Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)
Full Document:
Assented to 2001-06-14
161. (1) Part I.1 of the Act is repealed.
(2) Subsection (1) applies to the 2001 and subsequent taxation years.
162. (1) The formula in subparagraph 180.2(4)(a)(ii) of the Act is replaced by the following:
(0.0125A – $665)(1 – B)
(2) Subsection (1) applies to amounts paid after November 1999.
163. (1) The portion of paragraph 181.3(3)(a) of the Act before subparagraph (i) is replaced by the following:
(a) in the case of a financial institution, other than an authorized foreign bank or an insurance corporation, the amount, if any, by which the total at the end of the year of
(2) Subsection 181.3(3) of the Act is amended by striking out the word “and” at the end of paragraph (c), by adding the word “and” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) in the case of an authorized foreign bank, the total of
(i) 10% of the total of all amounts, each of which is the risk-weighted amount at the end of the year of an on-balance sheet asset or an off-balance sheet exposure of the bank in respect of its Canadian banking business that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, and
(ii) the total of all amounts, each of which is an amount at the end of the year in respect of the bank’s Canadian banking business that
(A) if the bank were a bank listed in Schedule II to the Bank Act, would be required under the risk-based capital adequacy guidelines issued by the Superintendent of Financial Institutions and applicable at that time to be deducted from the bank’s capital in determining the amount of capital available to satisfy the Superintendent’s requirement that capital equal a particular proportion of risk-weighted assets and exposures, and
(B) is not an amount in respect of a loss protection facility required to be deducted from capital under the Superintendent’s guidelines respecting asset securitization applicable at that time.
(3) Subsection 181.3(4) of the Act is replaced by the following:
Marginal note:Investment allowance of financial institution
(4) The investment allowance for a taxation year of a corporation that is a financial institution is
(a) in the case of a corporation that was resident in Canada at any time in the year, the total of all amounts each of which is the carrying value at the end of the year of an eligible investment of the corporation;
(b) in the case of an insurance corporation that was throughout the year not resident in Canada, the total of all amounts each of which is the carrying value at the end of the year of an eligible investment of the corporation that was used or held by it in the year in the course of carrying on an insurance business in Canada;
(c) in the case of an authorized foreign bank, the total of all amounts each of which is the amount at the end of the year, before the application of risk weights, that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, of an eligible investment used or held by the bank in the year in the course of carrying on its Canadian banking business; and
(d) in any other case, nil.
Marginal note:Interpretation
(5) For the purpose of subsection (4),
(a) an eligible investment of a corporation is a share of the capital stock or long-term debt (and, where the corporation is an insurance corporation, is non-segregated property within the meaning assigned by subsection 138(12)) of a financial institution that at the end of the year
(i) is related to the corporation,
(ii) is not exempt from tax under this Part, and
(iii) is resident in Canada or can reasonably be regarded as using the proceeds of the share or debt in a business carried on by the institution through a permanent establishment (as defined by regulation) in Canada; and
(b) a credit union and another credit union of which the credit union is a shareholder or member are deemed to be related to each other.
(4) Subsections (1) to (3) apply after June 27, 1999, except that in its application to taxpayers other than authorized foreign banks for taxation years that end before 2002, paragraph 181.3(5)(a) of the Act, as enacted by subsection (3), shall be read without reference to subparagraph (iii).
164. (1) Section 186 of the Act is amended by adding the following after subsection (6):
Marginal note:Interpretation
(7) For greater certainty, where a provision of this Act or the regulations indicates that the term “connected” has the meaning assigned by subsection 186(4), that meaning shall be determined by taking into account the application of subsection 186(2) unless the provision expressly provides otherwise.
(2) Subject to subsection (3), subsection (1) applies on and after March 16, 2001.
(3) Subsection (1) does not apply for the purposes of applying the Act on and after March 16, 2001 with respect to actions or transactions of a taxpayer required to be carried out under an agreement in writing made by the taxpayer before March 16, 2001 if the taxpayer elects in writing that this subsection apply by filing the election including a copy of the agreement with the Minister of National Revenue before the day that is 60 days after the day on which this Act receives royal assent.
165. (1) The description of C in subsection 190.1(1.1) of the Act is replaced by the following:
- C
- is the number of days in the year that are after February 25, 1992 and before 2001.
(2) Subsection (1) applies to taxation years that end after 1998.
166. (1) The portion of paragraph 190.13(a) of the Act before subparagraph (i) is replaced by the following:
(a) in the case of a financial institution, other than an authorized foreign bank or a life insurance corporation, the amount, if any, by which the total at the end of the year of
(2) Section 190.13 of the Act is amended by striking out the word “and” at the end of paragraph (b), by adding the word “and” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) in the case of an authorized foreign bank, the total of
(i) 10% of the total of all amounts, each of which is the risk-weighted amount at the end of the year of an on-balance sheet asset or an off-balance sheet exposure of the bank in respect of its Canadian banking business that the bank would be required to report under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, and
(ii) the total of all amounts, each of which is an amount at the end of the year in respect of the bank’s Canadian banking business that
(A) if the bank were a bank listed in Schedule II to the Bank Act, would be required under the risk-based capital adequacy guidelines issued by the Superintendent of Financial Institutions and applicable at that time to be deducted from the bank’s capital in determining the amount of capital available to satisfy the Superintendent’s requirement that capital equal a particular proportion of risk-weighted assets and exposures, and
(B) is not an amount in respect of a loss protection facility required to be deducted from capital under the Superintendent’s guidelines respecting asset securitization applicable at that time.
(3) Subsections (1) and (2) apply after June 27, 1999.
167. (1) Section 190.14 of the Act is replaced by the following:
Marginal note:Investment in related institutions
190.14 (1) A corporation’s investment for a taxation year in a financial institution related to it is
(a) in the case of a corporation that was resident in Canada at any time in the year, the total of all amounts each of which is the carrying value (or in the case of contributed surplus, the amount) at the end of the year of an eligible investment of the corporation in the financial institution;
(b) in the case of a life insurance corporation that was non-resident throughout the year, the total of all amounts each of which is the carrying value (or is, in the case of contributed surplus, the amount) at the end of the year of an eligible investment of the corporation in the financial institution that was used or held by the corporation in the year in the course of carrying on an insurance business in Canada (or that, in the case of contributed surplus, was contributed by the corporation in the course of carrying on that business); and
(c) in the case of a corporation that is an authorized foreign bank, the total of all amounts each of which is the amount at the end of the year, before the application of risk weights, that would be required to be reported under the OSFI risk-weighting guidelines if those guidelines applied and required a report at that time, of an eligible investment of the corporation in the financial institution that was used or held by the corporation in the year in the course of carrying on its Canadian banking business or, in the case of an eligible investment that is contributed surplus of the financial institution at the end of the year, the amount of the surplus contributed by the corporation in the course of carrying on that business.
Marginal note:Interpretation
(2) For the purpose of subsection (1), an eligible investment of a corporation in a financial institution is a share of the capital stock or long-term debt (and, where the corporation is an insurance corporation, is non-segregated property within the meaning assigned by subsection 138(12)) of the financial institution or any surplus of the financial institution contributed by the corporation (other than an amount otherwise included as a share or debt) if the financial institution at the end of the year is
(a) related to the corporation; and
(b) resident in Canada or can reasonably be regarded as using the surplus or the proceeds of the share or debt in a business carried on by the financial institution through a permanent establishment (as defined by regulation) in Canada.
(2) Subsection (1) applies after June 27, 1999 except that, in its application to taxpayers other than authorized foreign banks for taxation years that end before 2002, subsection 190.14(2) of the Act, as enacted by subsection (1), shall be read without reference to paragraph (b).
168. (1) Paragraph (a) of the definition “qualified investment” in section 204 of the Act is replaced by the following:
(a) money (other than money the fair market value of which exceeds its stated value as legal tender in the country of issuance or money that is held for its numismatic value) and deposits (within the meaning assigned by the Canada Deposit Insurance Corporation Act or with a branch in Canada of a bank) of such money standing to the credit of the trust,
(2) Paragraph (c) of the definition “qualified investment” in section 204 of the Act is replaced by the following:
(c) bonds, debentures, notes or similar obligations (other than those described in paragraph 147(2)(c))
(i) issued by a corporation the shares of which are listed on a prescribed stock exchange in Canada, or
(ii) issued by an authorized foreign bank and payable at a branch in Canada of the bank,
(3) Subsections (1) and (2) apply after June 27, 1999 except that, before 2003, paragraph (a) of the definition “qualified investment” in section 204 of the Act, as enacted by subsection (1), shall be read as follows:
(a) money (other than money the fair market value of which exceeds its stated value as legal tender in the country of issuance or money that is held for its numismatic value) and deposits (within the meaning assigned by the Canada Deposit Insurance Corporation Act or with a bank listed in Schedule I or II to the Bank Act or with a branch in Canada of an authorized foreign bank) of such money standing to the credit of the trust,
- Date modified: