• 48. (1) Section 112 of the Act is amended by adding the following after subsection (7):

  • Marginal note:Synthetic disposition  — holding period

    (8) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, for the purposes of paragraphs (3.01)(b) and (3.11)(b), subclauses (3.2)(a)(ii)(C)(I) and (3.3)(a)(ii)(C)(I) and paragraphs (3.31)(b), (3.32)(b), (4.01)(b), (4.11)(b), (4.21)(b), (4.22)(b), (5.1)(b) and (5.21)(b) and subsection (9), the taxpayer is deemed not to own the property during the synthetic disposition period.

  • Marginal note:Exception

    (9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement.

• (2) Subject to subsection (3), subsection (1) applies to:

  • (a) an agreement or arrangement entered into after March 20, 2013; and

  • (b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.

• (3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 112(9) of the Act, as enacted by subsection (1), is to be read as follows:

  • (9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period that ended immediately before the synthetic disposition period of the arrangement.

• 49. (1) The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:

  Marginal note:Annual adjustment

  • 117.1 (1) The amount of $1,000 referred to in the formula in paragraph 8(1)(s), each of the amounts expressed in dollars in subparagraph 6(1)(b)(v.1), subsection 117(2), the description of B in subsection 118(1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1) and subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a), the amounts of $925 and $1,680 referred to in the description of A, and the amounts of $10,500 and $14,500 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $462.50 referred to in the description of C, and the amounts of $16,667 and $25,700 referred to in the description of D, in the formula in subsection 122.7(3), and each of the amounts expressed in dollars in Part I.2 in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of

• (2) Subsection (1) applies to the 2015 and subsequent taxation years.

• 50. (1) Subparagraph 118.5(3)(c)(iv) of the Act is replaced by the following:

  • (iv) the provision of financial assistance to students, except to the extent that, if this Act were read without reference to subsection 56(3), the amount of the assistance would be required to be included in computing the income, and not be deductible in computing the taxable income, of the students to whom the assistance is provided, or

• (2) Subsection (1) applies to the 2012 and subsequent taxation years.

• 51. (1) The definition “non-portfolio property” in subsection 122.1(1) of the Act is replaced by the following:

  “non-portfolio property”

  « bien hors portefeuille »

  “non-portfolio property”, of a particular entity for a taxation year, means a property, held by the particular entity at any time in the taxation year, that is

  • (a) a security of a subject entity (other than a portfolio investment entity), if at that time the particular entity holds

    • (i) securities of the subject entity that have a total fair market value that is greater than 10% of the equity value of the subject entity, or

    • (ii) securities of the subject entity that, together with all the securities that the particular entity holds of entities affiliated with the subject entity, have a total fair market value that is greater than 50% of the equity value of the particular entity;

  • (b) a Canadian real, immovable or resource property, if at any time in the taxation year the total fair market value of all properties held by the particular entity that are Canadian real, immovable or resource properties is greater than 50% of the equity value of the particular entity; or

  • (c) a property that the particular entity, or a person or partnership with whom the particular entity does not deal at arm’s length, uses at that time in the course of carrying on a business in Canada.

• (2) Paragraph (b) of the definition “excluded subsidiary entity” in subsection 122.1(1) of the Act is amended by striking out “or” at the end of subparagraph (iv) and by replacing subparagraph (v) with the following:

  • (v) a person or partnership that does not have, in connection with the holding of a security of the entity, property the value of which is determined, all or in part, by reference to a security that is listed or traded on a stock exchange or other public market, or

  • (vi) an excluded subsidiary entity for the taxation year.

• (3) Subsection (1) applies to taxation years that end after July 20, 2011.

• (4) Subsection (2) is deemed to have come into force on October 31, 2006, except that it does not apply for the purpose of determining if an entity is an excluded subsidiary entity for taxation years of the entity that began before July 21, 2011 if the entity so elects in writing filed with the Minister of National Revenue within 365 days after the day on which this Act receives royal assent.

52. Subsection 122.61(3) of the Act is replaced by the following:

53. Section 122.64 of the Act is repealed.

• 54. (1) Subparagraph (a)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following:

  • (iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, that is the product of the amount, if any, determined for B in subsection 137(3) multiplied by the amount determined for C in subsection 137(3) in respect of the corporation for the year;

• (2) Subsection (1) applies to taxation years that end after March 20, 2013.

• 55. (1) The descriptions of G and H in the definition “specified partnership income” in subsection 125(7) of the Act are replaced by the following:

  G

  is the total of all amounts each of which is the corporation’s share of the income (determined in accordance with subdivision j of Division B) of the partnership for a fiscal period of the business that ends in the year, or an amount included in the corporation’s income for the year in respect of the business under any of subsections 34.2(2), (3) and (12), and

  H

  is the total of all amounts deducted in computing the corporation’s income for the year from the business (other than amounts that were deducted in computing the income of the partnership from the business) or in respect of the business under subsection 34.2(4) or (11), and

• (2) Subsection (1) applies to taxation years that end after March 22, 2011.

• 56. (1) Section 126 of the Act is amended by adding the following after subsection (4.4):

  • Marginal note:Synthetic disposition  — holding period

    (4.5) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more,

    • (a) for the purpose of determining whether the period referred to in subsection (4.2) is one year or less, the period is deemed to begin at the earlier of

      • (i) the time that is immediately before the particular time referred to in subsection (4.2), and

      • (ii) the end, if any, of the synthetic disposition period; and

    • (b) for the purposes of subsection (4.6), the taxpayer is deemed not to own the property during the synthetic disposition period.

  • Marginal note:Exception

    (4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement.

• (2) Subject to subsection (3), subsection (1) applies to:

  • (a) an agreement or arrangement entered into after March 20, 2013; and

  • (b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.

• (3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 126(4.6) of the Act, as enacted by subsection (1), is to be read as follows:

  • (4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period that ended immediately before the synthetic disposition period of the arrangement.

• 57. (1) The definition “non-government assistance” in subsection 127(9) of the Act is replaced by the following:

  “non-government assistance”

  « aide non gouvernementale »

  “non-government assistance” means an amount that would be included in income under paragraph 12(1)(x) if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to (vii);

• (2) Paragraphs (j) and (k) of the definition “investment tax credit” in subsection 127(9) of the Act are replaced by the following:

  • (j) if the taxpayer is subject to a loss restriction event at any time before the end of the year, the amount determined under subsection (9.1) in respect of the taxpayer, and

  • (k) if the taxpayer is subject to a loss restriction event at any time after the end of the year, the amount determined under subsection (9.2) in respect of the taxpayer,

• (3) The definition “pre-production mining expenditure” in subsection 127(9) of the Act is amended by striking out “or” at the end of subparagraph (a)(i) and by replacing subparagraph (a)(ii) with the following:

  • (ii) described in paragraph (g), (g.3) or (g.4) and not in paragraph (f), of the definition “Canadian exploration expense” in subsection 66.1(6) if the expression “mineral resource” in paragraph (g) of that definition were defined to mean a mineral deposit from which the principal mineral to be extracted is diamond, a base or precious metal deposit, or a mineral deposit from which the principal mineral to be extracted is an industrial mineral that, when refined, results in a base or precious metal, and

• (4) Clause (k)(iii)(B) of the definition “specified percentage” in subsection 127(9) of the Act is replaced by the following:

  • (B) in 2015, 5% if the expense is described in paragraph (a)(ii) of the definition “pre-production mining expenditure” because of paragraph (g.4) of the definition “Canadian exploration expense” in subsection 66.1(6), and 4% otherwise, and

• (5) The portion of subsection 127(9.1) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Loss restriction event before end of year

    (9.1) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) before the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (j) of the definition “investment tax credit” in subsection (9) with respect to the taxpayer is the amount, if any, by which

• (6) Subparagraph 127(9.1)(d)(i) of the Act is replaced by the following:

  • (i) if throughout the year the taxpayer carried on a particular business in the course of which a property was acquired, or an expenditure was made, before that time in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is

    • (A) its income for the year from the particular business, or

    • (B) its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time

    exceeds

    • (C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business,

• (7) The portion of subsection 127(9.2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Loss restriction event after end of year

    (9.2) If a taxpayer is subject to a loss restriction event at any time (in this subsection referred to as “that time”) after the end of a taxation year of the taxpayer, the amount determined for the purposes of paragraph (k) of the definition “investment tax credit” in subsection (9) is the amount, if any, by which

• (8) Subparagraph 127(9.2)(d)(i) of the Act is replaced by the following:

  • (i) if the taxpayer acquired a property or made an expenditure, in the course of carrying on a particular business throughout the portion of a taxation year that is after that time, in respect of which an amount is included in computing its investment tax credit at the end of the year, the amount, if any, by which the total of all amounts each of which is

    • (A) its income for the year from the particular business, or

    • (B) if the taxpayer carried on a particular business in the year, its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the taxpayer in carrying on the particular business before that time

    exceeds

    • (C) the total of all amounts each of which is an amount deducted under paragraph 111(1)(a) or (d) for the year by the taxpayer in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business

• (9) Subsection (1) is deemed to have come into force on December 21, 2012.

• (10) Subsections (2) to (8) are deemed to have come into force on March 21, 2013.

• 58. (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, if any, of the particular corporation for the particular taxation year;

• (2) Subsection (1) applies to taxation years that begin after December 21, 2012.