Economic Recovery Act (stimulus) (S.C. 2009, c. 31)
Full Document:
Assented to 2009-12-15
Economic Recovery Act (stimulus)
S.C. 2009, c. 31
Assented to 2009-12-15
An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and to implement other measures
SUMMARY
Part 1 implements income tax measures proposed in the Budget tabled in Parliament on January 27, 2009 but not included in the Budget Implementation Act, 2009, which received royal assent on March 12, 2009. In particular, it
(a) introduces the Home Renovation Tax Credit;
(b) introduces the First-time Home Buyers’ Tax Credit; and
(c) enhances the tax relief provided by the Working Income Tax Benefit.
In addition, Part 1 extends the existing tax deferral available to farmers in prescribed drought regions to farmers who dispose of breeding livestock because of flood or excessive moisture and sets out the regions prescribed either as eligible flood or drought regions in 2007 to 2009.
Part 2 authorizes payments to be made out of the Consolidated Revenue Fund for multilateral debt relief and in relation to offshore petroleum resources. It also makes the following amendments:
(a) the Bretton Woods and Related Agreements Act is amended to implement amendments proposed by the Board of Governors of the International Monetary Fund;
(b) the Broadcasting Act is amended to extend the Canadian Broadcasting Corporation’s borrowing limit to $220,000,000;
(c) the Budget Implementation Act, 2009 is amended to clarify the purposes for which payments may be made;
(d) the Canada Pension Plan is amended to
(i) remove the work cessation test in 2012 so that a person may take their retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction,
(ii) increase the general drop-out from 15% to 16% in 2012 allowing a maximum of almost seven and a half years of low or zero earnings to be dropped from the contributory period and to 17% in 2014 allowing a maximum of eight years to be dropped,
(iii) require a person under the age of 65 who receives a retirement pension and continues working to contribute to the Canada Pension Plan and thereby create eligibility for a post-retirement benefit,
(iv) permit a person aged 65 to 70 who receives a retirement pension to elect not to contribute to the Canada Pension Plan, and
(v) have the adjustment factors that apply to early or late take-up of retirement pensions fixed by regulation after December 31, 2010 and have the Minister of Finance and the ministers of the included provinces review the adjustment factors and make recommendations as to whether the factors should be changed;
(e) the Canada Pension Plan Investment Board Act is amended by repealing section 37 and by permitting the approval of regulations made under subsection 53(1) before they are made;
(f) The Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act is amended to provide for Crown share adjustment payments to be made in accordance with an agreement between Canada and Nova Scotia;
(g) the Customs Tariff is amended to change the conditions relating to containers temporarily imported under tariff item 9801.10.20 and to add new tariff item 9801.10.30 relating to temporarily imported trailers and semi-trailers;
(h) the Financial Administration Act is amended to require that departments and parent Crown corporations cause quarterly financial reports to be prepared every fiscal quarter and to make them public; and
(i) the Public Service Superannuation Act is amended by adding the name of PPP Canada Inc. to Part I of Schedule I to that Act.
Part 2 also amends the Bankruptcy and Insolvency Act and chapter 36 of the Statutes of Canada, 2007 to correct unintended consequences resulting from the inaccurate coordination of two amending Acts.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Economic Recovery Act (stimulus).
PART 1AMENDMENTS RELATED TO INCOME TAX
R.S., c. 1 (5th Supp.)Income Tax Act
2. (1) The portion of subsection 80.3(4) of the Income Tax Act before the formula is replaced by the following:
Marginal note:Income deferral for regions of drought, flood or excessive moisture
(4) If in a taxation year a taxpayer carries on a farming business in a region that is at any time in the year a prescribed drought region or a prescribed region of flood or excessive moisture and the taxpayer’s breeding herd at the end of the year in respect of the business does not exceed 85% of the taxpayer’s breeding herd at the beginning of the year in respect of the business, there may be deducted in computing the taxpayer’s income from the business for the year the amount that the taxpayer claims, not exceeding the amount, if any, determined by the formula
(2) The portion of subsection 80.3(5) of the Act before paragraph (b) is replaced by the following:
Marginal note:Inclusion of deferred amount
(5) The amount deducted under subsection (4) in computing the income of a taxpayer for a particular taxation year from a farming business carried on in a region prescribed under that subsection may, to the extent that the taxpayer so elects, be included in computing the taxpayer’s income from the business for a taxation year ending after the particular taxation year, and is, except to the extent that the amount has been included under this subsection in computing the taxpayer’s income from the business for a preceding taxation year after the particular year, deemed to be income of the taxpayer from the business for the taxation year of the taxpayer that is the earliest of
(a) the first taxation year beginning after the end of the period or series of continuous periods, as the case may be, for which the region is prescribed under that subsection,
(3) Subsections (1) and (2) apply to the 2008 and subsequent taxation years.
3. (1) Section 108 of the Act is amended by adding the following after subsection (1):
Marginal note:Home renovation tax credit
(1.1) For the purpose of the definition “testamentary trust” in subsection (1), a contribution to a trust does not include a qualifying expenditure (within the meaning of section 118.04) of a beneficiary under the trust.
(2) Subsection (1) applies to the 2009 and subsequent taxation years.
4. (1) The Act is amended by adding the following after section 118.03:
Marginal note:Definitions
118.04 (1) The following definitions apply in this section.
“eligible dwelling”
« logement admissible »
“eligible dwelling” of an individual, at any time, means a housing unit (including the land subjacent to the housing unit and the immediately contiguous land, but not including the portion of such land that exceeds the greater of 1/2 hectare and the portion of such land that the individual establishes is necessary for the use and enjoyment of the housing unit as a residence) located in Canada if
(a) the individual (or a trust under which the individual is a beneficiary) owns, whether jointly with another person or otherwise, at that time, the housing unit or a share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation; and
(b) the housing unit is ordinarily inhabited at any time during the eligible period by the individual, by the individual’s spouse or common-law partner or former spouse or common-law partner or by a child of the individual.
“eligible period”
« période d’admissibilité »
“eligible period” means the period that begins on January 28, 2009 and that ends on January 31, 2010.
“individual”
« particulier »
“individual” does not include a trust.
“qualifying expenditure”
« dépense admissible »
“qualifying expenditure” of an individual means an outlay or expense that is made or incurred, by the individual or by a qualifying relation in respect of the individual during the eligible period, that is directly attributable to a qualifying renovation by the individual and that is the cost of goods acquired or services received during the eligible period and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation, but does not include such an outlay or expense
(a) to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation in respect of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation in respect of the individual;
(b) made or incurred under the terms of an agreement entered into before the eligible period;
(c) to acquire a property that can be used independently of the qualifying renovation;
(d) that is the cost of annual, recurring or routine repair or maintenance;
(e) to acquire a household appliance;
(f) to acquire an electronic home-entertainment device;
(g) for financing costs in respect of the qualifying renovation;
(h) made or incurred for the purpose of gaining or producing income from a business or property; or
(i) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act.
“qualifying relation”
« proche admissible »
“qualifying relation” in respect of an individual means a person who is the individual’s spouse or common-law partner, or a child of the individual who has not attained the age of 18 years before the end of 2009 (other than a child who was, at any time during the eligible period, a married person, a person who is in a common-law partnership or a person who has a child).
“qualifying renovation”
« travaux de rénovation admissibles »
“qualifying renovation” by an individual, at any time, means a renovation or alteration, of a property that is at that time an eligible dwelling of the individual or of a qualifying relation in respect of the individual, that is of an enduring nature and that is integral to the eligible dwelling.
Marginal note:Rules of application
(2) For the purposes of this section,
(a) a qualifying expenditure of an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation (or, for civil law, a syndicate of co-owners) or a similar entity (in this paragraph referred to as the “corporation”), in respect of a property that is owned, administered or managed by that corporation, and that includes an eligible dwelling of the individual, to the extent of the individual’s share of that outlay or expense, if
(i) the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were an eligible dwelling of that natural person, and
(ii) the corporation has notified the individual, in writing, of the individual’s share of the outlay or expense; and
(b) a qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust, in respect of a property owned by the trust that includes an eligible dwelling of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the eligible dwelling of the individual (including, for this purpose, common areas relevant to more than one eligible dwelling), if
(i) the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were an eligible dwelling of that natural person, and
(ii) the trust has notified the individual, in writing, of the individual’s share of the outlay or expense.
Marginal note:Home renovation tax credit
(3) For the purposes of computing the tax payable under this Part by an individual for the individual’s 2009 taxation year, there may be deducted the amount determined by the formula
A × (B – $1,000)
where
- A
- is the appropriate percentage for the taxation year; and
- B
- is the lesser of $10,000 and the total of all amounts, each of which is a qualifying expenditure of the individual.
Marginal note:Interaction with medical expense credit
(4) Notwithstanding paragraph 248(28)(b), an amount may be included in determining both an amount under subsection (3) and under section 118.2 if those amounts otherwise qualify to be included for the purposes of those provisions.
Marginal note:Apportionment of credit
(5) If more than one individual is entitled to a deduction under this section for a taxation year in respect of a qualifying expenditure of an individual, 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 the qualifying expenditure, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.
Marginal note:Definitions
118.05 (1) The following definitions apply in this section.
“qualifying home”
« habitation admissible »
“qualifying home” in respect of an individual, means a “qualifying home” as defined in subsection 146.01(1) that is acquired, whether jointly or otherwise, after January 27, 2009 if
(a) the home is acquired by the individual, or by the individual’s spouse or common-law partner, and
(i) the individual intends to inhabit the home as a principal place of residence not later than one year after its acquisition,
(ii) the individual did not own, whether jointly or otherwise, a home that was occupied by the individual in the period
(A) that began at the beginning of the fourth preceding calendar year that ended before the acquisition, and
(B) that ended on the day before the acquisition, and
(iii) the individual’s spouse or common-law partner did not, in the period referred to in subparagraph (ii), own, whether jointly or otherwise, a home
(A) that was inhabited by the individual during the marriage to or common-law partnership with the individual, or
(B) that was a share of the capital stock of a cooperative housing corporation that relates to a housing unit inhabited by the individual during the marriage to or common-law partnership with the individual; or
(b) the home is acquired by the individual for the benefit of a specified person in respect of the individual, and
(i) the individual intends that the home be inhabited by the specified person as a principal place of residence not later than one year after its acquisition by the individual, and
(ii) the purpose of the acquisition of the home by the individual is to enable the specified person to live in
(A) a home that is more accessible by the specified person or in which the specified person is more mobile or functional, or
(B) an environment better suited to the specified person’s personal needs and care.
“specified person”
« personne déterminée »
“specified person” in respect of an individual, at any time, means a person who
(a) is the individual or is related at that time to the individual; and
(b) would be entitled to a deduction under subsection 118.3(1) in computing tax payable under this Part for the person’s taxation year that includes that time if that subsection were read without reference to paragraph (c) of that subsection.
Marginal note:Rules of application
(2) For the purposes of this section, an individual is considered to have acquired a qualifying home only if the individual’s interest (or for civil law, right) in it is registered in accordance with the land registration system or other similar system applicable where it is located.
Marginal note:First-time home buyers’ tax credit
(3) In computing the tax payable under this Part by an individual for a taxation year in which a qualifying home in respect of the individual is acquired, there may be deducted the amount determined by multiplying $5,000 by the appropriate percentage for the taxation year.
Marginal note: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 particular qualifying home, 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 the qualifying home, if that individual were the only individual entitled to deduct an amount for the year under this section, and if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions.
(2) Subsection (1) applies to the 2009 and subsequent taxation years.
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