Budget Implementation Act, 2017, No. 1 (S.C. 2017, c. 20)

• 20 (1) Section 118.92 of the Act is replaced by the following:

  Marginal note:Ordering of credits

  118.92 In computing an individual’s tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.04, 118.041, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.

• (2) Subsection (1) applies to the 2018 and subsequent taxation years.

• 21 (1) Subparagraph 122.3(1)(e)(iii) of the Act is replaced by the following:

  • (iii) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under paragraph 110(1)(d.2), (d.3), (f) or (g), in computing the individual’s taxable income for the year.

• (2) Subsection (1) comes into force on January 1, 2018.

• 22 (1) Subclause 126(1)(b)(ii)(A)(III) of the Act is replaced by the following:

  • (III) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (d.3), (f) and (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and

• (2) Subclause 126(2.1)(a)(ii)(A)(III) of the Act is replaced by the following:

  • (III) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (d.3), (f) and (g) and sections 112 and 113, in computing the taxpayer’s taxable income for the year, and

• (3) Subparagraph 126(3)(b)(iii) of the Act is replaced by the following:

  • (iii) the total of all amounts each of which is an amount deducted under section 110.6 or paragraph 111(1)(b), or deductible under any of paragraphs 110(1)(d) to (d.3), (f) and (g), in computing the taxpayer’s taxable income for the year,

• (4) Subsections (1) to (3) come into force on January 1, 2018.

• 23 (1) Subparagraph 127(5)(a)(i) of the Act is replaced by the following:

  • (i) the taxpayer’s investment tax credit at the end of the year in respect of property acquired before the end of the year, of the taxpayer’s apprenticeship expenditure for the year or a preceding taxation year, of the taxpayer’s flow-through mining expenditure for the year or a preceding taxation year, of the taxpayer’s pre-production mining expenditure for the year or a preceding taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the year or at the end of a preceding taxation year, and

• (2) Clause 127(5)(a)(ii)(A) of the Act is replaced by the following:

  • (A) the taxpayer’s investment tax credit at the end of the year in respect of property acquired in a subsequent taxation year, of the taxpayer’s apprenticeship expenditure for a subsequent taxation year, of the taxpayer’s flow-through mining expenditure for a subsequent taxation year, of the taxpayer’s pre-production mining expenditure for a subsequent taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the subsequent taxation year to the extent that an investment tax credit was not deductible under this subsection for the subsequent taxation year, and

• (3) Subsection 127(7) of the Act is replaced by the following:

  • Marginal note:Investment tax credit of certain trusts

    (7) If, in a particular taxation year of a taxpayer who is a beneficiary under a trust that is a graduated rate estate or that is deemed to be in existence by section 143, an amount is determined in respect of the trust under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9) for its taxation year that ends in that particular taxation year, the trust may, in its return of income for its taxation year that ends in that particular taxation year, designate the portion of that amount that can, having regard to all the circumstances including the terms and conditions of the trust, reasonably be considered to be attributable to the taxpayer and was not designated by the trust in respect of any other beneficiary of the trust, and that portion is to be added in computing the investment tax credit of the taxpayer at the end of that particular taxation year and is to be deducted in computing the investment tax credit of the trust at the end of its taxation year that ends in that particular taxation year.

• (4) The portion of subsection 127(8) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Investment tax credit of partnership

    (8) Subject to subsection (28), where, in a particular taxation year of a taxpayer who is a member of a partnership, an amount would be determined in respect of the partnership, for its taxation year that ends in the particular taxation year, under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9), if

• (5) Subparagraph 127(8.2)(b)(i) of the Act is amended by adding “or” at the end of clause (A.1) and by repealing clause (A.2).

• (6) Paragraph 127(8.31)(a) of the Act is replaced by the following:

  • (a) the total of all amounts each of which is an amount that would, if the partnership were a person and its fiscal period were its taxation year, be determined in respect of the partnership under paragraph (a), (a.1), (a.4), (b) or (e.1) of the definition investment tax credit in subsection (9) for a taxation year that is the fiscal period,

• (7) The definitions child care space amount, eligible child care space expenditure, specified child care start-up expenditure and specified property in subsection 127(9) of the Act are repealed.

• (8) 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 2017 and before 2019 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2019) 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),

• (9) 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 2017 and before April 2018, 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 2017 and before April 2018; (dépense minière déterminée)

• (10) Paragraph (a.5) of the definition investment tax credit in subsection 127(9) of the Act is repealed.

• (11) Paragraph (e.1) of the definition investment tax credit in subsection 127(9) of the Act is amended by adding “or” at the end of subparagraph (v), by replacing “or” at the end of subparagraph (vi) with “and” and by repealing subparagraph (vii).

• (12) Paragraph (f.1) of the definition specified percentage in subsection 127(9) of the Act is amended by adding “or” at the end of subparagraph (i), by striking out “or” at the end of subparagraph (ii) and by repealing subparagraph (iii).

• (13) Subsection 127(11.1) of the Act is amended by adding “and” at the end of paragraph (c.4) and by repealing paragraph (c.5).

• (14) Subsection 127(11.2) of the Act is replaced by the following:

  • Marginal note:Time of acquisition

    (11.2) In applying subsections (5), (7) and (8), paragraphs (a) and (a.1) of the definition investment tax credit in subsection (9) and section 127.1, qualified property and qualified resource property are deemed not to have been acquired by a taxpayer before the property is considered to have become available for use by the taxpayer, determined without reference to paragraphs 13(27)(c) and (28)(d).

• (15) Subsections 127(27.1) to (27.12) of the Act are repealed.

• (16) Subsection 127(28.1) of the Act is repealed.

• (17) Subparagraph 127(30)(a) of the Act is amended by adding “and” at the end of subparagraph (i), by striking out “and” at the end of subparagraph (ii) and by repealing subparagraph (iii).

• (18) Paragraph 127(30)(b) of the Act is replaced by the following:

  • (b) the amount that would be determined in respect of the partnership under subsection (8) if that subsection were read without reference to subsections (28) and (35).

• (19) Subsections (1) to (7) and (10) to (18) apply in respect of expenditures incurred after March 21, 2017, except that they do not apply in respect of expenditures incurred before 2020 under a written agreement entered into before March 22, 2017.

• (20) Subsections (8) and (9) apply to expenses renounced under a flow-through share agreement entered into after March 2017.

• 24 (1) Paragraph 149(1)(t) of the Act is repealed.

• (2) Subsections 149(4.1) to (4.3) of the Act are repealed.

• (3) The portion of subsection 149(10) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Becoming or ceasing to be exempt

    (10) If at any time (in this subsection referred to as that time), a person — that is a corporation or, if that time is after September 12, 2013, a trust — becomes or ceases to be exempt from tax under this Part on its taxable income, the following rules apply:

• (4) Subsections (1) to (3) apply to taxation years that begin after 2018.

• 25 (1) Subsection 149.1(15) of the Act is amended by adding “and” at the end of paragraph (b), by striking out “and” at the end of paragraph (c) and by repealing paragraph (d).

• (2) Subsection (1) applies in respect of gifts made after March 21, 2017.

• 26 (1) Subsection 182(1) of the Act is replaced by the following:

  Marginal note:Surtax

  • 182 (1) Every corporation shall pay a tax under this Part for the corporation’s taxation year equal to the amount determined by the formula

    0.5A(B/C)

    where

    A

    is the corporation’s Part I tax on tobacco manufacturing profits for the year;

    B

    is the number of days in the year that are before March 23, 2017; and

    C

    is the number of days in the year.

• (2) Subsection (1) applies to taxation years that include March 22, 2017.

• 27 (1) Part II of the Act, as amended by subsection 26(1), is repealed.

• (2) Subsection (1) applies to taxation years that begin after March 22, 2017.

• 28 (1) The Act is amended by adding the following after section 221:

  Marginal note:Providing information returns in electronic format

  221.01 A person may provide an information return electronically under subsection 209(5) of the Income Tax Regulations if the criteria specified by the Minister are met.

• (2) Subsection (1) comes into force on January 1, 2018.

• 29 (1) Subparagraph 241(4)(d)(viii) of the Act is replaced by the following:

  • (viii) to an official of the Department of Veterans Affairs solely for the purposes of the administration of the War Veterans Allowance Act, the Veterans Well-being Act or Part XI of the Civilian War-related Benefits Act,

• (2) Subsection (1) comes into force on April 1, 2018.

2016, c. 7Budget Implementation Act, 2016, No. 1

30 Subsection 29(9) of the Budget Implementation Act, 2016, No. 1 is replaced by the following:

C.R.C., c. 945Income Tax Regulations

• 31 (1) Section 209 of the Income Tax Regulations is amended by adding the following after subsection (4):

  • (5) A person may provide a Statement of Remuneration Paid (T4) information return, as required under subsection (1), as a single document in an electronic format (instead of the two copies required under subsection (1)) to the taxpayer to whom the return relates, on or before the date on which the return is to be filed with the Minister, unless

    • (a) the specified criteria referred to in section 221.01 of the Act are not met;

    • (b) the taxpayer has requested that the information return be provided in paper format; or

    • (c) at the time the return is required to be issued,

      • (i) the taxpayer is on extended leave or is no longer an employee of the person, or

      • (ii) the taxpayer cannot reasonably be expected to have access to the information return in electronic format.

• (2) Subsection (1) applies in respect of information returns that are required to be filed after 2017.

• 32 (1) Section 3505 of the Regulations is repealed.

• (2) Subsection (1) applies in respect of gifts made after March 21, 2017.

• 33 (1) Subsection 4802(2) of the Regulations is repealed.

• (2) Subsection (1) applies to taxation years that begin after 2018.

Coordinating Amendments

Marginal note:2016, c. 7

• 34 (1) In this section, other Act means the Budget Implementation Act, 2016, No. 1.

• (2) If subsection 29(9) of the other Act produces its effects before section 30 of this Act comes into force, then

  • (a) that section 30 is deemed never to have come into force and is repealed;

  • (b) the following amendments are deemed to have come into force on July 1, 2017:

    • (i) the first formula in subsection 122.61(1) of the Income Tax Act is replaced by the following:

      (A + C + M)/12

    • (ii) the formula in the description of A in subsection 122.61(1) of the Income Tax Act is replaced by the following:

      E − Q − R

    • (iii) subsection 122.61(1) of the Income Tax Act is amended by adding the following after the description of A:

      C

      is the amount determined by the formula

      F – (G × H)

      where

      F

      is, if the person is, at the beginning of the month, an eligible individual in respect of

      • (a) only one qualified dependant, $2,308, and

      • (b) two or more qualified dependants, the total of

        • (i) $2,308 for the first qualified dependant,

        • (ii) $2,042 for the second qualified dependant, and

        • (iii) $1,943 for each of the third and subsequent qualified dependants,

      G

      is the amount determined by the formula

      J – [K – (L/0.122)]

      where

      J

      is the person’s adjusted income for the year,

      K

      is $45,282, and

      L

      is the amount referred to in paragraph (a) of the description of F, and

      H

      is

      • (a) if the person is an eligible individual in respect of only one qualified dependant, 12.2%, and

      • (b) if the person is an eligible individual in respect of two or more qualified dependants, the fraction (expressed as a percentage rounded to the nearest one-tenth of one per cent) of which

        • (i) the numerator is the total that would be determined under the description of F in respect of the eligible individual if that description were applied without reference to the fourth and subsequent qualified dependants in respect of whom the person is an eligible individual, and

        • (ii) the denominator is the amount referred to in paragraph (a) of the description of F, divided by 0.122; and

    • (iv) the description of A in subsection 122.61(1) of the Income Tax Act is amended by striking out “and” at the end of the description of E, by adding “and” at the end of the description of Q and by adding the following after the description of Q:

      R

      is the amount determined for C;

  • (c) the following amendments come into force on July 1, 2018:

    • (i) the first formula in subsection 122.61(1) of the Income Tax Act is replaced by the following:

      (A + M)/12

    • (ii) the formula in the description of A in subsection 122.61(1) of the Income Tax Act is replaced by the following:

      E − Q

    • (iii) the description of C in subsection 122.61(1) of the Income Tax Act is repealed, and

    • (iv) the description of A in subsection 122.61(1) of the Income Tax Act is amended by striking out “and” at the end of the description of Q, by adding “and” at the end of the description of E and by repealing the description of R.

• (3) If this Act receives royal assent on July 1, 2017, then section 30 of this Act is deemed to have come into force before subsection 29(9) of the other Act has produced its effects.