Budget Implementation Act, 2009 (S.C. 2009, c. 2)
Full Document:
Assented to 2009-03-12
37. (1) Paragraph (c) of the definition “eligible individual” in subsection 122.51(1) of the Act is replaced by the following:
(c) the total of whose incomes for the year from the following sources is at least $2,500:
(i) offices and employments (computed without reference to paragraph 6(1)(f)),
(ii) businesses each of which is a business carried on by the individual either alone or as a partner actively engaged in the business, and
(iii) the program established under the Wage Earner Protection Program Act.
(2) Subsection (1) applies to the 2008 and subsequent taxation years.
38. (1) Paragraph (b) of the definition “working income” in subsection 122.7(1) of the Act is replaced by the following:
(b) all amounts that are included, or that would, but for paragraph 81(1)(a), be included, because of paragraph 56(1)(n) or (o) or subparagraph 56(1)(r)(v) in computing the individual’s income for a period in the taxation year; and
(2) Subsection (1) applies to the 2008 and subsequent taxation years.
39. (1) Subsection 125(2) of the Act is replaced by the following:
Marginal note:Business limit
(2) For the purpose of this section, a corporation’s business limit for a taxation year is $500,000 unless the corporation is associated in the taxation year with one or more other Canadian-controlled private corporations, in which case, except as otherwise provided in this section, its business limit is nil.
(2) Paragraph 125(3)(a) of the Act is replaced by the following:
(a) if the total of the percentages assigned in the agreement does not exceed 100%, $500,000 multiplied by the percentage assigned to that corporation in the agreement; and
(3) In applying subsection 125(5) of the Act to a corporation for a 2009 or 2010 taxation year of the corporation that began before 2009, subparagraph 125(5)(a)(i) of the Act is to be read as follows:
(i) the amount that would have been its business limit determined under subsection (3) or (4) for the first such taxation year ending in the calendar year if the reference to $400,000 in subsection (3), as it applied in respect of that first such taxation year, had been read in the same manner as it is read in respect of the particular taxation year ending in the calendar year, and
(4) The description of M in the definition “specified partnership income” in subsection 125(7) of the Act is replaced by the following:
- M
- is the lesser of
(i) $500,000, and
(ii) the product obtained when $1,370 is multiplied by the total of all amounts each of which is the number of days in a fiscal period of the partnership that ends in the year, and
(5) Subsection (1) applies to the 2009 and subsequent taxation years except that, for a 2009 or 2010 taxation year that began before 2009, the reference in subsection 125(2) of the Act, as enacted by subsection (1), to “$500,000” shall be read as a reference to the total of
(a) that proportion of $400,000 that the number of days in the taxation year that are before 2009 is of the number of days in the taxation year, and
(b) that proportion of $500,000 that the number of days in the taxation year that are after 2008 is of the number of days in the taxation year.
(6) Subsection (2) applies to the 2009 and subsequent taxation years except that, for a 2009 or 2010 taxation year that began before 2009, the reference in paragraph 125(3)(a) of the Act, as enacted by subsection (2), to “$500,000” is to be read as a reference to “the amount that would, if the corporation were not associated in the year with any other corporation, be its business limit for the year determined without reference to subsections (5) and (5.1)”.
(7) Subsection (4) applies to fiscal periods of a partnership that end after 2008.
40. (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 2009 and before 2011 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2011) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition “mineral resource” in subsection 248(1),
(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 2009 and before April 2010, and
(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2009 and before April 2010;
(3) Paragraph 127(9.01)(b) of the Act is replaced by the following:
(b) the number that is the total of 10 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 1997 exceeds 11.
(4) Paragraph 127(9.02)(b) of the Act is replaced by the following:
(b) the number that is the total of 9 and the number of taxation years by which the number of taxation years of the taxpayer that have ended after 1997 exceeds 11.
(5) The formula in subsection 127(10.2) of the Act is replaced by the following:
($8 million – 10A) × [($40 million – B)/$40 million]
(6) Paragraph (a) of the description of A in subsection 127(10.2) of the Act is replaced by the following:
(a) $500,000, and
(7) Subparagraphs (a)(i) and (ii) of the description of B in subsection 127(10.2) of the Act are replaced by the following:
(i) if the particular corporation is not associated with any other corporation in the particular taxation year, the amount that is its taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year, or
(ii) if the particular corporation is associated with one or more other corporations in the particular taxation year, the amount that is the total of all amounts, each of which is the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of the particular corporation for its, or of one of the other corporations for its, last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or
(8) Subsection 127(10.22) of the Act is replaced by the following:
Marginal note:Deemed non-association of corporations
(10.22) If a particular Canadian-controlled private corporation is associated with another corporation in circumstances where those corporations would not be associated if the Act were read without reference to paragraph 256(1.2)(a), the particular corporation has issued shares to one or more persons who have been issued shares by the other corporation and there is at least one shareholder of the particular corporation who is not a shareholder of the other corporation or one shareholder of the other corporation who is not a shareholder of the particular corporation, the particular corporation is deemed not to be associated with the other corporation for the purpose of determining the particular corporation’s expenditure limit under subsection (10.2).
(9) Paragraph 127(10.6)(c) of the Act is replaced by the following:
(c) for the purpose of subsection (10.2), where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, the taxable income of the corporation for the year shall be determined by multiplying that amount by the ratio that 365 is of the number of days in that year.
(10) Paragraph 127(36)(b) of the Act is replaced by the following:
(b) the number that is the total of 10 and the number of taxation years or fiscal periods, as the case may be, by which the number of taxation years or fiscal periods of the taxpayer that have ended after 1997 exceeds 11.
(11) Subsections (1) and (2) apply to expenses renounced under a flow through share agreement made after March 2009.
(12) Subsections (3), (4) and (10) apply in respect of the 2008 and subsequent taxation years.
(13) Subsections (5) and (6) apply to the 2010 and subsequent taxation years, except that the expenditure limit in subsection 127(10.2) of the Act in respect of a corporation for 2010 taxation years that begin before 2010, be determined by the formula
A + [(B – A) × (C/D)]
where
- A
- is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Act as that subsection read in its application to taxation years that end in 2009;
- B
- is the expenditure limit of the corporation for the taxation year determined in accordance with the formula in subsection 127(10.2) of the Act, as that subsection would apply to the taxation year in the absence of this exception;
- C
- is the number of days in the taxation year that are after 2009; and
- D
- is the total number of days in the taxation year.
(14) Subsection (7) applies to taxation years that end on or after February 26, 2008.
(15) Subsections (8) and (9) apply to taxation years that end on or after March 9, 2009.
41. (1) The definition “qualifying corporation” in subsection 127.1(2) of the Act is replaced by the following:
“qualifying corporation”
« société admissible »
“qualifying corporation” for a particular taxation year that ends in a calendar year means a particular corporation that is a Canadian-controlled private corporation in the particular taxation year the taxable income of which for its immediately preceding taxation year — together with, if the particular corporation is associated in the particular taxation year with one or more other corporations (in this subsection referred to as “associated corporations”), the taxable income of each associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year) — does not exceed the qualifying income limit of the particular corporation for the particular taxation year;
(2) Subsection 127.1(2) of the Act is amended by adding the following in alphabetical order:
“qualifying income limit”
« plafond de revenu admissible »
“qualifying income limit” of a corporation for a particular taxation year is the amount determined by the formula
$500,000 × [($40 million – A)/$40 million]
where
- A
- is
(a) nil, if $10 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or
(b) in any other case, the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million;
(3) Section 127.1 of the Act is amended by adding the following after subsection (3):
Marginal note:Qualifying income limit determined in certain cases
(4) For the purpose of the definition of “qualifying corporation” in subsection (2), where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, the taxable income of the corporation for the year shall be determined by multiplying that amount by the ratio that 365 is of the number of days in that year.
(4) Subsections (1) and (2) apply to taxation years that end on or after February 26, 2008, except that
(a) for taxation years that include February 26, 2008, the formula in the definition “qualifying income limit” in subsection 127.1(2) of the Act and the portion of that definition that follows that formula, as enacted by subsection (2), shall be read as follows:
A + [($400,000 × [($40 million – B)/$40 million] – A) × (C/D)]
where
- A
- is the business limit of the corporation for the particular taxation year determined in accordance with section 125 — together with, if the particular corporation is associated in the particular taxation year with one or more other corporations the business limit of each of those associated corporations for its last taxation year that ends in the particular taxation year (determined in accordance with section 125),
- B
- is
(a) nil, if $10 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or
(b) in any other case, the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million,
- C
- is the number of days in the particular taxation year that are after February 25, 2008, and
- D
- is the total number of days in the particular taxation year;
(b) for taxation years that begin after February 26, 2008 and end before 2010, the reference to “$500,000” in the formula in the definition “qualifying income limit” in subsection 127.1(2) of the Act, as enacted by subsection (2), shall be read as a reference to “$400,000”; and
(c) for 2010 taxation years that begin before 2010, the reference to “$500,000” in the formula in the definition “qualifying income limit” in subsection 127.1(2) of the Act, as enacted by subsection (2), shall be read as a reference to an amount that is the total of $400,000 and that proportion of $100,000 that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year.
(5) Subsection (3) applies in respect of the 2008 and subsequent taxation years.
- Date modified: