Sustaining Canada’s Economic Recovery Act (S.C. 2010, c. 25)
Full Document:
Assented to 2010-12-15
82. (1) Paragraphs 2401(2)(b) and (c) of the Regulations are replaced by the following:
(b) shall designate for a taxation year investment property of the insurer for the year with a total value for the year equal to the amount, if any, by which the insurer’s mean Canadian reserve liabilities for the year in respect of its accident and sickness insurance business in Canada exceeds the insurer’s mean Canadian outstanding premiums for the year in respect of that business;
(c) shall designate for a taxation year in respect of the insurer’s insurance business in Canada (other than a life insurance business or an accident and sickness insurance business) investment property of the insurer for the year with a total value for the year equal to the amount, if any, by which the insurer’s mean Canadian reserve liabilities for the year in respect of that business exceeds 50% of the total of all amounts each of which is the amount, as at the end of the year or as at the end of its preceding taxation year, of a premium receivable or a deferred acquisition expense (to the extent that it is included in the insurer’s Canadian reserve liabilities as at the end of the year or preceding taxation year, as the case may be) of the insurer in respect of that business;
(2) Subsection (1) applies to taxation years that begin after 2010.
83. (1) Section 3700 of the Regulations and the headings before it are replaced by the following:
PART XXXVIIREGISTERED CHARITIES
(2) Subsection (1) applies for taxation years that end on or after March 4, 2010.
84. (1) The portion of subsection 3701(1) of the Regulations before paragraph (a) is replaced by the following:
3701. (1) For the purposes of the description of B in the definition “disbursement quota” in subsection 149.1(1) of the Act, the prescribed amount for a taxation year of a registered charity is determined as follows:
(2) Paragraph 3701(1)(b) of the Regulations is replaced by the following:
(b) aggregate for each period chosen under paragraph (a) all amounts, each of which is the value, determined in accordance with section 3702, of a property, or a portion of a property, owned by the registered charity, and not used directly in charitable activities or administration, on the last day of the period;
(3) Subsections 3701(2) and (3) of the Regulations are replaced by the following:
(2) For the purposes of subsection (1) and subject to subsection (3),
(a) the number of periods chosen by a registered charity under paragraph (1)(a) shall, unless otherwise authorized by the Minister, be used for the taxation year and for all subsequent taxation years; and
(b) a registered charity is deemed to have existed on the last day of each of the periods chosen by it.
(3) The number of periods chosen under paragraph (1)(a) may be changed by the registered charity for its first taxation year commencing after 1986 and the new number shall, unless otherwise authorized by the Minister, be used for that taxation year and all subsequent taxation years.
(4) Subsections (1) to (3) apply to taxation years that end on or after March 4, 2010.
85. (1) Subsection 3702(1) of the Regulations is replaced by the following:
3702. (1) For the purposes of subsection 3701(1), the value of a property, or a portion of a property, owned by a registered charity, and not used directly in charitable activities or administration, on the last day of a period is determined as of that day to be
(a) in the case of a non-qualified investment of a private foundation, the greater of its fair market value on that day and its cost amount to the private foundation;
(b) subject to paragraph (c), in the case of property other than a non-qualified investment that is
(i) a share of a corporation that is listed on a designated stock exchange, the closing price or the average of the bid and asked prices of that share on that day or, if there is no closing price or bid and asked prices on that day, on the last preceding day for which there was a closing price or bid and asked prices,
(ii) a share of a corporation that is not listed on a designated stock exchange, the fair market value of that share on that day,
(iii) an interest in real property or a real right in an immovable, the fair market value on that day of the interest or right less the amount of any debt of the registered charity incurred in respect of the acquisition of the interest or right and secured by the interest or right, where the debt bears a reasonable rate of interest,
(iv) a contribution that is the subject of a pledge, nil,
(v) an interest, or for civil law a right, in property where the registered charity does not have the present use or enjoyment of the interest or right, nil,
(vi) a life insurance policy, other than an annuity contract, that has not matured, nil, and
(vii) a property not described in any of subparagraphs (i) to (vi), the fair market value of the property on that day; and
(c) in the case of any property described in paragraph (b) that is owned in connection with the charitable activities of the registered charity and is a share of a limited-dividend housing company referred to in paragraph 149(1)(n) of the Act or a loan, that has ceased to be used for charitable purposes and is being held pending disposition or for use in charitable activities, or that has been acquired for use in charitable activities, the lesser of the fair market value of the property on that day and an amount determined by the formula
(A / 0.035) x (12 / B)
where
- A
- is the income earned on the property in the period, and
- B
- is the number of months in the period.
(2) Subsection (1) applies for taxation years that end on or after March 4, 2010.
86. (1) The definition “total reserve liabilities” in section 8600 of the Regulations is replaced by the following:
- “total reserve liabilities”
“total reserve liabilities” of an insurer as at the end of a taxation year means the amount determined by the formula
A – B
where
- A
- is the total amount as at the end of the year of the insurer’s liabilities and reserves (other than liabilities and reserves in respect of a segregated fund within the meaning assigned by subsection 138(12) of the Act) in respect of all its insurance policies, as determined for the purposes of the Superintendent of Financial Institutions, if the insurer is required by law to report to the Superintendent of Financial Institutions, or, in any other case, the superintendent of insurance or other similar officer or authority of the province under the laws of which the insurer is incorporated, and
- B
- is the total of the reinsurance recoverable (within the meaning assigned by subsection 2400(1)) reported as a reinsurance asset by the insurer as at the end of the year relating to its liabilities and reserves in A. (passif total de réserve)
(2) Subsection (1) applies to taxation years that begin after 2010.
87. (1) The Regulations are amended by adding the following after section 9400:
PART XCVEMPLOYEE LIFE AND HEALTH TRUSTS
Marginal note:Prescribed rights
9500. For the purpose of subparagraph 144.1(2)(g)(iii) of the Act, prescribed payments are payments to General Motors of Canada Limited or Chrysler Canada Inc. by the employee life and health trust established for the benefit of retired automobile industry workers by the Canadian Auto Workers’ Union that
(a) are reasonable in the circumstances;
(b) are made as consideration for administrative services provided to or on behalf of the trust or its beneficiaries, or as reimbursement for employee benefit payments made on behalf of, or in contemplation of the establishment of, the trust; and
(c) the recipient acknowledges in writing shall be included in computing the recipient’s income in the year that they are receivable, to the extent that the recipient deducts in the year, or deducted in a prior year, in computing its income amounts in respect of the services or benefit payments described in paragraph (b).
(2) Subsection (1) applies after 2009.
88. (1) The portion of paragraph (v) of Class 10 in Schedule II to the Regulations before subparagraph (i) is replaced by the following:
(v) property acquired after August 31, 1984 (other than property that is included in Class 30) that is equipment used for the purpose of effecting an interface between a cable distribution system and electronic products used by consumers of that system and that is designed primarily
(2) Subsection (1) applies in respect of taxation years that end after March 4, 2010.
89. (1) Class 30 in Schedule II to the Regulations is replaced by the following:
Class 30
Property of a taxpayer that is
(a) an unmanned telecommunication spacecraft that was designed to orbit above the earth and that was acquired by the taxpayer
(i) before 1988, or
(ii) before 1990
(A) pursuant to an obligation in writing entered into by the taxpayer before June 18, 1987, or
(B) that was under construction by or on behalf of the taxpayer on June 18, 1987; or
(b) equipment used for the purpose of effecting an interface between a cable or satellite distribution system (other than a satellite radio distribution system) and electronic products used by consumers of that system if the equipment
(i) is designed primarily
(A) to augment the channel capacity of a television receiver, or
(B) to decode pay television or other signals provided on a discretionary basis,
(ii) is acquired by the taxpayer after March 4, 2010, and
(iii) has not been used or acquired for use for any purpose by any taxpayer before March 5, 2010.
(2) Subsection (1) applies in respect of taxation years that end after March 4, 2010.
90. (1) Subparagraphs (a)(iii) and (iii.1) of Class 43.1 in Schedule II to the Regulations are replaced by the following:
(iii) heat recovery equipment used primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated by equipment referred to in subparagraph (i) or (ii),
(iii.1) district energy equipment that is part of a district energy system that uses thermal energy that is primarily supplied by electrical cogeneration equipment that would be property described in paragraphs (a) to (c) if read without reference to this subparagraph,
(2) Subclause (d)(i)(A)(II) of Class 43.1 in Schedule II to the Regulations is replaced by the following:
(II) equipment that is part of a ground source heat pump system that transfers heat to or from the ground or groundwater (but not to or from surface water such as a river, a lake or an ocean) and that, at the time of installation, meets the standards set by the Canadian Standards Association for the design and installation of earth energy systems, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), energy conversion equipment, energy storage equipment, control equipment and equipment designed to enable the system to interface with other heating or cooling equipment, and
(3) Clause (d)(i)(B) of Class 43.1 in Schedule II to the Regulations is replaced by the following:
(B) it is not a building, part of a building (other than a solar collector that is not a window and that is integrated into a building), equipment used to heat water for use in a swimming pool, energy equipment that backs up equipment described in subclause (A)(I) or (II) nor equipment that distributes heated or cooled air or water in a building,
(4) Subparagraph (d)(iv) of Class 43.1 in Schedule II to the Regulations is replaced by the following:
(iv) heat recovery equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of conserving energy, or reducing the requirement to acquire energy, by extracting for reuse thermal waste that is generated directly in an industrial process (other than an industrial process that generates or processes electrical energy), including such equipment that consists of heat exchange equipment, compressors used to upgrade low pressure steam, vapour or gas, waste heat boilers and other ancillary equipment such as control panels, fans, instruments or pumps, but not including property that is employed in re-using the recovered heat (such as property that is part of the internal heating or cooling system of a building or electrical generating equipment), is a building or is equipment that recovers heat primarily for use for heating water in a swimming pool.
(5) Subparagraphs (d)(vii) to (ix) of Class 43.1 in Schedule II to the Regulations are replaced by the following:
(vii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electrical energy solely from geothermal energy, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), pumps, heat exchangers, steam separators, electrical generating equipment and ancillary equipment used to collect the geothermal heat, but not including buildings, transmission equipment, distribution equipment, equipment designed to store electrical energy, property otherwise included in Class 10 and property that would be included in Class 17 if that Class were read without reference to its subparagraph (a.1)(i),
(viii) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of collecting landfill gas or digester gas, including such equipment that consists of piping (including above or below ground piping and the cost of drilling a well, or trenching, for the purpose of installing that piping), fans, compressors, storage tanks, heat exchangers and other ancillary equipment used to collect gas, to remove non-combustibles and contaminants from the gas or to store the gas, but not including property otherwise included in Class 10 or 17,
(ix) equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating heat energy from the consumption of eligible waste fuel, and not using any fuel other than eligible waste fuel or fossil fuel, if the heat energy is used directly in an industrial process, or in a greenhouse, including such equipment that consists of fuel handling equipment used to upgrade the combustible portion of the fuel and control, feedwater and condensate systems, and other ancillary equipment, but not including buildings or other structures, heat rejection equipment (such as condensers and cooling water systems), fuel storage facilities, other fuel handling equipment and electrical generating equipment, and property otherwise included in Class 10 or 17,
(6) Subparagraph (d)(xi) of Class 43.1 in Schedule II to the Regulations is replaced by the following:
(xi) equipment used by the taxpayer, or by a lessee of the taxpayer, in a system that converts wood waste or plant residue into bio-oil, if that bio-oil is used primarily for the purpose of generating heat that is used directly in an industrial process or a greenhouse, generating electricity or generating electricity and heat, other than equipment used for the collection, storage or transportation of wood waste or plant residue, buildings or other structures and property otherwise included in Class 10 or 17,
(7) Subparagraph (d)(xiii) of Class 43.1 in Schedule II to the Regulations is replaced by the following:
(xiii) property that is part of a system that is used by the taxpayer, or by a lessee of the taxpayer, primarily to produce and store biogas, which property includes equipment that is an anaerobic digester reactor, a buffer tank, a pre-treatment tank, biogas piping, a biogas storage tank and a biogas scrubbing equipment, but not including
(A) property (other than a buffer tank) that is used to collect, move or store organic waste,
(B) equipment used to process the residue after digestion or to treat recovered liquids,
(C) buildings or other structures, and
(D) property otherwise included in Class 10 or 17, or
(8) Paragraph (d) of Class 43.1 in Schedule II to the Regulations is amended by deleting “or” at the end of subparagraph (xiii), by replacing “and” at the end of subparagraph (xiv) with “or” and by adding the following after subparagraph (xiv):
(xv) district energy equipment that
(A) is used by the taxpayer or by a lessee of the taxpayer,
(B) is part of a district energy system that uses thermal energy that is primarily supplied by equipment that is described in subparagraph (i) or (iv) or would be described in subparagraph (i) or (iv) if owned by the taxpayer, and
(C) is not a building, and
(9) Subsections (1), (4) and (8) apply to property acquired after March 3, 2010.
(10) Subsections (2), (3) and (5) to (7) apply to property acquired after February 25, 2008, except that in its application to property acquired before May 3, 2010,
(a) subclause (d)(i)(A)(II) of Class 43.1 in Schedule II to the Regulations, as enacted by subsection (2), shall be read as follows:
(II) equipment that is part of a ground source heat pump system that transfers heat to or from the ground or groundwater (but not to or from surface water such as a river, a lake or an ocean) and that, at the time of installation, meets the standards set by the Canadian Standards Association for the design and installation of earth energy systems, including such equipment that consists of underground piping, energy conversion equipment, energy storage equipment, control equipment and equipment designed to enable the system to interface with other heating or cooling equipment, and
(b) subparagraphs (d)(vii) and (viii) of Class 43.1 in Schedule II to the Regulations, as enacted by subsection (5), shall be read as follows:
(vii) above-ground equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of generating electrical energy solely from geothermal energy, including such equipment that consists of pumps, heat exchangers, steam separators, electrical generating equipment and ancillary equipment used to collect the geothermal heat, but not including buildings, transmission equipment, distribution equipment, equipment designed to store electrical energy, property otherwise included in Class 10 and property that would be included in Class 17 if that Class were read without reference to its subparagraph (a.1)(i),
(viii) above-ground equipment used by the taxpayer, or by a lessee of the taxpayer, primarily for the purpose of collecting landfill gas or digester gas, including such equipment that consists of fans, compressors, storage tanks, heat exchangers and other ancillary equipment used to collect gas, to remove non-combustibles and contaminants from the gas or to store the gas, but not including property otherwise included in Class 10 or 17,
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