Fall Economic Statement Implementation Act, 2023 (S.C. 2024, c. 15)

• 127 (1) Section 94 of the Act is replaced by the following:

  Marginal note:Restriction on payment by Minister

  94 An amount under section 92 or 93 is not to be paid to a person by the Minister at any time, unless all returns of which the Minister has knowledge and that are required to be filed at or before that time by the person under this Act, the Excise Tax Act, the Income Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001, Part 1 of the Greenhouse Gas Pollution Pricing Act, the Underused Housing Tax Act and the Digital Services Tax Act have been filed with the Minister.

• (2) Subsection (1) comes into force on the same day as subsection 96(1) of this Act.

• 128 (1) The description of B in paragraph 150(2)(d) of the Act is replaced by the following:

  B

  is the amount, if any, by which the amount assessed the transferee under subsection 325(2) of the Excise Tax Act, paragraph 97.44(1)(b) of the Customs Act, subsection 160(2) of the Income Tax Act, subsection 297(3) of the Excise Act, 2001, subsection 161(3) of the Greenhouse Gas Pollution Pricing Act or subsection 80(3) of the Underused Housing Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and

• (2) Subsection (1) comes into force on the same day as subsection 96(1) of this Act.

PART 3Amendments to the Excise Tax Act and to Related Legislation

R.S., c. E-15Excise Tax Act

• 129 (1) Section 68.19 of the Excise Tax Act is replaced by the following:

  Marginal note:Payment — use by province

  • 68.19 (1) If tax under Part III has been paid in respect of any goods that His Majesty in right of a province has purchased or imported, an amount equal to the amount of that tax shall, subject to this Part, be paid to His Majesty in right of the province if His Majesty in right of the province has purchased or imported those goods for any purpose other than

    • (a) resale;

    • (b) use by any board, commission, railway, public utility, university, manufactory, company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council of the province; or

    • (c) use by His Majesty in right of the province, or by any agents or servants of His Majesty in right of the province, in connection with the manufacture or production of goods or use for other commercial or mercantile purposes.

  • Marginal note:Application

    (1.1) No amount shall be paid under subsection (1) in respect of goods purchased or imported by His Majesty in right of a province unless an application for the payment is made within two years after His Majesty in right of the province purchased or imported those goods.

  • Marginal note:Election

    (1.2) His Majesty in right of a province and the particular person that is, as the case may require, the importer, transferee, manufacturer, producer, wholesaler, jobber or other dealer in respect of goods that His Majesty in right of the province purchases or imports may jointly elect, in prescribed form containing prescribed information, to have the following rules apply in respect of the purchase or importation:

    • (a) the particular person, and not His Majesty in right of the province, is entitled to apply for a payment under subsection (1) in respect of the purchase or importation; and

    • (b) the amount payable by the Minister under subsection (1) in respect of the purchase or importation shall be paid to the particular person, and not to His Majesty in right of the province.

  • Marginal note:Limitation

    (1.3) No more than one election under subsection (1.2) may be made by His Majesty in right of a province in respect of a particular purchase or importation of goods.

  • Marginal note:Exception

    (2) Subsection (1.2) does not apply in respect of goods purchased or imported by His Majesty in right of a province at a time when a reciprocal taxation agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements Act is in force in respect of the province.

  • Marginal note:Non-application of subsection 68.2(1)

    (3) For greater certainty, if an application for a payment in respect of goods can be made by any person in accordance with subsection (1), subsection 68.2(1) does not apply in respect of the goods.

• (2) Subsection (1) applies in respect of any goods purchased or imported after 2021.

• 130 (1) The definition financial instrument in subsection 123(1) of the Act is amended by adding the following after paragraph (b):

  • (b.1) a right (other than a right as a creditor), whether absolute or contingent, conferred by a corporation that does not have capital divided into shares to receive, either immediately or in the future, an amount that can reasonably be regarded as all or any part of the capital, revenue or income of the corporation,

• (2) Paragraph (h) of the definition financial instrument in subsection 123(1) of the Act is replaced by the following:

  • (h) a guarantee, an acceptance or an indemnity in respect of anything described in any of paragraphs (a) to (b.1), (d), (e) and (g), or

• (3) Subsections (1) and (2) are deemed to have come into force on August 10, 2022.

• 131 (1) Subsection 149(4) of the Act is replaced by the following:

  • Marginal note:Exclusion of interest and dividend

    (4) In determining a total for a person under paragraph (1)(b) or (c), there shall not be included interest, or any dividend, from

    • (a) if the person is a partnership, a corporation that is controlled by

      • (i) the person,

      • (ii) a corporation that is controlled by the person,

      • (iii) a corporation that is related to a corporation described in subparagraph (ii), or

      • (iv) a combination of persons described in subparagraphs (i) to (iii); or

    • (b) in any other case, a corporation related to the person.

• (2) Subsection (1) applies to taxation years that begin after August 9, 2022.

• 132 (1) Paragraph 150(4)(c) of the Act is replaced by the following:

  • (c) the day specified in the revocation of the election, which day is at least 365 days after the day specified in the election.

• (2) Section 150 of the Act is amended by adding the following after subsection (4):

  • Marginal note:Form of revocation

    (4.1) A revocation of an election made under subsection (1) by a member of a closely related group and a corporation shall

    • (a) be made jointly in prescribed form containing prescribed information by the member and the corporation;

    • (b) specify the day on which the revocation is to become effective; and

    • (c) be filed with the Minister in prescribed manner on or before

      • (i) the particular day that is the earlier of

        • (A) the day on or before which the member is required to file a return under Division V for the reporting period of the member that includes the day specified in the revocation, and

        • (B) the day on or before which the corporation is required to file a return under Division V for the reporting period of the corporation that includes the day specified in the revocation, or

      • (ii) any day after the particular day that the Minister may allow.

• (3) Subsections (1) and (2) are deemed to have come into force on August 10, 2022.

• 133 (1) The definition Canadian partnership in subsection 156(1) of the Act is repealed.

• (2) Paragraph (b) of the definition qualifying group in subsection 156(1) of the Act is replaced by the following:

  • (b) a group of specified partnerships, or of specified partnerships and corporations, each member of which is closely related, within the meaning of this section, to each other member of the group. (groupe admissible)

• (3) The portion of the definition qualifying member in subsection 156(1) of the Act before paragraph (a) is replaced by the following:

  qualifying member

  qualifying member of a qualifying group means a registrant that is a corporation resident in Canada or a specified partnership, each member of which is resident in Canada, and that meets the following conditions:

• (4) The portion of the definition temporary member in subsection 156(1) of the Act before paragraph (a) is replaced by the following:

  temporary member

  temporary member of a qualifying group means a particular corporation

• (5) Paragraph (f) of the definition temporary member in subsection 156(1) of the Act is replaced by the following:

  • (f) that receives a supply of property that meets the following conditions:

    • (i) the supply is made by another corporation that is a qualifying member of the qualifying group and in contemplation of a distribution made in the course of a reorganization whereby the shares of the particular corporation are to be transferred upon the distribution to one or more corporations (in this definition referred to as the “transferee corporations”),

    • (ii) the supplied property includes property that is neither a financial instrument nor property having a nominal value, and

    • (iii) all or substantially all of the supplied property (other than financial instruments and property having a nominal value)

      • (A) was last manufactured, produced, acquired or imported by the other corporation for consumption, use or supply exclusively in the course of the commercial activities of the other corporation,

      • (B) is not consumed, used or supplied by the particular corporation otherwise than exclusively in the course of its commercial activities, and

      • (C) may reasonably be expected to be consumed, used or supplied by the transferee corporations exclusively in the course of their commercial activities within 12 months after the time the supply is made;

• (6) Paragraph (h) of the definition temporary member in subsection 156(1) of the Act is replaced by the following:

  • (h) the shares of which are transferred to the transferee corporations upon the distribution referred to in subparagraph (f)(i). (membre temporaire)

• (7) Subsection 156(1) of the Act is amended by adding the following in alphabetical order:

  specified partnership

  specified partnership means a partnership each member of which is a corporation or a partnership. (société de personnes déterminée)

• (8) The portion of subsection 156(1.1) of the Act before subparagraph (a)(i) is replaced by the following:

  • Marginal note:Closely related persons

    (1.1) For the purposes of this section, a particular specified partnership and another person that is a specified partnership or a corporation are closely related to each other at any time if, at that time,

    • (a) in the case where the other person is a specified partnership,

• (9) Clause 156(1.1)(a)(i)(B) of the Act is replaced by the following:

  • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the particular partnership is a member, or

• (10) Clause 156(1.1)(a)(ii)(B) of the Act is replaced by the following:

  • (B) holds all or substantially all of the interest in a specified partnership that is a member of a qualifying group of which the other person is a member; and

• (11) Clause 156(1.1)(b)(i)(B) of the Act is replaced by the following:

  • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the particular partnership is a member, or

• (12) Clause 156(1.1)(b)(iii)(B) of the Act is replaced by the following:

  • (B) a corporation, or a specified partnership, that is a member of a qualifying group of which the other person is a member, or

• (13) Subparagraph 156(1.1)(b)(iv) of the Act is replaced by the following:

  • (iv) all or substantially all of the interest in a specified partnership is held by

    • (A) if the specified partnership is a member of a qualifying group of which the particular partnership is a member, the other person, and

    • (B) if the specified partnership is a member of a qualifying group of which the other person is a member, the particular partnership.

• (14) Subsection 156(1.2) of the Act is replaced by the following:

  • Marginal note:Persons closely related to the same person

    (1.2) If, under subsection (1.1), two persons are closely related to the same corporation or specified partnership, the two persons are closely related to each other for the purposes of this section.

• (15) Paragraph 156(2.1)(c) of the Act is replaced by the following:

  • (c) a supply that is not a supply of property that meets the conditions set out in paragraph (f) of the definition temporary member in subsection (1), if the recipient of the supply is a temporary member.

• (16) Subsections (1) to (3) and (7) to (14) are deemed to have come into force on August 10, 2022.

• (17) Subsections (4) to (6) are deemed to have come into force on August 9, 2022.

• (18) Subsection (15) applies in respect of any supply made on or after August 9, 2022.

• 134 (1) Paragraph (k) of the definition permitted deduction in section 217 of the Act is replaced by the following:

  • (k) consideration (other than interest referred to in paragraph (g), dividends referred to in paragraph (h) or consideration referred to in paragraph (k.1) or (k.2)) for a specified non-arm’s length supply made to the qualifying taxpayer less the total of all amounts, each of which is a part of the value of the consideration and is loading;

• (2) The definition permitted deduction in section 217 of the Act is amended by adding the following after paragraph (k.1):

  • (k.2) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a supply that is deemed by subsection 150(1) to be a supply of a financial service and that is made to the qualifying taxpayer by another person, if the other person is a qualifying taxpayer throughout each specified year of the other person during which the other person makes an outlay, or incurs an expense, outside Canada for the purpose of making the supply;

• (3) Subsections (1) and (2) apply to any specified year of a person that ends after November 16, 2005, except that for the purposes of applying the definition permitted deduction in section 217 of the Act, as amended by subsections (1) and (2), in respect of an amount of consideration for a specified non-arm’s length supply that became due, or was paid without having become due, on or before that day, paragraph (k) of that definition is to be read without reference to the words “less the total of all amounts, each of which is a part of the value of the consideration and is loading”.

• (4) If, in assessing under section 296 of the Act tax payable by a person under Division IV of Part IX of the Act for a particular specified year of the person, an amount was taken into consideration as an external charge or as qualifying consideration for the particular specified year and as a result of the application of the definition permitted deduction in section 217 of the Act, as amended by subsections (1) and (2), the amount or part of the amount is neither qualifying consideration for any specified year of the person nor an external charge for any specified year of the person for which an election under subsection 217.2(1) of the Act is in effect, the person is entitled until the day that is one year after the day on which this Act receives royal assent to request in writing that the Minister of National Revenue make an assessment, reassessment or additional assessment for the purpose of taking into account that the amount or the part of the amount, as the case may be, is neither, if an election under subsection 217.2(1) of the Excise Tax Act is in effect for the particular specified year, an external charge for the particular specified year nor, in any other case, qualifying consideration for the particular specified year and, on receipt of the request, the Minister must with all due dispatch

  • (a) consider the request; and

  • (b) under section 296 of the Act, assess, reassess or make an additional assessment of the tax payable by the person under Division IV of Part IX of the Act for any specified year of the person and of any interest, penalty or other obligation of the person, solely for the purpose of taking into account that the amount or the part of the amount, as the case may be, is neither, if an election under subsection 217.2(1) of the Act is in effect for the particular specified year, an external charge for the particular specified year nor, in any other case, qualifying consideration for the particular specified year.