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That it is expedient to amend the Income Tax Act to provide among other things:
Basic Personal Amount
(1) That, for the 2009 taxation year, the basic personal amount, the spouse or common law partner amount, and the eligible dependant amount be increased to $10,320 and be indexed to inflation for subsequent taxation years.
Personal Income Tax Rates
(2) That, for the 2009 and subsequent taxation years, subsection 117(2) of the Act be replaced by the following:
(2) The tax payable under this Part by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be (in this subdivision referred to as the "amount taxable") for a taxation year is
(a) 15% of the amount taxable, if the amount taxable is equal to or less than $40,726;
(b) if the amount taxable is greater than $40,726 and is equal to or less than $81,452, the maximum amount determinable in respect of the taxation year under paragraph (a), plus 22% of the amount by which the amount taxable exceeds $40,726;
(c) if the amount taxable is greater than $81,452, but is equal to or less than $126,264, the maximum amount determinable in respect of the taxation year under paragraph (b), plus 26% of the amount by which the amount taxable exceeds $81,452; and
(d) if the amount taxable is greater than $126,264, the maximum amount determinable in respect of the taxation year under paragraph (c), plus 29% of the amount by which the amount taxable exceeds $126,264.
Age Credit
(3) That, for the 2009 and subsequent taxation years, the formula in subsection 118(2) of the Act be replaced by the following:
A X ($6,408 - B)
Home Renovation Tax Credit
(4) That the Act be modified consequential on the introduction of the Home Renovations Tax Credit in accordance with proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on January 27, 2009.
Home Buyers’ Plan – Increased Withdrawal Limit
(5) That, for the 2009 and subsequent calendar years, in respect of withdrawals made after January 27, 2009, the Home Buyers’ Plan limits described in paragraph (h) of the definition "regular eligible amount", and in paragraph (g) of the definition "supplemental eligible amount", in subsection 146.01(1) of the Act be increased to $25,000.
First-Time Home Buyer’s Tax Credit
(6) That the Act be modified consequential on the introduction of the First-Time Home Buyer’s Tax Credit in accordance with proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on January 27, 2009.
Registered Retirement Savings Plans
(7) That, in the case of a registered retirement savings plan or a registered retirement income fund from which the final payment out of or under the plan or fund is made after 2008 and after the death of the annuitant under the plan or fund,
(a) the Act be amended to allow the annuitant’s legal representative to claim a deduction, in computing the annuitant’s income for the year in which the annuitant died, of an amount not exceeding the amount determined by the formula
A – B
where
A is the total of all amounts each of which is
(i) the amount deemed by subsection 146(8.8), or subsection 146.3(6), of the Act, to have been received by the annuitant out of or under the plan or fund,
(ii) an amount (other than an amount described in clause (iii)) received, after the death of the annuitant, by a taxpayer as a benefit out of or under the plan or fund and included, because of subsection 146(8) or subsection 146.3(5) of the Act, in computing the taxpayer’s income, or
(iii) a tax-paid amount (within the meaning assigned by subsection 146(1) of the Act) in respect of the plan, or in the case of a registered retirement income fund, an amount that would, if the fund were a registered retirement savings plan, be a tax-paid amount in respect of the fund, and
B is the total of all amounts paid out of the plan or fund after the death of the annuitant;
(b) that the deduction described in subparagraph (a) not be available, except to the extent acceptable to the Minister of National Revenue, in circumstances where
(i) at any time after the death of the annuitant, the plan or fund held a non-qualified investment, or
(ii) the last payment out of or under the plan or fund was made after the year following the year in which the annuitant died.
Mineral Exploration Tax Credit
(8) That, for expenses renounced under a flow through share agreement made after March 2009,
(a) paragraph (a) of the definition "flow-through mining expenditure" in subsection 127(9) of the Act be replaced by the following:
(a) that is a Canadian exploration expense incurred by a corporation after March 2009 and before 2011 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2011) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition "mineral resource" in subsection 248(1),
and
(b) paragraphs (c) and (d) of the definition "flow-through mining expenditure" in subsection 127(9) of the Act be replaced by the following:
(c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2009 and before April 2010, and
(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2009 and before April 2010.
Small Business Limit
(9) That, for taxation years that end after 2008, the rules in subsections 125(2) and (3) of the Act determining the business limit of a Canadian-controlled private corporation (CCPC) be modified such that
(a) subject to subparagraph (b), the business limit of a CCPC for a taxation year be the total of
(i) that proportion of $400,000 that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year, and
(ii) that proportion of $500,000 that the number of days in the taxation year that are after 2008 is of the number of days in the taxation year; and
(b) for the purpose of subsection 125(3) of the Act, associated CCPCs allocate a business limit for taxation years beginning after 2008 by allocating a total business limit of $500,000.
(10) That, in applying paragraph 125(5)(a) of the Act, the business limit of a CCPC in respect of each of its second and subsequent taxation years that end in 2009 (where it has more than one taxation year that ends in 2009 and is associated in two or more of those taxation years with another CCPC that has a taxation year that ends in 2009) be determined as if its business limit for its first taxation year that ends in 2009 was determined based on the amount referred to in subsection 125(3) that applies for taxation years that begin after 2008.
(11) That, for fiscal periods of a partnership that end after 2008, the references in the description of M in the definition "specified partnership income" in subsection 125(7) of the Act to "$400,000" and "$1,096" be replaced with references to "$500,000" and "$1,370".
(12) That, subject to paragraph (13), the expenditure limit in subsection 127(10.2) of the Act in respect of a corporation for the 2010 and subsequent taxation years be determined as if,
(a) the formula in subsection 127(10.2) of the Act were the following:
($8 million - 10A) � [($40 million - B) / $40 million]
and
(b) the reference to "$400,000" in paragraph (a) of the description of A in subsection 127(10.2) of the Act were a reference to "$500,000".
(13) That, for a corporation’s 2010 taxation year that begins before 2010, the expenditure limit in subsection 127(10.2) of the Act of the corporation be determined by the formula,
A + [(B-A) � (C/D)]
where
A is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Act as that subsection read in its application to taxation years that end in 2009;
B is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Act, as provided for in paragraph (12) without reference to this paragraph;
C is the number of days in the taxation year that are after 2009; and
D is the total number of days in the taxation year.
(14) That, subject to paragraph (15), in respect of the 2010 and subsequent taxation years, the reference to "$400,000" in the formula in the definition "qualifying income limit" in subsection 127.1(2) of the Act, as proposed in subclause 33(2) of the Notice and Ways and Means Motion tabled in Parliament on November 28, 2008, be replaced by a reference to "$500,000".
(15) That, for 2010 taxation years that begin before 2010, the reference to "$400,000" in the formula in the definition "qualifying income limit" in subsection 127.1(2) of the Act, as proposed in subclause 33(2) of the Notice and Ways and Means Motion tabled in Parliament on November 28, 2008, be replaced by a reference to the amount determined by the following formula
$400,000 + [$100,000 � (A/B)]
where
A is the number of days in the taxation year that are after 2009; and
B is the total number of days in the taxation year.
(16) That, subject to paragraph (17) in respect of taxation years that end after 2008, a reference to "$400,000" in paragraph 157(1.2)(a) of the Act be replaced by a reference to "$500,000."
(17) That for 2009 taxation years that begin before 2009, paragraph 157(1.2)(a) of the Act be read as follows:
(a) for which the amount determined under subsection 157(1.3) of the Act
(i) for the taxation year does not exceed an amount that is the total of
(A) that proportion of $500,000 that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year; and
(B) that proportion of $400,000 that the number of days in the taxation year that are before 2009 is of the number of days in the taxation year; or
(ii) for the preceding taxation year does not exceed $400,000;
Acquisition of Control of a Corporation
(18) That subsection 256(9) of the Act not apply for the purposes of determining if a corporation is, at any time, a small business corporation or a Canadian-controlled private corporation (CCPC), and that
(a) this paragraph apply in respect of acquisitions of control of a corporation that occur after 2005, other than in respect of such an acquisition of control that occurs before January 28, 2009 in respect of which the taxpayer elects on or before the taxpayer’s filing-due date for the taxpayer’s 2009 taxation year that this measure not apply; and
(b) a taxpayer be deemed to have made the election described in subparagraph (a) in respect of an acquisition of control of a corporation if it can reasonably be considered that the position taken in respect of the acquisition of control in a return of income, notice of objection or notice of appeal filed or served under the Act before January 28, 2009 relies upon an interpretation of that subsection of the Act to the effect that the subsection applies for the purposes of determining if the corporation was a small business corporation or a CCPC at the time of the transfer of shares of the corporation that caused the acquisition of control to occur.
Mandatory filing of return by electronic transmission
(19) That, for taxation years that end after 2009, corporations that meet conditions prescribed by the Minister of National Revenue be required to file the return of income required to be filed under section 150 of the Act by way of electronic filing.
(20) That, for taxation years that end after 2010, the Act be amended to provide that every person who fails to file a return of income for a taxation year by way of electronic filing as required by paragraph (19) be liable to a penalty of
(a) where the taxation year ends in 2011, $250;
(b) where the taxation year ends in 2012, $500; and
(c) where the taxation year ends after 2012, $1,000.
(21) That, for information returns that are prescribed for the purposes of this paragraph and required to be filed after 2009, the Act be amended to provide that every person (other than a registered charity) or partnership who fails to file such an information return when required by the Act or the Income Tax Regulations is liable to a penalty of the greater of
(a) $100; and
(b) where the taxpayer is required to file on a day one or more such information returns and the number of those information returns of a particular type so required to be filed is
(i) less than 51, $10 for each day during which the failure continues, not exceeding 100 days,
(ii) more than 50 but less than 501, $15 for each day during which the failure continues, not exceeding 100 days,
(iii) more than 500 but less than 2,501, $25 for each day during which the failure continues, not exceeding 100 days,
(iv) more than 2,500 but less than 10,001, $50 for each day during which the failure continues, not exceeding 100 days, and
(v) more than 10,000, $75 for each day during which the failure continues, not exceeding 100 days.
(22) That for information returns that are prescribed for the purposes of this paragraph and required to be filed electronically after 2009, the Act be amended to provide that every person (other than a registered charity) or partnership who fails to file such an information return by way of electronic filing is liable to a penalty of, where the number of those information returns of a particular type so required to be filed is
(a) more than 50 but less than 251, $250;
(b) more than 250 but less than 501, $500;
(c) more than 500 but less than 2,501, $1500; and
(d) more than 2500, $2,500.
Interest Deductibility
(23) That section 18.2 of the Act be repealed in respect of interest and other borrowing costs paid or payable in respect of a period or periods that begin after 2011.
(24) That, consequential to the repeal of section 18.2 of the Act:
(a) subsection 20(3) be amended, in respect of interest paid or payable in respect of a period or periods that begin after January 27, 2009, to remove the scheduled reference to section 18.2;
(b) subparagraphs 53(1)(e)(xiv) and 53(2)(c)(xiii) and subsections 91(5.1) to (5.3) of the Act be repealed applicable after 2011; and
(c) subsection 92(1) be amended, applicable after 2011, to repeal subparagraph 92(1)(a)(ii) and to remove the reference to section 91(5.1) in subparagraph 92(1)(b)(ii).
Notice of Ways and Means Motion to Amend the Excise Tax Act relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST)
That it is expedient to amend the Excise Tax Act as follows:
Simplification of the GST/HST for the Direct Selling Industry
1. (1) The Excise Tax Act is amended by adding the following after section 177:
Network Sellers
Definitions
178. (1) The following definitions apply in this section and section 236.5.
"network commission"
� commission de r�seau �
"network commission" of a sales representative of a person means an amount that is payable by the person to the sales representative under an agreement between the person and the sales representative
(a) as consideration for a supply of a service, made by the sales representative, of arranging for the sale of a select product or a sales aid of the person; or
(b) solely as a consequence of a supply of a service, made by any sales representative of the person described in paragraph (a) of the definition "sales representative", of arranging for the sale of a select product or a sales aid of the person.
"network seller"
� vendeur de r�seau �
"network seller" means a person notified by the Minister of an approval under subsection (5).
"sales aid"
� mat�riel de promotion �
"sales aid" of a particular person that is a network seller or a sales representative of a network seller means property (other than a select product of any person) that
(a) is a customized business form or a sample, demonstration kit, promotional or instructional item, catalogue or similar personal property acquired, manufactured or produced by the particular person for sale to assist in the promotion, sale or distribution of select products of the network seller; and
(b) is neither sold nor held for sale by the particular person to a sales representative of the network seller that is acquiring the property for use as capital property.
"sales representative"
� repr�sentant commercial �
"sales representative" of a particular person means
(a) a person (other than a person that is an employee of the particular person or that acts, in the course of its commercial activities, as agent in making supplies of select products of the particular person on behalf of the particular person) that
(i) has a contractual right under an agreement with the particular person to arrange for the sale of select products of the particular person, and
(ii) does not arrange for the sale of select products of the particular person primarily at a fixed place of business of the person other than a private residence; or
(b) a person (other than a person that is an employee of the particular person or that acts, in the course of its commercial activities, as agent in making supplies of select products of the particular person on behalf of the particular person) that has a contractual right under an agreement with the particular person to be paid an amount by the particular person solely as a consequence of a supply of a service, made by a person described in paragraph (a), of arranging for the sale of a select product or a sales aid of the particular person.
"select product"
� produit d�termin� �
"select product" of a person means tangible personal property that
(a) is acquired, manufactured or produced by the person for supply by the person for consideration, otherwise than as used property, in the ordinary course of business of the person; and
(b) is ordinarily acquired by consumers by way of sale.
Qualifying network seller
(2) For the purposes of this section, a person is a qualifying network seller throughout a fiscal year of the person if
(a) all or substantially all of the total of all consideration, included in determining the income from a business of the person for the fiscal year, for supplies made in Canada by way of sale is for
(i) supplies of select products of the person, made by the person, by way of sales that are arranged for by sales representatives of the person (in this subsection referred to as "select supplies"), or
(ii) where the person is a direct seller (as defined in section 178.1), supplies by way of sale of exclusive products (as defined in that section) of the person made by the person to independent sales contractors (as defined in that section) of the person at any time when an approval of the Minister for the application of section 178.3 to the person is in effect;
(b) all or substantially all of the total of all consideration, included in determining the income from a business of the person for the fiscal year, for select supplies is for select supplies made to consumers;
(c) all or substantially all of the sales representatives of the person to which network commissions become payable by the person during the fiscal year are sales representatives, each having a total of such network commissions of not more than the amount determined by the formula
$30,000 � A/365
where
A is the number of days in the fiscal year; and
(d) the person and each of its sales representatives have made joint elections under subsection (4).
Application
(3) A person may apply to the Minister, in prescribed form containing prescribed information and filed in prescribed manner before the first day of a fiscal year of the person, to have subsection (7) apply to the person and each of its sales representatives beginning on that day if the person
(a) is registered under Subdivision d of Division V; and
(b) is reasonably expected to be, throughout the fiscal year, engaged exclusively in commercial activities and a qualifying network seller.
Joint election
(4) If subsection (3) applies to a person or a person is a network seller, the person and a sales representative of the person may jointly elect, in prescribed form containing prescribed information, to have subsection (7) apply to them at all times when an approval granted under subsection (5) is in effect.
Approval or refusal
(5) If the Minister receives an application under subsection (3) from a person, the Minister may approve the application of subsection (7) to the person and each of its sales representatives beginning on the first day of a fiscal year of the person or may refuse the application and the Minister shall notify the person in writing of the approval and the day on which it becomes effective or of the refusal.
Evidence of joint elections
(6) Every network seller shall maintain evidence satisfactory to the Minister that the network seller and each of its sales representatives have made joint elections under subsection (4).
Effect of approval
(7) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, a network commission becomes payable by the network seller to a sales representative of the network seller as consideration for a taxable supply (other than a zero-rated supply) of a service made in Canada by the sales representative, the taxable supply is deemed not to be a supply.
Sales aids
(8) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, the network seller or a sales representative of the network seller makes in Canada a taxable supply by way of sale of a sales aid of the network seller or of the sales representative, as the case may be, to a sales representative of the network seller, the taxable supply is deemed not to be a supply.
Host gifts
(9) For the purposes of this Part, if, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, a sales representative of the network seller makes a supply of property to an individual as consideration for the supply by the individual of a service of acting as a host at an occasion that is organized for the purpose of allowing the sales representative to promote, or to arrange for the sale of, select products of the network seller, the individual is deemed not to have made a supply of the service and the service is deemed not to be consideration for a supply.
Notification of refusal
(10) If the Minister notifies a person of a refusal under subsection (5) at any time when the person and a sales representative of the person have made a joint election under subsection (4), the person shall forthwith notify the sales representative of the refusal in a manner satisfactory to the Minister.
Revocation by Minister
(11) The Minister may revoke an approval granted under subsection (5) in respect of a network seller and each of its sales representatives, effective on the first day of a fiscal year of the network seller, if, before that day, the Minister notifies the network seller of the revocation and the day on which it becomes effective and if
(a) the network seller fails to comply with any provision of this Part;
(b) it can reasonably be expected that the network seller will not be a qualifying network seller throughout the fiscal year;
(c) the network seller requests in writing that the Minister revoke the approval;
(d) the notice referred to in subsection 242(1) has been given to, or the request referred to in subsection 242(2) has been filed by, the network seller; or
(e) it can reasonably be expected that the network seller will not be engaged exclusively in commercial activities throughout the fiscal year.
Deemed revocation
(12) If an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect at any time in a particular fiscal year of the network seller and, at any time during the particular fiscal year, the network seller ceases to be engaged exclusively in commercial activities or the Minister cancels the registration of the network seller, the approval is deemed to be revoked, effective on the first day of the fiscal year of the network seller immediately following the particular fiscal year, unless, on that first day, the network seller is registered under Subdivision d of Division V and it is reasonably expected that the network seller will be engaged exclusively in commercial activities throughout that following fiscal year.
Effect of revocation
(13) If an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is revoked under subsection (11) or (12), the following rules apply:
(a) the approval ceases to have effect immediately before the day on which the revocation becomes effective;
(b) the network seller shall forthwith notify each of its sales representatives in a manner satisfactory to the Minister of the revocation and the day on which it becomes effective; and
(c) a subsequent approval granted under subsection (5) in respect of the network seller and each of its sales representatives shall not become effective before the first day of a fiscal year of the network seller that is at least two years after the day on which the revocation became effective.
Failure to notify on revocation
(14) For the purposes of this Part, a taxable supply (other than a zero-rated supply) of a service made in Canada by a sales representative of a network seller is deemed not to be a supply if
(a) the consideration for the taxable supply is a network commission that becomes payable by the network seller to the sales representative at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation on the basis of any of paragraphs (11)(a) to (c);
(b) the approval could not have been revoked on the basis of paragraph (11)(d) or (e) and would not have otherwise been revoked under subsection (12);
(c) at the time the network commission becomes payable, the sales representative
(i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and
(ii) neither knows, nor ought to know, that the approval ceased to have effect; and
(d) an amount has not been charged or collected as, or on account of, tax in respect of the taxable supply.
Failure to notify on revocation
(15) Subsection (16) applies if the following conditions are satisfied:
(a) the consideration for a taxable supply (other than a zero-rated supply) of a service made in Canada by a sales representative of a network seller is a network commission that becomes payable by the network seller to the sales representative at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection (11) or (12);
(b) the approval was, or could at any time otherwise have been, revoked on the basis of paragraph (11)(d) or (e) or was, or would at any time otherwise have been, revoked under subsection (12);
(c) at the time the network commission becomes payable, the sales representative
(i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and
(ii) neither knows, nor ought to know, that the approval ceased to have effect; and
(d) an amount has not been charged or collected as, or on account of, tax in respect of the taxable supply.
Failure to notify on revocation
(16) If the conditions described in paragraphs (15)(a) to (d) are satisfied, the following rules apply for the purposes of this Part:
(a) section 166 shall not apply in respect of the taxable supply described in paragraph (15)(a);
(b) tax that becomes payable or that would, in the absence of section 166, become payable in respect of the taxable supply shall not be included in determining the net tax of the sales representative referred to in paragraph (15)(a); and
(c) the consideration for the taxable supply shall not, in determining whether the sales representative is a small supplier, be included in the total referred to in paragraph 148(1)(a).
Sales aids on revocation
(17) For the purposes of this Part, a taxable supply of a sales aid of a particular sales representative of a network seller made in Canada by way of sale to another sales representative of the network seller is deemed not to be a supply if
(a) the consideration for the taxable supply becomes payable at any time after an approval granted under subsection (5) in respect of the network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection (11) or (12);
(b) at the time the consideration becomes payable, the particular sales representative
(i) has not been notified of the revocation by the network seller, as required under paragraph (13)(b), or by the Minister, and
(ii) neither knows, nor ought to know, that the approval ceased to have effect; and
(c) an amount has not been charged or collected as, or on account of, tax in respect of the taxable supply.
Restriction on input tax credits
(18) If
(a) a registrant that is a network seller in respect of which an approval granted under subsection (5) is in effect acquires or imports property (other than a select product of the network seller) or a service or brings it into a participating province for supply to a sales representative of the network seller or an individual related to the sales representative,
(b) tax became payable in respect of the acquisition, importation or bringing in, as the case may be,
(c) the property or service is so supplied by the registrant for no consideration or for consideration that is less than the fair market value of the property or service, and
(d) the sales representative or individual is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the sales representative or individual, as the case may be,
the following rules apply:
(e) no tax is payable in respect of the supply, and
(f) in determining an input tax credit of the registrant, no amount shall be included in respect of tax that becomes payable, or is paid without having become payable, by the registrant in respect of the property or service.
Appropriations for sales representatives
(19) For the purposes of this Part, if a registrant that is a network seller in respect of which an approval granted under subsection (5) is in effect appropriates, at any time, property (other than a select product of the network seller) that was acquired, manufactured or produced, or any service acquired or performed, in the course of commercial activities of the registrant, to or for the benefit of a sales representative of the network seller, or any individual related to the sales representative, that is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the sales representative or individual, in any manner (otherwise than by way of supply for consideration equal to the fair market value of the property or service), the registrant shall be deemed
(a) to have made a supply of the property or service for consideration paid at that time equal to the fair market value of the property or service at that time; and
(b) except where the supply is an exempt supply, to have collected, at that time, tax in respect of the supply calculated on that consideration.
Exception
(20) Subsection (19) does not apply to property or a service appropriated by a registrant where the registrant was not entitled to claim an input tax credit in respect of the property or service because of section 170.
Ceasing to be a registrant
(21) If, at any time when an approval granted under subsection (5) in respect of a network seller and each of its sales representatives is in effect, a sales representative of the network seller ceases to be a registrant, paragraph 171(3)(a) does not apply to sales aids of the sales representative that were supplied to the sales representative by the network seller or another sales representative of the network seller at any time when the approval was in effect.
Non-arm’s length supply
(22) Section 155 does not apply to the supply described in subsection (9) made to an individual acting as a host.
(2) Subsection (1) applies in respect of any fiscal year of a person that begins on or after January 1, 2010.
2. (1) The Act is amended by adding the following after section 236.4:
Adjustment by network seller if conditions not met
236.5 (1) If a network seller fails to satisfy the conditions referred to in paragraphs 178(2)(a) to (c) for a fiscal year of the network seller in respect of which an approval granted under subsection 178(5) is in effect and, at any time during the fiscal year, a network commission would, if this Part were read without reference to subsection 178(7), become payable by the network seller to a sales representative of the network seller as consideration for a taxable supply (other than a zero-rated supply) made in Canada by the sales representative, the network seller shall, in determining the net tax for the first reporting period of the network seller following the fiscal year, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on the earliest day on which consideration for the taxable supply is paid or becomes due and ending on the day on or before which the network seller is required to file a return for the reporting period that includes that earliest day.
Adjustment by network seller due to notification failure
(2) If, at any time after an approval granted under subsection 178(5) in respect of a network seller and each of its sales representatives ceases to have effect as a consequence of a revocation under subsection 178(11) or (12), a network commission would, if this Part were read without reference to subsection 178(7), become payable as consideration for a taxable supply (other than a zero-rated supply) made in Canada by a sales representative of the network seller that has not been notified, as required under paragraph 178(13)(b), of the revocation and an amount is not charged or collected as, or on account of, tax in respect of the taxable supply, the network seller shall, in determining the net tax for the particular reporting period of the network seller that includes the earliest day on which consideration for the taxable supply is paid or becomes due, add an amount equal to interest, at the prescribed rate, on the total amount of tax that would be payable in respect of the taxable supply if tax were payable in respect of the taxable supply, computed for the period beginning on that earliest day and ending on the day on or before which the network seller is required to file a return for the particular reporting period.
(2) Subsection (1) applies to any reporting period of a person included in any fiscal year of the person that begins on or after January 1, 2010.
3. (1) Section 242 of the Act is amended by adding the following after subsection (2.2):
Request for cancellation
(2.3) If, at any time when an approval granted under subsection 178(5) in respect of a network seller (as defined in subsection 178(1)) and each of its sales representatives (as defined in that subsection) is in effect, a sales representative of the network seller would be a small supplier if the approval had been in effect at all times before that time and the sales representative files with the Minister in prescribed manner a request, in prescribed form containing prescribed information, to have the registration of the sales representative cancelled, the Minister shall cancel the registration of the sales representative.
(2) Subsection (1) comes into force on January 1, 2010.
Notice of Ways and Means Motion to Amend the Customs Tariff
That it is expedient to amend the Customs Tariff to provide among other things:
1. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to provide that the Most-Favoured-Nation Tariff rates of customs duty and, where necessary, the applicable preferential tariff rates of customs duty, be "Free" for the following tariff items:
| 8406.90.32 8406.90.34 8406.90.37 8406.90.39 8413.91.10 8413.91.20 8417.20.00 8418.61.91 8419.89.21 8419.89.90 8421.39.90 8422.19.00 8423.20.00 8423.30.00 8423.81.00 8423.82.00 8423.89.00 8423.90.00 8427.20.11 8439.10.10 |
8439.20.90 8439.30.10 8443.12.00 8462.99.19 8464.90.10 8468.10.00 8468.20.00 8472.10.00 8479.50.91 8479.89.30 8479.89.41 8482.99.11 8483.50.20 8483.50.90 8483.60.90 8483.90.20 8483.90.30 8504.40.10 8504.40.40 8505.11.00 |
8515.11.00 8515.31.00 8515.39.00 8515.80.00 8535.29.00 8535.40.00 8535.90.20 8535.90.30 8535.90.90 8536.30.20 8536.30.90 8536.50.12 8536.50.19 8536.90.99 8537.10.19 8537.10.29 8537.10.91 8538.90.10 8538.90.20 8538.90.39 |
8540.11.11 8540.11.12 8540.11.21 8540.11.22 8540.11.90 8540.12.19 8540.12.99 8540.40.90 8540.50.90 8540.60.90 8540.72.00 8540.79.00 8540.89.00 8543.20.00 8546.10.00 8546.20.00 |
2. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended by revoking the tariff items set out in column 1 below and replacing them, respectively, with the tariff items set out in column 2 below and that the Most-Favoured-Nation Tariff rate of customs duty, and where necessary the applicable preferential tariff rates of customs duty, in respect of those items, be "Free":
| Column 1 | Column 2 | Column 1 | Column 2 |
|---|---|---|---|
| 8406.81.10 8406.81.90 |
8406.81.00 | 8419.32.10 8419.32.20 |
8419.32.00 |
| 8406.82.11 8406.82.19 8406.82.90 |
8406.82.00 |
8419.39.10 8419.39.91 8419.39.99 |
8419.39.00 |
| 8413.50.10 8413.50.90 |
8413.50.00 | 8419.40.10 8419.40.90 |
8419.40.00 |
| 8413.60.10 8413.60.90 |
8413.60.00 | 8419.81.10 8419.81.90 |
8419.81.00 |
| 8413.81.10 8413.81.90 |
8413.81.00 | 8420.10.10 8420.10.90 |
8420.10.00 |
| 8414.10.10 8414.10.91 8414.10.99 |
8414.10.00 | 8421.21.10 8421.21.90 |
8421.21.00 |
| 8416.10.10 8416.10.90 |
8416.10.00 | 8421.22.10 8421.22.90 |
8421.22.00 |
| 8417.10.10 8417.10.91 8417.10.99 |
8417.10.00 | 8421.29.10 8421.29.90 |
8421.29.00 |
|
8417.80.10 |
8417.80.00 | 8422.20.10 8422.20.91 8422.20.99 |
8422.20.00 |
| 8417.90.10 8417.90.20 |
8417.90.00 | 8422.30.10 8422.30.91 8422.30.99 |
8422.30.00 |
| 8418.69.10 8418.69.90 |
8418.69.00 | 8422.40.10 8422.40.91 8422.40.99 |
8422.40.00 |
| 8419.31.10 8419.31.90 |
8419.31.00 | 8424.20.10 8424.20.90 |
8424.20.00 |
| Column 1 | Column 2 | Column 1 | Column 2 |
|---|---|---|---|
| 8424.30.10 8424.30.90 |
8424.30.00 | 8443.15.10 8443.15.20 |
8443.15.00 |
| 8424.89.10 8424.89.90 |
8424.89.00 | 8443.16.10 8443.16.20 |
8443.16.00 |
| 8424.90.10 8424.90.90 |
8424.90.00 | 8443.19.10 8443.19.20 |
8443.19.00 |
| 8427.10.91 8427.10.99 |
8427.10.90 | 8443.32.10 8443.32.90 |
8443.32.00 |
| 8427.20.91 8427.20.99 |
8427.20.90 | 8443.39.10 8443.39.90 |
8443.39.00 |
| 8427.90.10 8427.90.90 |
8427.90.00 | 8443.91.10 8443.91.90 |
8443.91.00 |
| 8438.10.10 8438.10.90 |
8438.10.00 | 8443.99.10 8443.99.90 |
8443.99.00 |
| 8438.50.10 8438.50.91 8438.50.99 |
8438.50.00 | 8452.21.10 8452.21.90 |
8452.21.00 |
| 8438.80.10 8438.80.91 8438.80.99 |
8438.80.00 | 8453.10.10 8453.10.91 8453.10.99 |
8453.10.00 |
| 8438.90.10 8438.90.20 |
8438.90.00 |
8454.20.10 |
8454.20.00 |
| 8440.10.10 8440.10.90 |
8440.10.00 | 8454.30.10 8454.30.90 |
8454.30.00 |
| 8441.10.10 8441.10.90 |
8441.10.00 | 8456.10.10 8456.10.90 |
8456.10.00 |
| 8442.50.10 8442.50.20 8442.50.90 |
8442.50.00 | 8456.20.10 8456.20.90 |
8456.20.00 |
| 8443.11.10 8443.11.20 |
8443.11.00 | 8456.90.10 8456.90.90 |
8456.90.00 |
| 8443.14.10 8443.14.20 |
8443.14.00 | 8462.99.91 8462.99.99 |
8462.99.90 |
| Column 1 | Column 2 | Column 1 | Column 2 |
|---|---|---|---|
| 8464.20.10 8464.20.90 |
8464.20.00 |
8482.20.10 |
8482.20.00 |
| 8465.91.10 8465.91.90 |
8465.91.00 | 8482.91.10 8482.91.91 8482.91.99 |
8482.91.00 |
| 8465.92.10 8465.92.90 |
8465.92.00 | 8482.99.91 8482.99.99 |
8482.99.90 |
| 8465.93.10 8465.93.90 |
8465.93.00 | 8484.10.10 8484.10.90 |
8484.10.00 |
| 8465.94.10 8465.94.90 |
8465.94.00 | 8484.20.10 8484.20.90 |
8484.20.00 |
| 8465.95.10 8465.95.90 |
8465.95.00 |
8484.90.10 |
8484.90.00 |
| 8465.96.10 8465.96.90 |
8465.96.00 | 8487.90.10 8487.90.90 |
8487.90.00 |
| 8465.99.10 8465.99.90 |
8465.99.00 | 8504.10.10 8504.10.90 |
8504.10.00 |
| 8472.90.10 8472.90.90 |
8472.90.00 | 8504.21.10 8504.21.90 |
8504.21.00 |
| 8479.20.10 8479.20.90 |
8479.20.00 | 8504.22.10 8504.22.90 |
8504.22.00 |
| 8479.30.10 8479.30.90 |
8479.30.00 | 8504.23.10 8504.23.90 |
8504.23.00 |
| 8479.40.10 8479.40.90 |
8479.40.00 | 8504.31.10 8504.31.90 |
8504.31.00 |
| 8479.81.10 8479.81.90 |
8479.81.00 | 8504.32.10 8504.32.90 |
8504.32.00 |
| 8479.82.10 8479.82.90 |
8479.82.00 | 8504.33.10 8504.33.90 |
8504.33.00 |
| 8479.89.91 8479.89.99 |
8479.89.90 | 8504.34.10 8504.34.90 |
8504.34.00 |
| 8480.41.10 8480.41.90 |
8480.41.00 | 8504.50.10 8504.50.20 8504.50.90 |
8504.50.00 |
| Column 1 | Column 2 | Column 1 | Column 2 |
|---|---|---|---|
| 8505.19.10 8505.19.90 |
8505.19.00 | 8536.49.10 8536.49.90 |
8536.49.00 |
| 8505.20.10 8505.20.90 |
8505.20.00 | 8536.69.10 8536.69.20 8536.69.90 |
8536.69.00 |
| 8512.20.10 8512.20.90 |
8512.20.00 | 8537.10.92 | 8537.10.99 |
|
8512.90.10 |
8512.90.00 | 8537.20.10 8537.20.90 |
8537.20.00 |
| 8514.10.11 8514.10.19 8514.10.90 |
8514.10.00 | 8538.10.10 8538.10.90 |
8538.10.00 |
| 8514.20.11 8514.20.19 8514.20.90 |
8514.20.00 | 8538.90.91 8538.90.99 |
8538.90.90 |
| 8514.30.11 8514.30.19 8514.30.90 |
8514.30.00 | 8540.81.10 8540.81.90 |
8540.81.00 |
| 8514.40.10 8514.40.90 |
8514.40.00 | 8543.10.10 8543.10.90 |
8543.10.00 |
| 8515.19.10 8515.19.90 |
8515.19.00 | 8543.30.10 8543.30.91 8543.30.99 |
8543.30.00 |
| 8515.21.10 8515.21.90 |
8515.21.00 | 8543.70.10 8543.70.21 8543.70.29 8543.70.91 8543.70.99 |
8543.70.00 |
| 8515.29.10 8515.29.90 |
8515.29.00 | 8543.90.20 8543.90.90 |
8543.90.00 |
| 8535.10.10 8535.10.90 |
8535.10.00 | 8544.20.10 8544.20.90 |
8544.20.00 |
| 8535.21.10 8535.21.90 |
8535.21.00 | 8544.42.10 8544.42.20 8544.42.90 |
8544.42.00 |
| 8535.30.10 8535.30.90 |
8535.30.00 | 8547.10.10 8547.10.90 |
8547.10.00 |
| 8536.10.10 8536.10.90 |
8536.10.00 | 8547.90.10 8547.90.90 |
8547.90.00 |
| 8536.41.10 8536.41.20 8536.41.90 |
8536.41.00 |
3. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to add tariff item No. 8413.70.91 with a Most-Favoured-Nation Tariff rate of customs duty of "Free" for "Submersible pumps" currently classified under tariff item No. 8413.70.90 which is being revoked.
4. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to add tariff item No. 8413.70.99 to cover goods currently classified in tariff item No. 8413.70.90 except for "Submersible pumps".
5. That the Description of Goods of Tariff item No. 8518.30.91 in the List of Tariff Provisions set out in the schedule to the Customs Tariff be replaced by the following:
----Headphones, including earphones, and telephone headsets
6. That the Description of Goods of tariff item No. 8537.10.31 in the List of Tariff Provisions set out in the schedule to the Customs Tariff be replaced by the following:
----Automated industrial control systems, excluding panels for anode formers
7. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to add tariff item No. 8537.10.93 to maintain the current rates of customs duty on "Panel boards and distribution boards" currently classified under tariff item No. 8537.10.99.
8. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to reduce the Most-Favoured-Nation Tariff rate of customs duty and, where necessary, the applicable preferential tariff rates of customs duty on tariff item No. 8537.10.99 to "Free".
9. That the List of Tariff Provisions set out in the schedule to the Customs Tariff be amended to
a) delete the reference to "Gas turbines or parts thereof;" in the Description of Goods of tariff item No. 9945.00.00; and
b) add tariff item No. 9976.00.00 with a Most-Favoured-Nation Tariff rate of customs duty of "Free" for "Articles and materials, wholly or in chief part of metal, for use in the manufacture of gas turbines or parts thereof" and "Articles for use in the repair or overhaul of gas turbines or parts thereof" currently classified in various chapters in the List of Tariff Provisions.
10. That any enactment founded on sections 1 to 9 be deemed to have come into force on January 28, 2009.
