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 (the "Act") and the Income Tax Regulations (the "Regulations") as follows:

Lifetime Capital Gains Exemption

1 The Act is modified to give effect to the proposals relating to the Lifetime Capital Gains Exemption as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Canadian Entrepreneurs' Incentive

1 The Act is modified to give effect to the proposals relating to the Canadian Entrepreneurs' Incentive as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Capital Gains Inclusion Rate

1 The Act is modified to give effect to the proposals relating to the Capital Gains Inclusion Rate as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

The Volunteer Firefighters and Search and Rescue Volunteers Tax Credits

• 1 (1) The portion of subsection 118.06(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Volunteer firefighter tax credit

    (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $6,000 by the appropriate percentage for the taxation year if the individual

• (2) Subsection (1) applies to the 2024 and subsequent taxation years.

• 2 (1) The portion of subsection 118.07(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Search and rescue volunteer tax credit

    (2) For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible search and rescue volunteer services in the year, there may be deducted the amount determined by multiplying $6,000 by the appropriate percentage for the taxation year if the individual

• (2) Subsection (1) applies to the 2024 and subsequent taxation years.

Mineral Exploration Tax Credit

• 1 (1) Paragraph (a) of the definition flow-through mining expenditure in subsection 127(9) of the Act is replaced by the following:

  • (a) that is a Canadian exploration expense incurred by a corporation after March 2024 and before 2026 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2026) 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),

• (2) Paragraphs (c) and (d) of the definition flow-through mining expenditure in subsection 127(9) of the Act are 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 2024 and before April 2025,

  • (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 2024 and before April 2025, and

• (3) Subsections (1) and (2) apply in respect of expenses renounced under a flow-through share agreement entered into after March 2024.

Alternative Minimum Tax

• 1 (1) Subparagraph 120.2(1)(b)(i) of the Act is replaced by the following:

  • (i) the amount that, but for this section, section 120 and subsection 120.4(2), would be the individual's tax payable under this Part for the particular year if the individual were not entitled to any deduction under section 126

• (2) Paragraph 120.2(3)(b) of the Act is replaced by the following:

  • (b) the amount that, if this Act were read without reference to section 120, would be the individual's tax payable under this Part for the year if the individual were not entitled to any deduction under section 126, and

• (3) Subsections (1) and (2) apply to taxation years that begin after December 31, 2023.

• 2 (1) The description of A in section 127.51 of the Act is replaced by the following:

  A

  is 20.5%;

• (2) Paragraph (a) of the description of C in section 127.51 of the Act is replaced by the following:

  • (a) the first dollar amount for the year referred to in paragraph 117(2)(d), in the case of an individual (other than a trust) or a qualified disability trust (as defined in subsection 122(3)); and

• (3) Subsections (1) and (2) apply to taxation years that begin after December 31, 2023.

• 3 (1) Subparagraph 127.52(1)(d)(i) of the Act is replaced by the following:

  • (i) the references to the fraction applicable to the individual for the year in each of paragraphs 38(a) and (b) and section 41 were read as a reference to "1/1", and

• (2) The formula in subparagraph 127.52(1)(d)(ii) of the Act is replaced by the following:

  A ÷ B

• (3) Subsection 127.52(1) of the Act is amended by adding the following after paragraph (d):

  • (d.1) in respect of a disposition to which paragraph 38(a.1) applies, the portion of that paragraph before subparagraph (i) were read as "a taxpayer's taxable capital gain for a taxation year from the disposition of a property is equal to 3/10 of the taxpayer's capital gain for the year from the disposition of the property if";

• (4) The portion of subparagraph 127.52(1)(g)(ii) of the Act before clause (A) is replaced by the following:

  • (ii) the total of all amounts each of which is

• (5) Clause 127.52(1)(g)(ii)(A) of the French version of the Act is replaced by the following:

  • (A) un montant attribué par la fiducie en application du paragraphe 104(21) pour l'année,

• (6) The portion of clause 127.52(1)(g)(ii)(B) of the French version of the Act before subclause (I) is replaced by the following:

  • (B) la partie d'un gain en capital imposable net de la fiducie qu'il est raisonnable de considérer :

• (7) Subparagraphs 127.52(1)(h)(i) to (vi) of the Act are replaced by the following:

  • (i) the amounts deducted under subsection 110(2),

  • (ii) 7/5 of the amounts deducted under paragraph 110(1)(d.01) and any of subsections 110.6(2) and (2.1),

  • (iii) the amount that would be deductible under paragraph 110(1)(f) if the individual deducted 1/2 of the amount the individual deducted for the year under subparagraph 110(1)(f)(v),

  • (iv) ½ of the amount deducted for the year under subsection 110.7(1), and

  • (v) the amount deducted under paragraph 110(1)(g);

• (8) Clauses 127.52(1)(i)(i)(A) and (B) of the Act before subclause (B)(I) are replaced by the following:

  • (A) ½ of all amounts deducted for the year under paragraphs 111(1)(a), (c), (d) and (e), and

  • (B) the total of all amounts that would be deductible under those paragraphs for the year if the amount that would be deductible under paragraphs 111(1)(a), (c), (d) and (e) was ½ of the amount that would otherwise be deductible under those paragraphs and if

• (9) Clause 127.52(1)(i)(ii)(A) of the Act is replaced by the following:

  • (A) the total of all amounts deducted under paragraph 111(1)(b), and

• (10) Clause 127.52(1)(i)(ii)(B) of the Act is amended by striking out "and" at the end of subclause (II) and by replacing subclause (III) with the following:

  • (III) paragraphs (c.1) and (d) of this subsection applied in computing the individual's net capital loss for any taxation year that ends after 2011 and begins before 2024, and

  • (IV) paragraph (c.1) of this subsection applied in computing the individual's net capital loss for any taxation year that begins after 2023; and

• (11) Paragraph 127.52(1)(j) of the Act is replaced by the following:

  • (j) in computing the individual's income for the year, the individual deducted ½ of the amount deducted for the year under

    • (i) paragraphs 8(1)(c) to (e), (g) to (l.2) and (p) to (t),

    • (ii) paragraphs 20(1)(c) to (f) in respect of an amount borrowed to earn income from property for the year, other than an amount described under any of paragraphs (b), (c), (c.2), (c.3) and (e.1),

    • (iii) paragraphs 60(e), (e.1) and (g),

    • (iv) subsections 62(1) and (2),

    • (v) subsections 63(1) and (2.2), and

    • (vi) section 64.

• (12) Subsections (1) to (11) apply to taxation years that begin after December 31, 2023.

• 4 (1) Paragraphs 127.531(a) and (b) of the Act are replaced by the following:

  • (a) ½ of an amount deducted under any of subsections 118(1), (2), (3) and (10), sections 118.01 to 118.07, subsections 118.3(1), (2) and (3) and sections 118.5 to 118.9 in computing the individual's tax payable for the year under this Part;

  • (b) ½ of the amount that was claimed under section 118.2 in computing the individual's tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual's tax payable for the year under this Part, determined without reference to this Division;

  • (c) 4/5 of the amount that was claimed under section 118.1 in computing the individual's tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual's tax payable for the year under this Part, determined without reference to this Division; and

  • (d) an amount deducted under section 119 or subsection 127(1) in computing the individual's tax payable for the year under this Part.

• (2) Subsection (1) applies to taxation years that begin after December 31, 2023.

• 5 (1) Paragraph (b) of the definition foreign income in subsection 127.54(1) of the Act is repaced by the following:

  • (b) the individual's incomes for the year (as would be determined if paragraph 127.52(1)(d) were applicable) from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, within the meaning assigned by subsection 126(7), to governments of countries other than Canada; (revenu de source étrangère )

• (2) The description of A in subparagraph 127.54(2)(b)(ii) of the Act is replaced by the following:

  A

  is 20.5%, and

• (3) Subsections (1) and (2) apply to taxation years that begin after December 31, 2023.

• 6 (1) Paragraph 127.55(f) of the Act is replaced by the following:

  • (f) a taxation year of a trust throughout which the trust is

    • (i) a trust referred to in paragraph 150(1.2)(f), (g), (i), (j), (l) or (n),

    • (ii) an investment fund (as defined under subsection 251.2(1)) unless the trust is an investment fund throughout the taxation year as part of a transaction or event or series of transactions or events one of the main purposes of which is to avoid tax under this Division,

    • (iii) a trust

      • (A) all of the beneficiaries of which are any combination of

        • (I) persons exempt from tax under this Division, or

        • (II) trusts described in this subparagraph,

      • (B) under which no person (other than a person described in subclause (A)(I) or (II)) can be added as a beneficiary,

      • (C) in which all interests are fixed interests (as defined in subsection 94(1)), and

      • (D) that is irrevocable,

    • (iv) a trust that is exempt from tax under this Part,

    • (v) a trust described in subsection 143(1),

    • (vi) a unit trust if the total fair market value of the units of the trust that are listed on a designated stock exchange represents all or substantially all of the total fair market value of all the units of the trust,

    • (vii) an employee ownership trust,

    • (viii) a trust if

      • (A) it is established

        • (I) under a law of Canada or a province and is for the benefit of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982, or

        • (II) under a treaty, or a settlement agreement, between His Majesty in right of Canada, or His Majesty in right of a province, and an Indigenous group, community or people described in subclause (I), and

      • (B) all or substantially all of the contributions to the trust before the end of the taxation year are amounts paid under the law, treaty or settlement agreement described in subclauses (A)(I) or (II), or are reasonably traceable to those amounts,

    • (ix) a trust, all of the beneficiaries of which are any combination of

      • (A) all of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

      • (B) a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) in relation to an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

      • (C) a person described under paragraph 149(1)(f) or (l) that is organized and operated primarily for health, education, social welfare or community improvement for the benefit of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

      • (D) a corporation all of the shares (except directors' qualifying shares) or of the capital of which are owned by a person described in clause (B) or clause (C), a trust described in subparagraph (viii), another corporation that is described in this clause, or a combination of these persons, or

      • (E) a trust described in subparagraph (viii).

• (2) Subsection (1) applies to taxation years that begin after December 31, 2023.

Canada Child Benefit

• 1 (1) Section 122.62 of the Act is amended by adding the following after subsection (8):

  • Marginal note:Death of child — qualified dependant

    (9) For the purposes of this Subdivision (other than subsection (4)), a person is deemed to be a qualified dependant at the beginning of a month if

    • (a) the person died in any of the six preceding months;

    • (b) the person's date of birth was not 18 years or more prior to the beginning of the month; and

    • (c) the person was a qualified dependant immediately prior to their death.

  • Marginal note:Death of child — eligible individual

    (10) For the purposes of this Subdivision (other than subsection (4)), a person is deemed to be an eligible individual in respect of a qualified dependant at the beginning of a month if

    • (a) that qualified dependant is a qualified dependant at the beginning of that month because of subsection (9); and

    • (b) the person was an eligible individual in respect of the qualified dependant immediately before the qualified dependant's death.

  • Marginal note:Death of child

    (11) For the purposes of paragraphs (a) and (b) of the description of E in subsection 122.61(1), if a person is deemed to be a qualified dependant at the beginning of a month because of subsection (9), the person is deemed to be the age at the beginning of that month that the person would have been at the beginning of that month had the person not died.

  • Marginal note:Death of child — disability tax credit

    (12) For the purposes of paragraph (a) of the description of N in subsection 122.61(1), if a person died on or after July 1 of a particular taxation year and an amount could have been deducted in respect of that person under section 118.3 for that taxation year, an amount is deemed to be deductible under section 118.3 in respect of that person for the immediately following taxation year.

• (2) Subsection (1) applies in respect of the death of a person that occurs after 2024.

Disability Supports Deduction

• 1 (1) Subparagraph (ii) of the description of A in paragraph 64(a) of the Act is amended by striking out "and" at the end of clause (P) and by adding the following after clause (Q):

  • (R) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of an ergonomic work chair prescribed by a medical practitioner, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services,

  • (S) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of a bed positioning device prescribed by a medical practitioner, including related amounts paid for an ergonomic assessment to a person engaged in the business of providing such services,

  • (T) where the taxpayer has a severe and prolonged impairment in physical functions, for the cost of a mobile computer cart prescribed by a medical practitioner,

  • (U) where the taxpayer has an impairment in physical or mental functions, for the cost of an alternative input device prescribed by a medical practitioner to allow the taxpayer to use a computer,

  • (V) where the taxpayer has an impairment in physical or mental functions, for the cost of a digital pen device prescribed by a medical practitioner to allow the taxpayer to use a computer,

  • (W) where the taxpayer has a vision impairment, for the cost of a navigation device for low vision that is prescribed by a medical practitioner,

  • (X) where the taxpayer has an impairment in mental functions, for the cost of memory or organizational aids that are prescribed by a medical practitioner, and

  • (Y) where the taxpayer is blind or profoundly deaf or has severe autism, severe diabetes, severe epilepsy, severe mental impairment or a severe and prolonged impairment that markedly restricts the use of the taxpayer's arms or legs, for the cost of goods, services and expenses described in subparagraphs 118.2(2)(l)(i) to (iv) if the references in those subparagraphs to the "patient" were read as references to the "taxpayer" and the animal described in subparagraph 118.2(2)(l)(i) is prescribed by a medical practitioner,

• (2) Subsection (1) applies to the 2024 and subsequent taxation years.

Employee Ownership Trust Tax Exemption

1 The Act is modified to give effect to the proposals relating to the Employee Ownership Trust Tax Exemption as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Charities and Qualified Donees

• 1 (1) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:

  registered foreign charity

  registered foreign charity means a person described in subparagraph (a)(v) of the definition qualified donee in this subsection; (organisme de bienfaisance étranger enregistré)

• (2) Subsection 149.1(6.3) of the Act is replaced by the following:

  • Marginal note:Designation as public foundation, etc.

    (6.3) The Minister may, by notice sent by registered mail, or electronically if authorized in accordance with subsection 244(14.3), to a registered charity, on the Minister's own initiative or on application made to the Minister in prescribed form, designate the charity to be a charitable organization, private foundation or public foundation and the charity shall be deemed to be registered as a charitable organization, private foundation or public foundation, as the case may be, for taxation years commencing after the day of mailing or sending of the notice unless and until it is otherwise designated under this subsection or its registration is revoked under subsection (2), (3), (4), (4.1) or 168(2).

• (3) Section 149.1 of the Act is amended by adding the following after subsection (14.1):

  • Marginal note:Information returns

    (14.2) Every registered foreign charity must, within six months from the end of each taxation year of the charity and without notice or demand, file with the Minister a public information return for the year in prescribed form and containing prescribed information.

• (4) Paragraph 149.1(15)(a) of the Act is replaced by the following:

  • (a) the information contained in a public information return referred to in subsection (14), (14.1) or (14.2), and the filing status of information returns required by that subsection, must be communicated or otherwise made available to the public by the Minister in such manner as the Minister considers appropriate;

• (5) Subsection 149.1(22) of the Act is replaced by the following:

  • Marginal note:Refusal to register

    (22) The Minister may by mail, or electronically if authorized in accordance with subsection 244(14.3), give notice to a person that the application of the person for registration as a qualified donee referred to in subparagraph (a)(i) or (iii) or any of paragraphs (b) to (c) of the definition qualified donee in subsection (1) is refused.

• (6) Subsection 149.1(23) of the Act is replaced by the following:

  • Marginal note:Annulment of registration

    (23) The Minister may by registered mail, or electronically if authorized in accordance with subsection 244(14.3), give notice to a person that the registration of the person as a registered charity is annulled and deemed not to have been so registered, if the person was so registered by the Minister in error or the person has, solely as a result of a change in law, ceased to be a charity.

• (7) The portion of subsection 149.1(26) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Foreign charities

    (26) For the purposes of subparagraph (a)(v) of the definition qualified donee in subsection (1), the Minister may register, in consultation with the Minister of Finance, a foreign charity for a 36-month period that includes the time at which His Majesty in right of Canada has made a gift to the foreign charity, if

• (8) Subsections (1) and (3) are deemed to have come into force on the day after Budget Day and apply to taxation years that begin after that day.

• (9) Subsection (7) applies to registrations after Budget Day.

• 2 (1) The portion of subsection 168(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Notice of intention to revoke registration

  • 168 (1) The Minister may by registered mail, or electronically if authorized in accordance with subsection 244(14.3), give notice to a person described in any of paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) that the Minister proposes to revoke its registration if the person

• (2) Paragraph 168(1)(c) of the Act is replaced by the following:

  • (c) in the case of a registered charity, registered foreign charity, registered Canadian amateur athletic association or registered journalism organization, fails to file an information return as and when required under this Act or a regulation;

• (3) Subsection 168(2) of the Act is replaced by the following:

  • Marginal note:Revocation of registration

    (2) If the Minister gives notice under subsection (1) to a registered charity, a registered Canadian amateur athletic association or a registered journalism organization,

    • (a) if it has applied to the Minister in writing for the revocation of its registration, the Minister shall, forthwith after the mailing or sending of the notice, publish a copy of the notice on an internet webpage of the Government of Canada, and on that publication of a copy of the notice, the registration is revoked;

    • (b) in any other case, the Minister may, after the expiration of 30 days from the day of mailing or sending of the notice, or after the expiration of such extended period from the day of mailing or sending of the notice as the Federal Court of Appeal or a judge of that Court, on application made at any time before the determination of any appeal pursuant to subsection 172(3) from the giving of the notice, may fix or allow, publish a copy of the notice on an internet webpage of the Government of Canada, and on that publication of a copy of the notice, the registration is revoked; and

    • (c) the Minister shall maintain a permanent record of the notice and make the notice available to the public in such manner as the Minister considers appropriate.

• (4) The portion of subsection 168(4) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Objection to proposal or designation

    (4) A person may, on or before the day that is 90 days after the day on which the notice was mailed or sent, serve on the Minister a written notice of objection in the manner authorized by the Minister, setting out the reasons for the objection and all the relevant facts, and the provisions of subsections 165(1), (1.1) and (3) to (7) and sections 166, 166.1 and 166.2 apply, with any modifications that the circumstances require, as if the notice were a notice of assessment made under section 152, if

3 Subsection 188.1(6) of the Act is replaced by the following:

• 4 (1) The portion of subsection 188.2(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Notice of suspension with assessment

  • 188.2 (1) The Minister shall, with an assessment referred to in this subsection, give notice by registered mail, or electronically if authorized in accordance with subsection 244(14.3), to a registered charity, registered Canadian amateur athletic association or registered journalism organization that its authority to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed or sent, if the Minister has assessed the charity, association or organization for a taxation year for

• (2) The portion of subsection 188.2(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Notice of suspension — general

    (2) The Minister may give notice by registered mail, or electronically if authorized in accordance with subsection 244(14.3), to a person referred to in any of paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) that the authority of the person to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed or sent

• (3) Subsection 188.2(2.1) of the Act is replaced by the following:

  • Marginal note:Suspension – failure to report

    (2.1) If a registered charity, a registered foreign charity, a registered Canadian amateur athletic association or a registered journalism organization fails to report information that is required to be included in a return filed under subsection 149.1(14), (14.1) or (14.2) the Minister may give notice by registered mail, or electronically if authorized in accordance with subsection 244(14.3), to the charity, association or organization that its authority to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended from the day that is seven days after the day on which the notice is mailed or sent until such time as the Minister notifies the charity, association or organization that the Minister has received the required information in prescribed form.

• (4) Paragraph 188.2(3)(a) of the English version of the Act is replaced by the following:

  • (a) the qualified donee is deemed, in respect of gifts made and property transferred to the qualified donee within the one-year period that begins on the day that is seven days after the day on which the notice is mailed or sent, not to be a qualified donee for the purposes of subsections 110.1(1) and 118.1(1) and Part XXXV of the Income Tax Regulations; and

5 Subsection 189(8) of the Act is amended by striking out "and" at the end of paragraph (a) and by replacing paragraph (b) with the following:

6 Section 244 of the Act is amended by adding the following after subsection (14.2):

• 7 (1) Paragraph 3501(1)(d) of the Regulations is repealed.

• (2) Paragraph 3501(1)(e.1) of the Regulations is amended by adding "and" at the end of subparagraph (i), by removing "and" at the end of subparagraph (ii) and by repealing subparagraph (iii).

• (3) Paragraph 3501(1)(g) of the Regulations is replaced by the following:

  • (g) the name and address of the donor including, in the case of an individual, the individual's first name;

• (4) Paragraph 3501(1)(j) of the Regulations is replaced by the following:

  • (j) the name and Internet webpage of the Canada Revenue Agency.

• (5) Paragraph 3501(1.1)(c) of the Regulations is repealed.

• (6) Paragraph 3501(1.1)(e) of the Regulations is amended by adding "and" at the end of subparagraph (i), by removing "and" at the end of subparagraph (ii) and by repealing subparagraph (iii).

• (7) Paragraph 3501(1.1)(g) of the Regulations is replaced by the following:

  • (g) the name and address of the donor including, in the case of an individual, the individual's first name;

• (8) Paragraph 3501(1.1)(j) of the Regulations is replaced by the following:

  • (j) the name and Internet webpage of the Canada Revenue Agency.

• (9) Subsection 3501(2) of the Regulations is replaced by the following:

  • (2) Except as provided in subsection (3), (3.1) or (3.2), every official receipt shall be signed personally by an individual referred to in paragraph (1)(i) or (1.1)(i).

• (10) Section 3501 of the Regulations is amended by adding the following after subsection (3.1):

  • (3.2) Where an official receipt is electronically issued, it may contain a digital signature if

    • (a) it has a unique serial number; and

    • (b) it is issued and sent in a secure and non-editable format.

• (11) Subsection 3501(5) of the Regulations is replaced by the following:

  • (5) A spoiled official receipt form shall be marked "cancelled" or "void" and such form shall be retained by the registered organization or the other recipient of a gift as part of its records.

Home Buyers' Plan

1 The Act is modified to give effect to the proposals relating to the Home Buyers' Plan as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Indigenous Child and Family Services Settlement

• 1 (1) The portion of subparagraph 81(1)(g.3)(i) of the Act before clause (A) is replaced by the following:

  • (i) the taxpayer is a trust established under

• (2) Subparagraph 81(1)(g.3)(i) of the Act is amended by striking out "or" at the end of clause (D), by replacing "and" at the end of clause (E) with "or" and by adding the following after clause (E):

  • (F) the Settlement Agreement entered into by His Majesty in right of Canada, dated effective as of April 19, 2023, in respect of the class actions relating to the First Nations Child and Family Services, Jordan's Principle and Trout Class, and

• (3) Subsections (1) and (2) are deemed to have come into force on January 1, 2024.

Clean Electricity Investment Tax Credit

1 The Act is modified to give effect to the proposals relating to the Clean Electricity Investment Tax Credit as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Polymetallic Extraction and Processing

1 The Act is modified to give effect to the proposals relating to the Polymetallic Extraction and Processing as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Accelerated Capital Cost Allowance for Productivity — Enhancing Assets

1 The Act is modified to give effect to the proposals relating to the Accelerated Capital Cost Allowance for Productivity — Enhancing Assets as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Accelerated Capital Cost Allowance for Purpose-Built Rental Housing

1 The Act is modified to give effect to the proposals relating to the Accelerated Capital Cost Allowance for Purpose-Built Rental Housing as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Canada Carbon Rebate for Small Businesses

1 The Act is modified to give effect to the proposals relating to the Canada Carbon Rebate for Small Businesses as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Interest Deductibility Limits — Purpose-Built Rental Housing

1 The Act is modified to give effect to the proposals relating to the Interest Deductibility Limits — Purpose-Built Rental Housing as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Non-Compliance with Information Requests

• 1 (1) The portion of subsection 231.1(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Information gathering

  • 231.1 (1) An authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country,

• (2) Subsection 231.1(1) of the Act is amended by striking out "and" at the end of paragraph (d), by adding "and" at the end of paragraph (e) and by adding the following after paragraph (e):

  • (f) subject to subsection (4), require a taxpayer or any other person to provide and deliver, in a reasonable manner, within a reasonable period of time and without cost to His Majesty in right of Canada,

    • (i) any information or additional information, including a return of income or a supplementary return, or

    • (ii) any document.

• (3) Section 231.1 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Not applicable to unnamed persons

    (4) An authorized person shall not impose on a taxpayer or any other person a requirement under paragraph (1)(f) to provide information or any document relating to one or more unnamed persons for which an application under subsection 231.2(3) would be required if the information or document was sought under a notice of requirement under section 231.2.

• 2 (1) The portion of subsection 231.2(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Requirement to provide documents or information

  • 231.2 (1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act (including the collection of any amount payable under this Act by any person), of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice sent or served in accordance with subsection (1.1), require that any person provide, within such reasonable time and in such reasonable manner as is stipulated in the notice, without cost to His Majesty in right of Canada,

• (2) Paragraph 231.2(3)(b) of the Act is replaced by the following:

  • (b) the requirement is made to verify compliance by the person or persons in the group with any duty or obligation under this Act, a listed international agreement or, for greater certainty, a tax treaty with another country.

3 The Act is amended by adding the following after section 231.4:

4 Section 231.5 of the Act is replaced by the following:

• 5 (1) Subsections 231.6(1) and (2) of the Act are replaced by the following:

  Marginal note:Definition of foreign-based information or document

  • 231.6 (1) For the purposes of this section, foreign-based information or document means any information or document that is available or located outside Canada and that may be relevant to the administration or enforcement of this Act, of a listed international agreement or, for greater certainty, of a tax treaty with another country, including the collection of any amount payable under this Act by any person.

  • Marginal note:Requirement to provide foreign-based information

    (2) Notwithstanding any other provision of this Act, the Minister may, by notice sent or served in accordance with subsection (3.1), require that a person resident in Canada or a non-resident person carrying on business in Canada provide and deliver, within such reasonable time and in such reasonable manner as is stipulated in the notice, without cost to His Majesty in right of Canada, any foreign-based information or document.

• (2) Paragraph 231.6(3)(a) of the Act is replaced by the following:

  • (a) a reasonable period of time of not less than 90 days after the notice is sent or served for the production of the information or document;

• (3) Subsection 231.6(5) of the Act is amended by adding "or" at the end of paragraph (a) and by replacing paragraphs (b) and (c) with the following:

  • (b) vary or set aside the requirement if the judge determines that the requirement is unreasonable.

• (4) Subsection 231.6(8) of the Act is replaced by the following:

  • Marginal note:Consequence of failure

    (8) If a person fails to comply substantially with a notice sent or served under subsection (2) and if the notice is not set aside by a judge pursuant to subsection (5), any court having jurisdiction in a civil proceeding relating to the administration or enforcement of this Act, of a listed international agreement or, for greater certainty, of a tax treaty with another country, shall, on motion of the Minister, prohibit the introduction by that person of any foreign-based information or document covered by that notice.

• 6 (1) Subsection 231.7(1) of the Act is replaced by the following:

  Marginal note:Compliance order

  • 231.7 (1) On summary application by the Minister, a judge may, notwithstanding subsection 238(2), order a person to provide any access, assistance, information or document sought by the Minister under section 231.1, 231.2 or 231.6, and answer all questions either orally or in writing as required by paragraph 231.1(1)(d), if the judge is satisfied that

    • (a) the person was required under

      • (i) section 231.1, 231.2 or 231.6 to provide the access, assistance, information or document and did not do so, or

      • (ii) paragraph 231.1(1)(d) to answer questions orally or in writing and the person did not do so; and

    • (b) in the case of information, a document or an answer to a question, the information, document or answer is not protected from disclosure by solicitor-client privilege.

• (2) Section 231.7 of the Act is amended by adding the following after subsection (5):

  • Marginal note:Penalties

    (6) If an order under subsection (1) is issued in respect of a taxpayer's failure to comply, the taxpayer is, in addition to any penalty otherwise provided, liable to a penalty of 10% of the aggregate amount of tax payable by the taxpayer under this Act for each taxation year of the taxpayer in respect of which the order relates.

  • Marginal note:Threshold amount of tax

    (7) Subsection (6) does not apply if the amount of tax payable by the taxpayer under this Act for each taxation year in respect of which the order under subsection (1) relates is less than $50,000.

  • Marginal note:Make application at any time

    (8) The Minister may apply for a compliance order under subsection (1) before or after sending a notice described under subsection 231.9(1).

  • Marginal note:Assessment

    (9) The Minister may at any time assess any amount payable under subsection (6) by any person and, if the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152.

7 Section 231.8 of the Act is replaced by the following:

Avoidance of Tax Debts

• 1 (1) The portion of subsection 160(5) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Anti-avoidance rules

    (5) For the purposes of this section, if a person (referred to in this section as the "transferor" ) has transferred property either directly or indirectly, by means of a trust or by any other means whatever to another person (referred to in this section as the "transferee" ) in a transaction or as part of a series of transactions

• (2) Section 160 of the Act is amended by adding the following after subsection (5):

  • Marginal note:Deemed transfer - conditions

    (6) Subsection (7) applies in respect of a transaction or series of transactions if, as part of the transaction or series of transactions,

    • (a) a person (in this subsection referred to as the "planner") has transferred property, either directly or indirectly, by means of a trust or by any other means whatever, to a person (in this subsection referred to as the "transferee") or a person not dealing at arm's length with the transferee, pursuant to the direction of, or with the concurrence of the transferee;

    • (b) another person (in this subsection referred to as the "transferor") has transferred a property (in this subsection referred to as the "particular property"), either directly or indirectly, by means of a trust or by any other means whatever, to the planner or any other person; and

    • (c) it is reasonable to conclude that one of the purposes for undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and transferor for an amount payable under this Act.

  • Marginal note:Deemed transfer

    (7) If this subsection applies in respect of a transaction or series of transactions, for the purposes of this section, the transferor (within the meaning of subsection (6)) is deemed to have transferred the particular property to the transferee (within the meaning of subsection (6)) as part of the transaction or series of transactions.

  • (8) If a transaction or series of transactions is a section 160 avoidance transaction (as defined in subsection 160.01(1)), in determining the amount the transferee and transferor are jointly and severally, or solidarily, liable to pay under this section, the fair market value of the consideration given, if any, by the transferee for any transferred property is deemed to be nil if

    • (a) the transaction or series of transactions is described in paragraph (a) or (c) of the definition section 160 avoidance transaction in subsection 160.01(1); or

    • (b) it is reasonable to conclude that one of the purposes for undertaking or arranging the transaction or series of transactions is to avoid joint or several, or solidary, liability of the transferee and transferor for an amount payable under this Act.

• (3) Subsections (1) and (2) apply in respect of a transaction or series of transactions that occurs on or after Budget Day.

• 2 (1) The definition "section 160 avoidance transaction" in subsection 160.01(1) of the Act is amended by striking out "or" at the end of paragraph (a), by adding "or" at the end of paragraph (b) and by adding the following after paragraph (b):

  • (c) subsection 160(7) deems there to have been a transfer of property from the transferor to the transferee.

• (2) The definition transferee in subsection 160.01(1) of the Act is replaced by the following:

  transferee

  transferee has the meaning assigned by subsections 160(1), (5) and (7). (bénéficiaire du transfert)

• (3) The definition transferor in subsection 160.01(1) of the Act is replaced by the following:

  transferor

  transferor has the meaning assigned by subsections 160(1), (5) and (7). (auteur du transfert)

• (4) Subsections (1) to (3) apply in respect of a transaction or series of transactions that occurs on or after Budget Day.

Reportable and Notifiable Transactions Penalty

• 1 (1) The portion of subsection 238(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Offences and punishment

  • 238 (1) Every person who has failed to file or make a return — other than a return under section 237.3 or 237.4 — as and when required by or under this Act or a regulation or who has failed to comply with subsection 116(3), 127(3.1) or (3.2), 147.1(7) or 153(1), any of sections 230 to 232, 244.7 and 267 or a regulation made under subsection 147.1(18) or with an order made under subsection (2) is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to

• (2) Subsection (1) is deemed to have come into force on June 22, 2023.

Mutual Fund Corporations

• 1 (1) The portion of subsection 131(8) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Meaning of mutual fund corporation

    (8) Subject to subsections 131(8.1) to (8.3), a corporation is, for the purposes of this section, a mutual fund corporation at any time in a taxation year if, at that time, it was a prescribed labour-sponsored venture capital corporation or

• (2) Section 131 of the Act is amended by adding the following after subsection (8.1):

  • Marginal note:Substantial interest

    (8.2) A corporation (other than a prescribed labour-sponsored venture capital corporation) is deemed not to be a mutual fund corporation after a particular time if, at that time,

    • (a) a person or partnership, or any combination of persons or partnerships that do not deal with each other at arm's length (in either case, referred to in this subsection and subsection (8.3) as "specified persons") own, in the aggregate, shares of the capital stock of the corporation having a fair market value of more than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and

    • (b) the corporation is controlled by or for the benefit of one or more specified persons.

  • Marginal note:Exception

    (8.3) Subsection (8.2) does not apply to a corporation if, at the particular time referred to in subsection (8.2),

    • (a) the corporation was incorporated not more than two years before the particular time; and

    • (b) the aggregate fair market value of the shares of the capital stock of the corporation owned by specified persons does not exceed $5,000,000.

• (3) Subsections (1) and (2) apply to taxation years that begin after 2024.

Synthetic Equity Arrangements

1 The Act is modified to give effect to the proposals relating to the Synthetic Equity Arrangements as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Manipulation of Bankrupt Status

• 1 (1) Paragraph (i) of the description of B of the definition forgiven amount in subsection 80(1) of the Act is replaced by the following:

  • (i) if the debtor is an individual who is a bankrupt at that time, the principal amount of the obligation,

• (2) Subsection (1) applies in respect of bankruptcy proceedings that are commenced on or after Budget Day.

• 2 (1) Subsection 128(1) of the Act is amended by adding "and" at the end of subparagraph (e)(ii), by striking out "and" at the end of paragraph (f) and by repealing paragraph (g).

• (2) Subsection (1) applies in respect of bankruptcy proceedings that are commenced on or after Budget Day.

Crypto-Asset Reporting Framework and the Common Reporting Standard

1 The Act is modified to give effect to the proposals relating to the Crypto-Asset Reporting Framework and the Common Reporting Standard as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Withholding for Non-Resident Service Providers

• 1 (1) Section 153 of the Act is amended by adding the following after subsection (7):

  • Marginal note:Non-resident service providers

    (8) The Minister may

    • (a) waive the requirement under subsection (1) to deduct or withhold amounts from payments described in paragraph (1)(g) to a non-resident during a period of time specified by the Minister if the Minister is satisfied that

      • (i) the payments

        • (A) are income of a treaty-protected business of the non-resident, or

        • (B) would not be included in computing the income of the non-resident because of paragraph 81(1)(c), and

      • (ii) the conditions established by the Minster are met; and

    • (b) revoke a waiver made under paragraph (a) if the Minister is no longer satisfied that the conditions referred to in paragraph (a) are met.