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Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)

Assented to 2017-12-14

PART 1Amendments to the Income Tax Act and to Related Legislation (continued)

C.R.C., c. 945Income Tax Regulations (continued)

  • 86 (1) The portion of subsection 404(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

    • 404 (1) Malgré les paragraphes 402(3) et (4), le montant de revenu imposable qu’une banque est réputée avoir gagné au cours d’une année d’imposition dans une province où elle avait un établissement stable correspond au tiers du total des sommes suivantes :

  • (2) Paragraphs 404(1)(a) and (b) of the Regulations are replaced by the following:

    • (a) the proportion of its taxable income for the year that the total of the salaries and wages paid in the year by the bank to employees of its permanent establishment in the province is of the total of all salaries and wages paid in the year by the bank; and

    • (b) twice the proportion of its taxable income for the year that the total amount of loans and deposits of its permanent establishment in the province for the year is of the total amount of all loans and deposits of the bank for the year.

  • (3) Subsections 404(2) and (3) of the Regulations are replaced by the following:

    • (2) For the purposes of subsection (1), the amount of loans for a taxation year is 1/12 of the total of the amounts outstanding, on the loans made by the bank, at the close of business on the last day of each month in the year.

    • (3) For the purposes of subsection (1), the amount of deposits for a taxation year is 1/12 of the total of the amounts on deposit with the bank at the close of business on the last day of each month in the year.

  • (4) Subsections (1) to (3) are deemed to have come into force on September 16, 2016.

  • 87 (1) The Regulations are amended by adding the following after section 404:

    • 404.1 (1) Notwithstanding subsections 402(3) and (4), the amount of taxable income that is deemed to have been earned by a federal credit union in a taxation year in a province in which it had a permanent establishment is 1/3 of the total of

      • (a) the proportion of its taxable income for the year that the total of the salaries and wages paid in the year by the federal credit union to employees of its permanent establishment in the province is of the total of all salaries and wages paid in the year by the federal credit union, and

      • (b) twice the proportion of its taxable income for the year that the total amount of loans and deposits of its permanent establishment in the province for the year is of the total amount of all loans and deposits of the federal credit union for the year.

    • (2) For the purposes of subsection (1), the amount of loans for a taxation year is 1/12 of the total of the amounts outstanding, on the loans made by the federal credit union, at the close of business on the last day of each month in the year.

    • (3) For the purposes of subsection (1), the amount of deposits for a taxation year is 1/12 of the total of the amounts on deposit with the federal credit union at the close of business on the last day of each month in the year.

    • (4) For the purposes of subsections (2) and (3), loans and deposits do not include bonds, stocks, debentures, items in transit and deposits in favour of Her Majesty in right of Canada.

  • (2) Subsection (1) is deemed to have come into force on September 16, 2016.

  • 88 (1) The portion of section 412 of the Regulations before paragraph (a) is replaced by the following:

    412 If part of the business of a corporation for a taxation year, other than a corporation described in any of sections 403, 404, 404.1, 405, 406, 407, 408, 409, 410 and 411, consisted of operations normally conducted by a corporation described in one of those sections, the corporation and the Minister may agree to determine the amount of taxable income deemed to have been earned in the year in a particular province to be the total of the amounts computed

  • (2) Subsection (1) is deemed to have come into force on September 16, 2016.

  • 89 (1) Paragraph 600(b) of the Regulations is replaced by the following:

    • (b) subsections 13(4), (7.4) and (29), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 91(1.4), 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3), 251.2(6) and 256(9) of the Act;

  • (2) Subsection (1) is deemed to have come into force on July 12, 2013.

  • 90 (1) Sections 806 and 806.1 of the Regulations are replaced by the following:

    806 For the purposes of paragraph (c) of the definition fully exempt interest in subsection 212(3) of the Act, the Bank for International Settlements and the European Bank for Reconstruction and Development are prescribed.

  • (2) Subsection (1) is deemed to have come into force on January 1, 2008.

  • 91 (1) Paragraph 1104(17)(a) of the Regulations is replaced by the following:

    • (a) the property is included in Class 43.1 because of its subparagraph (c)(i) or is described in any of subparagraphs d(vii) to (ix), (xi), (xiii), (xiv) and (xvi) of Class 43.1 and paragraph (a) of Class 43.2; and

  • (2) Subsection (1) applies in respect of property acquired for use after March 21, 2017 that has not been used or acquired for use before March 22, 2017.

  • 92 (1) Paragraph 1219(1)(f) of the Regulations is replaced by the following:

    • (f) for the drilling or completion of a well for the project, other than

      • (i) a well that is, or can reasonably be expected to be, used for the installation of underground piping that is included in paragraph (d) of Class 43.1 or paragraph (b) of Class 43.2 in Schedule II, or

      • (ii) a well referred to in paragraph (h);

  • (2) Subsection 1219(1) of the Regulations is amended by adding “or” at the end of paragraph (g) and by adding the following after that paragraph:

    • (h) if at least 50% of the depreciable property to be used in the project, determined by reference to its capital cost, is described in subparagraph (d)(vii) of Class 43.1,

      • (i) for the drilling of a well, or

      • (ii) solely for the purpose of determining the extent and quality of a geothermal resource.

  • (3) Subparagraphs 1219(2)(b)(iv) and (v) of the Regulations are replaced by the following:

    • (iv) included in the capital cost of property that, but for this section, would be depreciable property (other than property that would be included in Class 14.1 of Schedule II), except as provided by paragraph (1)(b), (d), (e), (f), (g) or (h),

    • (v) included in the capital cost of property that, but for this section, would be property included in Class 14.1 of Schedule II, except as provided by any of paragraphs (1)(a) to (e) or subparagraph (h)(ii),

  • (4) Clause 1219(2)(b)(xi)(A) of the Regulations is replaced by the following:

    • (A) the construction, renovation or alteration of the property, except as provided by paragraph (1)(b), (f), (g) or (h), or

  • (5) Section 1219 of the Regulations is amended by adding the following after subsection (4):

    • (5) A Canadian renewable and conservation expense does not include an expense incurred by a taxpayer at any time that is in respect of a geothermal project

      • (a) that at that time is described in paragraph (1)(h); and

      • (b) in respect of which the taxpayer is not at that time in compliance with the requirements of all environmental laws, by-laws and regulations of

        • (i) Canada,

        • (ii) a province or a municipality in Canada, or

        • (iii) a municipal or public body performing a function of government in Canada.

  • (6) Subsections (1) to (5) apply in respect of expenses incurred after March 21, 2017.

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