individual, less any portion of that amount that was repaid to the Minister within that period:

      60 – n

      where

      n
      is the beneficiary’s age on — or the age that they would have attained by — December 31 of the calendar year in which the event occurs,
    • (iii) if the event occurs after the calendar year in which the beneficiary attains 50 years of age but before the calendar year in which they attain 60 years of age and the beneficiary ceased to be a DTC-eligible individual after the calendar year in which they attained 49 years of age, the total amount of grants and bonds paid into the RDSP during the period beginning on January 1 of the year that is 10 years before the year in which the event occurs and ending on the day preceding the day on which the beneficiary ceased to be a DTC-eligible individual, less any portion of that amount that was repaid to the Minister within that period, or

    • (iv) if the event occurs after the calendar year in which the beneficiary attains 59 years of age, nil,

  • (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2021.

 

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