Budget Implementation Act, 2023, No. 1 (S.C. 2023, c. 26)
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Assented to 2023-06-22
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
32 The portion of the definition entreprise de placement déterminée in subsection 125(7) of the French version of the Act before paragraph (a) is replaced by the following:
entreprise de placement déterminée Entreprise exploitée par une société, sauf une entreprise exploitée par une caisse de crédit ou une entreprise de location de biens autres que des biens immeubles ou réels, dont le but principal est de tirer un revenu de biens, notamment des intérêts, des dividendes, des loyers et des redevances. Toutefois, sauf dans le cas où la société est une société à capital de risque de travailleurs visée par règlement au cours de l’année, l’entreprise exploitée par une société au cours d’une année d’imposition n’est pas une entreprise de placement déterminée si, selon le cas :
33 Subsection 136(1) of the Act is replaced by the following:
Marginal note:Cooperative not private corporation
136 (1) Notwithstanding any other provision of this Act, a cooperative corporation that would, but for this section, be a private corporation is deemed not to be a private corporation except for the purposes of paragraphs 87(2)(vv) and (ww) (including, for greater certainty, in applying those paragraphs as provided under paragraph 88(1)(e.2)), the definitions excessive eligible dividend designation, general rate income pool and low rate income pool in subsection 89(1), subsections 89(4) to (6) and (8) to (10), sections 123.4, 125, 125.1, 127 and 127.1, the definition mark-to-market property in subsection 142.2(1), sections 152 and 157, subsection 185.2(3), the definition small business corporation in subsection 248(1) (as it applies for the purposes of paragraph 39(1)(c)) and subsection 249(3.1).
34 Paragraph (c) of the definition specified debt obligation in subsection 142.2(1) of the Act is replaced by the following:
(c) an income bond, an income debenture or a prescribed property, or
35 Subsection 143(1) of the Act is amended by adding “and” at the end of paragraph (k), by striking out “and” at the end of paragraph (l) and by repealing paragraph (m).
36 (1) Paragraph 144.1(2)(f) of the Act is replaced by the following:
(f) unless the condition in subparagraph (e)(ii) is satisfied, the rights under the trust of each key employee of a participating employer are not more advantageous than the rights of a class of beneficiaries described in subparagraph (e)(i);
(2) Subsection (1) is deemed to have come into force on February 27, 2018.
37 (1) The description of Q in the definition net past service pension adjustment in subsection 146(1) of the Act is replaced by the following:
- Q
- is the total of all amounts each of which is the amount of a contribution made under subsection 147.1(20), or deemed by prescribed rules to have been made, in respect of the taxpayer for the immediately preceding year, and
(2) Subsection (1) is deemed to have come into force on January 1, 2021.
38 (1) Paragraph 146.01(2)(b) of the Act is replaced by the following:
(b) except for the purposes of paragraphs (d) and (g) of the definition regular eligible amount and paragraphs (e) and (f) of the definition supplemental eligible amount in subsection (1), where an individual agrees to acquire a condominium unit, the individual shall be deemed to have acquired it on the day the individual is entitled to immediate vacant possession of it;
(2) Subsection (1) is deemed to have come into force on August 9, 2022.
39 (1) Paragraph (a) of the definition education savings plan in subsection 146.1(1) of the Act is amended by striking out “and” at the end of subparagraph (ii) and by adding the following after subparagraph (iii):
(iv) an individual (other than a trust), who is a legal parent of a beneficiary, and the individual’s former spouse or common-law partner, who is also the legal parent of a beneficiary, and
(2) Subclause 146.1(2)(g.1)(ii)(A)(II) of the Act is replaced by the following:
(II) the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 12-month period that ends at that time does not exceed $8,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual, or
(3) Clause 146.1(2)(g.1)(ii)(B) of the Act is replaced by the following:
(B) the individual satisfies, at that time, the condition set out in clause (i)(B) and the total of the payment and all other educational assistance payments made under a registered education savings plan of the promoter to or for the individual in the 13-week period that ends at that time does not exceed $4,000 or any greater amount that the Minister designated for the purpose of the Canada Education Savings Act approves in writing with respect to the individual;
(4) Subsections (1) to (3) are deemed to have come into force on March 28, 2023.
40 (1) Section 146.2 of the Act is amended by adding the following after subsection (4):
Marginal note:Right of set-off
(4.1) A qualifying arrangement that is a deposit may provide that the issuer has the right to set off any indebtedness owed by the holder to the issuer, or a person related to the issuer, against the holder’s interest in the arrangement if
(a) the terms and conditions of the indebtedness and the right of set-off are terms and conditions that persons dealing at arm’s length with each other would have entered into; and
(b) it is reasonable to conclude that none of the main purposes for the right of set-off is to enable a person (other than the holder) or a partnership to benefit from the exemption from tax under this Part of any amount in respect of the TFSA.
(2) The portion of subsection 146.2(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:TFSA
(5) If the issuer of an arrangement that is, at the time it is entered into, a qualifying arrangement files with the Minister, before March of the calendar year following the calendar year in which the arrangement was entered into (or such later date as is acceptable to the Minister), an election in prescribed form and manner to register the arrangement as a TFSA under the Social Insurance Number of the individual with whom the arrangement was entered into, the arrangement becomes a TFSA at the time the arrangement was entered into and ceases to be a TFSA at the earliest of the following times:
(3) Subsection (1) is deemed to have come into force on August 9, 2022.
(4) Subsection (2) applies to the 2009 and subsequent taxation years.
41 (1) The portion of paragraph 146.3(2)(e.1) of the Act before subparagraph (i) is replaced by the following:
(e.1) where the fund does not govern a trust or the fund governs a trust created before 1998 that does not hold an annuity contract as a qualified investment for the trust, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain an amount equal to the lesser of
(2) The portion of paragraph 146.3(2)(e.2) of the Act before subparagraph (i) is replaced by the following:
(e.2) where paragraph (e.1) does not apply, the fund provides that if an annuitant, at any time, directs that the carrier transfer all or part of the property held in connection with the fund, or an amount equal to its value at that time, to another registered retirement income fund of the annuitant or in accordance with subsection (14.1), the transferor shall retain property in the fund sufficient to ensure that the total of
(3) Paragraph 146.3(14.1)(b) of the Act is replaced by the following:
(b) is transferred at the direction of the annuitant directly to a registered pension plan of which, at any time before the transfer, the annuitant was a member (as defined in subsection 147.1(1)) or to a specified pension plan and is allocated to the annuitant under a money purchase provision (as defined in subsection 147.1(1)) of the plan; or
(4) Subsections (1) to (3) are deemed to have come into force on August 9, 2022.
42 (1) Clause (a)(ii)(B.1) of the definition disability savings plan in subsection 146.4(1) of the Act is replaced by the following:
(B.1) if the arrangement is entered into before 2027, a qualifying family member in relation to the beneficiary who, at the time the arrangement is entered into, is a qualifying person in relation to the beneficiary,
(2) The definition qualifying family member in subsection 146.4(1) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) a brother or sister (determined without reference to subsection 252(2)) of the beneficiary. (membre de la famille admissible)
(3) Paragraph 146.4(5)(b) of the Act is amended by striking out “and” at the end of subparagraph (i) and by replacing subparagraph (ii) with the following:
(ii) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition, and
(iii) the trust’s income shall be computed without reference to subsection 104(6).
(4) Subsection (3) is deemed to have come into force on August 9, 2022.
43 (1) Paragraph (a) of the definition compensation in subsection 147.1(1) of the Act is replaced by the following:
(a) an amount in respect of the individual’s employment with the employer, or an office in respect of which the individual is remunerated by the employer, that is required (or that would be required but for paragraph 81(1)(a) as it applies with respect to the Indian Act or the Foreign Missions and International Organizations Act) by section 5 or 6 to be included in computing the individual’s income for the year, except such portion of the amount that
(i) meets the following conditions:
(A) the portion may reasonably be considered to relate to a period throughout which the individual was not resident in Canada, and
(B) the portion is
(I) not attributable to the performance of the duties of the office or employment in Canada, or
(II) exempt from income tax in Canada by reason of a tax treaty, or
(ii) is deducted under paragraph 8(1)(o.2) in computing the taxpayer’s income for the year,
(2) Paragraph (b) of the definition money purchase provision in subsection 147.1(1) of the Act is replaced by the following:
(b) under which the only benefits in respect of a member are benefits
(i) determined solely with reference to, and provided by, the amount in the member’s account, or
(ii) provided under a VPLA fund described in subsection 8506(13) of the Income Tax Regulations; (disposition à cotisations déterminées)
(3) Subsection 147.1(1) of the Act is amended by adding the following in alphabetical order:
- designated money purchase provision
designated money purchase provision, in a calendar year, means a money purchase provision of a registered pension plan under which accounts are maintained in respect of at least 10 members throughout the year or under which the total contributions made for the year on behalf of an individual described in paragraph 8515(4)(a) or (b) of the Income Tax Regulations do not exceed 50% of the total contributions made for the year; (disposition à cotisations déterminées désignée)
- permitted corrective contribution
permitted corrective contribution to a registered pension plan means a contribution in a calendar year in respect of an individual that would otherwise have been made in one or more of the 10 immediately preceding years (each such year referred to in this definition as a “retroactive year”) in accordance with the money purchase provision of the plan as registered or a money purchase provision of a registered pension plan of a predecessor employer (for the purposes of this definition, as defined in subsection 8500(1) of the Regulations), but for an error that caused a failure to enroll the individual as a member of the plan or a failure to make a required contribution, to the extent that the amount of the contribution does not exceed the lesser of
(a) the total of all amounts each of which is an amount, for a retroactive year, determined by the formula
A + B − C
where
- A
- is the total of all amounts each of which is an amount by which a contribution required to be made at a particular time in the retroactive year under the provision in respect of the individual exceeds the amount contributed at the particular time in respect of the individual,
- B
- is the amount of interest, if any, calculated in respect of each amount determined for A at a rate that
(i) is required by the Pension Benefits Standards Act, 1985 or a similar law of a province, or
(ii) if subparagraph (i) does not apply, does not exceed a reasonable rate, and
- C
- is the total amount previously contributed to the provision in respect of the individual under subsection (20) for the retroactive year, and
(b) the amount determined by the formula
E − F
where
- E
- is 150% of the money purchase limit for the calendar year, and
- F
- is the total amount previously contributed in respect of the individual under subsection (20) to the provision, or to any other money purchase provision, if a participating employer under the provision or a predecessor employer has been a participating employer in respect of the individual under that other provision; (cotisation corrective permise)
(4) Section 147.1 of the Act is amended by adding the following after subsection (19):
Marginal note:Permitted corrective contribution
(20) An individual or an employer may make a contribution in a calendar year under a money purchase provision of a registered pension plan in respect of the individual if it is a permitted corrective contribution and the provision was a designated money purchase provision in each of the prior years in respect of which the contribution is made.
(5) Subsection (1) is deemed to have come into force on August 9, 2022.
(6) Subsection (2) is deemed to have come into force on January 1, 2020.
(7) Subsections (3) and (4) are deemed to have come into force on January 1, 2021.
- Date modified: