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Archived - Budget 2011
Annex 3
Tax Measures: Supplementary Information and Notices of Ways and Means Motions (June 6, 2011)
Tax Measures: Notices of Ways and Means Motions
Notice of Ways and Means Motion to Amend the Income Tax Act and the Income Tax Regulations
That it is expedient to amend the Income Tax Act and the Income Tax Regulations to provide among other things:
Children’s Arts Tax Credit
(1) That, for the 2011 and subsequent taxation years, the Act be amended by adding the following after section 118.03:
118.031
Definitions
(1) The following definitions apply in this section.
“eligible expense” in respect of a qualifying child of an individual for a taxation year means the amount of a fee paid to a qualifying entity (other than an amount paid to a person that is, at the time the amount is paid, the individual’s spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a prescribed program of artistic, cultural, recreational or developmental activity and, for the purposes of this section, that cost
(a) includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired; and
(b) does not include
(i) the cost of accommodation, travel, food or beverages,
(ii) any amount deductible in computing any person’s income for any taxation year, or
(iii) any amount, other than a medical expense included in the description of B in the formula in subsection 118.2(1) to the extent that the total of all such medical expenses is less than or equal to the amount in C in that formula, included in computing a deduction from any person’s tax payable under any Part of this Act, for any taxation year.
“qualifying child”, of an individual, has the meaning assigned by section 118.03.
“qualifying entity” means a person or partnership that offers one or more programs of artistic, cultural, recreational or developmental activity prescribed for the purposes of the definition “eligible expense”.
Children’s arts tax credit
(2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount determined by the formula
A × B
where
A is the appropriate percentage for the taxation year; and
B is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $500 and the amount determined by the formula
C – D
where
C is the total of all amounts each of which is an amount paid in the taxation year by the individual, or by the individual’s spouse or common-law partner, that is an eligible expense in respect of the qualifying child of the individual, and
D is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value of C in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person).
Children’s arts tax credit – child with disability
(3) For the purpose of computing the tax payable under this Part by an individual for a taxation year there may be deducted in respect of a qualifying child of the individual an amount equal to $500 multiplied by the appropriate percentage for the taxation year if
(a) the amount referred to in the description of B in subsection (2) is $100 or more; and
(b) an amount is deductible in respect of the qualifying child under section 118.3 in computing any person’s tax payable under this Part for the taxation year.
Apportionment of credit
(4) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a qualifying child, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to deduct an amount for the year under this section in respect of that qualifying child, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.
Volunteer Firefighters Tax Credit
(2) That, for the 2011 and subsequent taxation years,
(a) the Act be amended by adding the following after section 118.05:
118.06
Eligible volunteer firefighting services
(1) In this section, “eligible volunteer firefighting services” means services provided by an individual in the individual’s capacity as a volunteer firefighter to a fire department that consist primarily of responding to and being on call for firefighting and related emergency calls, attending meetings held by the fire department and participating in required training related to the prevention or suppression of fires, but does not include services provided to a particular fire department if the individual provides firefighting services to the department otherwise than as a volunteer.
Volunteer firefighter tax credit
(2) For the purpose of computing the tax payable under this Part for a taxation year by an individual, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the taxation year if the individual
(a) performs not less than 200 hours of eligible volunteer firefighting services in the taxation year for one or more fire departments; and
(b) provides the certificates referred to in subsection (3) as and when requested by the Minister.
Certificate
(3) If the Minister so demands, an individual making a claim under this section in respect of a taxation year shall provide to the Minister a written certificate from the fire chief or a delegated official of each fire department to which the individual provided eligible volunteer firefighting services for the year, attesting to the number of hours of eligible volunteer firefighting services performed in the year by the individual for the particular fire department.
and
(b) the portion of subsection 81(4) of the Act that is after paragraph (b) be replaced by the following:
there shall not be included in computing the individual’s income derived from the performance of those duties the lesser of $1,000 and the total of those amounts, other than, if the individual makes a claim under section 118.06 for the year, amounts received in respect of duties as a firefighter.
Family Caregiver Tax Credit
(3) That, subject to paragraphs (4) and (5), for the 2011 and subsequent taxation years,
(a) subparagraphs (a)(i) and (ii) of the description of B in subsection 118(1) of the Act be replaced with the following:
(i) $10,527, and
(ii) the amount determined by the formula
$10,527 + C – C.1
where
C is
(A) $2,000, if the spouse or common-law partner is dependent on the individual by reason of mental or physical infirmity, and
(B) in any other case, nil, and
C.1 is the income of the individual’s spouse or common-law partner for the year or, where the individual and the individual’s spouse or common-law partner are living separate and apart at the end of the year because of a breakdown of their marriage or common-law partnership, the spouse’s or common-law partner’s income for the year while married to, or in a common-law partnership with, the individual and not so separated,
(b) subparagraphs (b)(iii) and (iv) of the description of B in subsection 118(1) of the Act be replaced with the following:
(iii) $10,527, and
(iv) the amount determined by the formula
$10,527 + D – D.1
where
D is
(A) $2,000, if
(I) the dependent person is, at the end of the taxation year, 18 years of age or older and was, at any time in the year, dependent on the individual by reason of mental or physical infirmity, or
(II) the dependent person is a person, other than a child of the individual in respect of whom paragraph (b.1) applies, who, at the end of the taxation year, is under the age of 18 years and who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the dependent person’s personal needs and care, when compared to persons of the same age, and was so dependent on the individual at any time in the year, and
(B) in any other case, nil, and
D.1 is the dependent person’s income for the year,
(c) paragraph (b.1) of the description of B in subsection 118(1) of the Act be replaced with the following:
(b.1) if
(i) a child, who is under the age of 18 years at the end of the taxation year, of the individual ordinarily resides throughout the taxation year with the individual together with another parent of the child, the total of
(A) $2,131 for each such child, and
(B) $2,000 for each such child who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the child’s personal needs and care, when compared to children of the same age, or
(ii) except where subparagraph (i) applies, the individual may deduct an amount under paragraph (b) in respect of the individual’s child who is under the age of 18 years at the end of the taxation year, or could deduct such an amount in respect of that child if paragraph 118(4)(a) and the reference in paragraph 118(4)(b) to “or the same domestic establishment” did not apply to the individual for the taxation year and if the child had no income for the year, the total of
(A) $2,131 for each such child, and
(B) $2,000 for each such child who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the child’s personal needs and care, when compared to children of the same age,
(d) the formula in paragraph (c.1) of the description of B in subsection 118(1) of the Act and the portion of that paragraph after that formula be replaced with the following:
$18,906 + E – E.1
where
E is
(A) $2,000, if the person is dependent on the individual by reason of mental or physical infirmity, and
(B) in any other case, nil, and
E.1 is the greater of $14,624 and the particular person’s income for the year,
(e) the formula in paragraph (d) of the description of B in subsection 118(1) of the Act and the portion of that paragraph after that formula be replaced with the following:
$10,358 + $2,000 – F
where
F is the greater of $6,076 and the dependant’s income for the year, and.
(4) That, for the 2011 taxation year, the amount of $2,000 referred to in paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1) is to be read as nil.
(5) That, for the purpose of making the adjustment provided under subsection 117.1(1) of the Act
(a) subsection 117.1(1) shall not apply for the purposes of computing the amounts used for the 2011 taxation year in respect of the amounts expressed in dollars referred to in paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1);
(b) for the application of subsection 117.1(1) to the 2012 taxation year in respect of paragraph (d) of the description of B in subsection 118(1), in lieu of the amounts of $10,358 and $6,076, the amounts to be considered as the amounts to be used for the preceding year shall be $10,527 and $6,245 respectively; and
(c) for the 2012 taxation year, subsection 117.1(1) shall not apply in respect of the amount of $2,000 referred to in paragraphs (a), (b), (b.1), (c.1) and (d) of the description of B in subsection 118(1).
Medical Expense Tax Credit for Other Dependants
(6) That, for the 2011 and subsequent taxation years, the portion of the description of D in subsection 118.2(1) of the Act before the formula be replaced by the following:
D is the total of all amounts each of which is, in respect of a dependant of the individual (within the meaning assigned by subsection 118(6), other than a child of the individual who has not attained the age of 18 years before the end of the taxation year), the amount determined by the formula.
Child Tax Credit Eligibility
(7) That, for the 2011 and subsequent taxation years, paragraph 118(4)(b) of the Act be replaced by the following:
(b) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b) of the description of B in that subsection for a taxation year in respect of the same person or the same domestic establishment and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them;
(b.1) not more than one individual is entitled to a deduction under subsection (1) because of paragraph (b.1) of the description of B in that subsection for a taxation year in respect of the same person and where two or more individuals otherwise entitled to such a deduction fail to agree as to the individual by whom the deduction may be made, no such deduction for the year shall be allowed to either or any of them.
Tuition Tax Credit – Examination Fees
(8) That, for amounts paid for occupational, trade or professional examinations taken after 2010,
(a) the portion of paragraph 118.5(1)(a) of the Act following subparagraph (ii) and preceding subparagraph (ii.1) be replaced by the following:
an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual’s tuition paid in respect of the year to the educational institution if the total of those fees and any fees described in paragraph (d), paid to the institution in respect of the year, exceeds $100, except to the extent that the fees are for the individual’s tuition
(b) subsection 118.5(1) of the Act be amended by adding the following after paragraph (c):
(d) if the individual has taken an examination (in this section referred to as an “occupational, trade or professional examination”) in the year that is required to obtain a professional status recognized under a federal or provincial statute, or to be licensed or certified as a tradesperson, where that status, license or certification allows the individual to practice the profession or trade in Canada, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees paid in respect of the occupational, trade or professional examination to an educational institution referred to in paragraph (a), a professional association, a provincial ministry or other similar institution, if the total of those fees and any fees described in paragraph (a), paid to the institution in respect of the year, exceeds $100, except to the extent that the occupational, trade or professional examination fees
(i) are paid on behalf of, or reimbursed to, the individual by the individual’s employer and the amount paid or reimbursed is not included in the individual’s income, or
(ii) are fees in respect of which the individual is or was entitled to receive a reimbursement or any form of assistance under a program of Her Majesty in right of Canada or a province designed to facilitate the entry or re-entry of workers into the labour force, where the amount of the reimbursement or assistance is not included in computing the individual’s income;
(c) section 118.5 of the Act be amended by adding the following after subsection (3):
(3.1) For the purpose of this section, “fees paid in respect of the occupational, trade or professional examination” of an individual includes ancillary fees and charges, other than fees and charges included in subsection (3), that are paid to an educational institution referred to in subparagraph (1)(a)(i), a professional association, a provincial ministry or other similar institution, in respect of an occupational, trade or professional examination taken by the individual, but does not include any fee or charge to the extent that it is levied in respect of
(a) property to be acquired by an individual,
(b) the provision of financial assistance to an individual, except to the extent that, if this Act were read without reference to subsection 56(3), the financial assistance would be required to be included in computing the income, and would not be deductible in computing the taxable income, of the individual,
(c) the construction, renovation or maintenance of any building or facility, or
(d) any fee or charge for a taxation year that, but for this paragraph, would be included because of this subsection in the fees for the individual’s occupational, trade or professional examination and that is not required to be paid by all of the individuals taking the occupational, trade or professional examination to the extent that the total for the year of all such fees and charges paid in respect of the individual’s fees for the occupational, trade or professional examination exceeds $250.
Education Tax Measures – Study Abroad
(9) That, for tuition fees paid for the 2011 and subsequent taxation years, subparagraph 118.5(1)(b)(i) of the Act be replaced by the following:
(i) paid in respect of a course of less than three consecutive weeks duration.
(10) That, for tuition fees paid for the 2011 and subsequent taxation years, paragraph (b) in the definition “designated educational institution” in subsection 118.6(1) of the Act be replaced by the following:
(b) a university outside Canada at which the individual referred to in subsection (2) was enrolled in a course, of not less than three consecutive weeks duration, leading to a degree, or.
(11) That, for educational assistance payments made out of a registered education savings plan after 2010, paragraph (b) in the definition “post-secondary educational institution” in subsection 146.1(1) of the Act be replaced by the following:
(b) an educational institution outside Canada that provides courses at a post-secondary school level and that is
(i) a university, college or other educational institution at which a beneficiary was enrolled in a course of not less than 13 consecutive weeks, or
(ii) a university at which a beneficiary was enrolled on a full-time basis in a course of not less than three consecutive weeks.
RESPs – Asset Sharing Among Siblings
(12) That, in respect of property transferred after 2010, subparagraph 204.9(5)(c)(ii) of the Act be replaced by the following:
(ii) a parent of a beneficiary under the transferee plan was a parent of an individual who was, immediately before the particular time, a beneficiary under the transferor plan and
(A) the transferee plan is a plan that allows more than one beneficiary under the plan at any one time, or
(B) in any other case, the beneficiary under the transferee plan had not attained 21 years of age at the time the transferee plan was entered into.
RDSPs – Shortened Life Expectancy
(13) That the definition “specified year” in subsection 146.4(1) of the Act be replaced by the following:
“specified year” of a disability savings plan of a beneficiary means the particular calendar year in which a medical doctor licensed to practice under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor, the beneficiary is not likely to survive more than five years and
(a) if the plan is a specified disability savings plan, each subsequent calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan; or
(b) in any other case, each of the five calendar years following the particular calendar year, but does not include any calendar year prior to the calendar year in which the certification is provided to the issuer of the plan.
(14) That section 146.4 of the Act be amended by adding the following after subsection (1):
(1.1) If, in respect of a beneficiary under a registered disability savings plan, a medical doctor licensed to practice under the laws of a province (or of the place where the beneficiary resides) certifies in writing that the beneficiary’s state of health is such that, in the professional opinion of the medical doctor, the beneficiary is not likely to survive more than five years, the holder of the plan elects in prescribed form and provides the election and the medical certification in respect of the beneficiary to the issuer of the plan, and the issuer notifies the specified Minister of the election in a manner and format acceptable to the specified Minister, then the plan becomes a specified disability savings plan at the time the notification is received by the specified Minister.
(1.2) A registered disability savings plan ceases to be a specified disability savings plan at the earliest of the following times:
(a) the time that the specified Minister receives a notification, in a manner and format acceptable to the specified Minister, from the issuer of the plan that the holder elects that the plan is to cease to be a specified disability savings plan;
(b) the time that is immediately before the earliest time in a calendar year when the total disability assistance payments, other than non-taxable portions, made from the plan in the year and while it was a specified disability savings plan exceeds $10,000 (or, in the case of a plan to which paragraph (f) applies, such greater amount as is required to satisfy the condition in that paragraph);
(c) the time that is immediately before the time that
(i) a contribution is made to the plan, or
(ii) an amount described in paragraph (a) or (b) of the definition “contribution” is paid into the plan;
(d) the time that is immediately before the time that
(i) the plan is terminated, or
(ii) the plan ceases to be a registered disability savings plan as a result of the application of paragraph (10)(a);
(e) where lifetime disability assistance payments have not begun to be paid before the end of the particular calendar year following the year in which the plan last became a specified disability savings plan, the time immediately following the end of that particular calendar year; and
(f) where in a calendar year the plan is a plan to which paragraph (4)(n) applies and the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year is less than the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the calendar year (or such lesser amount as is supported by the property of the plan trust), the time immediately following the end of that calendar year.
(1.3) If at any time, a registered disability savings plan has ceased to be a specified disability savings plan because of subsection (1.2), then the holder of the plan may not make an election under subsection (1.1) until 24 months after that time.
(1.4) The Minister may waive the application of subsections (1.2) or (1.3), if it is just and equitable to do so.
(15) That paragraphs (13) and (14) apply on Royal Assent to the enacting legislation to the 2011 and subsequent taxation years, except that for a specified disability savings plan in respect of which the required medical certification was obtained before 2012, for 2012, paragraph 146.4(1.2)(b) of the Act, as enacted by subsection (14), is to be read as follows:
(b) the time that is immediately before the earliest time in a calendar year when the total disability assistance payments, other than non-taxable portions, made from the plan and while it was a specified disability savings plan exceeds $20,000 (or, in the case of a plan to which paragraph (f) applies, such greater amount as is required to satisfy the condition in that paragraph).
RRSPs – Anti-Avoidance Rules
(16) That the Act be amended to add, in alphabetical order, the acronyms “RRSP” and “RRIF” as defined terms that refer to a registered retirement savings plan and registered retirement income fund respectively.
(17) That Part XI.01 of the Act be amended by replacing the heading with “Taxes in Respect of TFSAs, RRSPs and RRIFs”.
(18) That subsection 207.01(1) of the Act be amended by
(a) amending the definition “advantage” by
i. extending the application of its paragraphs (a), (b) and (d) and subparagraph (c)(ii) to RRSPs and RRIFs, with such modifications as the circumstances require, and
ii. by adding, in respect of RRSPs and RRIFs, a reduction in value of the property held by an RRSP or a RRIF that is reasonably attributable to an “RRSP strip”;
(b) extending the application of the definitions “non-qualified investment”, “prohibited investment”, “specified non-qualified investment income” and “swap transaction” to RRSPs and RRIFs; and
(c) adding, in alphabetical order, a definition “RRSP strip” that refers to a transaction or event or a series of transactions or events (other than a withdrawal under the Home Buyers’ Plan or the Lifelong Learning Plan), one of the main purposes of which is to enable the annuitant of an RRSP or a RRIF, or a person who does not deal at arm’s length with the annuitant, to use or obtain property held in connection with the RRSP or RRIF, as the case may be, without including the value of the property in a taxpayer’s income.
(19) That the Act be amended to extend the application of the taxes under sections 207.04 and 207.05, in relation to prohibited investments, non-qualified investments and advantages, to
(a) the annuitant of an RRSP or a RRIF; and
(b) in the case of an advantage extended by the issuer of an RRSP or the carrier of a RRIF, the issuer or carrier.
(20) That the existing provisions of the Act relating to RRSP advantages and non-qualified investments, and similar rules applicable to RRIFs, be amended consequential on the proposals in paragraphs (16) to (19).
(21) That paragraphs (16) to (20) apply to transactions occurring, income earned, capital gains accruing and investments acquired, after March 22, 2011 except that,
(a) a benefit that is related to a “swap transaction” shall not be considered an “advantage” in relation to an RRSP or a RRIF
i. if the transaction is completed before 2013 and is undertaken to remove an investment from an RRSP or a RRIF that would be a prohibited investment for the RRSP or RRIF, or the holding of which by the RRSP or RRIF would result in an advantage in relation to the RRSP or RRIF, under these proposals, and
ii. in any other case, if the transaction is completed before July 2011; and
(b) the tax payable under section 207.04 of the Act will not apply to a prohibited investment that was acquired or held by an RRSP or a RRIF before March 22, 2011, provided that it is disposed of before 2013.
Individual Pension Plans
(22) That the provisions of the Act relating to registered pension plans be modified in accordance with the proposals related to Individual Pension Plans described in the budget documents tabled by the Minister of Finance in the House of Commons on March 22, 2011.
Tax on Split Income – Capital Gains
(23) That, for dispositions of shares occurring on or after March 22, 2011, the Act be amended to provide that if a specified individual would otherwise be required to include in computing income a capital gain from a disposition of shares of a corporation that is part of a transaction or event, or series of transactions or events, that includes an acquisition of those shares by a person who does not deal at arm’s length with the individual and the individual would be subject to the tax on split income in respect of dividends on those shares, then
(a) for the purposes of computing the income of the individual under the Act
i. the amount that would otherwise have been the individual’s capital gain in respect of the disposition will be deemed to be a taxable dividend received by the individual,
ii. section 120.4 of the Act will apply to the taxable dividend, and
iii. the taxable dividend will not be an eligible dividend; and
(b) the corporation will be considered not to have paid a dividend for the purposes of the Act.
Agri-Québec
(24) That, for the 2011 and subsequent taxation years,
(a) the definition “NISA Fund No. 2” in section 248(1) of the Act be amended to include a prescribed fund;
(b) the definition “net income stabilization account” in section 248(1) of the Act be amended to include a prescribed account; and
(c) the Regulations be amended to provide that
i. Fonds 2, as defined under the Agri-Québec program established by La Financière agricole du Québec, is a prescribed fund for the purposes of the definition “NISA Fund No. 2” in subsection 248(1) of the Act, and
ii. an account of a taxpayer established under the Agri-Québec program is a prescribed account for the purposes of the definition “net income stabilization account” in subsection 248(1) of the Act.
Mineral Exploration Tax Credit
(25) That, for expenses renounced under a flow-through share agreement made after March 2011,
(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 2011 and before 2013 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2013) 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 2011 and before April 2012, 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 2011 and before April 2012.
Administrative Changes
(26) That, for marital status changes that occur after June 2011, section 122.62 of the Act be amended to provide that
(a) if, after June 2011, a person becomes or ceases to be an eligible individual’s cohabiting spouse or common-law partner after June 2011, the individual shall notify the Minister of National Revenue of that fact before the end of the month following the month in which the event occurs; and
(b) each event described in (a) be reflected in the determination of the amount of the overpayment, if any, deemed under subsection 122.61(1) of the Act in respect of the eligible individual in the month following the month in which the event occurs.
(27) That, for amounts that are deemed to be paid during months specified for the 2010 and subsequent taxation years, the references to “$25” in subsection 122.5(3.1) of the Act be replaced by references to “$50”.
(28) That, for overpayments deemed to arise during months that are after June 2011, the reference to “$10” in subsection 122.61(2) of the Act be replaced by a reference to “$20”.
Strengthening the Charitable Sector
Enhance the Regulatory Regime for Qualified Donees
(29) That, effective on and after the later of January 1, 2012 and the date of Royal Assent to the enacting legislation, the Act be amended to provide that
(a) a qualified donee, in respect of whom gifts are eligible for a charitable donations tax credit or deduction for a taxation year, be a person that is
i. a registered charity or registered Canadian amateur athletic association, unless that registration has been revoked,
ii. a municipality in Canada included on a list maintained by the Minister of National Revenue, unless its status as a qualified donee has been revoked by that Minister,
iii. a university outside of Canada that is prescribed to be a university the student body of which ordinarily includes students from Canada, and that is included on a list maintained by the Minister of National Revenue, unless its status as a qualified donee has been revoked by that Minister,
iv. a charitable organization outside Canada to which Her Majesty in right of Canada has made a gift in the year or in the 12-month period preceding the year, and that is included on a list maintained by the Minister of National Revenue, unless its status as a qualified donee has been revoked by that Minister,
v. a municipal or public body performing a function of government in Canada, or a housing corporation resident in Canada and described in paragraph 149(1)(i) of the Act, that has applied for registration as a qualified donee and is included on a list maintained by the Minister of National Revenue, unless its status as a qualified donee has been revoked by that Minister, and
vi. Her Majesty in right of Canada or a province, the United Nations or an agency of the United Nations;
(b) a registered Canadian amateur athletic association be required, as a condition for registration,
i. to have, as its exclusive purpose and its exclusive function, the promotion of amateur athletics in Canada on a nation-wide basis, and
ii. to devote all of its resources to the exclusive purpose and exclusive function of the association, except to the extent permitted by subsection 149.1(6.2) as it applies to registered charities in respect of political activities;
(c) in respect of a registered Canadian amateur athletic association, the Minister be authorized, in the manner that applies to registered charities,
i. to apply a monetary penalty and to suspend the authority of the association to issue an official receipt if the association issues a receipt that is not in accordance with the requirements of the Act,
ii. to suspend the authority of the association to issue an official receipt if the association contravenes any of sections 230 to 231.5 of the Act,
iii. to apply a monetary penalty, to suspend the authority of the association to issue an official receipt and to revoke the association’s status as a qualified donee if the association provides an undue benefit to any person or carries on a business that is not a business related to the purpose and function of the association,
iv. to apply a monetary penalty if the association fails to file a return under the Act, and
v. to make available to any person the information described in subsections 149.1(15) and 241(3.2) of the Act;
(d) a qualified donee referred to in sub-subparagraphs (a)(ii) to (v) be required to maintain records and books of account in the manner described in subsection 230(2) of the Act; and
(e) in respect of a qualified donee that is referred to in sub-subparagraphs (a)(ii) to (v), the Minister of National Revenue be authorized, in the manner that applies to registered charities, to suspend the receipting authority of the qualified donee or to revoke its status as a qualified donee, if the qualified donee issues a receipt that is not in accordance with the requirements of the Act or contravenes any of sections 230 to 231.5 of the Act.
Safeguard Charitable Assets through Good Governance
(30) That, on or after the later of January 1, 2012 and the date of Royal Assent to the enacting legislation,
(a) subsection 149.1(1) of the Act be amended by adding the following definitions in alphabetical order:
“ineligible individual”, in relation to a charity or Canadian amateur athletic association, means an individual who, at a particular time, has been
(a) found guilty of a relevant criminal offence for which a pardon has not been granted,
(b) found guilty of a relevant offence within five years preceding the particular time,
(c) a director, trustee, officer or like official of a registered charity or registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that may reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which its registration was revoked within five years preceding the particular time,
(d) an individual who controlled or managed, directly or indirectly in any manner whatever, a registered charity or registered Canadian amateur athletic association during a period in which the charity or association engaged in conduct that may reasonably be considered to have constituted a serious breach of the requirements for registration under this Act and for which its registration was revoked within five years preceding the particular time, or
(e) a promoter in respect of a tax shelter that involved a gift to a registered charity or registered Canadian amateur athletic association the registration of which was revoked within five years preceding the particular time for reasons that included or were related to participation in the tax shelter;
“promoter” has the meaning assigned by section 237.1;
“relevant criminal offence” means a criminal offence under the laws of Canada, and an offence that would be a criminal offence if committed in Canada, that
(a) relates to financial dishonesty, including tax evasion, theft and fraud, or
(b) in respect of a particular charity or Canadian amateur athletic association, is relevant to the operation of the charity or association;
“relevant offence” means an offence, other than a relevant criminal offence, under the laws of Canada or a province, and an offence that would be such an offence if committed in Canada, that
(a) relates to financial dishonesty, including an offence under charitable fundraising legislation, consumer protection legislation and securities legislation, or
(b) in respect of a particular charity or Canadian amateur athletic association, is relevant to the operation of the charity or association;
(b) subsection 149.1(4.1) of the Act be amended to provide the Minister of National Revenue with the authority to revoke the registration of a registered charity if an ineligible individual controls or manages the charity, directly or indirectly in any manner whatever, or is a director, trustee, officer or like official of the charity;
(c) section 149.1 of the Act be amended to provide the Minister of National Revenue with the authority, in the manner described in subsection 149.1(22) of the Act, to refuse to register an entity that has applied for registration as a registered charity if
i. the application for registration is made by an ineligible individual, or
ii. an ineligible individual controls or manages the entity, directly or indirectly in any manner whatever, or is a director, trustee, officer or like official of the entity;
(d) subsection 188.2(2) of the Act be amended to provide the Minister of National Revenue with the authority to notify a charity, in the manner described in that subsection, that the charity’s authority to issue an official receipt is suspended if an ineligible individual controls or manages the charity, directly or indirectly in any manner whatever, or is a director, trustee, officer or like official of the charity; and
(e) the Act be amended to include provisions, similar to those in subparagraphs (b) to (d), that will apply, with such modifications as the circumstances require, to Canadian amateur athletic associations.
Recover Tax Assistance for Returned Gifts
(31) That, for transfers of property from a qualified donee to a person on or after March 22, 2011, the Act be amended to provide that,
(a) if a qualified donee has issued to a person an official donation receipt in respect of a transfer of property and the donee subsequently returns to the person the property, an identical property, or any other property that may reasonably be considered to be transferred as compensation for or in substitution for, in whole or in part, the original property, then to the extent of the property returned,
i. if the transfer of the original property was a gift, the person is deemed not to have made a gift of the original property nor to have disposed of the property at the time the gift was made,
ii. if the transfer of the original property was not a gift, for greater certainty, the person is considered not to have disposed of the original property at the time that it was provided to the qualified donee,
iii. if the returned property is identical to the original property, the returned property is deemed to be the original property, and
iv. if the returned property is not the same property or identical property, the person is deemed to have disposed of the original property at the time that the person acquires the returned property;
(b) if the value of the returned property is greater than $50, then the qualified donee must provide the person with a revised official donation receipt containing prescribed information with respect to the transfer of the original property and the related return of property and file a copy with the Minister of National Revenue; and
(c) the Minister of National Revenue have the authority to reassess a return of income of any person to the extent that the reassessment can reasonably be regarded as relating to a return of property from a qualified donee to a person.
Gifts of Non-Qualifying Securities
(32) That, for dispositions of securities by donees on or after March 22, 2011,
(a) paragraph 118.1(13)(c) of the Act be replaced by the following:
(c) if the security is disposed of by the donee within 60 months after the particular time and paragraph (b) does not apply to the security, the individual is deemed to have made a gift to the donee of property at the time of the disposition and the fair market value of that gift is deemed to be the lesser of the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee for the disposition and the amount of the gift made at the particular time that would, but for this subsection, have been included in the individual’s total charitable gifts or total Crown gifts for a taxation year; and
(b) section 118.1 of the Act be amended by adding the following after subsection (13):
(13.1) Subsection (13.2) applies if, as part of a series of transactions,
(a) an individual makes, at a particular time, a gift of a particular property to a donee,
(b) a particular person holds a non-qualifying security of the individual, and
(c) the donee acquires, directly or indirectly, a non-qualifying security of the individual or of the particular person.
(13.2) If this subsection applies,
(a) for the purposes of this section, the fair market value of the particular property is deemed to be reduced by an amount equal to the fair market value of the non-qualifying security acquired by the donee, and
(b) for the purposes of subsection (13),
(i) if the non-qualifying security acquired by the donee is a non-qualifying security of the particular person, it is deemed to be a non-qualifying security of the individual,
(ii) the individual is deemed to have made, at the particular time, a gift of the non-qualifying security acquired by the donee, the fair market value of which does not exceed the amount, if any, by which
(A) the fair market value of the particular property determined without reference to paragraph (a)
exceeds
(B) the fair market value of the particular property determined under paragraph (a), and
(iii) paragraph (13)(b) does not apply in respect of the gift.
(13.3) For the purposes of subsections (13.1) and (13.2), if, as part of a series of transactions, an individual makes a gift to a donee and the donee acquires a non-qualifying security of a person (other than the individual or particular person described in subsection (13.1)) and it may reasonably be considered, having regard to all the circumstances, that one of the purposes or results of the acquisition of the non-qualifying security by the donee was to facilitate, directly or indirectly, the making of the gift by the individual, then the non-qualifying security acquired by the donee is deemed to be a non-qualifying security of the individual.
(c) subsection 110.1(6) of the Act be replaced by the following:
(6) Subsections 118.1(13) to (14) and (16) to (20) apply to a corporation as if the references in those subsections to an individual were read as references to a corporation and as if a non-qualifying security of a corporation included a share (other than a share listed on a designated stock exchange) of the capital stock of the corporation.
Granting of Options to Qualified Donees
(33) That, for options granted to qualified donees on or after March 22, 2011,
(a) section 110.1 of the Act be amended by adding the following after subsection (9):
(10) Subject to subsections (12) and (13), if a corporation has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing an amount under any of paragraphs (1)(a) to (d) in respect of the corporation for any year.
(11) Subsection (12) applies if
(a) an option to acquire a property of a corporation is granted to a qualified donee;
(b) the option is exercised so that the property is disposed of to the qualified donee at a particular time; and
(c) either
(i) the amount that is 80 per cent of the fair market value of the property at that time is greater than the total of
(A) the consideration received by the corporation from the qualified donee to acquire the property, and
(B) the consideration received by the corporation from the qualified donee to acquire the option; or
(ii) the corporation establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the corporation with the intention to make a gift to the qualified donee.
(12) If this subsection applies, for the purposes of the Act and notwithstanding subsection 49(3),
(a) the corporation is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and
(b) there shall be added to the total referred to in paragraph (1)(a), for the corporation for the taxation year that includes the particular time, the amount by which the fair market value exceeds the total described in subparagraph (11)(c)(i).
(13) If an option to acquire a property of a corporation is granted to a qualified donee and the option is disposed of by the qualified donee at a particular time, for the purposes of the Act
(a) the corporation is deemed to have disposed of a property at the particular time
(i) the cost of which to the corporation immediately before the particular time is equal to the consideration, if any, paid by the donee to acquire the option, and
(ii) the proceeds of disposition of which are equal to the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee at the particular time; and
(b) there shall be added to the total charitable gifts of the corporation for the taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the donee to acquire the option;
and
(b) section 118.1 of the Act be amended by adding the following after subsection (20):
(21) Subject to subsections (23) and (24), if an individual has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in total charitable gifts, total Crown gifts, total cultural gifts or total ecological gifts of the individual for any year.
(22) Subsection (23) applies if
(a) an option to acquire a property of an individual is granted to a qualified donee;
(b) the option is exercised so that the property is disposed of to the qualified donee at a particular time; and
(c) either
(i) the amount that is 80 per cent of the fair market value of the property at that time is greater than the total of
(A) the consideration received by the individual from the qualified donee to acquire the property, and
(B) the consideration received by the individual from the qualified donee to acquire the option; or
(ii) the individual establishes to the satisfaction of the Minister that the granting of the option or the disposition of the property was made by the individual with the intention to make a gift to the qualified donee.
(23) If this subsection applies, for the purposes of the Act and
notwithstanding
subsection 49(3),
(a) the individual is deemed to have received proceeds of disposition of the property equal to the property’s fair market value at the particular time; and
(b) there shall be added to the individual’s total charitable gifts, for the taxation year that includes the particular time, the amount by which that fair market value exceeds the total described in subparagraph (22)(c)(i).
(24) If an option to acquire a property of an individual is granted to a qualified donee and the option is disposed of by the qualified donee at a particular time, for the purposes of the Act
(a) the individual is deemed to have disposed of a property at the particular time
(i) the cost of which to the individual immediately before the particular time is equal to the consideration, if any, paid by the donee to acquire the option, and
(ii) the proceeds of disposition of which are equal to the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee at the particular time; and
(b) there shall be added to the total charitable gifts of the individual for the taxation year that includes the particular time the amount, if any, by which the proceeds of disposition as determined by paragraph (a) exceed the consideration, if any, paid by the donee to acquire the option.
Donations of Publicly Listed Flow-Through Shares
(34) That, for dispositions of property by taxpayers made on or after March 22, 2011, the Act be amended
(a) to add the following after section 38:
38.1 If a taxpayer acquires a property (the “acquired property”) that is included in a flow-through share class of property in the course of a transaction to which any of section 51, subsections 73(1), 85(1) and (2) and 85.1(1) and sections 86 and 87 applies
(a) if the transfer of the property is part of a gifting arrangement (within the meaning assigned by section 237.1) or the transferor is a person with whom the taxpayer was, at the time of the acquisition, not dealing at arm’s length, there shall be added, at the time of the transfer, to the taxpayer’s exemption threshold in respect of the flow-through share class of property, and deducted from the transferor’s exemption threshold, the amount determined by the formula
A x B
where
A is the amount by which the transferor’s exemption threshold in respect of the flow-through share class of property immediately before that time exceeds the capital gain, if any, realized by the transferor as a result of the transfer, and
B is the amount that is the proportion that the fair market value of the acquired property immediately before the transfer is of the fair market value of all property of the transferor immediately before the transfer that is included in the flow-through share class of property, and
(b) if the transferor receives particular shares of the capital stock of the taxpayer that are listed on a designated stock exchange or are shares of a mutual fund corporation, as consideration for the transferred shares, for the purpose of this section and subsection 40(12) the particular shares are deemed to be flow-through shares of the transferor and there shall be added to the transferor’s exemption threshold in respect of the flow-through share class of property that includes the particular shares the amount that is determined under paragraph (a), or that would be so determined if paragraph (a) applied to the taxpayer,
(b) to add in section 40 the following after subsection (11):
Donated flow-through shares
(12) If at a particular time in a taxation year a taxpayer disposes of a capital property that is included in a flow-through share class of property, and subparagraph 38(a.1)(i) or (iii) applies to the disposition (in this subsection referred to as the “actual disposition”), then the taxpayer is deemed to have a capital gain from a disposition at that time of another capital property equal to the lesser of
(a) the amount of the taxpayer’s exemption threshold at that time in respect of the flow-through share class of property; and
(b) the total of the capital gains from each such actual disposition at that time by the taxpayer (for greater certainty, calculated without reference to this subsection),
(c) to add the following definitions in section 54 in alphabetical order:
“exemption threshold”, of a taxpayer, in respect of a flow-through share class of property at a particular time, means the amount determined by the formula
A – B
where
A is the total of all amounts, each of which is the amount that would be the cost to the taxpayer, computed as if this Act were read without reference to subsection 66.3(3), of a flow-through share that was included at any time before the particular time in the flow-through share class of property and that was issued by a corporation to the taxpayer on or after the taxpayer’s fresh-start date in respect of the flow-through share class of property at that time, other than a share that the taxpayer was obligated before March 22, 2011 to acquire pursuant to the terms of a flow-through share agreement entered into between the corporation and taxpayer before March 22, 2011, and
B is the total, if any, of all amounts, each of which is the lesser of
(a) the total of all amounts, each of which is a capital gain on a disposition at an earlier time (and after the first time after the taxpayer’s fresh-start date, in respect of the flow-through share class of property at that time, that the taxpayer acquired a flow-through share referred to in the description of A) of a property included in the flow-through share class of property, other than a capital gain on a transfer to which paragraph 38.1(a) applies, and
(b) the exemption threshold of the taxpayer in respect of the flow-though share class of property immediately before that earlier time;
“flow-through share class of property” means a group of properties each of which is
(a) a share of a class of the capital stock of a corporation, if any share of that class or any right described in paragraph (b) is, at any time, a flow-through share to any person,
(b) a right to acquire a share of the class, if any share of that class or any right described in this paragraph is, at any time, a flow-through share to any person, or
(c) a property that is an identical property of a property described in paragraph (a) or (b);
“fresh-start date”, of a taxpayer, in respect of a flow-through share class of property, at a particular time, means the day that is the later of
(a) March 22, 2011, and
(b) the last day, if any, before the particular time, on which the taxpayer disposed of a property that is included in the flow-through share class of property and at the end of which the taxpayer held no such property;
(d) to replace clause (a)(i)(A) of the definition “capital dividend account” in subsection 89(1) with the following:
(A) the amount of the corporation’s capital gain from the disposition (other than a disposition under subsection 40(12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year (that began after the corporation last became a private corporation and that ended after 1971) and ending immediately before the particular time (in this definition referred to as “the period”)
and
(e) to strike out “and” after clause (a)(i)(B) of the definition “capital dividend account” in subsection 89(1) of the Act and to add the following after that clause:
(B.1) the amount of the corporation’s taxable capital gain in respect of a capital gain in the period under subsection 40(12), and.
Qualifying Environmental Trusts
(35) That, for the 2012 and subsequent taxation years, the rules governing qualifying environmental trusts be extended to apply to a trust that otherwise meets the conditions in subsection 248(1) of the Act for being a qualifying environmental trust and that is
(a) created after 2011 in connection with the reclamation of property primarily used for the operation of a pipeline; and
(b) required to be maintained under a law of Canada or a province, an order of a tribunal constituted under a law of Canada or a province or a contract entered into with Her Majesty in right of Canada or a province.
(36) That, for the 2012 and subsequent taxation years, the rules governing qualifying environmental trusts be extended to apply to a trust that otherwise meets the conditions in subsection 248(1) of the Act for being a qualifying environmental trust and that is
(a) created after 2011; and
(b) required to be maintained under an order of a tribunal constituted under a law of Canada or a province.
(37) That, for the 2012 and subsequent taxation years, a qualifying environmental trust that is created after 2011, or that was created before 2012 and that jointly elects with the relevant regulatory authority, be permitted to invest in securities described in any of paragraphs (c), (c.1), and (d) of the definition “qualified investment” in section 204 of the Act other than a debt or security issued by
(a) a person or partnership that has contributed property to, or that is a beneficiary under, the trust;
(b) a person that is related to, or a partnership that is affiliated with, a person or partnership described in subparagraph (a); or
(c) a person or partnership in which a contributor to, or a beneficiary under, the trust has a “significant interest” within the meaning assigned by subsection 207.01(4) of the Act, with such modifications as the circumstances require.
(38) That, for the 2012 and subsequent taxation years, the rate used in the calculation of the tax payable by a qualifying environmental trust be set to the percentage applicable for corporate income tax in subsection 123(1) of the Act less the total of the general rate reduction percentage in subsection 123.4(1) and the percentage applicable for the deduction in subsection 124(1).
Intangible Capital Expenses in Oil Sands Projects
(39) That the provisions of the Act relating to Canadian resource property, Canadian exploration expense, Canadian development expense and Canadian oil and gas property expense be modified in accordance with the proposals described in the budget documents tabled by the Minister of Finance in the House of Commons on March 22, 2011.
Stop-Loss Rules on the Redemption of a Share
(40) That, for a disposition of a share that is a redemption, acquisition or cancellation occurring on or after March 22, 2011, section 112 of the Act be amended to provide that in the application of the provisions restricting losses on the disposition of shares in subsections 112(3), (3.1), (3.2), (3.3), (4), (4.2) and (5.2) of the Act, a dividend deemed to have been received under subsection 84(3) of the Act by a corporation (referred to as the “shareholder”), be included in the computation of the restriction of the loss that the shareholder realizes in respect of the share, regardless of the percentage of share ownership of the shareholder and the time that the relevant share was held by the shareholder, if the dividend is received by the shareholder, whether directly or indirectly through a partnership or trust, from another corporation (referred to as the “payor”) unless, at the time that the dividend is deemed to have been paid and received,
(a) the shareholder is a private corporation that is not a financial institution, and does not hold the share through a partnership or trust that is a financial institution; and
(b) the payor is a private corporation.
Partnerships – Deferral of Corporate Tax
(41) That the Act be modified in accordance with the proposals relating to the limitation of the deferral of corporate tax through the use of partnerships described in the budget documents tabled by the Minister of Finance in the House of Commons on March 22, 2011.
Notice of Ways and Means Motion to Amend the Excise Act, 2001 and the Excise Tax Act
That it is expedient to amend the Excise Act, 2001 and the Excise Tax Act as follows:
Excise Act, 2001
1. The definition “listed international agreement” in section 2 of the Excise Act, 2001 is replaced by the following:
“listed international agreement”
“listed international agreement” means
(a) the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada; or
(b) a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction.
Excise Tax Act
2. The definition “listed international agreement” in subsection 2(1) of the Excise Tax Act is replaced by the following:
“listed international agreement”
“listed international agreement” means
(a) the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada, or
(b) a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction;
3. The definition “listed international agreement” in subsection 123(1) of the Act is replaced by the following:
“listed international agreement”
“listed international agreement” means
(a) the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada, or
(b) a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction;
4. (1) The Act is amended by adding the following after section 259.1:
Definitions
259.2 (1) The following definitions apply in this section.
“claim period”
“claim period” has the same meaning as in subsection 259(1).
“Legion entity”
“Legion entity” means the Dominion Command or any provincial command or branch of the Royal Canadian Legion.
Rebate for poppies and wreaths
(2) If a Legion entity acquires, imports or brings into a participating province property that is a poppy or wreath, the Minister shall, subject to subsection (3), pay a rebate to the Legion entity equal to the amount of tax that becomes payable, or is paid without having become payable, by the Legion entity during a claim period of the Legion entity in respect of the acquisition, importation or bringing in.
Application for rebate
(3) A rebate shall not be paid under subsection (2) in respect of tax that becomes payable, or is paid without having become payable, by a Legion entity during a claim period of the Legion entity unless the Legion entity files an application for the rebate within four years after the last day of the claim period.
Limitation
(4) A Legion entity must not make more than one application for rebates under this section for any claim period of the Legion entity.
(2) Subsection (1) applies in respect of tax that becomes payable, or is paid without having become payable, after 2009.
(3) If, in the absence of this subsection, an application for a rebate under subsection 259.2(2) of the Act, as enacted by subsection (1), in respect of tax would have to be filed by a Legion entity before the day that is four years after the day on which this Act receives royal assent in order for the rebate to be paid to the Legion entity, the reference in subsection 259.2(3) of the Act, as enacted by subsection (1), to “last day of the claim period” is to be read as a reference to “day on which the Act enacting this section receives royal assent”.
Tax Measures:
Draft Amendments to the Income Tax Regulations
Regulations Amending the Income Tax Regulations
(Capital Cost Allowance – 2011 Budget Measures)
1. (1) The definition “thermal waste” in subsection 1104(13) of the Income Tax Regulations is replaced by the following:
“thermal waste” means waste heat energy extracted from a distinct point of rejection in an industrial process that would otherwise
(a) be vented to the atmosphere or transferred to a liquid, and
(b) not be used for a useful purpose. (déchets thermiques)
(2) Subsection (1) applies in respect of property acquired on or after March 22, 2011.
2. (1) The portion of subparagraph (c)(iii) of Class 29 of Schedule II to the Regulations before clause (A) is replaced by the following:
(iii) after March 18, 2007 and before 2014 if the property is machinery, or equipment,
(2) Subsection (1) applies after 2011.
3. (1) The portion of paragraph (c) of Class 43.1 of Schedule II of the French version of the Regulations before clause (i)(A) is replaced by the following:
c) qui, selon le cas :
(i) font partie d’un système, sauf un système à cycles combinés amélioré, qui, à la fois :
(2) Clause (c)(ii)(A) of Class 43.1 of Schedule II to the Regulations is replaced by the following:
(A) is used by the taxpayer, or by a lessee of the taxpayer, to generate electrical energy using only a combination of natural gas and thermal waste from one or more natural gas compressor systems located on a natural gas pipeline,
(3) Paragraph (c) of Class 43.1 of Schedule II to the Regulations is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) equipment that is used by the taxpayer, or by a lessee of the taxpayer, to generate electrical energy in a process all or substantially all of the energy input of which is thermal waste, other than
(A) equipment that uses heat from a gas turbine in the first stage of a combined cycle system, and
(B) equipment that, on the date of its acquisition, uses chlorofluorocarbons (CFCs) or hydrochlorofluorocarbons (HCFCs), within the meaning assigned by the Ozone-Depleting Substances Regulations, 1998, made under the Canadian Environmental Protection Act, 1999.
(4) Subsections (1) to (3) apply to property acquired on or after March 22, 2011.
