Archived - Annex 6:
Notice of Ways and Means Motion to amend the Income Tax Act and Other Related Legislation
That it is expedient to amend the Income Tax Act (the "Act") and other related legislation as follows:
Disability Tax Credit
1 The Act is modified to give effect to the proposals relating to the Disability Tax Credit as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Canada Workers Benefit
2 (1) The portion of subsection 117.1(1) of the Act before paragraph (b) is replaced by the following:
Annual adjustment
117.1 (1) Each specified amount 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 for the year under the provision for which the amount is relevant is the total of
(a) the amount that would, but for subsection (3), be the amount to be used under the relevant provision for the preceding taxation year, and
(2) Section 117.1 of the Act is amended by adding the following after subsection (1):
Annual adjustment — amounts
(2) For the purposes of subsection (1), each of the following amounts is a specified amount in relation to tax payable under this Part or Part I.2 for a taxation year:
(a) the amount of $300 referred to in subparagraph 6(1)(b)(v.1);
(b) the amount of $1,000 referred to in the formula in paragraph 8(1)(s);
(c) the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a);
(d) each of the amounts expressed in dollars in subsection 117(2);
(e) each of the amounts expressed in dollars in the description of B in subsection 118(1);
(f) the amount of $12,298 in the description of A in subsection 118(1.1);
(g) the amount of $15,000 in paragraph (d) of the description of F in subsection 118(1.1);
(h) each of the amounts expressed in dollars in subsection 118(2);
(i) the amount of $1,000 referred to in subsection 118(10);
(j) the amount of $15,000 referred to in subsection 118.01(2);
(k) each of the amounts expressed in dollars in subsection 118.2(1);
(l) each of the amounts expressed in dollars in subsection 118.3(1);
(m) each of the amounts expressed in dollars in subsection 122.5(3);
(n) the amount of $2,500 referred to in subsection 122.51(1);
(o) each of the amounts expressed in dollars in subsection 122.51(2);
(p) the amounts of $14,000 referred to in subsection 122.7(1.3);
(q) the amounts of $1,395 and $2,403 in the description of A, and each of the amounts expressed in dollars in the description of B, in subsection 122.7(2);
(r) the amount of $720 in the description of C, and each of the amounts expressed in dollars in the description of D, in subsection 122.7(3);
(s) the amount of $10,000 in the description of B in subsection 122.91(2); and
(t) each of the amounts expressed in dollars in Part I.2.
(3) Subsections (1) and (2) apply to the 2021 and subsequent taxation years. However, the adjustment provided for in subsection 117.1(1) of the Act, as enacted by subsection (1), does not apply
(a) for the 2021 to 2023 taxation years, in respect of paragraph 117.1(2)(g) of the Act, as enacted by subsection (2); and
(b) for the 2021 taxation year, in respect of paragraphs 117.1(2)(p), (q) and (r) of the Act, as enacted by subsection (2).
3 (1) Section 122.7 of the Act is amended by adding the following after subsection (1.2):
Secondary earner exemption
(1.3) For the purposes of subsections (2) and (3),
(a) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was less than the working income for the year of the eligible spouse, the eligible individual's adjusted net income for the year is deemed to be the amount, if any, by which the eligible individual's adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of
(i) the eligible individual's working income for the year, and
(ii) $14,000; and
(b) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was greater than or equal to the working income for the year of the eligible spouse, the eligible spouse's adjusted net income for the year is deemed to be the amount, if any, by which the eligible spouse's adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of
(i) the eligible spouse's working income for the year, and
(ii) $14,000.
(2) The descriptions of A and B in subsection 122.7(2) of the Act are replaced by the following:
A is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser of $1,395 and 27% of the amount, if any, by which the individual's working income for the taxation year exceeds $3,000, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,403 and 27% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $3,000; and
B is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $22,944, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $26,177.
(3) The descriptions of C and D in subsection 122.7(3) of the Act are replaced by the following:
C is the lesser of $720 and 27% of the amount, if any, by which the individual's working income for the taxation year exceeds $1,150; and
D is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the individual's adjusted net income for the taxation year exceeds $32,244,
(b) if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount under subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $42,197, and
(c) if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under subsection 118.3(1) for the taxation year, 7.5% of the amount, if any, by which the total of the adjusted net incomes of the individual and of the eligible spouse, for the taxation year, exceeds $42,197.
(4) Subsections (1) to (3) are deemed to have come into force on January 1, 2021.
Northern Residents Deductions
4 The Act is modified to give effect to the proposals relating to Northern Residents Deductions as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Postdoctoral Fellowship Income
5 (1) The definition earned income in subsection 146(1) of the Act is amended by adding the following after paragraph (b):
(b.01) an amount included under paragraph 56(1)(n) in computing the taxpayer's income for a period in the year throughout which the taxpayer was resident in Canada in connection with a program that consists primarily of research and does not lead to a diploma from a college or a Collège d'enseignement général et professionnel, or a bachelor, masters, doctoral or equivalent degree,
(2) Subsection (1) applies in respect of the definition "earned income" under subsection 146(1) of the Act for taxation years after 2020. However, it also applies in respect of the definition "earned income" under subsection 146(1) of the Act for the 2011 to 2020 taxation years, for the purpose of determining the taxpayer's "RRSP deduction limit" under subsection 146(1) of the Act in respect of a taxation year after 2020 during which the taxpayer makes a request in writing with the Minister of National Revenue for an adjustment to their "earned income" for any of those prior years.
Tax Treatment of COVID-19 Benefit Amounts
6 (1) Subparagraph 56(1)(r)(iv) of the Act is replaced by the following:
(iv) financial assistance provided under a program established by a government, or government agency, in Canada that provides income replacement benefits similar to income replacement benefits provided under a program established under the Employment Insurance Act, other than amounts referred to in subparagraph (iv.1),
(iv.1) financial assistance provided under
(A) the Canada Emergency Response Benefit Act,
(B) Part VIII.4 of the Employment Insurance Act,
(C) the Canada Emergency Student Benefit Act,
(D) the Canada Recovery Benefits Act, or
(E) a program established by a government, or government agency, of a province, that provides income replacement benefits similar to income replacement benefits provided under a program established under an Act referred to in any of clauses (A) to (D), or
(2) Subsection (1) is deemed to have come into force on January 1, 2020.
7 (1) Section 60 of the Act is amended by adding the following after paragraph (v.2):
COVID-19 – other benefit repayments
(v.3) any benefit repaid by the taxpayer before 2023 to the extent that the amount of the benefit was included in computing the taxpayer's income for the year under any of clauses 56(1)(r)(iv.1)(A) to (D), except to the extent that the amount is
(i) deducted in computing the taxpayer's income for any year under paragraph (n), or
(ii) deductible in computing the taxpayer's income for any year under paragraph (v.2);
(2) Subsection (1) is deemed to have come into force on January 1, 2020.
8 (1) Paragraph 115(1)(a) of the Act is amended by adding the following after subparagraph (iii.21):
(iii.22) the total of all amounts, each of which is an amount included under subparagraph 56(1)(r)(iv.1) in computing the non-resident person's income for the year,
(2) Subsection (1) is deemed to have come into force on January 1, 2020.
Fixing Contribution Errors in Defined Contribution Pension Plans
9 The Act is modified to give effect to the proposals relating to Fixing Contribution Errors in Defined Contribution Pension Plans as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Taxes Applicable to Registered Investments
10 (1) Subsection 204.6(1) of the Act is replaced by the following:
Tax payable
204.6 (1) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(b), (d) or (f) holds property that is not a prescribed investment for that taxpayer, it shall, in respect of that month, pay a tax under this Part equal to the total of all amounts each of which is an amount determined in respect of such a property by the formula
0.01(A × B/C)
where
A is the fair market value of the property at the time of its acquisition by the taxpayer;
B is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment held at the end of the month by
(a) registered retirement savings plans,
(b) deferred profit sharing plans,
(c) registered retirement income funds, or
(d) registered investments described in paragraphs 204.4(2)(b), (d) or (f); and
C is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment at the end of the month.
(2) Subsection (1) applies in respect of months after 2020. It also applies to a taxpayer in respect of a month before 2021 if, on or before Budget Day,
(a) no notice of assessment in respect of an amount payable under subsection 204.6(1) of the Act for the month has been sent to the taxpayer in respect of the month, or
(b) if such a notice of assessment has been sent to the taxpayer in respect of the month, it is not the case that the taxpayer has no further right of objection and appeal in respect of the assessment.
Registration and Revocation Rules Applicable to Charities
11 (1) The definition ineligible individual in subsection 149.1(1) of the Act is amended by striking out "or" at the end of paragraph (d), by adding "or" at the end of paragraph (e) and by adding the following after paragraph (e):
(f) a listed terrorist entity or a member of a listed terrorist entity,
(g) a director, trustee, officer or like official of a listed terrorist entity during a period in which that entity supported or engaged in terrorist activities, including a period prior to the date on which the entity became a listed terrorist entity, or
(h) an individual who controlled or managed, directly or indirectly, in any manner whatever, a listed terrorist entity during a period in which that entity supported or engaged in terrorist activities, including a period prior to the date on which the entity became a listed terrorist entity; (particulier non admissible)
(2) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:
listed terrorist entity, at any time, means a person, partnership, group, fund, unincorporated association or organization that is at that time a listed entity, as defined in subsection 83.01(1) of the Criminal Code; (entité terroriste inscrite)
(3) Section 149.1 of the Act is amended by adding the following after subsection (1.01):
Deeming rule — listed terrorist entity
(1.02) If, but for this subsection, a person, partnership, group, fund, unincorporated association or organization becomes a listed terrorist entity at a particular time and ceases to be a listed terrorist entity at a later time further to an application made under subsection 83.05(2), or as a result of paragraph 83.05(6)(d), of the Criminal Code, then the entity is deemed not to have become a listed terrorist entity and not to have been a listed terrorist entity throughout that period.
(4) Paragraph 149.1(4.1)(c) of the Act is replaced by the following:
(c) of a registered charity, if a false statement (as defined in subsection 163.2(1)) was made in circumstances amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of information for the purpose of obtaining or maintaining its registration;
12 Section 168 of the Act is amended by adding the following after subsection (3):
Listed terrorist entities
(3.1) Notwithstanding subsections (1), (2) and (4), if a qualified donee is a listed terrorist entity for the purposes of section 149.1, the registration of the qualified donee is revoked as of the date on which it became a listed terrorist entity.
13 The portion of subsection 188(1) of the Act before paragraph (a) is replaced by the following:
Deemed year-end on notice of revocation
188 (1) If on a particular day the Minister issues a notice of intention to revoke the registration of a taxpayer as a registered charity under any of subsections 149.1(2) to (4.1) and 168(1), it becomes a listed terrorist entity or it is determined, under subsection 7(1) of the Charities Registration (Security Information) Act, that a certificate served in respect of the charity under subsection 5(1) of that Act is reasonable on the basis of information and evidence available,
14 Subsection 188.2(2) of the Act is amended by striking out "or" at the end of paragraph (d), by adding "or" at the end of paragraph (e) and by adding the following after paragraph (e):
(f) in the case of a person that is a registered charity, if a false statement (as defined in subsection 163.2(1)) was made in circumstances amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of information for the purpose of maintaining its registration.
Electronic Filing and Certification of Tax and Information Returns
15 The Act is modified to give effect to the proposals relating to Electronic Filing and Certification of Tax and Information Returns as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Emergency Business Supports and Canada Recovery Hiring Program
16 Paragraph 87(2)(g.6) of the Act is replaced by the following:
COVID-19 – wage subsidy
(g.6) for the purposes of section 125.7, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation unless it is reasonable to consider that one of the main purposes of the amalgamation is to cause the new corporation to qualify for the deemed overpayment under any of subsections 125.7(2) to (2.2) or to increase the amount of that deemed overpayment;
17 (1) The portion of paragraph (a) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(a) for the fifth qualifying period,
(2) The portion of paragraph (b) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(b) for the sixth qualifying period,
(3) The portion of paragraph (c) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(c) for the seventh qualifying period,
(4) The portion of paragraph (d) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(d) for the eighth qualifying period,
(5) The portion of paragraph (e) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(e) for the ninth qualifying period,
(6) The portion of paragraph (f) of the definition base percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(f) for the tenth qualifying period,
(7) Paragraph (g) of the definition base percentage in subsection 125.7(1) of the Act is replaced by the following:
(g) for the eleventh qualifying period to the seventeenth qualifying period,
(i) if the entity's revenue reduction percentage is greater than or equal to 50%, 40%, and
(ii) in any other case, the amount determined by the formula
0.8 × A
where
A is the revenue reduction percentage;
(h) for the eighteenth qualifying period,
(i) if the entity's revenue reduction percentage is greater than or equal to 50%, 35%, and
(ii) in any other case, the amount determined by the formula
0.875 × (A – 10%)
where
A is the revenue reduction percentage;
(i) for the nineteenth qualifying period,
(i) if the entity's revenue reduction percentage is greater than or equal to 50%, 25%, and
(ii) in any other case, the amount determined by the formula
0.625 × (A – 10%)
where
A is the revenue reduction percentage;
(j) for the twentieth qualifying period,
(i) if the entity's revenue reduction percentage is greater than or equal to 50%, 10%, and
(ii) in any other case, the amount determined by the formula
0.25 × (A – 10%)
where
A is the revenue reduction percentage; and
(k) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage de base)
(8) Subparagraphs (b)(i) to (iv) of the definition baseline remuneration in subsection 125.7(1) of the Act are replaced by the following:
(i) begins on March 1, 2019 and ends on May 31, 2019, in respect of any of the first qualifying period to the third qualifying period,
(ii) begins on March 1, 2019 and ends on June 30, 2019, in respect of the fourth qualifying period, unless the eligible entity elects to use the period that begins on March 1, 2019 and ends on May 31, 2019 for that qualifying period,
(iii) begins on July 1, 2019 and ends on December 31, 2019, in respect of any of the fifth qualifying period to the thirteenth qualifying period,
(iii.1) begins on March 1, 2019 and ends on June 30, 2019, in respect of any of the fourteenth qualifying period to the seventeenth qualifying period, unless the eligible entity elects to use the period that begins on July 1, 2019 and ends on December 31, 2019 for that qualifying period,
(iii.2) begins on July 1, 2019 and ends on December 31, 2019, in respect of the eighteenth qualifying period and any subsequent qualifying period, or
(iv) if the eligible employee was on leave for any reason mentioned in subsection 12(3) of the Employment Insurance Act or section 2 of the Act respecting parental insurance, CQLR, c. A-29.011 throughout the period that begins on July 1, 2019 and ends on March 15, 2020, begins 90 days prior to the date on which the employee commenced that leave and ends on the day prior to the date on which they commenced their leave, in respect of the fifth qualifying period and any subsequent qualifying period. (rémunération de base)
(9) Paragraphs (a) to (c.7) of the definition current reference period in subsection 125.7(1) of the Act are replaced by the following:
(a) for the first qualifying period, March 2020;
(b) for the second qualifying period, April 2020;
(c) for the third qualifying period, May 2020;
(c.1) for the fourth qualifying period, June 2020;
(c.2) for the fifth qualifying period, July 2020;
(c.3) for the sixth qualifying period, August 2020;
(c.4) for the seventh qualifying period, September 2020;
(c.5) for the eighth qualifying period, October 2020;
(c.6) for the ninth qualifying period, November 2020;
(c.7) for the tenth qualifying period, December 2020;
(c.8) for the eleventh qualifying period, December 2020;
(c.9) for the twelfth qualifying period, January 2021;
(c.91) for the thirteenth qualifying period, February 2021;
(c.92) for the fourteenth qualifying period, March 2021;
(c.93) for the fifteenth qualifying period, April 2021;
(c.94) for the sixteenth qualifying period, May 2021;
(c.95) for the seventeenth qualifying period, June 2021;
(c.96) for the eighteenth qualifying period, July 2021;
(c.97) for the nineteenth qualifying period, August 2021;
(c.98) for the twentieth qualifying period, September 2021;
(c.99) for the twenty-first qualifying period, October 2021;
(c.991) for the twenty-second qualifying period, November 2021; and
(10) The definition eligible employee in subsection 125.7(1) of the Act is replaced by the following:
eligible employee, of an eligible entity in respect of a week in a qualifying period, means an individual employed by the eligible entity primarily in Canada throughout the qualifying period (or the portion of the qualifying period throughout which the individual was employed by the eligible entity), other than, if the qualifying period is any of the first qualifying period to the fourth qualifying period, an individual who is without remuneration by the eligible entity in respect of 14 or more consecutive days in the qualifying period. (employé admissible)
(11) Subparagraphs (a)(i) to (x) of the definition prior reference period in subsection 125.7(1) of the Act are replaced by the following:
(i) for the first qualifying period, March 2019,
(ii) for the second qualifying period, April 2019,
(iii) for the third qualifying period, May 2019,
(iv) for the fourth qualifying period, June 2019,
(v) for the fifth qualifying period, July 2019,
(vi) for the sixth qualifying period, August 2019,
(vii) for the seventh qualifying period, September 2019,
(viii) for the eighth qualifying period, October 2019,
(ix) for the ninth qualifying period, November 2019,
(x) for the tenth qualifying period, December 2019,
(xi) for the eleventh qualifying period, December 2019,
(xii) for the twelfth qualifying period, January 2020,
(xiii) for the thirteenth qualifying period, February 2020,
(xiv) for the fourteenth qualifying period, March 2019,
(xv) for the fifteenth qualifying period, April 2019,
(xvi) for the sixteenth qualifying period, May 2019,
(xvii) for the seventeenth qualifying period, June 2019,
(xviii) for the eighteenth qualifying period, July 2019,
(xix) for the nineteenth qualifying period, August 2019,
(xx) for the twentieth qualifying period, September 2019,
(xxi) for the twenty-first qualifying period, October 2019, and
(xxii) for the twenty-second qualifying period, November 2019;
(12) Paragraphs (e) to (g) of the definition public health restriction in subsection 125.7(1) of the Act are replaced by the following:
(e) it does not result from a violation by the eligible entity – or a party with which the eligible entity does not deal at arm's length that rents, directly or indirectly, the qualifying property from the eligible entity (referred to in this definition as the "specified tenant") – of an order or decision that meets the conditions in paragraphs (a) to (d);
(f) as a result of the order or decision, some or all of the activities of the eligible entity – or the specified tenant – at, or in connection with, the qualifying property (that it is reasonable to expect the eligible entity – or the specified tenant – would, absent the order or decision, otherwise have engaged in) are required to cease (referred to in this definition as the "restricted activities") based, for greater certainty, on the type of activity rather than the extent to which an activity may be performed or limits placed on the time during which an activity may be performed;
(g) it is reasonable to conclude that at least approximately 25% of the qualifying revenues of the eligible entity – or the specified tenant – for the prior reference period that were earned from, or in connection with, the qualifying property were derived from the restricted activities; and
(13) The portion of paragraph (c) of the definition qualifying entity in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(c) if the qualifying period is any of the first qualifying period to the fourth qualifying period, its qualifying revenues for the current reference period are equal to or less than the specified percentage, for the qualifying period, of
(14) Paragraphs (a) to (d) of the definition qualifying period in subsection 125.7(1) of the Act are replaced by the following:
(a) the period that begins on March 15, 2020 and ends on April 11, 2020 (referred to in this section as the "first qualifying period");
(b) the period that begins on April 12, 2020 and ends on May 9, 2020 (referred to in this section as the "second qualifying period");
(c) the period that begins on May 10, 2020 and ends on June 6, 2020 (referred to in this section as the "third qualifying period");
(c.1) the period that begins on June 7, 2020 and ends on July 4, 2020 (referred to in this section as the "fourth qualifying period");
(c.2) the period that begins on July 5, 2020 and ends on August 1, 2020 (referred to in this section as the "fifth qualifying period");
(c.3) the period that begins on August 2, 2020 and ends on August 29, 2020 (referred to in this section as the "sixth qualifying period");
(c.4) the period that begins on August 30, 2020 and ends on September 26, 2020 (referred to in this section as the "seventh qualifying period");
(c.5) the period that begins on September 27, 2020 and ends on October 24, 2020 (referred to in this section as the "eighth qualifying period");
(c.6) the period that begins on October 25, 2020 and ends on November 21, 2020 (referred to in this section as the "ninth qualifying period");
(c.7) the period that begins on November 22, 2020 and ends on December 19, 2020 (referred to in this section as the "tenth qualifying period");
(c.8) the period that begins on December 20, 2020 and ends on January 16, 2021 (referred to in this section as the "eleventh qualifying period");
(c.9) the period that begins on January 17, 2021 and ends on February 13, 2021 (referred to in this section as the "twelfth qualifying period");
(c.91) the period that begins on February 14, 2021 and ends on March 13, 2021 (referred to in this section as the "thirteenth qualifying period");
(c.92) the period that begins on March 14, 2021 and ends on April 10, 2021 (referred to in this section as the "fourteenth qualifying period");
(c.93) the period that begins on April 11, 2021 and ends on May 8, 2021 (referred to in this section as the "fifteenth qualifying period");
(c.94) the period that begins on May 9, 2021 and ends on June 5, 2021 (referred to in this section as the "sixteenth qualifying period");
(c.95) the period that begins on June 6, 2021 and ends on July 3, 2021 (referred to in this section as the "seventeenth qualifying period");
(c.96) the period that begins on July 4, 2021 and ends on July 31, 2021 (referred to in this section as the "eighteenth qualifying period");
(c.97) the period that begins on August 1, 2021 and ends on August 28, 2021 (referred to in this section as the "nineteenth qualifying period");
(c.98) the period that begins on August 29, 2021 and ends on September 25, 2021 (referred to in this section as the "twentieth qualifying period");
(c.99) the period that begins on September 26, 2021 and ends on October 23, 2021 (referred to in this section as the "twenty-first qualifying period");
(c.991) the period that begins on October 24, 2021 and ends on November 20, 2021 (referred to in this section as the "twenty-second qualifying period"); and
(d) a prescribed period that ends no later than November 30, 2021. (période d'admissibilité)
(15) The portion of paragraph (a) of the definition rent subsidy percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(a) if the qualifying period is any of the eighth qualifying period to the seventeenth qualifying period,
(16) The definition rent subsidy percentage in subsection 125.7(1) of the Act is amended by striking out "and" at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.1) if the qualifying period is any of the eighteenth qualifying period to the twentieth qualifying period, the percentage determined by the formula
A + B
where
A is the eligible entity's base percentage for the qualifying period, and
B is the eligible entity's top-up percentage for the qualifying period; and
(b) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage de subvention pour le loyer)
(17) The description of A in the definition rent top-up percentage in subsection 125.7(1) of the Act is replaced by the following:
A is 25%, or a prescribed percentage, for any of the eighth qualifying period to the twentieth qualifying period and nil, or a prescribed percentage, for any subsequent qualifying period,
(18) Paragraphs (a) to (c) of the definition specified percentage in subsection 125.7(1) of the Act are replaced by the following:
(a) for the first qualifying period, 85%; and
(b) for any of the second qualifying period to the fourth qualifying period, 70%. (pourcentage déterminé)
(19) The definition top-up percentage in subsection 125.7(1) of the Act is replaced by the following:
top-up percentage, of an eligible entity for a qualifying period, means the percentage determined by regulation for the qualifying period or, if there is no percentage determined by regulation for the qualifying period,
(a) for any of the fifth qualifying period to the tenth qualifying period, the lesser of 25% and the percentage determined by the formula
1.25 × (A – 50%)
where
A is the entity's top-up revenue reduction percentage for the qualifying period;
(b) for any of the eleventh qualifying period to the seventeenth qualifying period, the lesser of 35% and the percentage determined by the formula
1.75 × (A – 50%)
where
A is the entity's top-up revenue reduction percentage for the qualifying period;
(c) for the eighteenth qualifying period, the lesser of 25% and the percentage determined by the formula
1.25 × (A – 50%)
where
A is the entity's top-up revenue reduction percentage for the qualifying period;
(d) for the nineteenth qualifying period, the lesser of 15% and the percentage determined by the formula
0.75 × (A – 50%)
where
A is the entity's top-up revenue reduction percentage for the qualifying period;
(e) for the twentieth qualifying period, the lesser of 10% and the percentage determined by the formula
0.5 × (A – 50%)
where
A is the entity's top-up revenue reduction percentage for the qualifying period; and
(f) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage compensatoire)
(20) The portion of paragraph (a) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act before the formula is replaced by the following:
(a) for any of the fifth qualifying period to the seventh qualifying period, the result (expressed as a percentage) of the formula
(21) The portion of paragraph (b) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act before subparagraph (i) is replaced by the following:
(b) for any of the eighth qualifying period to the tenth qualifying period, the greater of
(22) Paragraph (c) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act is replaced by the following:
(c) for the eleventh qualifying period and each subsequent qualifying period, the eligible entity's revenue reduction percentage for the qualifying period. (pourcentage compensatoire de baisse de revenue)
(23) Subsection 125.7(1) of the Act is amended by adding the following in alphabetical order:
executive compensation repayment amount, of an eligible entity, means
(a) nil, unless
(i) shares of the capital stock of the eligible entity are listed or traded on a stock exchange or other public market, or
(ii) the eligible entity is controlled by a corporation described in subparagraph (i); and
(b) if the conditions in subparagraph (a)(i) or (ii) are met, the amount determined by the formula
A × B
where
A is
(a) a percentage assigned to the eligible entity under an agreement if
(i) the agreement is entered into by
(A) the eligible entity,
(B) an eligible entity, shares of the capital stock of which are listed or traded on a stock exchange or other public market, that controls the eligible entity (referred to in this definition as the "public parent corporation"), if the public parent corporation received a deemed overpayment under subsection (2) in respect of the seventeenth qualifying period or any subsequent qualifying period, and
(C) each other eligible entity that received a deemed overpayment under subsection (2) in respect of the seventeenth qualifying period or any subsequent qualifying period and was controlled in that period by the eligible entity or the public parent corporation, if any,
(ii) the agreement is filed in prescribed form and manner with the Minister,
(iii) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in subparagraph (i) of this description,
(iv) the total of all the percentages assigned under the agreement equals 100%, and
(v) the percentage allocated to any eligible entity under the agreement would not result in an amount allocated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity under subsection (2) for the seventeenth qualifying period and any subsequent qualifying period, and
(b) in any other case, 100%, and
B is the lesser of
(a) the total of all amounts each of which is an amount of a deemed overpayment under subsection (2) for each of the entities described in subparagraph (a)(i) of the description of A for the seventeenth qualifying period and each subsequent qualifying period, other than amounts in respect of employees on leave with pay, and
(b) the amount determined by the formula
C – D
where
C is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2021 calendar year (prorated based upon the number of days of the eligible entity's, or public parent corporation's, fiscal periods in the calendar year, if those fiscal periods are not the calendar year), and
D is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eligible entity, if any, for the 2019 calendar year (prorated based upon the number of days of the eligible entity's, or public parent corporation's, fiscal periods in the calendar year, if those fiscal periods are not the calendar year). (montant du remboursement de la rémunération de la haute direction)
executive remuneration, of an eligible entity, means
(a) the total amount of compensation that is reported in the eligible entity's Statement of Executive Compensation for Named Executive Officers pursuant to National Instrument 51-102 Continuous Disclosure Obligations, as amended from time to time, of the Canadian Securities Administrators in respect of Named Executive Officers of the eligible entity;
(b) if paragraph (a) does not apply and the eligible entity is required to make a similar disclosure to shareholders under the laws of another jurisdiction, the amount of total compensation reported in that disclosure (if the compensation of more than five individuals is required to be reported under that disclosure, using the five most highly compensated of those individuals); and
(c) if paragraphs (a) and (b) do not apply, the amount that would be required to be reported by the eligible entity using the methodology for preparing the Statement of Executive Compensation referred to in paragraph (a). (rémunération de la haute direction)
qualifying recovery entity, for a qualifying period, means an eligible entity that meets the following conditions:
(a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner no later than 180 days after the end of the qualifying period;
(b) it is a qualifying entity for the qualifying period;
(c) if it is a corporation (other than a corporation that is exempt from tax under this Part), it
(i) is a Canadian-controlled private corporation, or
(ii) would be a Canadian-controlled private corporation absent the application of subsection 136(1);
(d) if it is a partnership, throughout the qualifying period it is the case that
A ≤ 0.5B
where
A is the total of all amounts, each of which is the fair market value of an interest in the partnership held — directly or indirectly, through one or more partnerships — by
(i) a person or partnership other than an eligible entity, or
(ii) a corporation, other than a corporation that
(A) is exempt from tax under this Part, or
(B) is described in subparagraph (c)(i) or (ii), and
B is the total fair market value of all interests in the partnership; and
(e) it has a revenue reduction percentage
(i) greater than 0%, if it is the seventeenth qualifying period, or
(ii) greater than 10%, if it is any of the eighteenth qualifying period to the twenty-second qualifying period. (entité de relance admissible)
recovery wage subsidy rate, for a qualifying period, means
(a) for any of the seventeenth qualifying period to the nineteenth qualifying period, 50%;
(b) for the twentieth qualifying period, 40%;
(c) for the twenty-first qualifying period, 30%; and
(d) for the twenty-second qualifying period, 20%. (taux de subvention salariale de relance)
total base period remuneration, of an eligible entity, means the total of all amounts, each of which is for an eligible employee in respect of a week in the fourteenth qualifying period, equal to the least of
(a) $1,129,
(b) the eligible remuneration paid to the eligible employee in respect of the week,
(c) if the eligible employee does not deal at arm's length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and
(d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période de base)
total current period remuneration, of an eligible entity for a qualifying period, means the total of all amounts, each of which is for an eligible employee in respect of a week in the qualifying period, equal to the least of
(a) $1,129,
(b) the eligible remuneration paid to the eligible employee in respect of the week,
(c) if the eligible employee does not deal at arm's length with the eligible entity in the qualifying period, the baseline remuneration in respect of the eligible employee determined for that week, and
(d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période actuelle)
(24) Section 125.7 of the Act is amended by adding the following after subsection (2.1):
Canada Recovery Hiring Program
(2.2) For a qualifying recovery entity for a qualifying period, an overpayment on account of the qualifying entity's liability under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualifying period in an amount determined by the formula
A × (B – C)
where
A is the recovery wage subsidy rate for the qualifying period;
B is the qualifying recovery entity's total current period remuneration for the qualifying period; and
C is the qualifying recovery entity's total base period remuneration.
(25) Subsection 125.7(3) of the Act is replaced by the following:
When assistance received
(3) For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is deemed under any of subsections (2) to (2.2) to have overpaid is assistance received by it from a government immediately before the end of the qualifying period to which it relates.
(26) Paragraph 125.7(4.2)(d) of the Act is replaced by the following:
(d) if the seller meets any of the following conditions, the eligible entity is deemed to meet that condition:
(i) either of the conditions in paragraph (d) of the definition qualifying entity in subsection (1), and
(ii) both of the conditions in subparagraph (c)(ii), or the condition in subparagraph (c)(iii), of the definition qualifying renter in subsection (1); and
(27) Paragraphs 125.7(5)(a) and (b) of the Act are replaced by the following:
(a) the amount of any deemed overpayment by an eligible entity under any of subsections (2) to (2.2) in respect of a qualifying period cannot exceed the amount claimed by the eligible entity — in the application referred to in paragraph (a) of the definition qualifying entity in subsection (1), paragraph (a) of the definition qualifying renter in subsection (1) or paragraph (a) of the definition qualifying recovery entity in subsection (1) — in respect of that qualifying period; and
(b) if an eligible employee is employed in a week by two or more qualifying entities that do not deal with each other at arm's length, the total amount of the deemed overpayment under subsection (2) or (2.2) in respect of the eligible employee for that week shall not exceed the amount that would arise if the eligible employee's eligible remuneration for that week were paid by one qualifying entity.
(28) Subparagraph 125.7(6)(b)(ii) of the Act is replaced by the following:
(ii) in respect of the fifth qualifying period and subsequent qualifying periods, increase the amount of a deemed overpayment under subsection (2), or
(29) Section 125.7 of the Act is amended by adding the following after subsection (6):
Anti-avoidance — recovery wage subsidy
(6.1) Notwithstanding any other provision in this section, the total current period remuneration of an eligible entity for a qualifying period is deemed to be equal to the total base period remuneration of the eligible entity, if
(a) the eligible entity, or a person or partnership not dealing at arm's length with the eligible entity, enters into a transaction or participates in an event (or a series of transactions or events) or takes an action (or fails to take an action) that has the effect of increasing the difference between the total current period remuneration and the total base period remuneration of the eligible entity for the qualifying period; and
(b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph (a) is to increase the amount of a deemed overpayment under subsection (2.2).
(30) Paragraphs 125.7(7)(a) and (b) of the Act are replaced by the following:
(a) for the purposes of subsections (2) to (2.2) and subsections 152(3.4) and 160.1(1), to be a taxpayer, and
(b) for the purposes of subsections (2) to (2.2), to have a liability under this Part for a taxation year in which a qualifying period ends.
(31) Subparagraphs 125.7(8)(a)(i) and (ii) of the Act are replaced by the following:
(i) the percentages in subparagraphs (a)(i), (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i), and
(ii) the factors in subparagraphs (a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii) and (j)(ii); and
(32) Paragraph 125.7(8)(b) of the Act is replaced by the following:
(b) the definition rent subsidy percentage in subsection (1), the factors and percentages in paragraphs (a) and (a.1) of that definition;
(b.1) the definition recovery wage subsidy rate, the percentages in that definition; and
(33) Section 125.7 of the Act is amended by adding the following after subsection (9):
Special case
(9.1) For the purposes of paragraph (9)(b), if the particular qualifying period is the eleventh qualifying period, then the immediately preceding qualifying period is deemed to be the ninth qualifying period.
Greater of wage and recovery subsidies
(9.2) For a qualifying period,
(a) if the amount of any deemed overpayment under subsection (2) is equal to or greater than the amount of any deemed overpayment under subsection (2.2), the amount of any deemed overpayment under subsection (2.2) is deemed to be nil; and
(b) if the amount of any deemed overpayment under subsection (2.2) is greater than the amount of any deemed overpayment under subsection (2), the amount of any deemed overpayment under subsection (2) is deemed to be nil.
(34) Section 125.7 of the Act is amended by adding the following after section (13)
Executive compensation
(14) The amount of a refund made by the Minister to an eligible entity in respect of a deemed overpayment under subsection (2) on a particular date under subsection 164(1.6), in respect of any of the seventeenth qualifying period to the twenty-second qualifying period, is deemed to be an amount that has been refunded to the eligible entity on that particular date (for the taxation year in which the refund was made) in excess of the amount to which the eligible entity was entitled as a refund under this Act to the extent of the lesser of the amount of the refund and the amount determined by the formula
A – B
where
A is the executive compensation repayment amount of the eligible entity; and
B is the total of all amounts deemed to be an excess refund to the eligible entity under this subsection in respect of refunds made after the particular date.
Foreign currency — executive remuneration
(15) For the purposes of paragraphs 261(2)(b) and (5)(c), amounts referred to in the definition executive remuneration in subsection (1) are deemed to arise on the last day of the eligible entity's fiscal period to which the amount relates and not at any other time.
(35) Subsections (12) and (26) are deemed to have come into force on September 27, 2020.
18 Subsection 152(3.4) of the Act is replaced by the following:
COVID-19 — notice of determination
(3.4) The Minister may at any time determine the amount deemed by any of subsections 125.7(2) to (2.2) to be an overpayment on account of a taxpayer's liability under this Part that arose during a qualifying period (as defined in subsection 125.7(1)), or determine that there is no such amount, and send a notice of the determination to the taxpayer.
19 (1) Subparagraph 163(2)(i)(i) of the Act is replaced by the following:
(i) the amount that would be deemed by any of subsections 125.7(2) to (2.2) to have been an overpayment by the person or partnership if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying entity in subsection 125.7(1), paragraph (a) of the definition qualifying renter in subsection 125.7(1) or paragraph (a) of the definition qualifying recovery entity in subsection 125.7(1), as the case may be
(2) Section 163 of the Act is amended by adding the following after subsection (2.901):
Penalty — COVID-19
(2.902) Every eligible entity that is deemed by subsection 125.7(6.1) to have an amount of total current period remuneration for a qualifying period is liable to a penalty equal to 25% of the amount that would be deemed by subsection 125.7(2.2) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying recovery entity in subsection 125.7(1).
20 Subsection 164(1.6) of the Act is replaced by the following:
COVID-19 refunds
(1.6) Notwithstanding subsection (2.01), at any time after the beginning of a taxation year of a taxpayer in which an overpayment is deemed to have arisen under any of subsections 125.7(2) to (2.2), the Minister may refund to the taxpayer all or any part of the overpayment.
21 Section 8901.2 of the Income Tax Regulations is replaced by the following:
8901.2 The amount determined by regulation in respect of a qualifying entity for the purposes of clause (b)(iv)(B) of the description of A in subsection 125.7(2) of the Act for a week in a qualifying period is
(a) for the seventh qualifying period and eighth qualifying period, the greater of
(i) the amount determined for the week under subparagraph (a)(i) of the description of A in subsection 125.7(2) of the Act, and
(ii) the amount determined for the week under subparagraph (a)(ii) of the description of A in subsection 125.7(2) of the Act;
(b) for the ninth qualifying period and the tenth qualifying period, the greater of
(i) $500, and
(ii) the lesser of
(A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible employee determined for that week, and
(B) $573;
(c) for any of the eleventh qualifying period to the nineteenth qualifying period, the greater of
(i) $500, and
(ii) the lesser of
(A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible employee determined for that week, and
(B) $595; and
(d) for the twentieth qualifying period and any subsequent qualifying period, nil.
Immediate Expensing
22 The Act is modified to give effect to the proposals relating to Immediate Expensing as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Rate Reduction for Zero-Emission Technology Manufacturers
23 The Act is modified to give effect to the proposals relating to a Rate Reduction for Zero-Emission Technology Manufacturers as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Capital Cost Allowance for Clean Energy Equipment
24 The Act is modified to give effect to the proposals relating to Capital Cost Allowance for Clean Energy Equipment as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Film or Video Production Tax Credits
25 The Act is modified to give effect to the proposals relating to Film or Video Production Tax Credits as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Mandatory Disclosure Rules
26 The Act is modified to give effect to the proposals relating to Mandatory Disclosure Rules as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Avoidance of Tax Debts
27 The Act is modified to give effect to the proposals relating to Avoidance of Tax Debts as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Audit Authorities
28 (1) Subsection 231.1(1) of the Act is amended by striking out "and" at the end of paragraph (a), by adding "and" at the end of paragraph (b) and by replacing the portion of that subsection after paragraph (b) with the following:
(c) require the owner or manager of a property or business of a taxpayer — and any particular person on the premises or place where the business is carried on, the property is kept, anything is done in connection with the business or any books or records of the taxpayer are or should be kept — to give the authorized person all reasonable assistance and to answer all proper questions and, for those purposes, the authorized person may require
(i) the owner or manager to attend at the premises or place with the authorized person, and
(ii) the owner, manager or the particular person to answer those questions orally or in writing, in any form specified by the authorized person.
(2) Subsection 231.1(2) of the Act is replaced by the following:
Entry to premises
(2) For the purposes of subsection (1), an authorized person may enter into the premises or place where any business is carried on, any property is kept, anything is done in connection with any business or any books or records are or should be kept, except if the premises or place is a dwelling-house, the authorized person may enter the dwelling-house without the consent of the occupant only under the authority of a warrant under subsection (3).
Base Erosion and Profit Shifting
Interest Deductibility Limits
29 The Act is modified to give effect to the proposals relating to Interest Deductibility Limits as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Hybrid Mismatch Arrangements
30 The Act is modified to give effect to the proposals relating to Hybrid Mismatch Arrangements as described in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
Report a problem on this page
- Date modified: