SHORT TITLE

Marginal note:Short title

1. This Act may be cited as the Budget Implementation Act, 2006.

PART 1AMENDMENTS RELATING TO THE GST/HST RATE REDUCTION

Amendments Relating to the GST/HST

R.S., c. E-15Excise Tax Act

Marginal note:1997, c. 10, s. 150(6)

• 2. (1) The description of G in paragraph (a) of the definition “basic tax content” in subsection 123(1) of the Excise Tax Act is replaced by the following:

  G

  is

  • (A) 7%, if the amount determined for D is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends before July 1, 2006, and

  • (B) 6%, in any other case,

• Marginal note:1997, c. 10, s. 150(6)

  (2) The description of P in paragraph (b) of the definition “basic tax content” in subsection 123(1) of the Act is replaced by the following:

  P

  is

  • (A) 7%, if the amount determined for M is included, or would be included if the tax became payable, in the description of A in subsection 225.2(2) for a reporting period of the selected listed financial institution that ends before July 1, 2006, and

  • (B) 6%, in any other case,

• (3) Subsections (1) and (2) come into force, or are deemed to have come into force, on July 1, 2006.

Marginal note:1997, c. 10, s. 160(1)

• 3. (1) Subsection 165(1) of the Act is replaced by the following:

  Marginal note:Imposition of goods and services tax

  • 165. (1) Subject to this Part, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 6% on the value of the consideration for the supply.

• (2) Subsection (1) applies

  • (a) to any supply (other than a supply deemed under section 191 of the Act to have been made) made on or after July 1, 2006;

  • (b) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before July 1, 2006, but only in respect of the portion of the tax that

    • (i) becomes payable on or after July 1, 2006, without having been paid before that day, or

    • (ii) is paid on or after July 1, 2006, without having become payable;

  • (c) for the purposes of calculating tax in respect of any supply (other than a supply deemed under Part IX of the Act to have been made) by way of sale of real property made before July 1, 2006, if ownership and possession of the property are transferred on or after July 1, 2006, to the recipient under the agreement for the supply, unless the supply is a supply of a residential complex pursuant to an agreement of purchase and sale, evidenced in writing, entered into on or before May 2, 2006;

  • (d) to any supply by way of sale of a residential complex, which is a single unit residential complex (as defined in subsection 123(1) of the Act) or a residential condominium unit, deemed under subsection 191(1) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of the complex to a person under an agreement, entered into on or before May 2, 2006, for the supply by way of sale of the building or part of it in which the residential unit forming part of the complex is situated;

  • (e) to any supply by way of sale of a residential condominium unit deemed under subsection 191(2) of the Act to have been made on or after July 1, 2006, unless possession of the unit was given to the particular person referred to in that subsection before July 1, 2006;

  • (f) to any supply by way of sale of a residential complex deemed under subsection 191(3) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the complex to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

    • (i) the agreement was entered into on or before May 2, 2006, or

    • (ii) another agreement was entered into on or before May 2, 2006, by the builder and another person and that other agreement was not terminated before July 1, 2006, and was for the supply by way of sale of the building or part of it forming part of the complex;

  • (g) to any supply by way of sale of an addition to a residential complex deemed under subsection 191(4) of the Act to have been made on or after July 1, 2006, unless the supply is deemed to have been made as a consequence of the builder giving possession of a residential unit in the addition to a person under an agreement for the supply by way of sale of the building or part of it forming part of the complex and

    • (i) the agreement was entered into on or before May 2, 2006, or

    • (ii) another agreement was entered into on or before May 2, 2006, by the builder and another person and that other agreement was not terminated before July 1, 2006, and was for the supply by way of sale of the building or part of it forming part of the addition;

  • (h) for the purposes of calculating tax on the cost to another person of supplying property or a service to a financial institution under paragraph (c) of the description of A in subsection 225.2(2) of the Act if the reporting period of the financial institution ends on or after July 1, 2006; and

  • (i) for the purposes of determining or calculating any of the following amounts if none of paragraphs (a) to (h) applies:

    • (i) tax on or after July 1, 2006,

    • (ii) tax that is not payable but would have been payable on or after July 1, 2006, in the absence of certain circumstances described in the Act, and

    • (iii) an amount or a number, at any time on or after July 1, 2006, by or in accordance with an algebraic formula that makes reference to the rate set out in subsection 165(1) of the Act.

Marginal note:1997, c. 10, s. 165(5)(E)

• 4. (1) The description of A in clause 173(1)(d)(vi)(B) of the Act is replaced by the following:

  A

  is

  • (I) where

    • 1. the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing the individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in a participating prov-ince, or

    • 2. the benefit amount is required under subsection 15(1) of that Act to be included in computing the individual’s income and the individual is resident in a participating prov- ince at the end of the year,

    the total of 5% and the tax rate for the participating province, and

  • (II) in any other case, 5%,

• (2) Subsection (1) applies to the 2006 and subsequent taxation years of an individual, except that for the 2006 taxation year, the reference to “5%” in the description of A in clause 173(1)(d)(vi)(B) of the Act shall be read as “5.5%”.

Marginal note:1997, c. 10, s. 166(1)

• 5. (1) Paragraph 174(e) of the French version of the Act is replaced by the following:

  • e) la personne est réputée avoir payé, au moment du versement de l’indemnité et relativement à la fourniture, une taxe égale au résultat du calcul suivant :

    A × (B/C)

    où :

    A

    représente le montant de l’indemnité,

    B

    :

    • (i) la somme du taux fixé au paragraphe 165(1) et du taux de taxe applicable à une province participante si, selon le cas :

      • (A) la totalité ou la presque totalité des fournitures relativement auxquelles l’indemnité est versée ont été effectuées dans des provinces participantes,

      • (B) l’indemnité est versée en vue de l’utilisation du véhicule à moteur dans des provinces participantes,

    • (ii) dans les autres cas, le taux fixé au paragraphe 165(1),

    C

    la somme de 100 % et du pourcentage déterminé selon l’élément B.

• Marginal note:1997, c. 10, s. 166(1)

  (2) Paragraph 174(f) of the English version of the Act is replaced by the following:

  • (f) the person is deemed to have paid, at the time the allowance is paid, tax in respect of the supply equal to the amount determined by the formula

    A × (B/C)

    where

    A

    is the amount of the allowance,

    B

    is

    • (i) the total of the rate set out in subsection 165(1) and the tax rate for a participating province if

      • (A) all or substantially all of the supplies for which the allowance is paid were made in participating provinces, or

      • (B) the allowance is paid for the use of the motor vehicle in participating provinces, and

    • (ii) in any other case, the rate set out in subsection 165(1), and

    C

    is the total of 100% and the percentage determined for B.

• (3) Subsections (1) and (2) apply to any allowance paid by a person on or after July 1, 2006.

Marginal note:1997, c. 10, s. 169(3)

• 6. (1) The description of A in subsection 176(1) of the Act is replaced by the following:

  A

  is

  • (a) if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and

  • (b) in any other case, the rate set out in subsection 165(1),

• (2) Subsection (1) applies to any supply made on or after July 1, 2006.